UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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SEELOS THERAPEUTICS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant))
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SEELOS THERAPEUTICS, INC.
300 Park Avenue, 2nd Floor
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 20, 2016
18, 2023
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of Apricus Biosciences,Seelos Therapeutics, Inc., a Nevada corporation (the “Company”). The Annual Meeting will be held virtually, via live webcast at www.virtualshareholdermeeting.com/SEEL2023, on Friday,Thursday, May 20, 201618, 2023 at 8:00 a.m., local time, at Latham & Watkins LLP, located at 12670 High Bluff Drive, San Diego, California 92130,Eastern Time, for the following purposes:
| (1) | To elect |
| (2) | To ratify the selection of |
| (3) | To conduct an advisory (non-binding) vote on executive |
| (4) | To approve an amendment to the Company’s Amended and Restated Articles of Incorporation, as amended, to increase the number of authorized shares of common stock to a total of 480,000,000 (Proposal No. 4); and |
| To transact such other business as may properly come before the Annual Meeting or any adjournment(s) thereof. |
The record dateRecord Date for the Annual Meeting is March 24, 2016.27, 2023. Only stockholders of record at the close of business on that date may vote at the meeting or any adjournment(s) or postponement(s) thereof. The accompanying Proxy Statement more fully describes the details of the business to be conducted at the Annual Meeting. Our proxy materials (which include the Proxy Statement attached to this notice, our most recent Annual Report on Form 10-K and form of proxy card) are also available to you via the Internet at www.proxyvote.com.
By Order of the Board of Directors,
Raj Mehra, Ph.D.
Chief Executive Officer
April 12, 2023
New York, New York
THE BOARD OF DIRECTORS APPRECIATES AND ENCOURAGES YOUR PARTICIPATION IN THE ANNUAL MEETING. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. ACCORDINGLY, PLEASE VOTE YOUR PROXY VIA THE INTERNET AT WWW.PROXYVOTE.COM OR OVER THE TELEPHONE AT 1-800-690-6903 OR SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD BY MAIL IN THE PRE-PAID ENVELOPE PROVIDED. EVEN IF YOU HAVE VOTED BY PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTENDYOUR SHARES ELECTRONICALLY DURING THE ANNUAL MEETING.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice, Proxy Statement, Proxy Card and Form 10-K are available at www.proxyvote.com.www.proxyvote.com.
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SEELOS THERAPEUTICS, INC.
300 Park Avenue, 2nd Floor
New York, New York 10022
This Proxy Statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Apricus Biosciences,Seelos Therapeutics, Inc. (the(“we”, “us”, “our”, the “Company” or “Seelos”) for use at the Company’s Annual Meeting of Stockholders (the “Annual Meeting”) to be held virtually, via live webcast at www.virtualshareholdermeeting.com/SEEL2023, on Friday,Thursday, May 20, 2016,18, 2023, at 8:00 a.m., localEastern time, at Latham & Watkins LLP, located at 12670 High Bluff Drive, San Diego, California 92130, and any adjournment(s) or postponement(s) thereof. This proxy statementProxy Statement is being mailed on or about April 21, 201612, 2023 to the stockholders of record of the Company’s common stock, par value $0.001 per share (the “Common Stock”), as of March 24, 201627, 2023 (the “Record Date”).
In order to provide expanded access to our stockholders, our Board has determined to hold a live audio webcast in lieu of an in-person meeting. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting www.virtualshareholdermeeting.com/SEEL2023 on Thursday, May 18, 2023, at 8:00 a.m., Eastern time. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/SEEL2023, you must enter the control number included in your proxy materials. There is no physical location for the Annual Meeting. We recommend you log in at least 15 minutes before the meeting to ensure you are logged in when the meeting starts. Further instructions on how to attend and participate online are available at www.virtualshareholdermeeting.com/SEEL2023. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the log-in page at www.virtualshareholdermeeting.com/SEEL2023.
Solicitation and Voting Procedures
The solicitation of proxies will be conducted by mail and the Company will bear all costs. These costs will include the expense of preparing and mailing proxy materials for the Annual Meeting and reimbursements paid to brokerage firms and others for their expenses incurred in forwarding solicitation material regarding the Annual Meeting to “Beneficial Holders” (defined(as defined below). The Company has engaged a proxy solicitation firm, Morrow & Co.,Sodali LLC, 470 West Ave,333 Ludlow Street, Fifth Floor, South Tower, Stamford, CT 06902, and may conduct further solicitation personally, by telephone or by facsimile with the assistances of our officers, directors and regular employees, none of whom will receive additional compensation for assisting with the solicitation. The Company expects that the out-of-pocket costs associated with solicitation of proxies will be approximately $5,000.$9,500. In addition, the Company has agreed to indemnify Morrow Sodali LLC against certain damages, expenses, liabilities or claims relating to its services as the Company’s proxy solicitor.
As of the Record Date, there were 61,778,121121,811,097 shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) issued and outstanding. Only holders of record of Common Stock at the close of business on the Record Date are entitled to notice of and to vote at the Annual Meeting. Each share of Common Stock outstanding on the Record Date is entitled to one vote on all matters.
Holders of record who hold shares of Common Stock directly on the Record Date must return a proxy by one of the methods described on the proxy card or attend the Annual Meeting in personvirtually in order to vote on the proposals. Investors who hold shares of Common Stock indirectly on the Record Date (“Beneficial Holders”) through a brokerage firm, bank or other financial institution (a “Financial Institution”) must return a voting instruction form to have their shares voted in accordance with their instructions. Financial Institutions have
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discretion to vote absent instructions with respect to certain routine matters, such as Proposal Nos. 2 and 4, the ratification of the independent registered public accounting firm and the vote on an amendment to our Amended and Restated Articles of Incorporation, as amended, respectively, but not with respect to matters that are considered non-routine, such as ProposalsProposal Nos. 1 and 3, the election of two directors and the advisory vote on executive compensation, respectively. A “Broker Non-Vote” occurs when a Financial Institution has not received instructions from the beneficial owner and does not have discretionary authority to vote the shares for these non-routine matters.
The presence, in personvirtually or by proxy, of a majority of the outstanding shares of Common Stock on the Record Date, will constitute a quorum for the transaction of business at the Annual Meeting and any adjournments thereof. Abstentions from voting on a proposal and Broker Non-Votes will count for purposes of determining a quorum, but will not be counted as votes cast on any proposal.cast. A description of the required vote for each proposal is included within each proposal below.
We urge any stockholder not planning to attend the Annual Meeting to vote their proxy in advance, whether via the Internet (www.proxyvote.com)(www.proxyvote.com) or by telephone (1-800-690-6903) or by mailing an executed proxy card to us. The deadline to vote by Internet or by telephone is 11:59 P.M. Eastern Time on Thursday,Wednesday, May 19, 2016.17, 2023.
Any holder of record may revoke a proxy submitted in advance of the Annual Meeting by: (i) delivering a written revocation to the Company’s Secretary before the Annual Meeting, (ii) delivering an executed, later-dated proxy or (iii) votingparticipating in person at the Annual Meeting.
Meeting and voting shares electronically during the meeting.
Beneficial Holders who wish to change or revoke their voting instructions should contact their Financial InstitutionInstitutions for information on how to do so. Beneficial Holders who wish to attend the Annual Meeting and vote in personelectronically during the meeting should contact their respective Financial InstitutionInstitutions in order to obtain a “legal proxy,” which will allow them to both attend the meeting and vote in person.electronically during the meeting. Without a legal proxy, Beneficial Holders cannot vote atelectronically during the Annual Meeting because their Financial Institution may have already voted or returned a Broker Non-Vote on their behalf.Meeting.
Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made, then FOR each of the nominees listed in Proposal No. 1 and FOR each of the other proposals described below.Proposals No. 2, No. 3 and No. 4.
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ELECTION OF CLASS IIII DIRECTORS
Overview
The Company’s Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”), provide that the Board is to be divided into three classes as nearly equal in number as possible, with directors in each class serving staggered three-year terms. The total Board size is currently fixed at sevenfive directors. The Class IIII directors (whose terms expire at the Annual Meeting) are Kleanthis G. Xanthopoulos, Ph.D.Richard W. Pascoe and Paul V. Maier. The Class III directors (whose terms expire at the 2017 annual meeting of stockholders) are Rusty Ray and Wendell Wierenga,Margaret Dalesandro, Ph.D. The Class II directors (whose terms expire at the 20182024 annual meeting of stockholders) are Richard W. PascoeRaj Mehra, Ph.D. and Sandford D. Smith.Brian Lian, Ph.D. The Class I director (whose term expires at the 2025 annual meeting of stockholders) is Daniel J. O’Connor, J.D. The Class III directors elected at the Annual Meeting will hold office until the 20192026 annual meeting of stockholders, and until their successors arehis or her successor is elected and qualified, unless they resignhe or their seats becomeshe resigns or his or her seat becomes vacant due to death, removal or other causeotherwise in accordance with the Company’s Bylaws.Amended and Restated Bylaws (the “Bylaws”).
As described below, the Board has nominated Kleanthis G. Xanthopoulos,Richard W. Pascoe and Margaret Dalesandro, Ph.D. and Paul V. Maier for re-election as Class IIII directors. Each nominee for election as a director atof the Annual Meetingnominees has indicated theirsuch nominee’s willingness to serve if elected. Should anya nominee become unavailable for election at the Annual Meeting, either of the persons named on the enclosed proxy as a proxy holdersholder may vote all proxies given in response to this solicitation for the election of a substitute nominee chosen by our Board.
Nomination of Directors
The Corporate Governance/Nominating Committee of the Board (the “Corporate Governance/Nominating Committee”), which acts as the nominating committee of the Board, reviews and recommends potential candidates for election to the Board. In reviewing potential candidates, the Corporate Governance/Nominating Committee considers the qualifications described below under the captionsection titled “Board of Directors and Committees and Corporate Governance - Director Nominations and Stockholder Communications.” After reviewing the qualifications of potential Board candidates, the Corporate Governance/Nominating Committee presents its recommendations to the Board, which selects the final director nominees.nominee(s). The Corporate Governance/Nominating Committee recommended each of the nominees for director identified in this Proxy Statement. We did not pay any fees to any third parties to identify or assist in identifying or evaluating nominees for consideration for election at the Annual Meeting.
Information Regarding Nominees and Incumbent Directors
The Corporate Governance/Nominating Committee has recommended, and the Board has nominated, Kleanthis G. Xanthopoulos,each of Richard W. Pascoe and Margaret Dalesandro, Ph.D. and Paul V. Maier to be re-elected as Class IIII directors at the Annual Meeting. The following table contains information about the nominees and about each of the Company’s continuing directors: the year eachhe or she was firstinitially elected as a director, their respective ageshis or her age as of April 12, 2023, the Record Date, the positions currently heldposition(s) with the Company currently held by him or her, the year theirhis or her current term as a director will expire and theirhis or her current director class:
Name | | | Year Initially Elected | | | Age | | | Position(s) | | | Expiration of Term | | | Class |
Richard W. Pascoe(1)(3) | | | 2013 | | | 59 | | | Director | | | 2023 | | | III |
Margaret Dalesandro, Ph.D.(1)(2) | | | 2021 | | | 76 | | | Director | | | 2023 | | | III |
Raj Mehra, Ph.D. | | | 2019 | | | 63 | | | Chairman, Chief Executive Officer and President | | | 2024 | | | II |
Brian Lian, Ph.D.(1)(2)(3) | | | 2019 | | | 57 | | | Director | | | 2024 | | | II |
Daniel J. O’Connor, J.D. | | | 2019 | | | 58 | | | Director | | | 2025 | | | I |
| Name | Year Initially Elected | Age | Position(s) | Expiration of Term | Class | |||||
| Kleanthis G. Xanthopoulos, Ph.D. | 2011 | 57 | Chairman | 2016 | I | |||||
| Paul V. Maier | 2012 | 68 | Director | 2016 | I | |||||
| Rusty Ray | 2009 | 45 | Director | 2017 | III | |||||
| Wendell Wierenga, Ph.D. | 2014 | 68 | Director | 2017 | III | |||||
| Richard W. Pascoe | 2013 | 52 | Chief Executive Officer, Secretary & Director | 2018 | II | |||||
| Sandford D. Smith | 2014 | 69 | Director | 2018 | II | |||||
| (1) | Member of the Audit Committee of the Board (the “Audit Committee”). |
| (2) | Member of the Corporate Governance/Nominating Committee. |
| (3) | Member of the Compensation Committee of the Board (the “Compensation Committee”). |
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Class IIII Directors Nominated for Election
The following personsindividuals have been nominated by our Board to be elected as Class IIII directors at the Annual Meeting:
Margaret Dalesandro, Ph.D. has served as a member of the Board since September 2021. She is the Chair of our Corporate Governance/Nominating Committee and a member of our Audit Committee. She has served as a pharmaceutical development consultant with Brecon Pharma Consulting LLC since December 2012. Since August 2020, Dr. Dalesandro has served as an independent director on the board of directors of Skye Bioscience, Inc. (previously Emerald Bioscience, Inc.). Dr. Dalesandro served on the board of directors of OncoSec Medical Incorporated from March 2019 (and as the Chair of the board of directors since April 2020) until December 2021. She previously served as a Business Director of Integrative Pharmacology at Corning, Incorporated, as a Vice President of Project, Portfolio and Alliance Management at ImClone Systems Inc., as an Executive Director of Project and Portfolio Management at GlaxoSmithKline, and as a Senior Consultant at Cambridge Pharma Consultancy over the course of her career. Dr. Dalesandro earned her Ph.D. in Biochemistry from Bryn Mawr College and completed a NIH Post-Doctoral Fellowship in Molecular Immunology at the Wake Forest University School of Medicine. The Board believes Dr. Dalesandro is qualified to serve as a director based on the depth and diversity of her experience in senior management of pharmaceutical companies and his personal and professional integrity, ethics and values.the healthcare industry.
Class II Directors Continuing in Office until 2024
The following directors will continue in office until the 2024 annual meeting of stockholders, or until their earlier resignation or removal in accordance with our Bylaws:
Raj Mehra, Ph.D.Sandford D. Smith has been our President, Chief Executive Officer and Chairman of the Board of Directors since January 2019. He also served as our Interim Chief Financial Officer from January 2019 until September 2021. Dr. Mehra served as a director at Larkspur Health Acquisition Corporation (Nasdaq: LSPR), a special purpose acquisition company, from July 2021 until December 2022. Prior to founding Seelos, Dr. Mehra spent nine years at Auriga USA, LLC as a Managing Director focused on private and public equity investments in global healthcare companies. Prior to Auriga, Dr. Mehra was the sector head for healthcare equity investments at Bennett Lawrence Management, LLC in New York. He also founded and managed a long-short equity hedge fund at Weiss, Peck & Greer LLC. Dr. Mehra started his career as an investment professional at Cowen Asset Management, LLC. Dr. Mehra holds M.S., M.Phil., Ph.D., JD and MBA degrees from Columbia University in
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New York. He is also a graduate of Indian Institute of Technology, Kanpur, where he was ranked first in his class. The Board believes Dr. Mehra is qualified to serve as our Chairman based on his experience in the healthcare industry, including his significant business knowledge based on his experience with healthcare-based investment banking.
Brian Lian, Ph.D. has been a director since August 2014.January 2019. He is the Chair of our Compensation Committee and our Audit Committee and a member of our CompensationCorporate Governance/Nominating Committee. Mr. Smith has been actively engaged in the development of international biotech and pharmaceutical companies for almost four decades. Most recently, Mr. Smith served as Interim Chief Executive Officer at Aegerion Pharmaceuticals, Inc. from July 2015 to January 2016, and now serves as Aegerion Chairman. He is chair/founder of Global BioLink LLC, a biotech consultancy formed in 2011. He was President of Genzyme International and Executive Vice President of Genzyme Corporation until the company’s acquisition by Sanofi in 2011. He joined Genzyme in 1996, and initially served as Vice President and General Manager of Genzyme International and President of Genzyme Specialty Therapeutics. Prior to joining Genzyme, Mr. Smith wascurrently President and Chief Executive Officer at RepliGen Corporation,and a publicly traded biotechnology company, from 1986-1995. Mr. Smith previously held leadership positions at Bristol-Myers Squibb from 1977-1985, including Director of OperationsViking Therapeutics, Inc. (Nasdaq: VKTX), a biopharmaceutical company. Dr. Lian has over 15 years of experience in the biotechnology and financial services industries. Prior to joining Viking, he was a Managing Director and Senior Research Analyst at SunTrust Robinson Humphrey, an investment bank, from 2012 to 2013. At SunTrust Robinson Humphrey, he was responsible for Bristol-Myers Squibb–Asia Pacificcoverage of small and Vicemid-cap biotechnology companies with an emphasis on companies in the diabetes, oncology, infectious disease and neurology spaces. Prior to SunTrust Robinson Humphrey, he was Managing Director and Senior Research Analyst at Global Hunter Securities, an investment bank, from 2011 to 2012. Prior to Global Hunter Securities, he was Senior Healthcare Analyst at The Agave Group, LLC, a registered investment advisor, from 2008 to 2011. Prior to The Agave Group, he was an Executive Director and Senior Biotechnology Analyst at CIBC World Markets, an investment bank, from 2006 to 2008. Prior to CIBC, he was a research scientist in small molecule drug discovery at Amgen, a biotechnology company. Prior to Amgen, he was a research scientist at Microcide Pharmaceuticals, a biotechnology company. Dr. Lian holds an MBA in accounting and finance from Indiana University, an MS and Ph.D. in organic chemistry from The University of Michigan, and a BA in chemistry from Whitman College. The Board believes Dr. Lian is qualified to serve as a director based on his experience in the healthcare industry, including his significant business knowledge based on his experience with healthcare-based investment banking.
Class I Director Continuing in Office until 2025
The following director will continue in office until the 2025 annual meeting of stockholders, or until his earlier resignation or removal in accordance with our Bylaws:
Daniel J. O’Connor, J.D. has been a director since January 2019. Mr. O’Connor has served as the Chief Executive Officer, President of Business Development and Strategic Planning for the Pharmaceutical and Nutritional Division. Mr. Smith currently serves ona member of the board of directors of publicly traded biotechnology companies Cytokinetics, Incorporated, Aegerion Pharmaceuticals,Ambrx Biopharma Inc. and Neuralstem, Inc.(Nasdaq: AMAM) since November 2022. He is on the advisory council for non-profit Brigham & Women’s Hospital, where he created the Smith Scholars Residency in medical education to benefit physicians from resource-poor nations. He is also on the advisory board at Tullis Health Advisors. Mr. Smith holds a bachelor’s degree from the University of Denver. Mr. Smith’s qualifications to serve on the Board include his wealth of senior management and board level experience from his leadership roles in both the biotech and pharmaceutical industries.
Family Relationships
There are no family relationships among any of the individuals who serve as our directors or practices.executive officers.
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Executive Officer and Director Interest
Each of Richard W. Pascoe and Margaret Dalesandro, Ph.D. has an interest in this Proposal No. 1, as each such nominee is currently a member of our Board.
Agreements with Directors
None of the directors or nominees for director was selected pursuant to any arrangement or understanding, other than compensation arrangements in the ordinary course of business.
Vote Required and Majority Vote StandardGuideline
Any shares that are not voted in the election of directors for any reason, including abstentions and Broker Non-Votes, will not be counted as votes cast and accordingly will not affect the outcome of the election of directors.
Holders of proxies solicited by this Proxy Statement will vote the proxies received by them as directed on the proxy card or, if no direction is made, then FOR the election of the nominees named above.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOREACH OF THE
NOMINEES IDENTIFIED ABOVE.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected BDO USA,KPMG LLP (“BDOKPMG”) as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2016,2023, and has further directed that we submit the selection of BDOKPMG for ratification by our stockholders at the Annual Meeting. A representativeKPMG audited our financial statements for the year ended December 31, 2022. Although ratification is not required by our Bylaws or otherwise, the Board is submitting this proposal as a matter of BDOgood corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain KPMG. Even if the selection is ratified, the Audit Committee in its discretion may decide to appoint a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and our stockholders. One or more representatives of KPMG will be present at the Annual Meeting, will have an opportunity to make a statement and will be available to respond to appropriate questions. The Company does not expect a representative of Pricewaterhouse Coopers LLP (“PwC”), the Company’s former independent registered public accounting firm, to be present at the Annual Meeting.questions from our stockholders.
Fees for Independent Registered Public Accounting Firm
The following is a summary of the fees billed to the Company by BDO and PwCKPMG for professional services rendered for the fiscal years ended December 31, 20152022 and 2014,2021, respectively:
| | | 2022 | | | 2021 | |
Audit Fees(1) | | | $570,000 | | | $453,500 |
Audit Related Fees | | | — | | | — |
Tax Fees(2) | | | $17,600 | | | $20,700 |
All Other Fees | | | — | | | — |
Total All Fees | | | $587,600 | | | $474,200 |
| BDO | PwC | |||||||
| 2015 | 2014 | |||||||
Audit Fees (1): | $ | 340,000 | $ | 755,000 | ||||
| Other Fees: | ||||||||
Audit-Related Fees (2) | $ | — | $ | — | ||||
| Tax Fees | ||||||||
Tax compliance (3) | $ | 20,000 | $ | 53,000 | ||||
Tax consulting (4) | $ | — | $ | 29,000 | ||||
All Other Fees (5) | — | — | ||||||
| Total Other Fees | $ | 20,000 | $ | 82,000 | ||||
| Total All Fees | $ | 360,000 | $ | 837,000 | ||||
| (1) | Audit fees consist of estimated fees for professional services rendered for the audit of our annual financial statements included in our Form 10-K filing and review of financial statements included in our quarterly Form 10-Q filings, reviews of registration statements and issuances of consents, comfort letters and services that are normally provided in connection with statutory and regulatory filings or engagements. |
| (2) | Consists of fees billed for tax compliance and consulting. |
Pre-Approval Policies and Procedures
All audit and non-audit services provided by BDOKPMG must be pre-approved by the Audit Committee. BDOKPMG will provide the Audit Committee with an engagement letter during the first half of the fiscal year, outlining the scope of the proposed services and estimated fees for the fiscal year. Pre-approval may be given for a category of services, provided that (i) the category is reasonably narrow and detailed and (ii) the Audit Committee establishes a fee limit for such category. The Audit Committee may delegate to any other member of the Audit Committee the authority to grant pre-approval of permitted non-audit services to be provided by BDOKPMG between Audit Committee meetings; provided, however, that any such pre-approval shall be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee pre-approved all audit and permitted non-audit services provided by PwCKPMG in fiscal 20142022 and such services provided by BDO in fiscal 2015.2021.
Required Vote
Assuming that a quorum is present at the Annual Meeting, approval of this proposal requires the affirmative vote of the majority of the votes cast (meaning the number of shares voted “for” the proposal must exceed the number of shareshares voted “against” the proposal). Abstentions from votingAny shares that are not voted on the proposal for any reason, including abstentions and Broker Non-Votes (if any), will not be counted as votes cast and accordingly will not affect the outcome of the proposal. The approval of Proposal No. 2 is a routine proposal on which a broker or other nominee has discretionary authority to vote, and as such, it is unlikely that any Broker Non-Votes will result from this proposal. If our stockholders do not ratify the selection of KPMG, our Board will consider the selection of KPMG as well as other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2023.
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ADVISORY VOTE ON EXECUTIVE COMPENSATION
Our executive compensation program embodies a pay-for-performance philosophy that supports our business strategy and aligns the interests of our executives with our stockholders. In particular, our compensation program rewards financial, strategic and operational performance and the goals set for each performance category support our short and long-term plans.
We are requesting that our stockholders vote to approve the compensation of our Named Executive Officers (as defined below) as described below under the section titled “Executive Compensation” pursuant to the compensation disclosure rules of the Securities and Exchange Commission (the “SEC”), which disclosures include the compensation tables and the narrative discussion following the compensation tables.
This advisory vote is generally referred to as a “say-on-pay vote” and is being provided pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In accordance with the results of the advisory vote held at our 2019 annual meeting of stockholders on the frequency of future say-on-pay votes, we are conducting say-on-pay votes every year. After the Annual Meeting, our next say-on-pay vote will be held at our 2024 annual meeting of stockholders.
The Board is asking stockholders to cast an advisory (non-binding) vote FOR the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion within the section of the Company’s proxy statement entitled “Executive Compensation,” is hereby APPROVED.”
Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board value the views of our stockholders and will consider the outcome of the vote when determining future compensation arrangements for our Named Executive Officers and other executive officers.
Executive Officer and Director Interest
Our executive officers have an interest in this Proposal No. 3, as the compensation for our executive officers is subject to this vote.
Required Vote
Assuming that a quorum is present at the Annual Meeting, approval of this proposal requires the affirmative vote of the majority of the votes cast (meaning the number of shares voted “for” the proposal must exceed the number of shares voted “against” the proposal). Any shares that are not voted on the proposal for any reason, including abstentions and Broker Non-Votes, will not be counted as votes cast and accordingly will have no effect uponnot affect the outcome of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTEFORAPPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION PAID TO THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE COMPENSATION DISCUSSION AND ANALYSIS, COMPENSATION TABLES AND NARRATIVE DISCUSSION.DISCUSSION WITHIN THE SECTION OF THIS PROXY STATEMENT ENTITLED “EXECUTIVE COMPENSATION”.
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APPROVAL OF AN AMENDMENT TO THE COMPANY’S AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO A TOTAL NUMBER OF 480,000,000 SHARES
Our stockholders are being asked to approve an amendment to our Articles of Incorporation to increase the number of authorized shares of Common Stock. On March 23, 2023, the Board approved a proposal to amend the Articles of Incorporation to increase the number of authorized shares of Common Stock from 240,000,000 shares to 480,000,000 (the “Share Increase”). As of the close of business on the Record Date, there were 121,811,097 shares of Common Stock issued and outstanding, and 66,088,642 shares of Common Stock were reserved for issuance under long-term equity incentive plans, the employee stock purchase plan, convertible notes and warrants to purchase Common Stock. Accordingly, of the total number of shares of Common Stock currently authorized under our Articles of Incorporation, 52,100,261 shares of Common Stock remain available for issuance or may be reserved for issuance.
Form of the Amendment
The proposed amendment (the “Amendment”) would amend Paragraph A of Article FIFTH of our Articles of Incorporation to read in its entirety as follows:
“FIFTH: A. The total number of shares of all classes of stock which the Corporation shall have authority to issue is four hundred ninety million (490,000,000), consisting of four hundred eighty million (480,000,000) shares of Common Stock, par value one-tenth of one cent ($0.001) per share (the “Common Stock”), and ten million (10,000,000) shares of preferred stock, par value one-tenth of one cent ($0.001) per share (the “Preferred Stock”).”
Background and Reasons for the Share Increase
The Articles of Incorporation currently authorize the issuance of up to 240,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. As of the close of business on the Record Date, there were 121,811,097 shares of Common Stock issued and outstanding, and 66,088,642 shares of Common Stock were reserved for issuance under long-term equity incentive plans, employee stock purchase plan, convertible notes and warrants to purchase Common Stock. Accordingly, of the total number of shares of Common Stock currently authorized under our Articles of Incorporation, 52,100,261 shares of Common Stock remain available for issuance or may be reserved for issuance.
If the Amendment is approved by our stockholders, upon its effectiveness we will have a total of 480,000,000 authorized shares of Common Stock, with 121,811,097 shares of Common Stock issued and outstanding (as of the Record Date), and 66,088,642 shares reserved for issuance under long-term equity incentive plans, the employee stock purchase plan, convertible notes and warrants to purchase Common Stock, leaving available 292,100,261 shares of Common Stock authorized and unissued and not reserved for any specific purpose.
The Board recommends that stockholders approve this Amendment. Under applicable Nevada law, the affirmative vote of the stockholders holding a majority of the outstanding shares of Common Stock is required for approval of the Amendment. Abstentions from voting on this proposal and Broker Non-Votes, if any, will have the same effect as a vote against this Proposal No. 4.
Purpose of the Amendment
The Board believes it is in the best interests of the Company and our stockholders to increase the number of authorized shares of Common Stock in order to give the Company greater flexibility in considering and planning for future general corporate needs, including, but not limited to, grants under equity compensation plans, forward or reverse stock splits, financings, potential strategic transactions, as well as other general corporate transactions. The Board believes that having available additional authorized shares of Common Stock will enable the Company to take timely advantage of market conditions and favorable financing and acquisition opportunities that become available to the Company by allowing the issuance of such shares without the expense and delay of holding another stockholder meeting.
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At this time, the increase in authorized shares of Common Stock is not in any way related to any plans or intentions to enter into a merger, consolidation, acquisition or similar business transaction.
Rights of Additional Authorized Shares
Any newly authorized shares of Common Stock will be identical to the shares of Common Stock now authorized and outstanding. The Amendment will not alter the voting powers or relative rights of the Common Stock. In accordance with the Articles of Incorporation and the Nevada Revised Statutes, any of our authorized but unissued shares of preferred stock are “blank check” preferred stock, which shall have such voting rights, dividend rights, liquidation preferences, conversion rights and perceptive rights as may be designated by the Board pursuant to a certificate of designation.
Potential Adverse Effects of the Amendment
Adoption of the Amendment will have no immediate dilutive effect on the proportionate voting power or other rights of the Company’s existing stockholders. The Board has no current plan to issue shares from the additional authorized shares provided by the Amendment. However, any future issuance of additional authorized shares of our Common Stock may, among other things, dilute the earnings per share of Common Stock and the equity and voting rights of those holding Common Stock at the time the additional shares are issued. Additionally, this potential dilutive effect may cause a reduction in the market price of our Common Stock.
Potential Anti-Takeover Effects
By increasing the number of authorized but unissued shares of Common Stock, the Share Increase could, under certain circumstances, have an anti-takeover effect, although this is not the intent of the Board. For example, the Share Increase could adversely affect the ability of third parties to take over the Company or effect a change of control of the Company by, for example, permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of the Board or contemplating a tender offer or other transaction for the combination of us with another company that the Board determines is not in the Company’s best interests or in the best interests of our stockholders. The ability of the Board to cause the Company to issue substantial amounts of Common Stock or preferred stock without the need for stockholder approval, except as may be required by law or regulation, upon such terms and conditions as the Board may determine from time to time in the exercise of its business judgment may, among other things, result in practical impediments with respect to changes in control of the Company or have the effect of diluting the stock ownership of holders of Common Stock seeking to obtain control of the Company. The issuance of Common Stock or preferred stock, while providing desirable flexibility in connection with potential financings and other corporate transactions, may have the effect of discouraging, delaying or preventing a change in control of the Company. The Board, however, does not intend or view the Amendment to effect the Share Increase as an anti-takeover measure, nor does the Board contemplate using the Share Increase in this manner at any time in the foreseeable future.
Appraisal or Dissenter’s Rights
Pursuant to the Nevada Revised Statutes, our stockholders are not entitled to appraisal rights or dissenter’s rights with respect to the Amendment or the Share Increase.
Effectiveness of Amendment
If the Amendment is approved by the stockholders at the Annual Meeting, it will become effective upon the filing of a certificate of amendment to our Articles of Incorporation with the Nevada Secretary of State.
Executive Officer and Director Interest
Our directors and executive officers do not have an interest in this Proposal No. 4.
Required Vote
Assuming that a quorum is present at the Annual Meeting, this proposal will be approved only if a majority of the total outstanding shares of Common Stock vote “for” this Proposal No. 4 (meaning the number of shares voted “for” the proposal must exceed 50% of the total number of shares of the Common Stock outstanding on the Record Date). Any shares that are not voted on the proposal for any reason, including abstentions and Broker
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Non-Votes (if any), will have the same effect as a vote “against” this proposal. The approval of Proposal No. 4 is a routine proposal on which a broker or other nominee has discretionary authority to vote, and as such, it is unlikely that any Broker Non-Votes will result from this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK.
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Meetings of the Board
During fiscal 2015,2022, the Board met thirteensix times and acted by unanimous written consent seven times. Each director attended at least 90%75% of the aggregate of (i) the total number of meetings of the Board and (ii) the total number of the meetings of the committees of the Board on which theyhe or she served during the periods that theyhe or she served. Although we expectencourage directors to attend each annual meeting of stockholders and expect any of them in attendance to be available to answer appropriate questions from our stockholders, we have no formal policy requiring attendance by directors at annual stockholder meetings. All of the members of the Board serving at the time of our 20152022 annual meeting of stockholders except for Kleanthis G. Xanthopoulos, Ph.D., attended the 2015our 2022 annual meeting of stockholders, in person or by telephone.stockholders.
Committees of the Board
There are currently three active committees of the Board: the Audit Committee, the Corporate Governance/Nominating Committee and the Compensation Committee. Below are descriptions of our three active Board committees.
The Audit Committee regularly meets with our financial and accounting management and independent auditors and is responsible for the selection and engagement of the Company’sour independent auditors. Additionally, the Audit Committee reviews with the independent auditors the scope and results of the audit engagement, approves professional services provided by the independent auditors, reviews the independence of the independent auditors and reviews the adequacy of the internal accounting controls. The Audit Committee acts under a written charter, a copy of which is available on the Company’sour website at www.apricusbio.com. Thewww.seelostherapeutics.com/corporate-governance/. During fiscal 2022, the Audit Committee met sixfour times in fiscal 2015, and asdid not take any action by unanimous written consent. As of April 12, 2023, the Record Date,Audit Committee consisted of Paul V. MaierBrian Lian, Ph.D. (Chair), Deirdre Y. Gillespie, M.D.Margaret Dalesandro, Ph.D., and Rusty Ray,Richard W. Pascoe, none of whom was an employee of the Companyours and each of whom met the applicable independence standards promulgated by the NASDAQ Marketplacerules of The Nasdaq Stock Market LLC (the “Nasdaq Rules”) and thoseapplicable rules of the Securities and Exchange Commission (the “SEC”).SEC. The Board has also determined that each of Dr. Lian and Mr. MaierPascoe qualifies as an “audit committee financial expert,” as defined in Item 407(d)(5) of the SEC’s Regulation S-K.
The Corporate Governance/Nominating Committee makes recommendations to the Board regarding the election of directors, as well as providing guidance and oversight on matters relating to corporate governance. TheDuring fiscal 2022, the Corporate Governance/Nominating Committee met two times in fiscal 2015, and asacted by unanimous written consent once. As of April 12, 2023, the Record Date,Governance/Nominating Committee consisted of Rusty RayMargaret Dalesandro, Ph.D. (Chair) and Brian Lian, Ph.D., Deirdre Y. Gillespie, M.D. and Paul V. Maier, noneneither of whom was an employee of the Companyours and each of whom met the independence requirements of the NASDAQ Marketplace.Nasdaq Rules. The Corporate Governance/Nominating Committee acts under a written charter, which is available on our website at www.apricusbio.comwww.seelostherapeutics.com/corporate-governance/. We have not paid any third party a fee to assist in the process of identifying and evaluating candidates for director, and as of the Record Date we have not received any nominees for director from any stockholder or stockholder group for the Annual Meeting in accordance with the nominating procedures set forth in our Bylaws and the charter for our Corporate Governance/Nominating Committee.
The Compensation Committee determines compensation levels for our executive officers, implements incentive programs for officers, directors and consultants, and administers our equity compensation plans. TheDuring fiscal 2022, the Compensation Committee held four meetings in fiscal 2015.met three times and did not take any action by unanimous written consent. As of the Record Date,April 12, 2023, the Compensation Committee consisted of Deirdre Y. Gillespie, M.D.Brian Lian, Ph.D. (Chair), Sandford D. Smith and Wendell Wierenga, Ph.D., noneRichard W. Pascoe, neither of whom was an employee of the Companyours and each of whom met the independence requirements of the NASDAQ Marketplace.Nasdaq Rules and applicable rules of the SEC. The Compensation Committee acts under a written charter, a copy of which is posted on the Company’sour website at www.apricusbio.comwww.seelostherapeutics.com/corporate-governance/. The Company’sOur independent compensation consultants, as well as executive officers and management play important roles in making recommendations and formulating compensation plans for our employees, including the Named Executive Officers. Beginning 2018, the Compensation Committee determined to engage Radford, an AON Hewitt company, as its independent compensation consultant to provide compensation consulting services. Specifically, for 2021 and 2022, the Compensation Committee requested Radford to advise it on a variety of compensation related issues, including compiling, analyzing and presenting third-party survey data regarding the compensation of executives and directors at comparable companies. Radford did not provide any other services to us in 2021 or 2022 beyond its engagement as an advisor to the Compensation Committee on executive compensation and director compensation matters. After review, the Compensation Committee has determined
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that there is no conflict of interest resulting from retaining Radford currently or during the year ended December 31, 2022. In reaching these conclusions, the Compensation Committee considered the factors set forth in Exchange Act Rule 10C-1.
The Compensation Committee may delegate authority for day-to-day administration and interpretation of the Company’sour various compensation plans, including the selection of participants, the determination of award levels and the approval of award documents to our non-officer employees. However, the Compensation Committee may not delegate any authority under those plans for matters affecting the compensation and benefits of the Company’sour Named Executive Officers. For fiscal 2015, the Compensation Committee retained Radford, An Aon Hewitt Company (“Radford”), to assist the Compensation Committee in evaluating our executive compensation program to ensure competitive compensation standards with other comparable biotechnology and pharmaceutical companies. This process enables us to benchmark our job functions and job levels within our specific industry sector and geography, and to obtain competitive salary data, to maintain a competitive salary structure. Compensation recommendations and performance assessments of Named Executive Officers from the Company’sour Chief Executive Officer are also considered by the Compensation Committee in determining the total compensation packages for Named Executive Officers (excluding the Chief Executive Officer). The Chief Executive Officer is not present for any discussions relating to his compensation.
The Compensation Committee adopted an Equity Award Grant Policy on October 2, 2021, pursuant to which the Compensation Committee delegated to the Chief Executive Officer the power and authority, separately but concurrently with the power and authority of the Compensation Committee, to grant stock options, restricted stock awards, restricted stock units and stock-settled stock appreciation rights under the Company’s Amended and Restated 2012 Stock Long Term Incentive Plan (as amended, restated, supplemented or superseded, the “Equity Plans”) to our employees (other than executives and directors) on the terms and conditions approved by our Chief Executive Officer. The Equity Award Grant Policy also established the policy for the Company to follow when it grants stock options, stock appreciation rights, shares of restricted stock, restricted stock units, performance restricted stock units, performance-based units, stock-settled stock appreciation rights or other equity-based awards to our executives and employees pursuant to the Equity Plans.
Director Nominations and Stockholder Communications
Our Corporate Governance/Nominating Committee considers candidates for the Board submitted in writing to the Chair of the committee. Candidates may be submitted by our executive officers, current directors, search firms engaged by the Corporate Governance/Nominating Committee, and subject to the conditions described below, by a stockholder. Information with respect to any proposed candidate shall be provided in writing to the Chair of the Corporate Governance/Nominating Committee at Apricus Biosciences,Seelos Therapeutics, Inc., 11975 El Camino Real, Suite 300 San Diego, California 92130.Park Avenue, 2nd Floor, New York, New York 10022. A nominating stockholder shall provide evidence that he, she or itthe nominating stockholder is a stockholder (including information relating to all shares deemed beneficially held by the nominating stockholder) and shall provide the name of the Board candidate(s), and such other information with respect to the nominee required under the rules and regulations of the SEC to be included in our proxy statement if such proposed candidate were to be included therein. In addition, the stockholder shall include a statement that the proposed candidate has no direct or indirect business conflict of interest with the Company,us, and otherwise meets our standards set forth below.
There are currently no specific, minimum or absolute criteria for Board membership. Candidates are evaluated based upon a number of factors, including but not limited to independence, knowledge, judgment, integrity, character, leadership, skills, education, experience, financial literacy, standing in the community and ability to foster a diversity of backgrounds and views and to complement the Board’s existing strengths. The Corporate Governance/Nominating Committee does not alter its evaluation practices with regardsregard to potential Board candidates recommended by a stockholder.
In addition, pursuant to Rule 14a-19 of the Exchange Act (“Rule 14a-19”), the SEC’s universal proxy rule, notices of a solicitation of proxies in support of director nominees other than our own nominees must be postmarked or electronically submitted no later than March 19, 2024, and each nomination must comply with the SEC regulations under Rule 14a-19, which requires, among other things, that such notice include a statement that such person intends to solicit the holders of shares representing at least 67% of the voting power of shares entitled to vote on the election of directors. If, however, the date of the 2024 annual meeting of stockholders is more than 30 days before or after May 18, 2024, then the Rule 14a-19 deadline shall be the later of 60 calendar days prior to the date of the 2024 annual meeting of stockholders or the 10th calendar day following the day on which we first make a public announcement of the date of our 2024 annual meeting of stockholders. A nomination that does not comply with the requirements set forth in the Articles of Incorporation and the Bylaws will not be considered for presentation at the Annual Meeting. We intend to file a proxy statement and white proxy card with the SEC in connection with our solicitation of proxies for our 2024 annual meeting of stockholders.
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The table below provides an enhanced disclosure regarding the diversity of our Board members and nominees. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).
Board Diversity Matrix (As of April 12, 2023) | ||||||||||||
Board Size: | | | | | | | | | ||||
Total Number of Directors | | | 5 | |||||||||
| | | Male | | | Female | | | Non-Binary | | | Gender Undisclosed | |
Part I: Gender Identity | | | | | | | | | ||||
Number of directors based on gender identity | | | 4 | | | 1 | | | — | | | — |
Part II: Demographic Background | | | | | | | | | ||||
African American or Black | | | — | | | — | | | — | | | — |
Alaskan Native or Native American | | | — | | | — | | | — | | | — |
Asian | | | 1 | | | — | | | — | | | — |
Hispanic or Latinx | | | — | | | — | | | — | | | — |
Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — |
White | | | 3 | | | 1 | | | — | | | — |
Two or More Races or Ethnicities | | | — | | | — | | | — | | | — |
LGBTQ+ | | | — | |||||||||
Did not Disclose Demographic Background | | | — | |||||||||
Directors who are U.S. Military Veterans: 2
Board Diversity Matrix (As of April 12, 2022) | | ||||||||||||||
Board Size: | | | | | | | | | | ||||||
Total Number of Directors | | | 5 | | |||||||||||
| | | Male | | | Female | | | Non-Binary | | | Gender Undisclosed | | |||
Part I: Gender Identity | | | | | | | | | | ||||||
Number of directors based on gender identity | | | 4 | | | 1 | | | — | | | — | | ||
Part II: Demographic Background | | | | | | | | | | ||||||
African American or Black | | | — | | | — | | | — | | | — | | ||
Alaskan Native or Native American | | | — | | | — | | | — | | | — | | ||
Asian | | | 1 | | | — | | | — | | | — | | ||
Hispanic or Latinx | | | — | | | — | | | — | | | — | | ||
Native Hawaiian or Pacific Islander | | | — | | | — | | | — | | | — | | ||
White | | | 3 | | | 1 | | | — | | | — | | ||
Two or More Races or Ethnicities | | | — | | | — | | | — | | | — | | ||
LGBTQ+ | | | — | | |||||||||||
Did not Disclose Demographic Background | | | — | | | ||||||||||
Directors who are U.S. Military Veterans: 2
Any other stockholder communications intended for our management or the Board shall be submitted in writing to the Chair of the Corporate Governance/Nominating Committee (at theour Company’s address provided in this proxy statement)Proxy Statement) who shall determine whether to forward the communication, in his or her discretion and considering the identity of the submitting stockholder and the materiality and appropriateness of the communication.
Director Independence
Our Board has determined that each of Mr. Pascoe and Drs. XanthopoulosLian and Wierenga, and Messrs. Maier, Ray and SmithDalesandro met the definitions of independence under the NASDAQ MarketplaceNasdaq Rules and Section 10A-3 of the Securities Exchange Act as of 1934, as amended (the “Exchange Act”).April 12, 2023. Accordingly, all of our directors, other than our Chairman, Chief Executive Officer Mr. Pascoe,and President, Dr. Mehra, and Daniel J. O’Connor, are deemed to be independent.
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Code of Ethics
We have adopted a Code of Ethics that applies to our Chief Executive Officer Chief Accounting Officer, and to all of our other officers, directors and employees. The Code of Ethics, as amended and restated, is available on the Corporate Governance section of the Investors page on our website at www.apricusbio.comwww.seelostherapeutics.com/corporate-governance/. We intend towill disclose future amendments to, or waivers from, certain provisions of our codeCode of ethics,Ethics, if any, on the above website within four business days following the date of such amendment or waiver. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this Proxy Statement, and references to our website address in this Proxy Statement are inactive textual references only.
Our Bylaws and corporate governance guidelines do not requireboard believes that our Chief Executive Officer, Dr. Mehra, is best situated to serve as Chairman of the Board because he is the director who is most familiar with our business and industry, possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing us and is therefore best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters. Our independent directors bring experience, oversight and expertise from outside the Company and industry, while the Chief Executive Officer positions be separate. Nevertheless,brings Company-specific experience and expertise. The Board believes that the positioncombined role of Chairman of the Board and Chief Executive Officer are separate positions. Mr. Pascoefacilitates information flow between management and the Board, which is our current Chief Executive Officer and Dr. Xanthopoulos is our current Chairman of the Board.essential to effective governance. The Board believes that this governancedoes not currently have a lead independent director. Our Board will continue to periodically review our leadership structure provides a necessary degree of independence betweenand may make such changes in the Board and management.future as it deems appropriate.
Board’s Role in Risk Oversight
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including, but not limited to, risks relating to product candidate development, technological uncertainty, dependence on clients and collaborative partners, uncertainty regarding patents and proprietary rights, comprehensive government regulations, marketing or sales capability or experience, business integration and dependence on key personnel. Management is responsible for the day-to-day management of the risks we face, while our Board as a whole and through its committees, is responsible for the oversight of risk management. Our Board believes its administration of its risk oversight function has not affected its leadership structure.
Board oversight is conducted primarily through committees of the Board, including the Audit Committee, Compensation Committee and the Corporate Governance/Nominating Committee. However, the full Board has retained responsibility for general risk oversight. Our Board satisfies this responsibility, in part, through reports by each committee chairChair regarding the committee’s considerations and actions. The Board also has the responsibility of ensuring compliance with the risk management processes designed and implemented by management, which it satisfies through reports directly from the officersofficer responsible for oversight of particular risks within our Company. The Board believes that full and open communication between management and the Board is essential for effective risk management and oversight.
Compensation Committee Interlocks and Insider Participation
During the last completed fiscal year, no member of the Compensation Committee was a current or former officer or employee of theour Company. None of our executive officers served as a member of the Compensation Committeecompensation committee (or board of directors serving the compensation function) of another entity where such entity’s executive officers served on our Compensation Committee.Committee, except that Dr. Mehra served as a member of the compensation committee of Larkspur Healthcare Acquisition Corp., a special purpose acquisition company, from December 2021 through December 2022, where its Chief Executive Officer, Daniel J. O’Connor, served as a member of our Compensation Committee until February 2022. None of our executive officers served as a director of another entity whose executive officers served on our Compensation Committee. Moreover, none of our executive officers served as a member of the compensation committee (or board of directors serving the compensation function) of another entity where such entity’s executive officers served on our Board.
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As of the date of this proxy,April 12, 2023, our current executive officers and their respective ages and positions are set forth in the following table.
Name | | | Age | | | Position(s) |
Raj Mehra, Ph.D. | | | 63 | |||
| | ||||||
Chairman, Chief Executive Officer | ||||||
Michael Golembiewski | | 51 | | Chief | ||
Raj Mehra, Ph.D.Richard W. Pascoe, is our Chairman, Chief Executive Officer Secretary and a member of the Board.President. See “Election of Class II Directors - Class“Class II Directors Continuing in OfficerOffice until 2018”2024” above for a discussion of Mr. Pascoe’sDr. Mehra’s business experience.
Michael GolembiewskiBarbara Troupin, M.D., M.B.A. has beenserved as our Senior Vice President, Chief MedicalFinancial Officer since December 2014. Dr. Troupin has held various senior management roles with VIVUS, Inc. in medical affairs and clinical development from 2006 until 2014. In these roles, Dr. Troupin was the lead clinician for the Phase 3 program for Qsymia, was the lead contributor for all medical review of the Qsymia New Drug Application and was the lead medical presenter at the successful Qsymia FDA Advisory Committee Meeting.September 2021. Prior to this, Dr. Troupin held Medical Director positions at the Profil Institute for Clinical Research and Radiant Research, both contract research organizations. Dr. Troupin received her M.D. from the University of Pennsylvania School of Medicine and her M.B.A. from the Wharton School of Business. In light of the Company’s decision to deprioritize its pipeline assets, Dr. Troupin and the Company entered into an employment transition agreement on April 13, 2016, pursuant to which Dr. Troupin’s employment with the Company will terminate effectiveMr. Golembiewski’s appointment as of May 31, 2016.
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The following table sets forth the compensation paid by us during the years ended December 31, 2022 and 2021 to the fiscal year that ended on December 31, 2015 were Richard W. Pascoe, Chief Executive Officer, Secretary and Director, Barbara Troupin, M.D., M.B.A., Senior Vice President, Chief Medical Officer, and Brian T. Dorsey, Senior Vice President, Chief Development Officer.
Name and Position(s) | | | Year | | | Salary | | | Bonus | | | Stock Awards | | | Option Awards(1) | | | Non-Equity Incentive Plan Compensation | | | All Other Compensation(2) | | | Total |
Raj Mehra, Ph.D., Chairman, Chief Executive Officer, President | | | 2022 | | | $561,688 | | | — | | | — | | | $1,603,680 | | | $280,844 | | | $12,200 | | | $2,458,412 |
| | 2021 | | | $522,500 | | | $100,000 | | | $10,344,000(3) | | | $4,360,685 | | | $287,375 | | | $11,242 | | | $15,625,802 | ||
Michael Golembiewski, Chief Financial Officer | | | 2022 | | | $317,125 | | | — | | | — | | | $616,800 | | | $126,850 | | | $10,852 | | | $1,071,627 |
| | 2021 | | | $281,667 | | | $25,000 | | | — | | | $720,461 | | | $97,350 | | | $12,917 | | | $1,137,395 |
| (1) | Represents the grant date fair value of the option awards, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, excluding the effect of estimated forfeitures. These figures do not reflect the amortized compensation expense or value received by the officer in the year indicated or that may be received by the officer with respect to such equity awards. |
| (2) | ||
| Our Named Executive Officers’ All Other Compensation | ||
| (3) | Represents the grant date fair value of a performance restricted stock unit award granted to Dr. Mehra on March 15, 2021, calculated in | |
Narrative Disclosure to Summary Compensation CommitteeTable
Base Salary
In general, base salaries for our Named Executive Officers are approved by the Compensation Committee and are initially established through arm’s length negotiation at the time the executive is hired, taking into account such executive’s qualifications, experience, prior salary and market pay levels. Base salaries of our Named Executive Officers are approved and reviewed annually by our Compensation Committee and adjustments to base salaries are based on the scope of an executive’s responsibilities, individual contribution, prior experience and sustained performance. Decisions regarding salary increases may take into account an executive officer’s current salary, equity ownership, and the amounts paid to an executive officer’s peers inside our companyCompany by conducting an internal analysis, which compares the pay of an executive officer to other members of the management team. Base salaries are also reviewed in the case of promotions or other significant changes in responsibility. Base salaries are not automatically increased if the Compensation Committee believes that other elements of the Named Executive Officer’sOfficers’ compensation are more appropriate in light of our stated objectives. This strategy is consistent with our intent of offering compensation that is both cost-effective, competitive and contingent on the achievement of performance objectives.
| Annual Base Salary | ||||||||||
| Name | Title | 2016 | 2015 | |||||||
| Richard W. Pascoe | Chief Executive Officer, Secretary and Director | $ | 487,396 | $ | 473,200 | |||||
| Barbara Troupin, M.D., M.B.A. | Senior Vice President, Chief Medical Officer | $ | 334,750 | $ | 325,000 | |||||
| Brian T. Dorsey | Senior Vice President, Chief Development Officer | $ | 319,300 | $ | 310,000 | |||||
Annual Cash Incentive
The Compensation Committee considers the Company’sour overall performance for the preceding fiscal year in deciding whether to award a bonus and, if one is to be awarded, the amount of the bonus. The annual cash bonus for each executive officer is based 100% on our overall Company performance. The Compensation Committee retains the ability to apply discretion in making adjustments to the final bonus payouts.
