If any matters not described in the proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is adjourned, the proxy holders can vote your shares on the new meeting date as well, unless you have revoked your proxy instructions, as described under “Can I revoke or change my vote?”
Q:
| Q: | What does it mean if I get more than one proxy card? |
A:
| A: | Your shares are probably registered in more than one account. You should follow voting instructions for all proxy cards you receive. |
Q:
| Q: | How many votes can I cast? |
A:
| You areA: | Holders of record of shares of the Company’s Common Stock will be entitled to one vote perfor each share of Common Stock held by them on the Record Date, and have the right to vote on all matters presented atbrought before the SpecialAnnual Meeting. Our stockholdersThe holder of record of the one outstanding share of the Company’s Preferred Stock will be entitled to 100,000,000 votes for each share of the Company’s Preferred Stock held on the Record Date, and has the right to vote only on the Reverse Stock Split proposal (Proposal 4), provided that such votes must be counted in the same proportion as the shares of Common Stock voted on Proposal 4. As an example, if 50.5% of the shares of Common Stock are voted FOR Proposal 4, 50.5% of the votes cast by the holder of the Preferred Stock will be cast as votes FOR Proposal 4. Holders of Common Stock and Preferred Stock will vote on Proposal 4 as a single class. Holders of our Common Stock do not have a right to cumulate their votes for the election of directors or otherwise. |
Q:
| Q: | When are stockholder proposals and nominees due for the 20232024 Annual Meeting of Stockholders? |
A:
| | If you want to submit a stockholder proposal or nominee for the 20232024 Annual Meeting of Stockholders, you must submit the proposal in writing to our Secretary at Panbela Therapeutics, Inc., 712 Vista Boulevard #305, Waconia, Minnesota 55387, so it is received by the relevant date set forth below under “Submission of Stockholder Proposals and Nominations.” |
Q:
| Q: | How is this proxy solicitation being conducted? |
A:
| A: | We will bear the entire cost of solicitation, including the preparation, printing and mailing of this proxy statement, the proxy card and any other solicitation materials or services we may use in connection with the SpecialAnnual Meeting or any adjournment thereof, as well as the preparation and posting of all proxy materials furnished to the stockholders in connection with the SpecialAnnual Meeting or any adjournment thereof. We may engage a proxy solicitorhave engaged Alliance Advisors LLC to assist in the solicitation of proxies and provide related advice and information support, for a services fee and the reimbursement of customary disbursements.disbursements, which are not expected to exceed $35,000 in total. |
Copies of any solicitation materials will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward the solicitation materials to such beneficial owners. In addition, we may reimburse such persons for their costs in forwarding the solicitation materials to such beneficial owners. The original solicitation of proxies may be supplemented by a solicitation, by telephone, email or other means, by our directors, officers or employees. No additional compensation will be paid to these individuals for any such services.
Q:
| Q: | Can I seek appraisal rights? |
A:
| CompanyA: | The stockholders of Panbela have no appraisal or dissenter’s rights in connection with any of the proposals described in this proxy statement. |
PROPOSAL 1:
ELECTION OF CLASS I DIRECTORS
Our business is overseen by a Board divided into three classes as nearly equal in number as possible, and directors typically are elected to a designated class for a term of three years. The following table sets forth certain information regarding the current members of our Board:
Name | | Age | | Position(s) |
Michael T. Cullen | | 77 | | Chair of the Board of Directors |
Jennifer K. Simpson | | 54 | | President and Chief Executive Officer |
Daniel J Donovan | | 58 | | Director |
Jeffrey S. Mathiesen | | 62 | | Vice Chair and Lead Independent Director |
Jeffrey E. Jacob | | 61 | | Director |
D. Robert Schemel | | 67 | | Director |
Arthur J. Fratamico | | 57 | | Director |
The Board has fixed at three the number of directors to be elected to the Board at the Annual Meeting. Based upon the recommendation of its Nominating and Governance Committee, the Board has nominated Daniel J Donovan, Jeffrey E. Jacob, and Jennifer K. Simpson to stand for election for a three-year term. Proxies solicited by the Board will, unless otherwise directed, be voted to elect the nominees as set forth below.
Nominees for Class I Directors – Terms expiring in 2023 (2026 if re-elected)
Each of the nominees named below is a current director of Panbela and has indicated a willingness to serve as a director for the term to which he is elected, but in case any nominee is not a candidate at the meeting for any reason, the proxy holders named in our form of proxy may vote for a substitute nominee in their discretion or our Board may recommend that the number of directors to be elected be reduced
Daniel J. Donovan has served as a director since June 2022. He had served as a director and Chief Business Officer, a non-employee position, of CPP from 2011 until immediately before the completion of its acquisition by Panbela in June 2022. He has served as chief executive officer of rareLife Solutions, Inc., a private company since he founded it in 2014. He served on the Board of Directors at Intensity Therapeutics since January of 2023 and is a member of the audit committee. Before rareLife, Mr. Donovan founded Envision Pharma in 2001, serving as managing director then president until 2011. Envision Pharma was acquired by United BioSource Corporation in 2008, where Mr. Donovan served as Senior Vice President Strategy and Market Development and was a member of the leadership team. Mr. Donovan began his career at Pfizer serving in a variety of positions of increasing responsibility, ranging from sales to market research and marketing in the U.S. and internationally, culminating in his position as Director and European Team Leader. During his time at Pfizer, he played a pivotal role in the commercialization of some of the pharmaceutical industry’s most successful product launches.
Jeffrey E. Jacob has served as a director since June 2022. He served as Chief Executive Officer of CPP from 2009 until immediately before the completion of its acquisition by Panbela in June 2022. He is also the principal of Tucson Pharma Ventures LLC, an Arizona-based biopharmaceutical consulting and investment firm, a role he’s held since 2004. In 2004, Mr. Jacob founded Systems Medicine Inc., a startup company applying systems biology, predictive pharmacogenomics, and clinical trial design innovations to the development of new cancer drugs and served as its chief executive officer until its sale in 2007, after which he served as a divisional chief executive officer until late 2008. Between 1987 and 2004, Mr. Jacob was employed by Research Corporation Technologies, most recently as Senior Vice President. During that time, he led the transformation of Research Corporation Technologies from a patent development and licensing organization to an early stage-technology incubation and venture deployment firm. He has served as a member of the board of directors of Research Corporation Technologies and currently serves as its chair. He is also a founding board member and previously served as the chief program officer of Critical Path Institute. Mr. Jacob holds a master’s degree in engineering and a master’s degree in technology and policy from the Massachusetts Institute of Technology and a bachelor’s degree in engineering from the University of Arizona.
Jennifer K. Simpson, Ph.D., MSN, CRNP has served as President and Chief Executive Officer and as a director of our Company since July 2020. Prior to joining the Company Dr. Simpson served as President and Chief Executive Officer and as a member of the board of directors of Delcath Systems, Inc. (Nasdaq: DCTH) from 2015 to June 2020. She had previously held various other leadership roles at Delcath since 2012. From 2011 to 2012, Dr. Simpson served as Vice President, Global Marketing, Oncology Brand Lead at ImClone Systems, Inc. (a wholly owned subsidiary of Eli Lilly and Company), where she was responsible for all product commercialization activities and launch preparation for one of the late-stage assets. From 2009 to 2011, Dr. Simpson served as Vice President, Product Champion and from 2008 to 2009 as the Associate Vice President, Product Champion for ImClone’s product Ramucirumab. From 2006 to 2008, Dr. Simpson served as Product Director, Oncology Therapeutics Marketing at Ortho Biotech (now Janssen Biotech), a Pennsylvania-based biotech company that focuses on innovative solutions in immunology, oncology and nephrology. Earlier in her career, Dr. Simpson spent over a decade as a hematology/oncology nurse practitioner and educator. Dr. Simpson has served on the board of directors and nominating and corporate governance committee of Eagle Pharmaceuticals, Inc. since August 2019 and on the board of Directors of CytRx Corporation since July 2021. Dr. Simpson earned a Ph.D. in Epidemiology from the University of Pittsburgh, an M.S. in Nursing from the University of Rochester, and a B.S. in Nursing from the State University of New York at Buffalo.
Class II Directors –Terms Expiring in 2024
Michael T. Cullen, M.D., M.B.A. has served as Chairman of the Board and a non-employee director of our Company since his retirement as an employee of the Company in May 2021. Dr. Cullen had served as Executive Chairman and as a director of our Company since its co-founding in November 2011. Dr. Cullen brings 33 years of pharmaceutical experience to our Company, including expertise in working with development-stage companies in planning, designing and advancing drug candidates from preclinical through clinical development. Dr. Cullen served as our President and Chief Executive Officer between October 2018 and July 2020. He previously served as our Chief Medical Officer and President from November 2011 to June 2015. Dr. Cullen provided due diligence consulting to the pharmaceutical industry from 2009 to 2011, after one year in transition consulting to Eisai Pharmaceuticals. He developed several oncology drugs as Chief Medical Officer for MGI Pharma Inc. from 2000 to 2008, and previously at G.D. Searle, SunPharm Corporation, and as Vice President for Clinical Consulting at IBAH Inc., the world’s fifth largest contract research organization, where he provided consulting services on business strategy, creating development plans, regulatory matters and designing clinical trials for several development stage companies in the pharmaceutical industry. Dr. Cullen was also a co-founder and Chief Executive Officer of IDD Medical, a pharmaceutical start-up company. Dr. Cullen joined 3M Pharmaceuticals in 1988 and contributed to the development of cardiovascular, pulmonary, rheumatology and immune-response modification drugs. Over the course of his career Dr. Cullen has been instrumental in obtaining the approval of ten drugs, including three since 2004: Aloxi®, Dacogen® and Lusedra®. Board-certified in Internal Medicine, Dr. Cullen practiced from 1977 to 1988 at Owatonna Clinic, Owatonna, MN, where he served as president. Dr. Cullen earned his MD and BS degrees from the University of Minnesota and his M.B.A. from the University of St. Thomas and completed his residency and Board certification in Internal Medicine through the University of North Carolina in Chapel Hill and Wilmington, NC.
D. Robert Schemel, has served as a director since September 2015. Mr. Schemel had previously served as a director of Sun BioPharma Research, Inc. since March 2012. Mr. Schemel has over 39 years’ experience in the agriculture industry. From 1973-2005, Mr. Schemel owned and operated a farming operation in Kandiyohi County, Minnesota, building a 5,000-acre operation producing corn, soybeans, and sugar beets. Mr. Schemel has extensive experience in serving on boards of directors. From 1992-1996 he served as a board member for ValAdCo and then from 1996-2003 he served as the Chairman of the Board for Phenix Biocomposites.
Class III Directors – Term Expiring in 2025
Arthur J. Fratamico has served as a director of our Company since December of 2019. He is a registered pharmacist with over 30 years of experience in the pharmaceutical industry and has been the Chief Executive Officer of Radiant Biotherapeutics, which is advancing a novel antibody platform that is focused on the development of Multabodies, which are multi-valent and multi-specific antibodies since May 2021. Prior to Radiant, Mr. Fratamico served as Chief Business Officer at Galera Therapeutics, Inc., a biopharmaceutical company dedicated to discovering and developing novel dismutase mimetics with the goal of transforming cancer radiotherapy, since January 2017. Prior to joining Galera, Mr. Fratamico served as Chief Business Officer of Vitae Pharmaceuticals, Inc., a Nasdaq-listed clinical-stage biotechnology company, from May 2014 until its sale to Allergan in December 2016. Prior to Vitae Pharmaceuticals, he held similar executive roles with a number of biotechnology companies leading their business development efforts, including facilitating the sales of Gemin X Pharmaceuticals, Inc. and MGI Pharma, Inc. In addition to being responsible for numerous licensing transactions and acquisitions, he also directed corporate strategy and managed external corporate communications. He also served in several senior marketing, product planning and new product development positions. Mr. Fratamico earned a bachelor’s degree in pharmacy from the Philadelphia College of Pharmacy and Science and an M.B.A. from Drexel University.
Jeffrey S. Mathiesen has served as a director of our Company since September 2015. Mr. Mathiesen also serves as a director and audit committee chairman of NeuroOne Medical Technologies Corporation, a publicly traded medical device company. Since June 2021, Mr. Mathiesen has served as Chief Financial Officer, Treasurer and Secretary of Helius Medical Technologies, Inc. (Nasdaq: HSDT), a publicly traded medical device company, developing noninvasive platform technologies focused on neurological wellness, and he served as director since May 2022 and previously served as director and Audit Committee Chair from June 2020 through June 2021. Additionally, Mr. Mathiesen previously served as a director and Audit Committee Chair of Healthcare Triangle, Inc. (Nasdaq: HCTI), a publicly traded provider of cloud and data transformation platform and solutions for healthcare and life sciences, from March 2022 to December 2022 and as a director and audit committee chairman of eNeura, Inc., a privately held medical technology company providing therapy for both acute treatment and prevention of migraine, from July 2018 to February 2020. Mr. Mathiesen has served as Advisor to the CEO of Teewinot Life Sciences, a privately held biopharmaceutical company focused on the biosynthetic production of pure pharmaceutical grade cannabinoids from October 2019 to December 2019, and as Chief Financial Officer from March 2019 to October 2019. In August 2020, Teewinot Life Sciences filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code. Previously he served as Chief Financial Officer of Gemphire Therapeutics Inc., a publicly traded biopharmaceutical company from September 2015 to September 2018. From August 2015 to September 2015, he was a consultant to Gemphire. He served as Chief Financial Officer of Sunshine Heart, Inc., a publicly traded medical device company, from March 2011 to January 2015. Mr. Mathiesen has held executive positions with publicly traded companies dating back to 1993, including vice president and chief financial officer positions. Mr. Mathiesen holds a B.S. in Accounting from the University of South Dakota and is also a Certified Public Accountant.
Required Vote and Board Recommendation
Directors are elected by a plurality of the votes cast by holders of Common Stock. Provided that a quorum is present, the nominees receiving the highest number of votes will be elected. Votes cannot be cast for more than three nominees.
The Board recommends that you vote “FOR” each of the nominees for Class I Directors.
CORPORATE GOVERNANCE
In accordance with applicable laws and our bylaws, the business and affairs of Panbela are governed under the direction of our Board. The system of governance practices we follow is set forth in the charters of each of the committees of our Board. We also have adopted a code of business conduct and ethics relating to the conduct of our business by our employees, officers and directors. The corporate governance documents of Panbela are reviewed periodically to ensure effective and efficient governance and compliance in a timely manner with all laws.
Corporate governance information, including the corporate governance guidelines, committee charters and the code of business conduct and ethics applicable to our directors, officers and employees is posted on our website at www.panbela.com under the “Investor Relations” page. We plan to post to our website at the address described above any future amendments or waivers to our code of ethics and business conduct.
Board Diversity Matrix (as of April 14, 2023)
The following chart summarizes certain self-identified personal characteristics of our directors, in accordance with Nasdaq Listing Rule 5605(f). Each term used in the table has the meaning given to it in the rule and related instructions.
Total Number of Directors | 7 |
| Female | Male | Did Not Disclose |
Part I: Gender Identity |
Directors | 1 | 5 | 1 |
Part II: Demographic Background |
White | 1 | 4 | |
Two or More Races or Ethnicities | | 1 | |
Did Not Disclose Demographic Background | 1 |
Board Leadership Structure
The positions of Chair of the Board of Directors and Chief Executive Officer have been held by separate individuals since Dr. Simpson joined Panbela as President and Chief Executive Officer in July 2020. We believe the separation of those roles has strengthened Panbela’s governance. In March 2020, our Board designated Mr. Mathiesen to serve as its Vice Chair and as lead independent director. As Vice Chair and lead independent director, Mr. Mathiesen is responsible for (a) presiding over all executive sessions of non-employee, independent directors, (b) presiding at meetings of the Board in the absence of, or upon the request of, the Chair, (c) approving the scheduling of Board meetings as well as the agenda and materials for each Board meeting and executive session of the Board’s non-employee, independent directors, (d) serving as a liaison and supplemental channel of communication between the non-employee, independent directors and the Chair, (e) meeting regularly with the Chair, (f) communicating with stockholders as appropriate, and (g) approving and coordinating the retention of advisors and consultants who report directly to the non-employee, independent members of the Board, except as otherwise required by applicable law or any applicable exchange rules or listing standards.
Anti-Hedging Policy
Each of our directors, officers, other employees and their designees are prohibited from (i) purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities and (ii) otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities. Notwithstanding the foregoing, portfolio diversification transactions and investments in broad-based index funds are generally permitted. The prohibition applies to securities granted to the covered persons as part of compensation for their service to Panbela plus any other of our securities held by them, whether directly or indirectly.
Nominating Process and Board Diversity
The Nominating and Governance Committee generally identifies director candidates based upon suggestions from current directors and senior management, recommendations by stockholders and advisors or use of a director search firm. Stockholders who wish to suggest qualified candidates may write to the attention of the Chair of our Nominating and Governance Committee at Panbela Therapeutics, Inc., 712 Vista Boulevard #305, Waconia, Minnesota 55387. All recommendations should state in detail the qualifications of such person for consideration by the committee and should be accompanied by an indication of the recommended person’s willingness to serve if elected. The committee will consider candidates recommended by stockholders in the same manner that it considers all director candidates.
Candidates for director are reviewed in the context of the current composition of our Board, our operations, and the long-term interests of our stockholders. We do not have a policy regarding the consideration of diversity in identifying director nominees.
Director Independence
Our Board has reviewed the materiality of any relationship that each of our directors has with us, either directly or indirectly. Based on this review, our Board has determined that Messrs. Donovan, Mathiesen, Schaffer, Schemel and Fratamico are “independent directors” as defined under the applicable rules of The Nasdaq Stock Market, LLC.
Communications with our Board of Directors
You may contact our Board or any director by mail addressed to the attention of our Board, or the specific director identified by name or title, at 712 Vista Boulevard #305, Waconia, Minnesota 55387. All communications will be submitted to our Board or the specified director on a periodic basis.
Board Meetings and Attendance
Our Board held seven meetings during 2022. Each director attended at least 75% of the meetings of our Board and the committees on which he or she served held during their service as a director or member of the committee in the year ended December 31, 2022.
Director Attendance at Annual Meeting
We do not have a formal policy regarding attendance of directors at our annual meeting of stockholders. All seven directors were present, in person or via teleconference, at our Annual Meeting of Stockholders held in 2022.
Committees of the Board of Directors
Our Board has established three standing committees: Audit, Compensation, and Nominating and Governance. The membership of each committee is as follows:
| | Committees | | |
Director | | Audit | | Compensation | | Nominating and Governance | | Independent Directors |
Michael T. Cullen | | – | | – | | – | | |
Jennifer K. Simpson | | – | | – | | – | | |
Daniel J. Donovan | | Member | | Member | | – | | ✔ |
Jeffrey S. Mathiesen | | Chair | | – | | Member | | ✔ |
Jeffrey E. Jacobs | | – | | – | | – | | |
D. Robert Schemel | | Member | | Chair | | – | | ✔ |
Arthur J. Fratamico | | – | | Member | | Member | | ✔ |
Audit Committee
The Audit Committee’s primary functions, among others, are to: (a) assist the Board in discharging its statutory and fiduciary responsibilities with regard to audits of the books and records of Panbela and the monitoring of its accounting and financial reporting practices; (b) carry on appropriate oversight to determine that Panbela and its subsidiaries have adequate administrative and internal accounting controls and that they are operating in accordance with prescribed procedures and codes of conduct; and (c) independently review Panbela’s financial information that is distributed to stockholders and the general public. The Audit Committee held four meetings during 2022. The Audit Committee has a charter, which is available on our website at www.panbela.com.
All of the members of the Audit Committee meet the requirements for financial literacy under the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”). Our Board has determined that Jeffrey S. Mathiesen is qualified to serve as an audit committee financial expert, as that term is defined under the applicable rules of the SEC. Each member of the Audit Committee satisfies the independence requirements of Rule 10A-3(b)(1) of the Securities Exchange Act.
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors, as amended, the Audit Committee assists the Board in fulfilling its oversight responsibility regarding the quality and integrity of the accounting, auditing, and financial reporting practices of Panbela.
In discharging its duties, the Audit Committee:
| (1) | reviewed and discussed the audited financial statements included in the Form 10-K for the fiscal year ended December 31, 2022, with management; |
| (2) | discussed with Cherry Bekaert LLP, Panbela’s independent registered public accounting firm, the matters required to be discussed by the applicable Public Company Accounting Oversight Board standards and the SEC; |
| (3) | received and reviewed the written disclosures and the letter from Cherry Bekaert LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Cherry Bekaert LLP’s communications with the audit committee concerning independence, and the Audit Committee discussed with Cherry Bekaert LLP their independence from management and Panbela; and |
| (4) | has considered whether the provision of services by Cherry Bekaert LLP not related to the audit of the financial statements referred to above and to the reviews of the interim financial statements included in Panbela’s quarterly reports on Form 10-Q are compatible with maintaining Cherry Bekaert LLP’s independence and has determined that they are compatible and do not impact Cherry Bekaert LLP’s independence. |
Based upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in Panbela’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, to be filed with the SEC.
| Audit Committee: |
| Jeffrey S. Mathiesen (Chair) |
| D. Robert Schemel |
| Daniel J. Donovan |
Compensation Committee
The Compensation Committee reviews and recommends to our Board all compensation for our executive officers and, on an annual basis, the goals and objectives relevant to the annual compensation of our executive officers in light of their respective performance evaluations. Our Compensation Committee is also responsible for administering our equity incentive plans, including our 2011 Equity Incentive Plan, as amended (the “2011 Plan”), and our 2016 Omnibus Incentive Plan, as amended (the “2016 Plan”), including approval of individual grants of stock options and other equity-based awards. The Compensation Committee held three meetings during 2022. The Compensation Committee has a charter, which is available on our website at www.panbela.com.
In 2020, the Compensation Committee engaged the services of 21-Group, an independent compensation consultant, to complete a review of the compensation of executive officers and non-employee directors and aggregate compensation data for those position among firms in comparable industries at comparable growth stages. This information was updated by 21-Group in early 2022. The Compensation Committee used the information from the resulting report and discussions with management to establish a compensation strategy and establish target compensation levels for officers and non-employee directors. Applicable positions were evaluated using comparable industry, revenue and job responsibilities. In making final decisions regarding compensation to be paid to our executive officers, the Compensation Committee considers a variety of factors, including the information provided by its compensation consultant, the achievement of Panbela’s performance objectives, the general performance of Panbela and each executive officer, and other relevant factors. Final deliberations and decisions by the Compensation Committee regarding the form and amount of compensation to be paid to our executive officers are made by the Compensation Committee, without the presence of any of our executive officers. The non-employee director compensation review provided a market-based review of director compensation levels, practices and forms using data from survey sources, peer group proxy data and comparable market practices and included all forms of compensation.
Nominating and Governance Committee
The Nominating and Governance Committee is primarily responsible for identifying individuals qualified to serve as members of our Board, recommending individuals to our Board for nomination as directors and committee membership, reviewing the compensation paid to our non-employee directors and recommending adjustments in director compensation, as necessary, in addition to overseeing the annual evaluation of our Board. The Nominating and Governance Committee held one meeting during 2022. The Nominating and Governance Committee has a charter that is available on our website at www.panbela.com.
Role of the Board in Risk Oversight
We face a number of risks, including regulatory, compliance, legal, competitive, financial (accounting, credit, interest rate, liquidity and tax), operational, acquisitions, integration, political, strategic and reputational risks. Our management is responsible for the day-to-day management of risks faced by us, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board ensures that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board oversees risks through the establishment of policies and procedures that are designed to guide daily operations in a manner consistent with applicable laws, regulations and risks acceptable to us. Our President and Chief Executive Officer, who is also a member of the Board, regularly discusses with the Board the strategies and risks facing our company. In particular, our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. Our Nominating and Governance Committee monitors the effectiveness of our corporate governance practices, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Certain Relationships and Related Party Transactions
The following is a summary of transactions since January 1, 2021 to which Panbela has been a party and in which the amount involved exceeded $89,000, which is approximately 1% of the average of our total assets as of the ends of our last two completed fiscal years, and in which any of our directors, executive officers, or beneficial owners of more than 10% of our capital stock had or will have a direct or indirect material interest, other than the compensation arrangements that are described under the heading “Executive Compensation: Employment Agreements” below.
Dr. Suzanne Gagnon was Panbela’s Chief Medical Officer until her retirement in July of 2021. Dr. Gagnon retired from our Board on June 15, 2022. We were party to an employment agreement with Dr. Gagnon in substantially the same form as the employment agreements with the Executives described below under the heading “Executive Compensation: Employment Agreements.” Dr. Gagnon was eligible to participate in the other compensation and benefit programs generally available to our employees. Her employment agreement also included customary confidentiality, non-competition and non-solicitation covenants. Under the employment agreement in effect through her voluntary retirement, Dr. Gagnon was entitled to receive an annualized base salary of $360,000. During 2021, Dr. Gagnon received compensation from Panbela of $197,700. In addition, in February 2021, based on the achievement of established metrics for 2020, Dr. Gagnon received a cash bonus of $117,000. No cash bonus was paid to Dr. Gagnon in 2022 as Panbela’s plan requires that employees be employed as of the end of the year to be eligible for a bonus.
In July 2021, after approval by our Audit Committee, we entered a consulting contract with Dr. Gagnon. The services to be provided by Dr. Gagnon include her professional support to complete the final study report for the Phase Ia/Ib clinical trial and additional support as a medical consultant for the clinical and administrative teams. The contract provides for a monthly retainer of $14,000 representing approximately eight hours per week for the first three months of the agreement; for the remainder of the term Dr. Gagnon shall be paid $400 per hour for all services provided. The contract will expire in July 2023 but may be terminated early by either party or extended if mutually agreed upon. For the years ended December 31, 2022, and December 31, 2021, Dr. Gagnon was paid approximately $71,800 and $62,100, respectively in professional consulting fees.
Limitation of Liability of Directors and Officers and Indemnification
Our certificate of incorporation limits the liability of the directors to the fullest extent permitted by Delaware law.
Our certificate of incorporation and bylaws provide that we will indemnify and advance expenses to the directors and officers to the fullest extent permitted by law or, if applicable, pursuant to indemnification agreements. They further provide that we may choose to indemnify other employees or agents of Panbela from time to time. The Delaware General Corporation Law, the certificate of incorporation and the bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to Panbela, regardless of whether the certificate of incorporation or bylaws, as applicable, permit indemnification. We maintain a directors’ and officers’ liability insurance policy.
At present there is no pending litigation or proceeding involving any of the current or former directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Related Person Transaction Approval Policy
Our Board has adopted a written policy regarding transactions with related persons, which we refer to as our related party transaction approval policy. Our related party transaction approval policy requires that any executive officer proposing to enter into a transaction with a “related party” generally must promptly disclose to our Audit Committee the proposed transaction and all material facts with respect thereto. In reviewing a transaction, our Audit Committee will consider all relevant facts and circumstances, including (1) the commercial reasonableness of the terms, (2) the benefit and perceived benefits, or lack thereof, to us, (3) the opportunity costs of alternate transactions and (4) the materiality and character of the related party’s interest, and the actual or apparent conflict of interest of the related party.
Our Audit Committee will not approve or ratify a related party transaction unless it determines that, upon consideration of all relevant information, the transaction is beneficial to Panbela, and stockholders and the terms of the transaction are fair to Panbela. No related party transaction will be consummated without the approval or ratification of our Audit Committee. It will be our policy that a director will recuse him- or herself from any vote relating to a proposed or actual related party transaction in which they have an interest. Under our related party transaction approval policy, a “related party” includes any of our directors, director nominees, executive officers, any beneficial owner of more than 5% of our Common Stock and any immediate family member of any of the foregoing. Related party transactions exempt from our policy include transactions available to all of our employees and stockholders on the same terms and transactions between us and the related party that, when aggregated with the amount of all other transactions between us and the related party or its affiliates, involved less than one percent of the average of Panbela’s total assets at yearend for the last two completed fiscal years.
DIRECTOR COMPENSATION
The following table sets forth certain information regarding compensation of the persons who served as our non-employee directors during the most recent completed fiscal year.
Director Compensation
The following table sets forth certain information regarding compensation of the persons who served as non-employee directors during the most recently completed fiscal year.
Name | | Fees Earned or Paid in Cash ($) | | Total ($) |
Michael T. Cullen(a) | | 72,500 | | 72,500 |
Daniel J. Donovan(b) | | 26,250 | | 26,250 |
Arthur J. Fratamico(c) | | 49,000 | | 49,000 |
Jeffrey E. Jacob(d) | | 20,000 | | 20,000 |
Jeffrey S. Mathiesen(e) | | 81,500 | | 81,500 |
Paul W. Schaffer(f) | | 30,000 | | 30,000 |
D. Robert Schemel(g) | | 57,500 | | 57,500 |
| (a) | Dr. Cullen held options to purchase an aggregate of 12,461 shares as of December 31, 2022 |
| (b) | Mr. Donovan held options to purchase an aggregate of 1,488 shares as of December 31, 2022. |
| (c) | Mr. Fratamico held options to purchase an aggregate of 1,441 shares as of December 31, 2022. |
| (d) | Mr. Jacob held options to purchase an aggregate of 8,662 shares as of December 31, 2022. |
| (e) | Mr. Mathiesen held options to purchase an aggregate of 2,016 shares as of December 31, 2022. |
| (f) | Mr. Schafer resigned from the Board on June 15, 2022, and holds options to purchase an aggregate of 2,016 shares as of December 31, 2022. |
| (g) | Mr. Schemel held options to purchase an aggregate of 2,016 shares as of December 31, 2022. |
During 2022, our Company reimbursed non-employee directors for out-of-pocket expenses incurred in connection with attending meetings of our Board and its committees.
In February 2022, the Compensation Committee approved the following cash compensation for non-employee directors. These annual amounts described below were effective January 1, 2022, and will be paid out monthly.
Annual Retainer (all amounts in $) | | General | | Audit Committee | | Nominating & Governance Committee | | Compensation Committee |
Nonemployee director | | 40,000 | | ‐ | | ‐ | | ‐ |
Chairman | | 32,500(a) | | - | | - | | - |
Lead independent director | | 22,500(a) | | ‐ | | ‐ | | ‐ |
Committee chair | | ‐ | | 15,000 | | 7,500 | | 10,000 |
Committee member | | ‐ | | 7,500 | | 4,000 | | 5,000 |
(a) | Paid in addition to nonemployee director retainer. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our outstanding Common Stock as of April 14, 2022, by (i) each of our named executive officers identified in the Summary Compensation Table below; (ii) each of our directors; (iii) all of our executive officers, directors and director nominees as a group; and (iv) each other beneficial owner of 5% or more of our outstanding Common Stock. Ownership percentages are based on 16,786,821 shares of Common Stock outstanding as of the close of business on the same date. Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge and subject to applicable community property laws, each of the holders of stock listed below has sole voting and investment power as to the stock owned unless otherwise noted. The table below includes the number of shares underlying rights to acquire Common Stock that are exercisable within 60 days from April 14, 2023. Except as otherwise noted below, the address for each director or officer listed in the table is c/o Panbela Therapeutics, Inc., 712 Vista Blvd #305, Waconia, Minnesota 55387.
Name | | Amount and Nature of Beneficial Ownership | | Percentage of Outstanding Shares |
Executive Officers and Directors | | | | |
Jennifer K. Simpson | | 20,443(a) | | * |
Susan Horvath | | 18,599(b) | | * |
Michael T. Cullen | | 42,619(c) | | * |
Daniel Donovan | | 17,708(d) | | * |
Arthur J. Fratamico | | 10,074(e) | | * |
Jeffrey Jacob | | 27,537(f) | | * |
Jeffrey S. Mathieson | | 10,604(g) | | * |
D. Robert Schemel | | 32,623(h) | | * |
All directors and current executive officers as a group (8 persons) | | 180,207(i) | | 1.1%
|
| | | | |
Lind Global Fund II LP 444 Madison Ave, Floor 41 New York, NY 10022 | | 975,000(j) | | 5.6% |
* | Less than 1% |
(a) | Includes 25 shares indirectly held; 6,966 shares subject to stock options; and 8,948 shares subject to warrants. |
(b) | Includes 4,436 shares subject to stock options and 9,384 shares subject to warrants. |
(c) | Includes 9,239 shares held by the Cullen Living Trust; 20,022 shares subject to stock options; and 7,937 shares subject to warrants. |
(d) | Includes 9,821 shares subject to stock options. Also includes 1,888 shares held by Westport Boys, LLC (“Westport”), 4,081 shares held by GDB Investments, LLP (“GDB”), and 129 shares subject to a warrant held by GDB Investments, LLP. Mr. Donovan is a managing member of Westport and a designated member of GDB. Mr. Donovan disclaims beneficial ownership of the securities owned by Westport and GDB except to the extent of his pecuniary interest therein. |
(e) | Includes 9,774 shares subject to stock options and 60 shares subject to warrants. |
(f) | Includes 1,237 shares subject to warrants, 16,995 shares subject to options and 444 shares held jointly with spouse. Also includes 1,359 shares and 129 shares subject to a warrant, in each case held by the Jeffrey and Deborah Jacob Family Revocable Trust. |
(g) | Includes 10,349 shares subject to options. |
(h) | Includes 12,066 shares held by spouse; 293 shares held by parent’s estate over which director holds both voting and depository power but disclaims beneficial ownership; 10,349 shares subject to stock options; and 7,500 shares subject to warrants. |
(i) | Includes 88,712 shares subject to stock options and 35,325 shares subject to warrants. |
(j) | Includes warrants to purchase up to 650,000 shares of Common Stock. The warrants include a provision limiting the holder’s ability to exercise the warrants if such exercise would cause the holder to beneficially own greater than 9.99% of the Company. Based on Schedule 13G filed with the SEC jointly by Lind Global Fund II LP, Lind Global Partners II LLC, and Jeff Easton on January 30, 2023, reflecting securities beneficially owned as of the same date. Mr. Easton, the managing member of Lind Global Partners II LLC, and Lind Global Partners II LLC, the general partner of Lind Global Fund II, LP, were reported to have sole voting and dispositive power with respect to the shares, which are held by Lind Global Fund II LP. |
EXECUTIVE COMPENSATION
Compensation of Named Executive Officers
The following disclosure focuses on our named executive officers. For fiscal 2022, our “named executive officers” consisted only of our executive officers, Dr. Simpson and Ms. Horvath.
Base salaries for each of our named executive officers were initially established based on arm’s-length negotiations with the applicable executive. The Compensation Committee of our Board reviews our executive officers’ salaries annually. When negotiating or reviewing base salaries, the Compensation Committee considers market competitiveness based on the experience of its members, the executive’s expected future contribution to our success and the relative salaries and responsibilities of our other executives.
All share and per share amounts of our common stock presented have been retroactively adjusted to reflect the one-for-forty reverse stock split.
Summary Compensation Table
The following table provides information regarding the compensation earned by our named executive officers for fiscal 2022 and 2021 (collectively referred to as the “Executives”):
Name and Principal Positions | | Year | | Salary ($) | | Option Awards(a) ($) | | Stock Awards ($) | | Nonequity Incentive Plan Compensation (b) ($) | | Total ($) |
Jennifer K. Simpson | | 2022 | | 506,000 | | – | | – | | 188,324 | | 694,324 |
President and Chief Executive Officer | | 2021 | | 476,609 | | 537,702 | | – | | 182,422 | | 1,196,733 |
Susan Horvath | | 2022 | | 320,000 | | – | | – | | 103,459 | | 423,459 |
Chief Financial Officer and Vice President of Finance | | 2021 | | 302,200 | | 155,258 | | – | | 99,620 | | 557,078 |
(a) | The values of option awards in this table represent the fair value of such awards granted during the fiscal year, as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. The assumptions used to determine the valuation of the awards are discussed in Note 9 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
(b) | Represents payments made under Panbela’s 2022 and 2021 Cash Incentive Programs as described further below. |
Cash Incentive Compensation
For 2022 and 2021, the Compensation Committee established performance objectives for each of the Executives based on clinical development and financial milestones. Each Executive’s potential payment upon satisfaction of the objectives was equal to the target set forth in the Executive’s employment agreement as described further below. In the first quarter of 2023, the Compensation Committee determined that Dr. Simpson’s bonus for 2022 was approved for payment at 74.44% of target and Ms. Horvath’s bonus was approved for payment at 80.83% of target. The 2022 incentive was paid in the first quarter of 2023. In the first quarter of 2022, the Compensation Committee determined that Dr. Simpson’s bonus for 2021 was approved for payment at 76.55% of target and Ms. Horvath’s bonus was approved for payment at 82.41% of target. The 2021 incentive was paid in the first quarter of 2022.
Outstanding Equity Awards as of December 31, 2022
| | | | Option Awards |
Name | | Grant Date | | Number of securities underlying unexercised options (#) exercisable | | Number of securities underlying unexercised options (#) un-exercisable | | Option exercise price ($) | | Option expiration Date |
Jennifer K. Simpson | | 7/17/2020 | | 3,975 | | 1,326(a) | | 399.60 | | 7/17/2030 |
| | 3/30/2021 | | 1,416 | | 2,834(b) | | 163.60 | | 3/30/2031 |
| | 9/13/2021 | | 159 | | 319(c) | | 90.40 | | 9/13/2031 |
| | | | | | | | | | |
Susan Horvath | | 4/17/2018 | | 1,000 | | – | | 230.00 | | 4/17/2028 |
| | 5/21/2019 | | 1,444 | | - | | 118.00 | | 5/21/2029 |
| | 9/24/2019 | | 625 | | – | | 200.00 | | 9/24/2029 |
| | 6/24/2020 | | 600 | | 200(d) | | 159.36 | | 6/24/2030 |
| | 3/30/2021 | | 333 | | 667(e) | | 163.60 | | 3/30/2031 |
| | 9/13/2021 | | 101 | | 202(f) | | 90.40 | | 9/13/2031 |
(a) | Scheduled to vest with respect to 1,326 shares on July 17, 2023. |
(b) | Scheduled to vest with respect to 1,417 on March 30th in each of 2023 and 2024. |
(c) | Scheduled to vest with respect to 159 on September 13, 2023 and 160 on September 13, 2024. |
(d) | Scheduled to vest with respect to 200 on June 24, 2023. |
(e) | Scheduled to vest with respect to 333 and 334 on March 30, 2023 and 2024, respectively. |
(f) | Scheduled to vest with respect to 101 on September 13th in each of 2023 and 2024. |
Employment Agreements
We are party to employment agreements with each of the Executives. In addition to the specific terms summarized below, each Executive is eligible to participate in the other compensation and benefit programs generally available to our employees, including our other executive officers, if any. Each such employment agreement also includes customary non-competition and non-solicitation covenants and a requirement that the Executive carry out a supplemental agreement regarding confidentiality and assignment of intellectual property.
In accordance with the employment agreements, the base salary of each Executive is reviewed annually by the Compensation Committee of our Board. Pursuant to the employment agreements, the committee may authorize an increase for the applicable year but may not reduce an Executive’s base salary below its then-current level other than with the Executive’s consent or pursuant to a general wage reduction in respect of substantially all of our executive officers. As discussed above, the Compensation Committee established performance criteria for 2022 and, based upon achievement of those objectives, cash payments were approved and paid in the first quarter of 2023.
President and Chief Executive Officer
Under her employment agreement, Dr. Simpson is eligible to receive an annual performance-based cash bonus with a target amount equal to no less than 50% of her base salary. Payment of the bonus amount is subject to achievement of metrics to be established by our Board and her continued employment with Panbela through the end of the applicable cash bonus period.
Vice President of Finance and Chief Financial Officer
Under her employment agreement, Ms. Horvath is eligible to receive an annual performance-based cash bonus with a target amount equal to no less than 40% of her base salary. Payment of the bonus amount is subject to achievement of metrics to be established by our Board and her continued employment with Panbela through the end of the applicable cash bonus period.
Potential Payments Upon Termination or Change-in-Control
Under their respective employment agreements, if any of the Executive’s employment is terminated by us for any reason other than for “cause” (as defined in the applicable employment agreement) or by him or her for “good reason” (as defined in the applicable employment agreement), then he or she will be eligible to receive an amount equal to their respective annualized salary plus an amount equal to a prorated portion of their cash bonus target, if any, for the year in which the termination occurred, in addition to other amounts accrued on or before the date of termination. If any such termination occurs within six months prior to or two years after a “change of control” (as defined in the applicable employment agreement), then the Executive would instead receive an amount equal to his or her respective annualized salary, plus an amount equal to his or her full cash bonus target for the year in which the termination occurred.
Pay Versus Performance Disclosure
Pay Versus Performance Table
The following table sets forth additional compensation information of our principal executive officer (“PEO”) and our other named executive officers (“NEOs”) (averaged) along with total shareholder return and net income for our 2022 and 2021 fiscal years.
Year | | Summary Compensation Table Total for PEO(1) | | | Compensation Actually Paid (“CAP”) to PEO(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs(3) | | | Average CAP to Non-PEO NEOs(4) | | | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(5) | | | Net (Loss) Income (in thousands) | |
| | | | | | | | | | | | | | | | | | | | | | | |
2022 | | $ | 694,324 | | | $ | 394,281 | | | $ | 423,459 | | | $ | 192,718 | | | $ | 4 | | | | 34,933 | |
2021 | | $ | 1,196,733 | | | $ | 539,923 | | | $ | 556,212 | | | $ | 164,599 | | | $ | 49 | | | | 10,135 | |
(1) | Jennifer K. Simpson, President and Chief Executive Officer of the Company, was our PEO for 2021 and 2022. |
(2) | The following tables show how CAP was determined for the PEO from the “total compensation” amount disclosed in the Summary Compensation Table: |
Year | | SCT Total For PEO | | | Equity Adjustment | | | Average CAP to PEO | |
| | (a) | | | (b) | | | (a) + (b) | |
2022 | | $ | 694,324 | | | $ | (300,043 | ) | | $ | 394,281 | |
2021 | | $ | 1,196,733 | | | $ | (656,810 | ) | | $ | 539,923 | |
The equity component of CAP for the PEO is further detailed in the supplemental tables below calculated in accordance with SEC methodology:
PEO Equity Adjustments for Fiscal Year ended December 31, 2022:
Equity Type | | Amount Reported under the “Option Awards” Column in the Summary Compensation Table for 2022 | | | Fair Value of Equity Awards Granted in 2022 at 12/31/2022 | | | Change in Value of Equity Awards Granted in Prior Years Outstanding and Unvested at 12/31/2022 | | | Fair Value at Vesting Date of Awards Granted and Vested During 2022 | | | Change in Fair Value Awards Granted Prior to 2022 that Vested in 2022 (Measured as Fair Value at Vesting Date Versus the End of the Prior Year) | | | Total Equity Adjustments | |
| | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (a)+(b)+(c)+(d)+(e) | |
Stock Options | | $ | - | | | $ | - | | | $ | (316,249 | ) | | - | | | $ | 16,207 | | | $ | (300,043 | ) |
No equity awards were made during the year ended December 31, 2022. |
PEO Equity Adjustments for Fiscal Year ended December 31, 2021:
Equity Type | | Amount Reported under the “Option Awards” Column in the Summary Compensation Table for 2021 | | | Fair Value of Equity Awards Granted in 2021 at 12/31/2021 | | | Change in Value of Equity Awards Granted in Prior Years Outstanding and Unvested at 12/31/2021 | | | Fair Value at Vesting Date of Awards Granted and Vested During 2021 | | | Change in Fair Value Awards Granted Prior to 2021 that Vested in 2021 (Measured as Fair Value at Vesting Date Versus the End of the Prior Year) | | | Total Equity Adjustments | |
| | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (a)+(b)+(c)+(d)+(e) | |
Stock Options | | $ | 537,702 | | | $ | 192,865 | | | $ | (273,214 | ) | | $ | - | | | $ | (38,758 | ) | | $ | (656,810 | ) |
(3) For fiscal year 2022, Susan Horvath, Vice President and Chief Financial Officer, was the only non-PEO NEO. For fiscal year 2021, Michael T. Cullen, former Executive Chairman of the Company, and Ms. Horvath were both non-PEO NEOs.
(4) The following is a reconciliation of average CAP to the NEOs other than the PEO from the “total compensation” amounts disclosed in the Summary Compensation Table:
Year | | SCT Total For NEO | | | Equity Adjustment | | | Average CAP to NEO | |
| | (a) | | | (b) | | | (a) + (b) | |
2022 | | $ | 423,459 | | | $ | (230,741 | ) | | $ | 192,718 | |
2021 | | $ | 556,212 | | | $ | (391,613 | ) | | $ | 164,599 | |
The equity component of average CAP to the NEOs other than the PEO is further detailed in the supplemental tables below calculated in accordance with SEC methodology:
Other NEO Equity Adjustments for Fiscal Year ended December 31, 2022:
Equity Type | | Amount Reported under the “Option Awards” Column in the Summary Compensation Table for 2022 | | | Fair Value of Equity Awards Granted in 2022 at 12/31/2022 | | | Change in Value of Equity Awards Granted in Prior Years' Outstanding and Unvested at 12/31/2022 | | | Fair Value at Vesting Date of Awards Granted and Vested During 2022 | | | Change in Fair Value Awards Granted Prior to 2022 that vested in 2022 (Measured as Fair Value at Vesting Date Versus the End of the Prior Year) | | | Total Equity Adjustments | |
| | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (a)+(b)+(c)+(d)+(e) | |
Stock Options | | $ | - | | | $ | - | | | $ | (213,786 | ) | | $ | - | | | $ | (16,955 | ) | | $ | (230,741 | ) |
No Equity awards were made during the year ended December 31, 2022.
Average Other NEO Equity Adjustments for Fiscal Year ended December 31, 2021:
Equity Type | | Amount Reported under the “Option Awards” Column in the Summary Compensation Table for 2021 | | | Fair Value of Equity Awards Granted in 2021 at 12/31/2021 | | | Change in Value of Equity Awards Granted in Prior Years' Outstanding and Unvested at 12/31/2021 | | | Fair Value at Vesting Date of Awards Granted and Vested During 2021 | | | Change in Fair Value Awards Granted Prior to 2021 that Vested in 2021 (Measured as Fair Value at Vesting Date Versus the End of the Prior Year) | | | Total Equity Adjustments | |
| | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (a)+(b)+(c)+(d)+(e) | |
Stock Options | | $ | 186,729 | | | $ | 59,637 | | | $ | (274,960 | ) | | $ | 3,452 | | | $ | 6,986 | | | $ | (391,613 | ) |
(5) Total shareholder return as calculated based on a fixed investment of one hundred dollars measured from the market close on December 31, 2020 (the last trading day of 2020) through and including the end of the fiscal year for each year reported in the table.
Relationship between Pay and Performance
The charts shown below present a graphical comparison of CAP to our PEO and the average CAP to our other NEOs set forth in the Pay versus Performance Table above, as compared against the following performance measures: our (1) total shareholder returns and (2) net (loss) income.
(1) Total shareholder return in the above chart reflects the cumulative return of $100 as if invested on December 31, 2020, including reinvestment of any dividends. |
TABLE
PROPOSAL2:
RATIFICATION OF CONTENTSSELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Cherry Bekaert LLP to serve as our independent registered public accounting firm for 2023, and the Board is asking stockholders to ratify that selection. Although current law, rules and regulations, as well as the Audit Committee charter, require our independent registered public accounting firm to be supervised by the Audit Committee and recommended to the Board for appointment and, if necessary, removal, our Board considers the selection of an independent registered public accounting firm to be a matter of stockholder concern and considers this proposal to be an opportunity for stockholders to provide direct feedback. Cherry Bekaert LLP has served as Panbela’s independent registered public accounting firm since 2015.
Notwithstanding its selection of Cherry Bekaert LLP, the Audit Committee, in its discretion, may appoint another independent registered public accounting firm at any time during the year if the committee believes that such a change would be in the best interests of Panbela and our stockholders. If the appointment of Cherry Bekaert LLP is not ratified by our stockholders, the Audit Committee may reconsider whether it should appoint another independent registered public accounting firm. Representatives of Cherry Bekaert LLP are not expected to be present at the Annual Meeting.
Required Vote and Board Recommendation
Provided a quorum is present at the Annual Meeting, this proposal will be approved if it receives the affirmative vote of a majority of the shares of Common Stock present in person or by proxy at the meeting and entitled to vote on the proposal.
The Board recommends that you vote “FOR” the ratification of the selection of Cherry Bekaert LLP as Panbela’s
independent registered public accounting firm for 2023.
Audit Fees
Cherry Bekaert LLP (PCAOB ID 00677) served as our independent registered public accounting firm for the years ended December 31, 2022 and 2021. The following table presents the aggregate fees for professional services provided by Cherry Bekaert LLP related to those fiscal years:
| | Year Ended | |
| | December 31, 2022 | | | December 31, 2021 | |
Audit Fees (a) | | $ | 124,800 | | | $ | 105,500 | |
Audit-Related Fees (b) | | | 5,575 | | | | 2,350 | |
Total | | $ | 130,375 | | | $ | 107,850 | |
(a) | Audit Fees consisted of fees for the audit of our annual consolidated financial statements, including audited consolidated financial statements presented in our annual report on Form 10-K, review of the consolidated financial statements presented in our quarterly reports on Form 10-Q and services that are normally provided by the independent registered public accountants in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and statutory audits required by non-U.S. jurisdiction. |
(b) | Audit Related Fees consisted of fees for assurances and related services that are reasonably related to the performance of the audit of the consolidated financial statements and are not reported under “Audit Fees”. |
Pre-approval Policy
The Audit Committee has established a policy governing our use of the services of our independent registered public accountants. Under the policy, the Audit Committee is required to pre-approve all audit and permitted non-audit services performed by our independent registered public accountants in order to ensure that the provision of such services does not impair the public accountants’ independence. In 2022 and 2021, all fees identified above that were billed by Cherry Bekaert LLP were approved by the Audit Committee in accordance with SEC requirements.
PROPOSAL 1:3:
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, and Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the following proposal, commonly known as a “Say on Pay” proposal, provides our stockholders with a separate nonbinding advisory vote to approve the compensation of our named executive officers. The named executive officers are the individuals identified in the Summary Compensation Table on page 16 of this proxy statement. Because your vote on this proposal is advisory, it will not be binding upon us or our Board. However, the Compensation Committee will review the results of the vote carefully and will take the results of its review into account when making future executive officer compensation decisions.
Based on the results of the last advisory vote to approve the frequency of future Say on Pay votes, which occurred at our annual meeting of stockholders held in 2019 and the recommendation of our Compensation Committee in light of the same, our Board determined that the Company would include a Say on Pay vote every two years. Accordingly, the compensation of our named executive officers was last subject to a Say on Pay vote at our annual meeting held in 2021, where it received substantial support and was approved, on an advisory basis, by approximately 96.2% of the votes cast “FOR” or “AGAINST”. The Compensation Committee and other members of our Board believe that this vote reflected our stockholders’ strong support of the compensation decisions made by the compensation committee for our named executive officers for 2021. We expect the Say on Pay vote will next occur at our annual meeting of stockholders to be held in 2025.
Compensation Philosophy and Compensation of our Named Executive Officers
The Company seeks to align the interests of its named executive officers with the interests of its stockholders. Therefore, the Company’s compensation programs are designed to reward the named executive officers for the achievement of strategic and operational goals and the achievement of increased stockholder value, while at the same time avoid encouraging of unnecessary or excessive risk-taking. The Board and its Compensation Committee believe that the Company’s compensation policies and procedures are competitive and focused on performance and are strongly aligned with the long-term interest of its stockholders.
Form of Resolution
This proposal, commonly known as a “Say-on-Pay” proposal, gives you the opportunity to express your views regarding the compensation of our named executive officers by voting to approve or not approve such compensation as described in this proxy statement. This vote is advisory and will not be binding upon the Board or its Compensation Committee. However, both will take into account the outcome of the vote when considering future executive compensation arrangements. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of the named executive officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission.
Stockholders are being asked to vote “FOR” or “AGAINST” the following resolution at the Annual Meeting:
RESOLVED, that the compensation paid to the Company’s executives named in the Summary Compensation Table, as disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, is hereby APPROVED.
Required Vote and Board Recommendation
Provided a quorum is present at the Annual Meeting, this proposal will be approved if it receives the affirmative vote of a majority of the shares of Common Stock present in person or by proxy at the meeting and entitled to vote on the proposal.
The Board recommends that you vote “FOR” this Proposal.
PROPOSAL4:
APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL
We are asking stockholders to approve a proposed amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our outstanding Common Stock at a reverse stock split ratio of 1-for-40 (the “Reverse Stock Split”).ranging from any whole number between 1-for-5 and 1-for-100, subject to and as determined by our Board. Our Board of Directors has unanimously approved and declared advisable the amendment relating to the Reverse Stock Split and recommends that our stockholders approve the amendment. The language of the amended and restated Section 4.1 of Article Four of our Amended and Restated Certificate of Incorporation which would be contained in an amendment to effect the Reverse Stock Split is attached to this proxy statement as AppendixA.
The primary reason we are seeking stockholder approval of the Reverse Stock Split is to attempt to increase the per share market price of our Common Stock to exceed the minimum per share bid price requirements for continued listing on The Nasdaq Capital Market. We believe that if the Reverse Stock Split proposal is not approved by our stockholders, it is likely that our Common Stock will be delisted from The Nasdaq Capital Market.
If our stockholders approve this proposal, then we will cause an amendment to the Amended and Restated Certificate of Incorporation to be filed with the Delaware Secretary of State and effect the Reverse Stock Split if and only if our Board of Directors determines that the Reverse Stock Split would be in the best interests of the Company and its stockholders. As filed, the amendment would state the number of outstanding shares to be combined into one share of our Common Stock, at the ratio approved by our Board within the range approved by our stockholders. Following the stockholders’ approval of this Proposal 1,4, no further action on the part of the stockholders will be required to either implement or abandon the Reverse Stock Split and the Board of Directors may effect and implement the Reverse Stock Split at any time prior to the 20232024 annual meeting of stockholders (the “2024 Annual Meeting.
Meeting”).Our Board of Directors also may determine, in its sole discretion, not to effect the Reverse Stock Split and not to file the related amendment. Although we presently intend to effect the Reverse Stock Split to regain compliance with The Nasdaq Capital Market’s minimum bid price requirement, our Board has reserved the right, notwithstanding our stockholders’ approval of the proposed amendment of the Amended and Restated Certificate of Incorporation, to abandon the proposed amendment at any time (without further action by our stockholders) before the amendment of the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. Our Board may consider a variety of factors in determining whether or not to proceed with the proposed amendment of the Amended and Restated Certificate of Incorporation, including overall trends in the stock market, recent changes and anticipated trends in the per-share market price of our Common Stock, rule changes and/or guidance by Nasdaq, business developments, and our actual and projected stock price performance. If the closing bid price of our Common Stock on The Nasdaq Capital Market reaches a minimum of $1.00 per share and remains at or above that level for a minimum of ten consecutive trading days (or longer, if required by the Nasdaq Listing Qualifications Panel), as discussed more fully below, our Board may decide to abandon the filing of the proposed amendment of the Amended and Restated Certificate of Incorporation.
As of October 14, 2022,April 19, 2023, there were 27,876,962 shares of our Common Stock issued and outstanding. Based on such number of shares of our Common Stock issued and outstanding, immediately following the effectiveness of the Reverse Stock Split, we will have, approximately 696,924depending on the Reverse Stock Split ratio selected by our Board, issued and outstanding shares of stock as described under the caption “Effects of the Reverse Stock Split – Effect on Shares of Common Stock.”
The Reverse Stock Split will not change the number of authorized shares of our Common Stock or the relative voting power of such holders of our outstanding Common Stock. The relative number of authorized but unissued shares of our Common Stock will materially increase and will be available for issuance by the Company. The Reverse Stock Split, if effected, would affect all holders of our Common Stock uniformly.
No fractional shares of our Common Stock would be issued as a result of the Reverse Stock Split. Instead, any stockholders who would have been entitled to receive fractional shares as a result of the Reverse Stock Split would receive cash payments in lieu of such fractional shares. Each holder of our Common Stock would hold the same percentage of the outstanding Common Stock immediately following the Reverse Stock Split as that stockholder did immediately prior to the Reverse Stock Split, except to the extent that the Reverse Stock Split results in stockholders receiving cash in lieu of fractional shares. The par value of our Common Stock would continue to be $0.001 per share (see “Effects of the Reverse Stock Split – Reduction in Stated Capital”).