By Order of the Board of Directors,
Monmouth Junction, New JerseyDated: April 25, 2018
FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 2, 2020
registered public accounting firm for the fiscal year ending December 31, 2020.
election of the nominees for director will be excluded entirely fromdeemed present at the voteAnnual Meeting for purposes of determining a quorum and will have nothe
Stockholders may vote “FOR”, “AGAINST”, or “ABSTAIN
If you request a printed copy of the proxy materials by mail, mark, date, sign, and return the enclosed proxy card to Broadridge Representatives of Broadridge Financial Solutions, Inc., and our inspectors of election will tabulate and certify the votes. Alternatively, a representative of our transfer agent may serve as inspector of election.
Attendance at
Name and Address of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Percentage Beneficially Owned | | ||||||
The Robert F. Shipley Family Trust P.O. Box 894 Nogales, Arizona 85628 | | | 2,853,267(1) | | | | | | 7.9% | | | ||
BlackRock, Inc. 55 East 52nd St. New York, NY 10055 | | | | | 2,059,602(2) | | | | | | 5.7% | | |
Name of Beneficial Owner(1) | | | Number of Shares | | | Percentage of Common Stock(1) | | ||||||
Al W. Kraus | | | | | 221,621(2) | | | | | | * | | |
Phillip P. Chan, MD, PhD | | | | | 804,298(3) | | | | | | 2.2% | | |
Vincent J. Capponi, MS | | | | | 509,058(4) | | | | | | 1.4% | | |
Kathleen P. Bloch, CPA | | | | | 312,847(5) | | | | | | * | | |
Michael G. Bator | | | | | 69,450(6) | | | | | | * | | |
Edward R. Jones, MD, MBA | | | | | 90,450(7) | | | | | | * | | |
Alan D. Sobel, CPA | | | | | 64,950(8) | | | | | | * | | |
All current directors, director nominees and executive officers as a group (7 persons) | | | | | 2,072,674 | | | | | | 5.7% | | |
Name of Beneficial Owner(1) | Number of Shares | Percentage of Common Stock(1) | ||||||
Al W. Kraus | 214,121 | (2) | * | |||||
Phillip P. Chan, MD, PhD | 670,914 | (3) | 2.2 | % | ||||
Vincent J. Capponi, MS | 562,421 | (4) | 2.2 | % | ||||
Kathleen P. Bloch, CPA | 236,102 | (5) | * | |||||
Eric R. Mortensen, MD, PhD | 43,250 | (6) | * | |||||
Michael G. Bator | 50,700 | (7) | * | |||||
Edward R. Jones, MD, MBA | 75,700 | (8) | * | |||||
Alan D. Sobel, CPA | 46,200 | (9) | * | |||||
All current directors, director nominees and executive officers as a group (8 persons) | 1,899,408 | 6.9 | % |
2021.
Name | | | Age | | | Director Since | | | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |
Phillip P. Chan, MD, PhD | | | 49 | | | 2008 | | | Dr. Chan became a director of CytoSorbents in 2008, and since January 2009 has served as our President and Chief Executive Officer. Prior to joining CytoSorbents, Dr. Chan led healthcare and life science investments for the NJTC Venture Fund from 2003 to 2008, most recently as a Partner. In 2006, Dr. Chan co-founded Andrew Technologies, a medical device company commercializing its U.S. Food and Drug Administration, or FDA -approved HydraSolveTM lipoplasty system for plastic surgery. He is an Internal Medicine physician with a strong background in clinical medicine and research. Dr. Chan received his MD and PhD from the Yale University School of Medicine, completed his Internal Medicine residency at the Beth Israel Deaconess Medical Center at Harvard Medical School, and received his Board certification. He also holds a BS in cell and molecular biology from Cornell University. | |
Al W. Kraus(1)(2)(3) | | | 75 | | | 2003 | | | Mr. Kraus has been a director of CytoSorbents since 2003, and has been Chairman of our Board since 2009. From 2003 through 2008, Mr. Kraus also served as our President and Chief Executive Officer. Prior to joining CytoSorbents, from 2001 to 2003, Mr. Kraus served as President and Chief Executive Officer of NovoVascular Inc., an early stage company developing coated stent technology. From 1996 to 1998, Mr. Kraus served as President and Chief Executive Officer of Althin Healthcare and from 1998 to 2000, served as President and Chief Executive Officer of Althin Medical Inc., a manufacturer of products for the treatment of end stage renal disease. While Chief Executive Officer of Althin Healthcare, he provided strategic direction and management for operations throughout the Americas. From 1985 through 1989, Mr. Kraus served as Chief Executive Officer of Victor Technologies, formerly known as Micronics, a computer company, and from 1979 to 1985, he was U.S. Subsidiary Manager and Chief Operating Officer of Gambro Inc., a leading medical technology and healthcare company. Mr. Kraus was the Chief Operating Officer of Gambro when it went public in the United States in an offering led by Morgan Stanley. Mr. Kraus holds a BS in Business Administration from St. Joseph’s University. | |
Name | | | Age | | | Director Since | | | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |
Edward R. Jones, MD, MBA(1)(3) | | | 71 | | | 2007 | | | Dr. Jones has been a director of the Company since April 2007. Dr. Jones has been an attending physician at Albert Einstein Medical Center and Chestnut Hill Hospital as well as Clinical Professor of Medicine at Temple University Hospital since 1985. Dr. Jones has published or contributed to the publishing of 30 chapters, articles, and abstracts on the subject of treating kidney-related illnesses. He has been a member of the Renal Physicians Association, the Philadelphia County Medical Society for 17 years, and is a past board member of the National Kidney Foundation of the Delaware Valley. From March 2009 to March 2011, Dr. Jones is past-President of, and past Counselor at, the Renal Physicians Association. Dr. Jones is past Chairman of Kidney Care Partners, and he is past President of Delaware Valley Nephrology and Hypertension, Associates. He retired from that practice in June 30, 2018. Dr. Jones graduated from The Medical University of South Carolina and completed his Internal Medicine Residency at Temple University Hospital (TUH). He later served as Chief Medical Resident at Temple University Hospital. He was a fellow in the Renal and Electrolyte Section of the University of Pennsylvania after which he joined the faculty of Temple where he ran the renal physiology laboratory while teaching and providing patient care. Dr. Jones received his MBA in healthcare management from St Joseph’s University in Philadelphia. | |
Name | | | Age | | | Director Since | | | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |
Michael G. Bator(2) | | | 56 | | | 2015 | | | Mr. Bator has been a director of CytoSorbents since July 2015. Mr. Bator is a founder and partner of Quartz Advisory Group, LLC, a capital markets investment bank. Mr. Bator is the founder and partner of Certus Advisory, a consulting firm he founded in February 2015. From April 2015 to December 2016, Mr. Bator was the Chief Financial Officer of Trek Therapeutics, a development stage pharmaceutical company. From January 2001 until February 2015, Mr. Bator held several positions with Jennison Associates, a United States mutual and pension fund management company, where he was most recently Managing Director, Healthcare Research. Prior to that time, he worked in management consulting with Cambridge Pharma Consultancy, Lexington Strategy, and The Boston Consulting Group. Since March 2015, Mr. Bator has served on the board of directors of 3DBio Corporation, a private company focused on bioprinted cartilage implants used in reconstructive and orthopedic surgery. Since June 2017, Mr. Bator has served on the board of directors of Hippo Technologies, LLC., a technology company focused on helping consumers manage their prescriptions. Mr. Bator received his MBA in Finance from Wharton Business School at the University of Pennsylvania, and his BA from Princeton University. | |
Alan D. Sobel, CPA(1)(3) | | | 59 | | | 2017 | | | Mr. Sobel has been a director of CytoSorbents since 2014. Since 1996, Mr. Sobel has served as the Managing Member of Sobel & Co., LLC, a full-service accounting, auditing, taxation, and business consulting firm. He has provided corporate advisory and consulting services, including mergers and acquisitions, for clients in the real estate, manufacturing, pharmaceutical, and distribution businesses, among others. Mr. Sobel is a Certified Public Accountant, and has served in various leadership roles including Chairman of the Audit Committee of the New Jersey Society of Certified Public Accountants. Mr. Sobel received his BS in accounting from Bentley College and his MS in taxation from Fairleigh Dickinson University. | |
Name | Age | Director Since | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |||
Nominees for Election – Terms Expiring in 2017 | ||||||
Phillip P. Chan, MD, PhD | 47 | 2008 | Dr. Chan became a director of CytoSorbents in 2008, and since January 2009 has served as our President and Chief Executive Officer. Prior to joining CytoSorbents, Dr. Chan led healthcare and life science investments for the NJTC Venture Fund from 2003 to 2008, most recently as a Partner. In 2006, Dr. Chan co-founded Andrew Technologies, a medical device company commercializing its U.S. Food and Drug Administration, or FDA, -approved HydraSolveTM lipoplasty system for plastic surgery. He is an Internal Medicine physician with a strong background in clinical medicine and research. Dr. Chan received his MD and PhD from the Yale University School of Medicine, completed his Internal Medicine residency at the Beth Israel Deaconess Medical Center at Harvard Medical School, and received his Board certification. He also holds a BS in cell and molecular biology from Cornell University. | |||
Al W. Kraus(1)(2)(3) | 73 | 2003 | Mr. Kraus has been a director of CytoSorbents since 2003, and has been Chairman of our Board since 2009. From 2003 through 2008, Mr. Kraus also served as the our President and Chief Executive Officer. Prior to joining CytoSorbents, from 2001 to 2003, Mr. Kraus served as President and Chief Executive Officer of NovoVascular Inc., an early stage company developing coated stent technology. From 1996 to 1998, Mr. Kraus served as President and Chief Executive Officer of Althin Healthcare and from 1998 to 2000, served as President and Chief Executive Officer of Althin Medical Inc., a manufacturer of products for the treatment of end stage renal disease. While Chief Executive Officer of Althin Healthcare, he provided strategic direction and management for operations throughout the Americas. From 1985 through 1989, Mr. Kraus served as Chief Executive Officer of Victor Technologies, formerly known as Micronics, a computer company, and from 1979 to 1985, he was U.S. Subsidiary Manager and Chief Operating Officer of Gambro Inc., a leading medical technology and healthcare company. Mr. Kraus was the Chief Operating Officer of Gambro when it went public in the United States in an offering led by Morgan Stanley. Mr. Kraus holds a BS in Business Administration from St. Joseph’s University. |
Name | Age | Director Since | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |||
Edward R. Jones, MD, MBA(1)(3) | 69 | 2007 | Dr. Jones has been a director of CytoSorbents since April 2007. Dr. Jones has been an attending physician at Albert Einstein Medical Center and Chestnut Hill Hospital as well as Clinical Professor of Medicine at Temple University Hospital since 1985. Dr. Jones has published or contributed to the publishing of 30 chapters, articles, and abstracts on the subject of treating kidney-related illnesses. He has been a member of the Renal Physicians Association, the Philadelphia County Medical Society for 17 years, and is a past board member of the National Kidney Foundation of the Delaware Valley. From March 2009 to March 2011, Dr. Jones was President of, and currently serves as a Counselor at, the Renal Physicians Association. Since January 2014, Dr. Jones has been Chairman of Kidney Care Partners, and he is the President and Managing Director of Delaware Valley Nephrology and Hypertension, Associates. Dr. Jones graduated from The Medical University of South Carolina and completed his Internal Medicine Residency at Temple University Hospital (TUH). He later served as Chief Medical Resident at Temple University Hospital. He was a fellow in the Renal and Electrolyte Section of the University of Pennsylvania after which he joined the faculty of Temple where he ran the renal physiology laboratory while teaching and providing patient care. Dr. Jones received his MBA in healthcare management from St Joseph’s University in Philadelphia. |
Name | Age | Director Since | Principal Occupation, Other Business Experience During Past Five Years and Other Directorships | |||
Michael G. Bator(2) | 54 | 2015 | Mr. Bator has been a director of CytoSorbents since July 2015. Mr. Bator is the founder and partner of Certus Advisory, a consulting firm he founded in February 2015. From April 2015 to December 2016, Mr. Bator was the Chief Financial Officer of Trek Therapeutics, a development stage pharmaceutical company. From January 2001 until February 2015, Mr. Bator held several positions with Jennison Associates, a United States mutual and pension fund management company, where he was most recently Managing Director, Healthcare Research. Prior to that time, he worked in management consulting with Cambridge Pharma Consultancy, Lexington Strategy, and The Boston Consulting Group. Since March 2015, Mr. Bator has served on the board of directors of 3DBio Corporation, a private company focused on bioprinted cartilage implants used in reconstructive and orthopedic surgery. Mr. Bator received his MBA in Finance from Wharton Business School at the University of Pennsylvania, and his BA from Princeton University. | |||
Alan D. Sobel, CPA(1)(3) | 57 | 2014 | Mr. Sobel has been a director of CytoSorbents since 2014. Since 1996, Mr. Sobel has served as the Managing Member of Sobel & Co., LLC, a full-service accounting, auditing, taxation, and business consulting firm. He has provided corporate advisory and consulting services, including mergers and acquisitions, for clients in the real estate, manufacturing, pharmaceutical, and distribution businesses, among others. Mr. Sobel is a Certified Public Accountant, and has served in various leadership roles including Chairman of the Audit Committee of the New Jersey Society of Certified Public Accountants. Mr. Sobel received his BS in accounting from Bentley College and his MS in taxation from Fairleigh Dickinson University. |
the United States, as well as experience serving on other companies’ boards, which provides an understanding of different business processes, challenges and strategies facing boards and other companies. Collectively, our directors have experience as chief executive officers, presidents, or general partners of medical-device companies, physician or other professional organizations, and investment companies which brings unique perspectives to the Board. Furthermore, our directors also have other experience that makes them valuable members, such as prior experience with financing transactions or mergers and acquisitions that provides insight into issues faced by companies.
President of Delaware Valley Nephrology and Hypertension, Associates.
The
The Audit Committee was established in accordance with section 3(a)(58)(A) of the Exchange Act. The Audit Committee oversees our financial reporting process and system of internal control over financial reporting, and selects and oversees the performance of, and approves in advance the services provided by, our independent auditors. The Audit Committee provides an open avenue of communication among our independent auditors, financial and senior management and the Board. The Audit Committee meets regularly with our independent auditors without management present, and from time to time with management in separate private sessions, to discuss any matters that the Committee or these individuals believe should be discussed privately with the Audit Committee, including any significant issues or disagreements that may arise concerning our accounting practices or financial statements. In addition, the Audit Committee assists the Board in its oversight role by receiving periodic reports regarding our risk and control environment.
The Nominating and Corporate Governance Committee assists the Board in fulfilling its responsibilities regarding the oversight of the composition of the Board and other corporate governance matters. Among its other duties, the Nominating and Corporate Governance Committee evaluates nominees and reviews the qualifications of individuals eligible to stand for election and reelection as directors and makes recommendations to the Board on this matter; oversees compliance with our Code of Business Conduct and Ethics; reviews and approves related party transactions; recommends and advises the Board on certain other corporate governance matters; and oversees the Board’s performance evaluation process.
The Compensation Committee held twosix meetings during 2017.2019. A copy of the Compensation Committee’s charter is posted on our website at
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($) | | | Option Awards ($)(1) | | | Total ($) | | ||||||||||||
Michael G. Bator | | | | $ | 41,000 | | | | | | — | | | | | | 109,950(2) | | | | | $ | 150,950 | | |
Edward R. Jones, MD, MBA | | | | $ | 47,000 | | | | | | — | | | | | | 109,950(3) | | | | | $ | 156,950 | | |
Al W. Kraus | | | | $ | 92,000 | | | | | | — | | | | | | 219,000(4) | | | | | $ | 311,000 | | |
Alan D. Sobel, CPA | | | | $ | 59,000 | | | | | | — | | | | | | 109,000(5) | | | | | $ | 168,000 | | |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Total ($) | ||||||||||||
Michael G. Bator | $ | 19,000 | — | 47,368 | (3) | $ | 66,368 | |||||||||
Edward R. Jones, MD, MBA | $ | 25,000 | — | 47,368 | (4) | $ | 72,368 | |||||||||
Al W. Kraus | $ | 42,000 | — | 94,736 | (5) | $ | 136,736 | |||||||||
Alan D. Sobel, CPA | $ | 27,750 | — | 47,368 | (6) | $ | 75,118 |
In early 2017,On February 28, 2020 the Board approved a new fee schedule for its members which became effective January 1, 2017. Pursuant to the revised fee schedule, the Chairman of the Board is entitled to an annual retainer of $33,000 and each non-employee Board member is entitled to an annual retainer of $15,000. Each member of the Audit Committee and Nominating and Corporate Governance Committee is entitled to an additional $6,000 per year, and each member of the Compensation Committee is entitled to an additional $5,000 per year. The Chairmen of the Audit Committee and the Nominating and Corporate Governance Committee are entitled to an additional $14,000 per year. In addition, each of our directors is eligible to receive reimbursement for actual out-of-pocket expenses incurred by them in connection with their attendance at meetings of the Board and Board committees and an annual equity grant.
In February 2017, the Chairman of the Board received an optiongranted options to purchase 27,50030,000, 15,000, 15,000 and 15,000 shares of our Common Stock,commons stock at an exercise price of $6.03 to each Mr. Kraus, Mr. Bator, Dr. Jones and eachMr. Sobel,
Below is information about Phillip P. Chan, Vincent J. Capponi, Kathleen P. Bloch Robert H. Bartlett, MD and Eric R. Mortensen, our named executive officers. This information includes each officer’s age, his or her position with CytoSorbents, the length of time he or she has held each position and his or her business experience for at least the past five years. Our Board elects our executive officers annually, and executive officers serve until they resign or the Board terminates their position. There are no family relationships among any of our directors, nominee for director and executive officers.
Name | | | Age | | | Position | |
Phillip P. Chan, MD, PhD | | 49 | | | President and Chief Executive Officer | | |
Vincent J. Capponi, MS | | 62 | | | Chief Operating Officer | | |
Kathleen P. Bloch, CPA, MBA | | 65 | | | Chief Financial Officer | ||
Eric R. Mortensen, MD, PhD. Dr. Mortensen has more than 20 years of management and clinical trial experience in the pharmaceutic industry. He began his employment as Chief Medical Officer of CytoSorbents effective June 1, 2017. Prior to that, for two years, Dr. Mortensen served as the Vice President & Therapeutic Area Clinical Head for Inflammation and Immunology at Pfizer, leading Pfizer’s global, late-stage development organization for programs in inflammatory diseases including studies for Enbrel® and Xeljanz®. Prior to that, Dr. Mortensen held various other clinical managerial positions at Pfizer from 2008 through 2014. Prior to that, Dr. Mortensen spent five years at Merck Research Laboratories, where he was responsible for registration studies of the COX2 inhibitors rofecoxib and etoricoxib. Dr. Mortensen received his medical
degree from the Harvard University and Massachusetts Institute of Technology Division of Health Sciences and Technology, and his doctorate in biophysics from the Graduate School of Arts and Sciences at Harvard University. Dr. Mortensen completed his residency training in internal medicine at Massachusetts General Hospital and a fellowship in gastroenterology at the University of Michigan Medical Center, Ann Arbor.
Robert H. Bartlett, MD. Dr. Bartlett served as our Chief Medical Officer from January 2009 to June 2017. He is Professor Emeritus of Surgery at the University of Michigan Health System. Prior to becoming Professor Emeritus in 2005, Dr. Bartlett was Director of the Surgical Intensive Care Unit, Chief of the Trauma/Clinical Care Division and Director of the Extracorporeal Life Support Program at the University of Michigan Medical Center from 1980 to -2005. Dr. Bartlett was the pioneer in the development of the extracorporeal membrane oxygenation machine (ECMO), used to oxygenate blood in critically ill patients worldwide. He received his MD from the University of Michigan Medical School, cum laude. He completed his general surgery residency at Peter Bent Brigham Hospital in Boston, and was Chief resident in thoracic surgery. Dr. Bartlett was also a NIH Trainee in Academic Surgery at Harvard Medical School, and was previously faculty at the University of California, Irvine. Dr. Bartlett is the recipient of 26 separate research grants, 14 from the National Institute of Health, including an RO1 grant for the development of a totally artificial lung. He has also received numerous national and international awards for his contributions to critical care medicine.
2019.
Our executive compensation program is designed to achieve the following principal objectives:
2019
The equity compensation awarded to our named executive officers in 20172019 is discussed below under “Executive Compensation Program Components — Equity Compensation.”
2019.
Named Executive Officer | | | 2019 Base Salary | | | 2018 Base Salary | | | % Increase from 2018 to 2019 | | |||||||||
Phillip P. Chan, MD, PhD . . . . . . . . . . . . . . . . . . . . . . . . | | | | $ | 438,000 | | | | | $ | 400,000 | | | | | | 9.5% | | |
Vincent J. Capponi, MS . . . . . . . . . . . . . . . . . . . . . . . . . | | | | $ | 363,540 | | | | | $ | 332,000 | | | | | | 9.5% | | |
Kathleen P. Bloch, CPA . . . . . . . . . . . . . . . . . . . . . . . . . | | | | $ | 323,025 | | | | | $ | 295,000 | | | | | | 9.5% | | |
Named Executive Officer | 2017 Base Salary | 2016 Base Salary | % Increase from 2016 to 2017 | |||||||||
Phillip P. Chan, MD, PhD | $ | 378,000 | $ | 350,000 | 8.0 | % | ||||||
Vincent J. Capponi, MS | $ | 314,000 | $ | 291,000 | 7.9 | % | ||||||
Kathleen P. Bloch, CPA | $ | 275,000 | $ | 255,000 | 7.8 | % | ||||||
Eric R. Mortensen, MD, PhD | $ | 330,000 | $ | — | — | % | ||||||
Robert H. Bartlett, MD | $ | — | $ | — | — | % |
Dr. Mortensen joinedOn February 28, 2020, the Company as Chief Medical Officer on June 1, 2017. In 2017, he was paid $186,576 of hisCompensation Committee approved increases in the annual base salary based upon actual months employed by the Company.
for fiscal year 2020 to $455,520, $386,770, and $349,460 for each of Dr. Bartlett served as our Chief Medical Officer until his resignation on June 1, 2017. Dr. Bartlett was paid consulting fees for his services to the Company. In 2017, his consulting compensation was $54,000, which was the same as his 2016 consulting compensation. Dr. Bartlett continues to advise the Company on various clinicalChan, Mr. Capponi and medical matters.
On February 28, 2018, the Board determined, in its discretion, that 85%award, one fourth one year from the first anniversary of these performance milestones had been met.
In addition, in 2016the award, one fourth on the second anniversary of the award, and 2017, our Compensation Committee granted restricted stock units to named executive officers which would vest inone fourth on the eventthird anniversary of a “Change in Control” as defined in the Company’s 2014 Long-Term Incentive Plan. See “Executive Compensation — Grants of Plan-Based Awards.”
and on February 3, 2016, we entered into a consulting agreement with Robert H. Bartlett, who was our Chief Medical Officer until June 1, 2017.Officer. On May 23, 2017, we entered into an employment agreement with Dr. Eric R. Mortensen, which agreement became effective June 1, 2017. The employment agreements with Dr. Chan and Mr. Capponi, and the consulting agreement with Dr. Bartlett, replaced agreements which had previously expired. With the exception of his own agreement, each of these agreements was negotiated on our behalf by our CEO, with the oversight and approval of our Compensation Committee. Our CEO’s employment agreement was negotiated directly with our
The employment agreements with Dr. Chan, Mr. Capponi, and Ms. Bloch will expire on December 31, 2021.
Where reasonably practicable, our Compensation Committee may seek to qualifyThe 2017 tax reform legislation removed the variable“performance-based compensation” exception from Section 162(m), effective for taxable years beginning after December 31, 2017, such that compensation paid to our namedcovered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
2019.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | All Other Compensation | Total ($) | | Year | | Salary ($) | | Bonus ($) | | Stock Awards(1) ($) | | Option Awards(2) ($) | | All Other Compensation | | Total ($) | | |||||||||||||||||||||||||||||||||||||||||||||||||
Phillip P. Chan, MD, PhD President and Chief Executive Officer | 2017 | 378,000 | — | 227,500 | (3) | 210,097 | — | 815,597 | | | | | 2019 | | | | | 438,000 | | | | | 99,645 | | | | | 484,075(3) | | | | | 370,656 | | | | | 12,000 | | | | | 1,404,376 | | | ||||||||||||||||||||||||||
2016 | 350,000 | — | 121,940 | (4) | 23,262 | — | 495,202 | | | | 2018 | | | | | 400,000 | | | | | 160,000 | | | | | 337,550(4) | | | | | 337,745 | | | | | 12,000 | | | | | 1,247,295 | | | ||||||||||||||||||||||||||||
2015 | 325,000 | — | 95,959 | — | 420,959 | | | | 2017 | | | | | 378,000 | | | | | — | | | | | 227,500(5) | | | | | 210,097 | | | | | 12,000 | | | | | 827,597 | | | ||||||||||||||||||||||||||||||
Vincent J. Capponi, MS Chief Operating Officer | 2017 | 314,000 | — | 201,253 | (3) | 198,185 | — | 713,438 | | | | | 2019 | | | | | 363,540 | | | | | 57,258 | | | | | 433,744(3) | | | | | 315,058 | | | | | — | | | | | 1,169,600 | | | ||||||||||||||||||||||||||
2016 | 291,000 | — | 107,870 | (4) | 21,932 | — | 420,802 | | | | 2018 | | | | | 332,000 | | | | | 132,800 | | | | | 298,300(4) | | | | | 316,520 | | | | | — | | | | | 1,079,620 | | | ||||||||||||||||||||||||||||
2015 | 270,000 | — | — | 90,476 | — | 360,476 | | | | 2017 | | | | | 314,000 | | | | | — | | | | | 201,253(5) | | | | | 198,185 | | | | | — | | | | | 713,438 | | | |||||||||||||||||||||||||||||
Kathleen P. Bloch, MBA, CPA Chief Financial Officer | 2017 | 275,000 | — | 183,753 | (3) | 167,861 | — | 626,614 | | | | | 2019 | | | | | 323,025 | | | | | 50,876 | | | | | 347,954(3) | | | | | 277,992 | | | | | — | | | | | 999,847 | | | ||||||||||||||||||||||||||
2016 | 255,000 | — | 98,490 | (4) | 18,609 | — | 372,099 | | | | 2018 | | | | | 295,000 | | | | | 118,000 | | | | | 272,395(4) | | | | | 268,188 | | | | | — | | | | | 953,583 | | | ||||||||||||||||||||||||||||
2015 | 235,000 | — | — | 76,767 | — | 311,767 | | | | 2017 | | | | | 275,000 | | | | | — | | | | | 183,753(5) | | | | | 167,861 | | | | | — | | | | | 626,614 | | | |||||||||||||||||||||||||||||
Eric R. Mortensen, MD, PhD(5) Chief Medical Officer | 2017 | 186,576 | — | — | 116,700 | — | 303,276 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert H. Bartlett, MD Chief Medical Officer | 2017 | — | — | — | 43,319 | 54,000 | (6) | 97,319 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | — | — | — | 6,646 | 54,000 | (6) | 60,646 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | — | 10,000 | — | 27,417 | 54,000 | (6) | 91,417 |
for a full “gross-up” of any excise taxes payable under IRC Section 4999 for any payments or benefits received under his employment agreement.
In addition, Dr. Chan’s employment agreement provides for benefits if his employment is terminated under certain circumstances, as more fully described under “Executive Compensation — Potential Payments upon Termination or Change of Control.”
new agreement is negotiated.
new agreement is negotiated.
On May 23, 2017, the Company entered into an executive employment agreement with Dr. Mortensen relating to his employment as our Chief Medical Officer. Dr. Mortensen’s employment agreement has an initial term of thirty-one months and became effective as of June 1, 2017. Under the terms of his employment agreement, Dr. Mortensen’s 2017 annual base salary was $330,000, and Dr. Mortensen receives up to forty (40) hours of paid time off each calendar year for attendance at continuing education programs, and reimbursement for the cost of attending CE programs up to a maximum amount of $1,000 per year, prorated for partial years. The Company also agreed to pay for the cost of the one-time conversion or transfer of his Pennsylvania Medical License to New Jersey, up to a maximum of $500, and up to $500 each year for annual renewal of his New Jersey Medical License for the term of the employment agreement. Further, Dr. Mortensen’s employment agreement provides for terms of benefits afforded to Dr. Mortensen, including the ability to participate in various group insurance plans, reimbursement for reasonable business expenses, liability insurance, vacation time and bonuses, and provides for a full “gross-up” of any excise taxes payable under IRC Section 4999 for any payments or benefits received under her employment agreement.
In addition, Dr. Mortensen’s employment agreement provides for benefits if her employment is terminated under certain circumstances, as more fully described under “Executive Compensation — Potential Payments upon Termination or Change of Control.”
On February 3, 2016, we entered into a consulting agreement with Dr. Bartlett, which replaced his previously expired consulting agreement. Pursuant to this consulting agreement, which became retroactively effective as of January 1, 2015, Dr. Bartlett will receive consulting fees at an annualized rate of $54,000 payable in equal installments over 26 pay periods. He is eligible for stock options, which will be adjusted on the same basis as all other stockholders to account for any stock split, stock dividends, combination or recapitalization. This agreement has an initial term of two years and is renewable for additional one-year periods upon written consent of the parties. Dr. Bartlett resigned as Chief Medical Officer on June 1, 2017, however he continues to provide consulting services to the Company on various medical and clinical matters.
Name | | | Grant date | | | Estimated future payouts under equity incentive plan awards Target (#)(1) | | | Exercise or base price of option awards ($/Sh) | | | Grant date fair value of stock and option awards ($)(2)(3) | | ||||||||||||
Phillip P. Chan, MD, PhD | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs(2) | | | | | 3/04/2019 | | | | | | 5,500 | | | | | $ | 8.05 | | | | | $ | 44,275 | | |
RSUs(3) | | | | | 7/22/2019 | | | | | | 60,000 | | | | | $ | 7.33 | | | | | $ | 439,800 | | |
Options(4) | | | | | 7/22/2019 | | | | | | 80,000 | | | | | $ | 7.33 | | | | | $ | 370,656 | | |
Vincent J. Capponi, MS | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs(2) | | | | | 3/04/2019 | | | | | | 4,620 | | | | | $ | 8.05 | | | | | $ | 37,191 | | |
RSUs(3) | | | | | 7/22/2019 | | | | | | 54,100 | | | | | $ | 7.33 | | | | | $ | 396,553 | | |
Options(4) | | | | | 7/22/2019 | | | | | | 68,000 | | | | | $ | 7.33 | | | | | $ | 315,058 | | |
Kathleen P. Bloch, CPA | | | | | | | | | | | | | | | | | | | | | | | | | |
RSUs(2) | | | | | 3/04/2019 | | | | | | 4,070 | | | | | $ | 8.05 | | | | | $ | 32,764 | | |
RSUs(3) | | | | | 7/22/2019 | | | | | | 43,000 | | | | | $ | 7.33 | | | | | $ | 315,190 | | |
Options(4) | | | | | 7/22/2019 | | | | | | 60,000 | | | | | $ | 7.33 | | | | | $ | 277,992 | | |
Name | Grant date | Estimated future payouts under equity incentive plan awards Target (#)(1) | Exercise or base price of option awards ($/Sh) | Grant date fair value of stock and option awards ($)(2)(3) | ||||||||||||
Phillip P. Chan, MD, PhD | ||||||||||||||||
RSUs(2) | 2/24/2017 | 18,700 | — | — | ||||||||||||
RSUs(3) | 2/24/2017 | 40,625 | — | $ | 227,500 | |||||||||||
Options(4) | 2/24/2017 | 95,200 | $ | 5.60 | $ | 210,097 | ||||||||||
Vincent J. Capponi, MS | ||||||||||||||||
RSUs(2) | 2/24/2017 | 17,900 | — | — | ||||||||||||
RSUs(3) | 2/24/2017 | 35,938 | — | $ | 201,253 | |||||||||||
Options(4) | 2/24/2017 | 89,250 | $ | 5.60 | $ | 198,185 | ||||||||||
Kathleen P. Bloch, CPA | ||||||||||||||||
RSUs(2) | 2/24/2017 | 15,700 | — | — | ||||||||||||
RSUs(3) | 2/24/2017 | 32,813 | — | $ | 183,752 | |||||||||||
Options(4) | 2/24/2017 | 75,650 | $ | 5.60 | $ | 167,861 | ||||||||||
Eric R. Mortensen, MD, PhD | ||||||||||||||||
RSUs(2) | 5/11/2017 | 100,000 | — | — | ||||||||||||
Options(5) | 5/11/2017 | 40,000 | $ | 4.50 | $ | 116,700 | ||||||||||
Robert H. Bartlett, MD | ||||||||||||||||
Options(4) | 2/24/2017 | 17,000 | $ | 5.60 | $ | 51,149 |
Option Awards | Stock Awards | |||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | Option Exercise Price ($) | Option Expiration Date | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(2) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(3) | ||||||||||||||||||
Phillip P. Chan, MD, PhD | 600 | 2.000 | 12/31/2018 | |||||||||||||||||||||
100,155 | 2.100 | 1/8/2019 | ||||||||||||||||||||||
20,000 | 4.325 | 1/4/2020 | ||||||||||||||||||||||
89,100 | 3.450 | 5/5/2020 | ||||||||||||||||||||||
30,500 | 2.875 | 4/4/2023 | ||||||||||||||||||||||
66,500 | 4.875 | 3/28/2024 | ||||||||||||||||||||||
7,000 | 8.070 | 4/8/2025 | ||||||||||||||||||||||
77,600 | 4.690 | 6/7/2026 | ||||||||||||||||||||||
112,000 | (1) | 5.600 | 2/24/2027 | |||||||||||||||||||||
241,451 | 1,569,432 | |||||||||||||||||||||||
Vincent J. Capponi, MS | 44,000 | 6.25 | 01/16/2018 | |||||||||||||||||||||
76,000 | 0.875 | 06/25/2018 | ||||||||||||||||||||||
12,000 | 4.200 | 01/28/2019 | ||||||||||||||||||||||
20,000 | 4.325 | 1/4/2020 | ||||||||||||||||||||||
81,300 | 3.450 | 5/5/2020 | ||||||||||||||||||||||
30,000 | 2.875 | 4/4/2023 | ||||||||||||||||||||||
62,700 | 4.875 | 3/28/2024 | ||||||||||||||||||||||
6,600 | 8.070 | 4/8/2025 | ||||||||||||||||||||||
73,200 | 4.690 | 6/7/2026 | ||||||||||||||||||||||
105,000 | (1) | 5.600 | 2/24/2027 | |||||||||||||||||||||
228,526 | 1,485,419 | |||||||||||||||||||||||
Kathleen P. Bloch, CPA | 40,000 | 2.900 | 5/7/2023 | |||||||||||||||||||||
20,000 | 2.875 | 4/4/2023 | ||||||||||||||||||||||
53,200 | 4.875 | 3/28/2024 | ||||||||||||||||||||||
5,600 | 8.070 | 4/8/2025 | ||||||||||||||||||||||
62,000 | 4.690 | 6/7/2026 | ||||||||||||||||||||||
89.000 | (1) | 5.600 | 2/24/2027 | |||||||||||||||||||||
201,576 | 1,310,244 | |||||||||||||||||||||||
Eric Mortensen, MD | 40,000 | 4.500 | 5/11/2017 | |||||||||||||||||||||
45,000 | (1) | 5.600 | 5/11/2017 | |||||||||||||||||||||
100,000 | 650,000 | |||||||||||||||||||||||
Robert H. Bartlett, MD | 7,000 | 4.325 | 1/4/2020 | |||||||||||||||||||||
20,600 | 3.450 | 5/5/2020 | ||||||||||||||||||||||
8,000 | 2.875 | 4/4/2024 | ||||||||||||||||||||||
19,000 | 4.875 | 3/28/2024 | ||||||||||||||||||||||
2,000 | 8.070 | 4/8/2025 | ||||||||||||||||||||||
16,000 | 4.690 | 6/7/2026 | ||||||||||||||||||||||
20,000 | (1) | 5.600 | 2/24/2027 | |||||||||||||||||||||
30,000 | 195,000 |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Equity incentive plan awards: number of securities underlying unexercised unearned options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)(1) | | | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(2) | | ||||||||||||||||||
Phillip P. Chan, MD, PhD | | | | | 14,100 | | | | | | | | | | | | 3.450 | | | | | | 5/5/2020 | | | | | | | | | | | | | | |
| | | | | 30,500 | | | | | | | | | | | | 2.875 | | | | | | 4/4/2023 | | | | | | | | | | | | | | |
| | | | | 66,500 | | | | | | | | | | | | 4.875 | | | | | | 3/28/2024 | | | | | | | | | | | | | | |
| | | | | 7,000 | | | | | | | | | | | | 8.070 | | | | | | 4/8/2025 | | | | | | | | | | | | | | |
| | | | | 77,600 | | | | | | | | | | | | 4.690 | | | | | | 6/7/2026 | | | | | | | | | | | | | | |
| | | | | 95,200 | | | | | | | | | | | | 5.600 | | | | | | 2/24/2027 | | | | | | | | | | | | | | |
| | | | | 70,650 | | | | | | | | | | | | 7.900 | | | | | | 4/4/2023 | | | | | | | | | | | | | | |
| | | | | 20,000 | | | | | | 60,000 | | | | | | 7.330 | | | | | | 7/22/2029 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 274,001 | | | | | | 1,054,904 | | |
Vincent J. Capponi, MS | | | | | 15,400 | | | | | | | | | | | | 4.325 | | | | | | 1/4/2020 | | | | | | | | | | | | | | |
| | | | | 21,300 | | | | | | | | | | | | 3.450 | | | | | | 5/5/2020 | | | | | | | | | | | | | | |
| | | | | 30,000 | | | | | | | | | | | | 2.875 | | | | | | 4/4/2023 | | | | | | | | | | | | | | |
| | | | | 62,700 | | | | | | | | | | | | 4.875 | | | | | | 3/28/2024 | | | | | | | | | | | | | | |
| | | | | 6,600 | | | | | | | | | | | | 8.070 | | | | | | 4/8/2025 | | | | | | | | | | | | | | |
| | | | | 73,200 | | | | | | | | | | | | 4.690 | | | | | | 6/7/2026 | | | | | | | | | | | | | | |
| | | | | 89,250 | | | | | | | | | | | | 5.600 | | | | | | 2/24/2027 | | | | | | | | | | | | | | |
| | | | | 66,210 | | | | | | | | | | | | 7.900 | | | | | | 3/15/2028 | | | | | | | | | | | | | | |
| | | | | 17,000 | | | | | | 51,100 | | | | | | 7.330 | | | | | | 7/22/2029 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 258,815 | | | | | | 996,348 | | |
Kathleen P. Bloch, CPA | | | | | 53,200 | | | | | | | | | | | | 4.875 | | | | | | 3/28/2024 | | | | | | | | | | | | | | |
| | | | | 5,600 | | | | | | | | | | | | 8.070 | | | | | | 4/8/2025 | | | | | | | | | | | | | | |
| | | | | 65,650 | | | | | | | | | | | | 5.600 | | | | | | 2/24/2027 | | | | | | | | | | | | | | |
| | | | | 56,100 | | | | | | | | | | | | 7.900 | | | | | | 3/15/2028 | | | | | | | | | | | | | | |
| | | | | 15,000 | | | | | | 45,000 | | | | | | 7.330 | | | | | | 7/22/2029 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 224,448 | | | | | | 864,125 | | |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | ||||||||||||
Phillip P. Chan, MD, PhD | — | — | 22,208 | 110,931 | ||||||||||||
Vincent J. Capponi, MS | 4,000 | $ | 11,200 | 19,646 | 98,134 | |||||||||||
Kathleen P. Bloch, CPA | — | — | 17,937 | 89,597 | ||||||||||||
Eric R. Mortensen, MD | — | — | — | — | ||||||||||||
Robert H. Bartlett, MD | — | — | — | — |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | ||||||||||||
Phillip P. Chan, MD, PhD | | | | | 95,000 | | | | | $ | 38,900 | | | | | | 49,708 | | | | | | 390,895 | | |
Vincent J. Capponi, MS | | | | | 4,600 | | | | | | | | | | | | 44,219 | | | | | | 347,532 | | |
Kathleen P. Bloch, CPA | | | | | 10,000 | | | | | | | | | | | | 38,194 | | | | | | 301,298 | | |
In addition, restricted stock units granted to each of the named executive officers in April 2015, June 2016, and February 2017 and March 2018 will vest upon a “Change in Control” as defined in the Company’s 2014 Long-Term Incentive Plan.
resultResult of Death or Disability. Upon termination of a named executive officer as a result of death or disability, the named executive officer is entitled to receive any accrued but unpaid base salary and any accrued but unused vacation.Table of Benefits upon Termination Events
2017$6.50$3.85 per share closing price of our Common Stock on December 29, 201731, 2019 as reported on Nasdaq.Payment Type
following
Change of
Control
Without
Cause
or Voluntary
Termination
for Good
Reason
for Cause or
Expiration of
Employment
Agreement
Disability Severance payment $ 657,000 $ 438,000 — — Health and Welfare Benefits — — — — Stock Options $ 35,378 $ 35,378 — — Restricted Stock Units $ 1,054,904 $ 1,054,904 — — Excise Tax and Gross-Ups — — — — TOTAL $ 1,747,282 $ 1,528,282 — —
Payment Type | Termination following Change of Control | Termination Without Cause or Voluntary Termination for Good Reason | Termination for Cause or Expiration of Employment Agreement | Death or Disability | ||||||||||||
Severance payment | $ | 378,000 | $ | 189,000 | — | — | ||||||||||
Health and Welfare Benefits | — | — | — | — | ||||||||||||
Stock Options | — | $ | 1,117,718 | — | — | |||||||||||
Restricted Stock Units | $ | 1,569,432 | $ | 1,569,432 | — | — | ||||||||||
Excise Tax and Gross-Ups | — | — | — | — | ||||||||||||
TOTAL | $ | 1,947,432 | $ | 2,876,150 | — | — |
Payment Type | | | Termination following Change of Control | | | Termination Without Cause or Voluntary Termination for Good Reason | | | Termination for Cause or Expiration of Employment Agreement | | | Death or Disability | | ||||||||||||
Severance payment | | | | $ | 545,310 | | | | | $ | 454,425 | | | | | | — | | | | | | — | | |
Health and Welfare Benefits | | | | $ | 21,801 | | | | | $ | 21,801 | | | | | | — | | | | | | — | | |
Stock Options | | | | $ | 37,770 | | | | | $ | 37,770 | | | | | | — | | | | | | — | | |
Restricted Stock Units | | | | $ | 996,438 | | | | | $ | 996,438 | | | | | | — | | | | | | — | | |
Excise Tax and Gross-Ups | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
TOTAL | | | | $ | 1,601,319 | | | | | $ | 1,510,434 | | | | | | — | | | | | | — | | |
Payment Type | Termination following Change of Control | Termination Without Cause or Voluntary Termination for Good Reason | Termination for Cause or Expiration of Employment Agreement | Death or Disability | ||||||||||||
Severance payment | $ | 271,731 | $ | 271,731 | — | — | ||||||||||
Health and Welfare Benefits | $ | 24,000 | $ | 24,000 | — | — | ||||||||||
Stock Options | — | $ | 1,100,695 | — | — | |||||||||||
Restricted Stock Units | $ | 1,485,418 | $ | 1,485,418 | — | — | ||||||||||
Excise Tax and Gross-Ups | — | — | — | — | ||||||||||||
TOTAL | $ | 1,781,150 | $ | 2,881,844 | — | — |
Payment Type | | | Termination following Change of Control | | | Termination Without Cause or Voluntary Termination for Good Reason | | | Termination for Cause or Expiration of Employment Agreement | | | Death or Disability | | ||||||||||||
Severance payment | | | | $ | 484,538 | | | | | $ | 242,269 | | | | | | — | | | | | | — | | |
Health and Welfare Benefits | | | | $ | 15,023 | | | | | $ | 15,023 | | | | | | — | | | | | | — | | |
Stock Options | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Restricted Stock Units | | | | $ | 864,125 | | | | | $ | 864,125 | | | | | | — | | | | | | — | | |
Excise Tax and Gross-Ups | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
TOTAL | | | | $ | 1,363,686 | | | | | $ | 1,121,417 | | | | | | — | | | | | | — | | |
Payment Type | Termination following Change of Control | Termination Without Cause or Voluntary Termination for Good Reason | Termination for Cause or Expiration of Employment Agreement | Death or Disability | ||||||||||||
Severance payment | $ | 206,250 | $ | 137,500 | — | — | ||||||||||
Health and Welfare Benefits | $ | 14,700 | $ | 14,700 | — | — | ||||||||||
Stock Options | — | $ | 415,170 | — | — | |||||||||||
Restricted Stock Units | $ | 1,310,244 | $ | 1,310,244 | — | — | ||||||||||
Excise Tax and Gross-Ups | — | — | — | — | ||||||||||||
TOTAL | $ | 1,531,194 | $ | 1,877,614 | — | — |
Payment Type | Termination following Change of Control | Termination Without Cause or Voluntary Termination for Good Reason | Termination for Cause or Expiration of Employment Agreement | Death or Disability | ||||||||||||
Severance payment | $ | 165,000 | $ | 165,000 | — | — | ||||||||||
Health and Welfare Benefits | $ | 15,400 | $ | 15,400 | — | — | ||||||||||
Stock Options | — | — | — | — | ||||||||||||
Restricted Stock Units | $ | 650,000 | $ | 650,000 | — | — | ||||||||||
Excise Tax and Gross-Ups | — | — | — | — | ||||||||||||
TOTAL | $ | 830,400 | $ | 830,400 | — | — |
Plan category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted- average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | | |||||||||
| | | (a) | | | (b) | | | (c) | | |||||||||
Equity compensation plans approved by security security holders | | | | | 3,475,586 | | | | | $ | 6.58 | | | | | | 9,595,082 | | |
Equity compensation plans not approved by security holders | | | | | 742,603 | | | | | $ | 4.22 | | | | | | 174,678 | | |
Total | | | | | 4,218,189 | | | | | $ | 6.16 | | | | | | 9,769,760 | | |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders | 1,956,710 | $ | 5.260 | 3,458,381 | ||||||||
Equity compensation plans not approved by security holders | 1,621,828 | $ | 3,895 | 162,892 | ||||||||
Total | 3,578,538 | $ | 4.641 | 3,621,273 |
Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to disclose the ratio of our median employee’s annual total compensation to the annual total compensation of our principal executive officer.
During fiscal year 2017, the principal executive officer of CytoSorbents Corporation was our President and Chief Executive Officer, Dr. Phillip P. Chan. For 2017, the combined annual total compensation for Dr. Chan was $815,597, and for our median employee was $86,488, resulting in a pay ratio of approximately 9 to 1.
We used information post fiscal year 2017 to identify the “median employee” so as not to estimate bonus or commission amounts. In accordance with Item 402(u) of Regulation S-K, we identified the median employee by using total compensation reflected in our payroll records reportable to the various taxing authorities, generally consisting of salary, wages, overtime, bonus, commissions, health and welfare benefits, and long-term incentive taxable compensation for those employees. In making these determinations, we annualized the compensation of all permanent employees who did not work for us for the entire fiscal year. We did not make any cost-of-living adjustments in identifying the median employee. This calculation was performed for all employees, excluding Dr. Chan, whether employed on a full-time, part-time, or seasonal basis.
The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
At our 2015 Annual Meeting, our stockholders recommended, on an advisory basis, that the frequency of our “Say-on-Pay” vote be once every three years. Based on this stockholder recommendation, we are conducting our Say-on-Pay vote at our 2018 Annual Meeting.
The advisory vote on executive compensation is a non-binding vote on the compensation of our named executive officers, the tabular disclosure regarding such compensation, and the accompanying narrative disclosure, set forth in this proxy statement. The advisory vote on executive compensation is not a vote on our general compensation policies, the compensation of our Board, or our compensation policies as they relate to risk management.
The Compensation Committee of our Board oversees and administers our executive compensation program, including the evaluation and approval of compensation plans, policies and programs offered to our named executive officers. The Compensation Committee has designed the executive compensation program for our named executive officers to meet the following objectives:
We believe our approach to goal setting and setting of targets with payouts based upon performance results assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our programs reflect sound risk management practices. We believe we have allocated our compensation among base salary and short and long-term compensation target opportunities in such a way as to not encourage excessive risk-taking.
The vote solicited by this Proposal No. 2 is advisory, and therefore is not binding on the Company, our Board or our Compensation Committee. The outcome of the vote will not require the Company, our Board or our Compensation Committee to take any action, and will not be construed as overruling any decision by the Company or the Board.
Furthermore, because this non-binding, advisory resolution primarily relates to the compensation of our named executive officers that has already been paid or contractually committed, there is generally no opportunity for us to revisit these decisions. However, our Board, including our Compensation Committee, values the opinions of our stockholders and, to the extent there is any significant vote against the executive officer compensation as disclosed in this proxy statement, we consider our stockholders’ concerns and evaluate what actions, if any, may be appropriate to address those concerns.
Stockholders will be asked at the Annual Meeting to approve the following resolution pursuant to this Proposal No. 2:
RESOLVED, that the stockholders of CytoSorbents Corporation approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, disclosed pursuant to Item 402 of Regulation S-K in the Company’s definitive proxy statement for the 2018 Annual Meeting.
The affirmative vote of a majority of the votes cast in person or by duly executed proxies is required for approval of the advisory (non-binding) vote on executive compensation.
The affirmative vote of
| | | 2019 | | | 2018 | | ||||||
Audit Fees(1) | | | | $ | 177,50000 | | | | | $ | 177,500 | | |
Audit Related Fees(2) | | | | | 44,845 | | | | | | 19,300 | | |
Tax Fees(3) | | | | | 9,500 | | | | | | 18,025 | | |
All Other Fees(4) | | | | | — | | | | | | — | | |
Total | | | | $ | 231,845 | | | | | $ | 214,825 | | |
2017 | 2016 | |||||||
Audit Fees(1) | $ | 176,500 | $ | 181,961 | ||||
Audit Related Fees(2) | 59,116 | 25,500 | ||||||
Tax Fees(3) | 19,840 | 8,000 | ||||||
All Other Fees(4) | — | — | ||||||
Total | $ | 255,456 | $ | 215,461 |
determining whether to approve or ratify a related party transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the related party transaction is on terms no less favorable to us than terms generally available to us from an unaffiliated third-party under the same or similar circumstances, and the extent of the related party’s interest in the transaction.
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our directors and executive officers and persons who own more than 10% of our outstanding shares of Common Stock to file with the SEC initial reports of ownership and reports of changes in ownership in our Common Stock and other equity securities. Based solely on a review of the copies of such forms furnished to us, and representations from the persons subject to Section 16(a) with respect to our equity securities, we believe that all Section 16(a) filing requirements applicable to our directors, executive officers and greater than 10% beneficial owners during 2017 have been satisfied, except that one report on Form 4 was inadvertently filed late on December 8, 2017 by Vincent Capponi, our Chief Operating Officer, reporting the exercise of options to purchase shares of our Common Stock and subsequent sale of the shares issued upon such exercise on November 27, 2017.
21, 2020.
You are asked
By Order of the Board of Directors,
/s/ Kathleen P. BlochKathleen P. Bloch, CPAChief Financial Officer and Secretary
| | | | By Order of the Board of Directors, | | |||
| | | | /s/ Kathleen P. Bloch | | |||
| | | | Kathleen P. Bloch, CPA | | |||
| | | | Chief Financial Officer and Secretary | |