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Corcept Therapeutics Incorporated 149 Commonwealth Drive Menlo Park, California 94025 650-327-3270 PROXY STATEMENT 20162017 ANNUAL MEETING OF STOCKHOLDERS
General We are furnishing this Proxy Statement and the enclosed proxy in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use at the Annual Meeting of Stockholders of Corcept Therapeutics Incorporated (the “Company”) to be held on Wednesday, May 19, 201624, 2017 at 8:00 a.m. local time, at our headquarters located at 149 Commonwealth Drive, Menlo Park, California 94025 and at any adjournments thereof (the “Annual Meeting”). This Proxy Statement and accompanying proxy card are being first mailed to stockholders on or about April 22, 2016.24, 2017. Who Can Vote Only holders of our common stock as ofat the close of business on April 8, 2016March 31, 2017 (the “Record Date”) are entitled to vote at the Annual Meeting. Stockholders who hold shares of our common stock in “street name” may vote at the Annual Meeting only if they hold a valid proxy from their broker. Shares Outstanding and Quorum As of the Record Date, there were 109,710,939113,112,210 shares of our common stock outstanding. A majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting must be present in person or by proxy in order for there to be a quorum at the meeting. Stockholders of record who are present at the meeting in person or by proxy and who abstain from voting, including brokers holding customers’ shares of record who cause abstentions to be recorded at the meeting, will be included in the number of shares present at the meeting for purposes of determining whether a quorum is present. Voting Rights Each stockholder of record is entitled to one vote at the Annual Meeting for each share of common stock held by such stockholder on the Record Date. Stockholders do not have cumulative voting rights. Stockholders may vote their shares by using the proxy card enclosed with this Proxy Statement. Stockholders do not have cumulative voting rights. All proxies we receive which are properly voted, whether by signed proxy card or by telephonic or internet voting, that have not been revoked will be voted in accordance with the instructions contained in the proxy. If a proxy is received which does not specify a vote or an abstention, the shares represented by that proxy will be voted (a) for each of the nominees to the Board listed on the proxy card and in this Proxy Statement, and (b) for the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.2017, (c) for the approval of the compensation of our named executive officers as disclosed in this Proxy Statement and (d) for three years as the frequency of future advisory votes by the stockholders to approve the compensation of our named executive officers. We are not aware, as of the date hereof, of any matters to be voted upon at the Annual Meeting other than those stated in this Proxy Statement and the accompanying Notice of Annual Meeting of Stockholders. If any other matters are properly brought before the Annual Meeting, the enclosed proxy card gives discretionary authority to the persons named as proxies to vote the shares represented by the proxy card in their discretion. Votes Required to Approve Each Proposal Under Delaware law and our Amended and Restated Bylaws, if a quorum exists at the Annual Meeting, (a) Meeting: the seven nominees for director who receiveelection of directors (Proposal No. 1), the greatest numberratification of votes cast will be elected to the Board and (b) the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016 will be approved if 1
| | 2017 (Proposal No. 2) and the advisory vote to approve the compensation of our named executive officers (Proposal No. 3) will be approved if such proposals receive the affirmative vote of the majority of the votes cast affirmatively or negatively; and |
the option of one year, two years or three years that receives a majority of the votes cast affirmatively or negatively. by stockholders will be the frequency of future advisory votes by the stockholders to approve the compensation of our named executive officers (Proposal No. 4); however, in the event that no option receives a majority of the votes case, we will consider the option that receives the most votes to be the option selected by the stockholders. The holders of a majority of all outstanding shares of our common stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for the Annual Meeting.
Abstentions and broker non-votes will have no impact on the election of directors because they have not been cast in favor(Proposal No. 1), the ratification of or against any nominee. Abstentions and broker non-votes will likewise not have any effect on the proposal to ratify the appointment of Ernst & Young LLP as ourthe Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016 because approval2017 (Proposal No. 2), the advisory vote to approve the compensation of these proposals is based solelyour named executive officers (Proposal No. 3) or the advisory vote on the numberfrequency of future advisory votes cast affirmatively or negatively.by the stockholders to approve the compensation of our named executive officers (Proposal No. 4). Abstentions and broker non-votes will be counted for purpose of determining whether a quorum exists. Revocability of Proxies A stockholder of record may revoke a proxy at any time before it is voted at the Annual Meeting by (a) delivering a proxy revocation or another duly executed proxy bearing a later date to the Secretary of our company at 149 Commonwealth Drive, Menlo Park, California 94025 or (b) attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not revoke a proxy unless the stockholder actually votes in person at the meeting. Solicitation of Proxies The proxy card accompanying this Proxy Statement is solicited by our Board. We will pay all of the costs of soliciting proxies. In addition to solicitation by mail, our officers, directors and employees may solicit proxies personally, or by telephone, without receiving additional compensation. We, ifIf requested, we will pay brokers, banks and other fiduciaries that hold shares of common stock for beneficial owners for theirthe reasonable out-of-pocket expensescost of forwarding these materials to stockholders. Householding of Proxy Materials “Householding” is a procedure approved by the Securities and Exchange Commission (the “SEC”) under which stockholders who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of our Proxy Statement from us or a company, single bank, broker or other intermediary, unless one or more of these stockholders notifies us, the bank, broker or other intermediary that they wish to continue to receive individual copies. At the present time, we do not “household” for any of our stockholders of record. However, as explained below, your bank, broker, or other intermediary may be householding your account if you hold your shares in street name. If you hold shares in street name, your bank, broker or other intermediary may be deliveringdeliver only one copy of our Proxy Statement to multiple stockholders of the same household who share the same address, and may continue to do so, unless your bank, broker or other intermediary has received contrary instructions from one or more of the affected stockholders in the household. If you are such a beneficial holder, contact your bank, broker or other intermediary directly in order to receive a separate set of our proxy materials. 2
NOMINEES TO BOARDBOARD OF DIRECTORS At the Annual Meeting, the stockholders will vote on the election of seven directors, each to serve until the annual meeting of stockholders in 20172018 and until their successors are duly elected and qualified. The name, age as ofat April 22, 201621, 2017 and principal occupation of each person nominated for election to the Board, all of whom currently serve as our directors, are set forth below: | | | | | Name | | Age | | Occupation | James N. Wilson(3) | | 7273 | | Chairman of the Board of the Company | Joseph K. Belanoff, M.D. | | 5859 | | Chief Executive Officer and President | G. Leonard Baker, Jr. (2) | | 74 | | Venture Capitalist | Daniel M. Bradbury (2)(3) | | 56 | | Founder of BioBrit, LLC | Reneé D. Galá (1) | | 45 | | Senior Vice President and Chief Financial Officer of Theravance Biopharma, Inc. | David L. Mahoney (1)(3) | | 62 | | Private Investor | Daniel N. Swisher, Jr. (1) (2) | | 54 | | Chief Executive Officer and President of the CompanySunesis Pharmaceuticals, Inc. | G. Leonard Baker, Jr.(2)
| | 73 | | Venture Capitalist |
Daniel M. Bradbury(2)(1)
| | 55 | | Independent Director | Patrick G. Enright(1)
| | 54 | | Venture Capitalist | David L. Mahoney(1)(2)
| | 61 | | Private Equity Investor | Daniel N. Swisher, Jr.(1)
| | 53 | | Independent Director |
(1) | Member of Audit Committee |
(2) | Member of Compensation Committee |
(3) | Member of Corporate Governance and Nominating Committee |
In addition to the information presented below regarding each director’s specific experience, qualifications, attributes and skillsthe qualities that led our Board to the conclusionconclude that each individualthey should serve as a director, we also believe that all ofdirectors, our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They eachstandards and have demonstrated business acumen, and an ability to exercise sound judgment as well asand a commitment of service to usserve our company and ourthe Board. Our Board believes that the backgrounds and qualifications of the directors,these nominees, considered as a group, provideexhibit a significant mixcombination of experience, knowledge and abilitiestalent that allows the Boardwill allow these nominees to fulfill its responsibilities.their responsibilities as Board members. James N. Wilsonhas served as a director and as Chairman of our Board since 1999. In addition, sinceSince 2005, Mr. Wilsonhe has also been the Chairman of the Board of NuGEN Technologies, Inc. (NuGEN)(“NuGEN”), a provider of systems for genomic analysis. From 2002 to 2009, heMr. Wilson served as the lead independent director of Amylin Pharmaceuticals, Inc. (Amylin)(“Amylin”), a publicly-traded biopharmaceutical company, and from 1996 to 2001, Mr. Wilsonhe was Chairman of the Board of Amira Medical, Inc., which was acquired by Hoffmann-La Roche A.G. From 1991 to 1994, heMr. Wilson was Chief Operating Officer of Syntex Corporation (Syntex)(“Syntex”), which was acquired by Roche Holding, Ltd. From 1989 to 1990, Mr. Wilson was Chairman and Chief Executive Officer of Neurex Corporation (Neurex)(“Neurex”), which was acquired by Elan Corporation plc, and fromplc. From 1982 to 1988, Mr. Wilsonhe was Chief Executive Officer of LifeScan, Inc., which was acquired by Johnson & Johnson Company. Mr. Wilson received his B.A. and M.B.A. from the University of Arizona. Our Board selected Mr. Wilson to serve as a director because he brings to our Board extensive experience in the biotechnology industry, evidenced by 30 years of representing biotechnology companies as both a director orand officer. Joseph K. Belanoff, M.D.is a co-founder of our company and has served as a member of our Board and as our Chief Executive Officer since 1999, and has served as our President since January 1, 2014. Dr. Belanoff is currently a clinical faculty member and has, since 1992, held various positions in the Department of Psychiatry and Behavioral Sciences at Stanford University since 1992.University. Dr. Belanoff received his B.A. from Amherst College and his M.D. from Columbia University’s College of Physicians & Surgeons. Our Board selected Dr. Belanoff brings to serve asour Board a director because, asdeep knowledge of our Chief Executive Officer, he brings expertise and knowledge regarding our finances,financial activities, commercial business operations, and pre-clinical and clinical development programs to our Board. Dr. Belanoffprograms. He also has valuable expertise in drug discovery, clinical medicine and psychopharmacology. G. Leonard Baker, Jr. has served as a member of our Board since 1999. Since 1973, Mr. Baker has been a Managing Director of the General Partner of Sutter Hill Ventures, a venture capital firm in Palo Alto, California. Mr. Baker currently serves on the boards of a number of private companies. Mr. BakerHe received his B.A. from Yale University and his M.B.A. from Stanford University. Mr. Baker’s contributions as a director include his broadBaker brings to our Board extensive experience and expertise in advising companies in capital raising,about finance, strategic transactions and operations. 3
Daniel M. Bradbury has served as a member of our Board since October 2012. Mr. Bradbury is the founder and Managing Member of BioBrit, LLC, a life sciences consulting firm and investment fund. Mr. Bradbury served as President and Chief Executive Officer of Amylin Pharmaceuticals, Inc. (Amylin) from March 2007 until its acquisition by Bristol-Myers Squibb Company in August 2012. From June 2006 until August 2012 he was a member of Amylin’s board of directors and served on its Finance and Risk Management Committee. Mr. Bradbury served as Amylin’s President (2006 to 2007), Chief Operating Officer (2003 to 2006) and Executive Vice President (2000 to 2003) and held a variety of sales and marketing positions (1994 to 2003). Before joining Amylin, Mr. Bradbury worked in marketing and sales roles for ten years at SmithKline Beecham Pharmaceuticals. He currently serves on the boards of directors and is a member of board committees of the following publicly-traded companies: Illumina, Inc. (Audit and CompensationNominating & Governance Committees), Geron Corporation (Audit Committee)and Nominating & Governance Committees), Biocon Limited (Audit, Compensation, Risk Review and Social ResponsibilityStakeholder Relation Committees) and Syngene International Limited (NominationIntercept Pharmaceuticals, Inc. (Audit and RemunerationNominating & Governance Committees). Mr. Bradbury also serves on the board of trustees of the Keck Graduate Institute, the Patricia Industries (a part of Investor Growth CapitalAB) Advisory Board, andChairman of the Board of ADCY5.org, the Pharming Group N.V. Commercial Advisory Board, the ProLynx, LLC Advisory Board, the Arctic Aurora Life Science Advisory Board, the BioMed Ventures Advisory Committee. Mr. Bradbury currently serves onCommittee and the University of California San Diego’s Rady School of Management’s Advisory Council and the University of Miami’s Innovation Corporate Advisory Council. He received a Bachelor of Pharmacy from Nottingham University and a Diploma in Management Studies from Harrow and Ealing Colleges of Higher Education in the United Kingdom. Our Board selected Mr. Bradbury to serve as a director because he brings to our Board extensive experience in pharmaceutical industry strategy, operations and management in the pharmaceutical industry.management. Patrick G. Enright has served as a member ofReneé D. Galá joined our Board since 2008. He is a founderin June 2016. She has been the Senior Vice President and Chief Financial Officer of Longitude Capital, a venture capital firm focused on investments in pharmaceutical and medical technology companies, and has served as its Managing Director since 2006. From 2002 through 2006, Mr. Enright was a Managing Director of Pequot Ventures, a venture capital investment firm, where he co-led the life sciences investment practice. Mr. Enright also has significant life sciences operations experience, beginning his career more than 25 years ago at Sandoz (now Novartis), a pharmaceutical company. He currently serves on the boards of directors of several publically held companies, including Esperion Therapeutics, Inc., where he serves as the Chair of the Audit Committee, Jazz Pharmaceuticals plc, where he serves as a member of the Compensation Committees, and Aimmune Therapeutics,Theravance Biopharma, Inc., a publicly-traded biopharmaceutical company, where he serves assince July 2014. From 2006 to June 2014, Ms. Galá held various roles in the Chairfinance organization before leading the separation of the Compensation Committeebiopharmaceutical business (now Theravance Biopharma) from the royalty company, Innoviva, Inc. Prior to joining Theravance, Ms. Galá held positions in global treasury, pharmaceutical sales and corporate strategy/business development at Eli Lilly and Company, a member ofpublicly-traded drug manufacturing company, from 2001 to 2006. Before that, Ms. Galá worked for seven years in the Nominatingenergy industry, both in the U.S. and Corporate Governance Committee. Mr. Enrightinternationally, in positions focused on corporate finance, project finance, and mergers and acquisitions. Ms. Galá received a B.S. in Mathematics from StanfordVanderbilt University and an M.B.A. from the Wharton School at the University of Pennsylvania. As a venture capital investor focused on life science companies and someone who has worked in the pharmaceutical industry, Mr. EnrightColumbia Business School. Ms. Galá brings to our Board both operatingextensive experience in pharmaceutical industry sales, finance, corporate strategy and financial expertise in the life sciences industry.business development.
David L. Mahoney is a private equity investor whohaswho has served as a member of our Board since July 2004. From 1999 to 2001, Mr. Mahoney served as co- Chiefco-Chief Executive Officer of McKesson HBOC, Inc., a healthcare supply management and information technology company, and as Chief Executive Officer of iMcKesson LLC, a healthcare management and connectivity company. He joined McKesson Corporation in 1990 as Vice President for Strategic Planning. Prior to joining McKesson, Mr. Mahoney was a principal with McKinsey & Company, a management consulting firm, where he worked from 1981 to 1990. Mr. Mahoney serves on the board of Symantec Corporation (Symantec)(“Symantec”), a publicly-traded software technology company, including as a member of its Compensation Committee and Chairman of its Nominating and Governance Committees; and Adamas Pharmaceuticals, Inc. (Adamas)(“Adamas”), a publicly traded bio-pharmaceutical company, where he is the Lead Independent Director and serves on the Audit Committee and Compensation Committee. Mr. Mahoney also served as a member of the Audit Committee of Symantec from 2003 to 2011. He also serves on the boardboards of directors of the San Francisco Museum of Modern Art and Mercy Corps, and is a Trustee of the Schwab/Laudis Family of Funds.Funds and Mount Holyoke College. Mr. Mahoney previously served on the Boardboard of Directorsdirectors of KQED, Inc., a public non-profit television and radio operator. Mr. Mahoney received his B.A. from Princeton University and his M.B.A. from Harvard University. Our Board selected Mr. Mahoney to serve as a director because he brings to our Board extensive experience in pharmaceutical distribution, fiscal management, operating strategy and in operating and advising technology companies.logistics. Daniel N. Swisher, Jr.became a member of our Board in June 2015. He has been the Chief Executive Officer and a member of the Board of Sunesis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, since 2003, and Sunesis’its President since 2005. He joined Sunesis in 2001 and had previously served as the
company’s chief business officer and chief financial officer. Prior to that, Mr. Swisher had held a broad range of senior management roles, including Senior Vice president of Sales and Marketing at ALZA Corporation, a pharmaceutical and medical systems company, from 1992 to 2001. Mr. Swisher is also Chairman of the Board of Cerus Corporation, a biopharmaceutical company, a position heand has held this position since 2013. Mr. Swisher holds a B.A. from 4
Yale University and an M.B.A. from the Stanford Graduate School of Business. Our Board selected Mr. Swisher to serve as a director because he brings to our Board experience in life science industry sales, experience, operating experienceoperations and financial expertise infinance. Patrick G. Enright, who has served as a member of our Board since 2008, is not included on the life sciences industry.slate of director nominees, and his term as a director will end as of the 2017 Annual Meeting of Stockholders. There are no family relationships among any of our directors or named executive officers. DIRECTORS NOT STANDING FOR RE-ELECTION
The following current directors have decided to retire from our Board as of the date of this Annual Meeting and are, therefore, not standing for re-election.
Joseph C. Cook, Jr.joined our Board in 2002. Mr. Cook is a founder and director of Ironwood Pharmaceuticals, Inc. (Ironwood), a publicly traded biotechnology company, and served as Chairman of its board of directors from 1998 to 2010. Mr. Cook is a principal, director and co-founder of Mountain Group Capital, LLC, a private investment company, and a principal, director and founder of The Limestone Fund, a recipient of the State of Tennessee TNInvestco award. He serves as Executive Chairman and President of Nusirt Biopharma Inc., a company developing medicines for people with diabetes. Mr. Cook served as Chairman of Amylin Pharmaceuticals, Inc. (Amylin) from 1998 to 2009 and was Chief Executive Officer from 1998 to 2003. He spent 28 years at Eli Lilly and Company (Lilly), retiring in 1993 as a Group Vice-President. In 2009, Mr. Cook received the Pinnacle Award for Life Science Leadership from the Rady School of Management at the University of California at San Diego. In 1999, Mr. Cook also received The Nathan W. Dougherty Award for Distinguished Service in the Engineering Profession from the University of Tennessee. Mr. Cook received his B.S. in Engineering from the University of Tennessee in 1965. Our Board selected Mr. Cook to serve as a director because he brought to our Board extensive experience in the pharmaceutical industry.
Joseph L. Turner joined our Board in 2010.Mr. Turner was Senior Vice President of Finance and Administration and Chief Financial Officer at Myogen, Inc., a therapeutics company focused on cardiovascular disease, from 1999 until its acquisition by Gilead Sciences, Inc. in November 2006. Prior to Myogen, Inc., he served as Vice President, Finance and Chief Financial Officer at Centaur Pharmaceuticals, Inc., a privately-held biopharmaceutical company, from 1997 to 1999 and as Vice President, Finance and Chief Financial Officer of Cortech, Inc. from 1992 to 1997. From 1979 to 1991, Mr. Turner worked at Lilly, where he held a variety of financial management positions both within the United States and abroad. Mr. Turner is currently a member of the boards of directors of Alexza Pharmaceuticals, Inc. (Alexza) and Sophiris Bio Inc. (Sophiris), publicly traded biotechnology companies. Mr. Turner serves as the Chair of the Audit and Ethics Committee of Alexza and of the Audit Committee of Sophiris. He also serves on the board of directors of BioClin Therapeutics, Inc., a privately held pharmaceutical company. Mr. Turner also currently serves on the board of managers of Swarthmore College and of the Linda Crnic Institute for Down Syndrome Research at the University of Colorado Medical School. Mr. Turner previously served on the boards of directors and committees of several publicly-held biotechnology companies: member of the board and Chair of the Audit Committee of Kythera Biopharmaceuticals, Inc. (acquired by Allergan); member of the board and Chair of the Audit Committee of Allos Therapeutics, Inc. (acquired by Spectrum Pharmaceuticals); and member of the boards and Audit Committees of QLT, Inc. and SGX Pharmaceuticals, Inc., (acquired by Lilly). Mr. Turner also served previously on board of directors and committees of privately-held biotechnology companies: director and Chairman of the Audit Committee of NovaCardia, Inc. (acquired by Merck & Co., Inc.); and director of Sequel Pharmaceuticals, Inc. and ApopLogic Pharmaceuticals, Inc. Mr. Turner received his M.B.A. from the University of North Carolina at Chapel Hill, an M.A. in Molecular Biology from the University of Colorado at Boulder and a B.A. in Chemistry from Swarthmore College. Our Board selected Mr. Turner to serve as a director because he brought to our Board more than 30 years of experience in financial management and fiscal oversight of biotechnology companies.
DIRECTOR NOMINATION The information below describes the criteria and process that the Corporate Governance and Nominating Committee uses to evaluate candidates to the Board.
Corporate Governance and Nominating Committee. Our Corporate Governance and Nominating Committee currently consists of Joseph C. Cook, Jr. (Chairman), Joseph L. Turner and James N. Wilson. Following the 2016 Annual Meeting of Stockholders, assuming the election of each director nominee herein, the Corporate Governance and Nominating Committee will consist of David L. Mahoney (Chairman), Patrick G. Enright and James N. Wilson. The Corporate Governance and Nominating Committee met four times during 2015. The Corporate Governance and Nominating Committee is responsible for identifying individuals qualified to serve as members of the Board, recommending to the independent members of the Board nominees for election as our directors and providing oversight with respect to corporate governance and ethical conduct. Although Mr. Wilson wasThe Corporate Governance and Nominating Committee’s charter is available at www.corcept.com. The Committee currently consists of David L. Mahoney (Chairman), Daniel M. Bradbury, Patrick G. Enright and James N. Wilson. Following the 2017 Annual Meeting of Stockholders, assuming the election of each director nominee herein, the Committee will consist of David L. Mahoney (Chairman) and Daniel M. Bradbury. The Corporate Governance and Nominating Committee met four times during 2015 our employee and therefore was not an “independent director” for2016. In accordance with the requirements of the NASDAQ purposes, our director nomination process meets applicable NASDAQ requirements because ourStock Market, director nominees are selected by the independent members of theour Board inby means of votes in which only independent directors participate. The Corporate Governance and Nominating Committee has a written charter, a copy of which is available on our website atwww.corcept.com.
The information below describes the criteria and process that the Corporate Governance and Nominating Committee uses to evaluate candidates to the Board.for director. Board Membership Criteria. The Corporate Governance and Nominating Committee is responsible for assessingassesses whether candidates possess the appropriate balance of experience, skills and characteristics required of the Board. Nominees for director are selectedjudgment to serve on the basis of depth and breadth of experience, knowledge, integrity, ability to make independent analytical inquiries, understanding of our business environment, the willingness to devote adequate time to Board duties, the interplay of the candidate’s experience and skills with those of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any Committees of the Board. Although there is no specific policy regarding diversity in identifying director nominees, both the Corporate Governance and Nominating Committee and the Board seek the talents and backgrounds that would be most helpful to us when selecting director nominees.the Company. In particular, the Corporate Governance and Nominating Committee, when recommending director candidates, to the full Board for nomination, may considerconsiders whether a director candidate if elected, assists in achieving a mix ofcould help the Board members that representsrepresent a diversity of background and experience. In addition, theThe Corporate Governance and Nominating Committee also seeks to ensure that at least a majority of the directors are independent under the rules of the NASDAQ Stock Market, that the Audit Committee and Compensation Committee are each composed entirely of independent directors, and that members of the Audit Committee possess suchthe accounting and financial expertise as the NASDAQ Stock Market and SEC rules require. Stockholders Proposals for Nominees. The Corporate Governance and Nominating Committee will consider written proposals from stockholders for nominees for director. Any suchSuch nominations should be submitted to the Corporate Governance and Nominating Committee c/o the Secretary of our Company and should include (at a minimum) the following information: (a) all information relating to such nominee that is required to be disclosed pursuant toby Regulation 14A underof the Securities Exchange Act of 1934, as amended or (“Exchange Act,Act”), including such person’s written consent to being named in the proxy statement as a nominee and willingness to servingserve as a director if elected;director; (b) the name(s) and address(es) of the stockholder(s) making the nomination and the number of shares of our common stock which are owned beneficially and of record by such stockholder(s); and (c) appropriate biographical information and a statement as to the qualifications of the nominee, andnominee. All of this should be submitted in the time frame described inrequired by our Amended and Restated Bylaws and under the caption, “Stockholder Proposals for the 2017 Annual Meeting” below.Bylaws. Process for Identifying and Evaluating Nominees. The Corporate Governance and Nominating Committee initiates the process for identifying and evaluating nominees to the Board by identifying a slate of candidates who meet the criteria for selection as nominees and have the specific qualities or skills being sought based on input from members of the Board, management and, if the Corporate Governance and Nominating Committee deems appropriate, a third-partythird party search firm. In addition, pursuant to the Securities Purchase Agreement, dated as of March 14, 2008, we agreed to take allthe Corporate Governance and Nominating Committee takes the necessary steps to have one designee of Longitude Venture Partners, L.P., one of our significant stockholders, nominated for election to our Board, subject to compliance with relevant NASDAQ Stock
Market rules and regulations and approval of the nominee by the Corporate Governance and Nominating Committee for so long as Longitude Venture Partners, L.P. beneficially owns at least 5% of our issued and outstanding common stock. Candidates, including candidates proposed byAs of March 31, 2017, Longitude Venture Partners, L.P., are evaluated by the Corporate Governance beneficially owned approximately 5.4% of our issued and Nominating Committee on the basis of the factors described above under “Board Membership Criteria.”outstanding common stock. 5
With respect to candidates for initial election to the Board, the Corporate Governance and Nominating Committee also reviews biographical information and qualifications and checks the candidate’s references. Qualified candidates are interviewed by at least one member of the Corporate Governance and Nominating Committee. Serious candidates meet, either in person or by telephone, with all members of the Corporate Governance and Nominating Committee and as many other members of the Board as practicable. Using the input fromBased on interviews and other information, obtained, the Corporate Governance and Nominating Committee evaluates which of the prospective candidates is qualified to serve as a director and whether the committeeCommittee should recommend to the independent members of the Board that the Board nominate, or elect to fill a vacancy with, a prospective candidate. Candidates recommended by the Corporate Governance and Nominating Committee are presented to the independent members of the Board for selection as nominees to be presented for the approval of the stockholders or for election to fill a vacancy. The Corporate Governance and Nominating Committee expects that a similar process will be used to evaluate nominees recommended by stockholders.
Nominees to the Board of Directors for the Annual Meeting. The nominees for the Annual Meeting were recommended for selection by the Corporate Governance and Nominating Committee and were selected by the independent members of the Board. 6
BOARD MEETINGS AND COMMITTEES The Board met four times during 2015.in 2016. In addition to the Corporate Governance and Nominating Committee, which is described above, the Board has standing Audit and Compensation Committees. The Audit Committee met five times and the Compensation Committee met two times during 2015.2016. The Corporate Governance and Nominating Committee met threefour times during 2015.2016. Each member of the Board attended 75% or more of the total number of Board meetings and meetings of Board committees on which such Board member served. The independent directors of the Board met in executive sessions four times in 2016. We have a policy of encouragingencourage our directors to attend the annual stockholder meetings. ThreeOne of our directors attended the 20152016 annual stockholder meeting. Audit Committee. In 2015,2016, the Audit Committee consisted of Joseph L. Turner (Chairman)Daniel N. Swisher, Jr. (Chairman of the Committee), Patrick G. Enright, Reneé D. Galá and David L. Mahoney and Daniel N. Swisher, Jr. Mr. Swisher became Chairman of the Committee on January 27, 2016.Mahoney. Following the 20162017 Annual Meeting of Stockholders, assuming the election of each director nominee herein, the Audit Committee shallwill consist of Daniel N. Swisher, Jr. (Chairman)(Chairman of the Committee), Patrick G. EnrightReneé D. Galá and David L. Mahoney. The Board has determined that all members of the Audit Committee are independent directors under the rules of the NASDAQ Stock Market and that each of them is able tocan read and understand fundamental financial statements. In addition, the Board has determined that each member of the Audit Committee also satisfies the independence requirements of Rule 10A-3(b)(1) of the Exchange Act. The Board has determined that Mr. Enright is independent even though he falls outside the “safe harbor” definition set forth in Rule 10A-3(e)(1)(ii) under the Exchange Act because Longitude Venture Partners, LP and its affiliates own in excessAfter due consideration of 10% of our common stock. Among other things, the Board consideredall relevant factors, including Mr. Enright’s history of service and the percentage of our common stock held by others, and itthe Board determined that heMr. Enright is independent as defined in NASDAQ Listing Rule 5605 and Rule 10A-3 of the Exchange Act. Further, the Board determined that Mr. Enright is not an “affiliated person” of our company who would be ineligible to serve on the Audit Committee. The Board has determined that each of Messrs. Turner, Enright,Swisher and Mahoney and SwisherMs. Galá qualifies as an “Audit Committee financial expert” as defined by Item 407(d)(5) of Regulation S-K of the Securities Act and the Exchange Act. The purpose of the Audit Committee is to oversee the accounting and financial reporting processes and financial statements audits. The responsibilities of the Audit Committee include appointing and providing for the compensation of the independent registered public accounting firm to conduct the annual audit of our accounts, reviewing the scope and results of the independent audits, reviewing and evaluating internal accounting policies, and approving all professional services to be provided to us by our independent registered public accounting firm. The Audit Committee has a written charter a copy of which is available on our website atwww.corcept.com. www.corcept.com. Compensation Committee. In 2015,2016, the Compensation Committee consisted of G. Leonard Baker, Jr. (Chairman), Daniel M. Bradbury Joseph C. Cook,and Daniel N. Swisher, Jr. and David L. Mahoney. Following the 20162017 Annual Meeting of Stockholders, assuming the election of each director nominee herein, the Compensation Committee shall consist of G. Leonard Baker Jr. (Chairman), Daniel M. Bradbury and Daniel N. Swisher, Jr.will remain the same. The Board has determined that all members of the Compensation Committee are independent directors under the rules of the NASDAQ Stock Market. The Compensation Committee administers ourthe Company’s benefit plans, reviews and administers all compensation arrangements forwith named executive officers, and establishes and reviews generalour policies relating to the compensation and benefits of our officers and employees. The Compensation Committee has a writtenCommittee’s charter pursuantpermits it to which it may delegate its authority and responsibilities as it deems appropriate to individual members of the Compensation Committee or to a subcommittee. A copysubcommittee of the Compensation Committee. The charter is available on our website atwww.corcept.com. 7
BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT Board Leadership Structure. We are committed to sound corporate governance practices and values independent board oversight as an essential component of strong corporate performance. Six of our eight current directors qualify as independent under the rules of the NASDAQ Stock Market, and, following the 2017 Annual Meeting of Stockholders, assuming the election of each director nominee herein, five of our seven directors will qualify as independent under the rules of the NASDAQ Stock Market. In February 2017, our Board reviewed the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board determined that the following directors are “independent” under the rules of the NASDAQ Stock Market: G. Leonard Baker, Jr. Daniel M. Bradbury Patrick G. Enright Reneé D. Galá David L. Mahoney Daniel N. Swisher, Jr. In accordance with our Amended and Restated Bylaws, our Board appoints our officers, including our Chief Executive Officer. Our Board does not have a policy on whether the role of the Chairman of the Board and Chief Executive Officer should be separate and, if it is to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee and if it is to be combined, whether a lead independent director should be selected. Our Board is committed to corporate governance practices and values independent board oversight as an essential component of strong corporate performance. For example, seven of our nine current directors qualify as independent under the rules of the NASDAQ Stock Market. In February 2016, our Board undertook a review of the independence of each director and considered whether any director has a material relationship with us that could compromise his ability to exercise independent judgment in carrying out his responsibilities. As a result of this review, our Board determined that the following directors are “independent” under the rules of the NASDAQ Stock Market: G. Leonard Baker, Jr.
Daniel M. Bradbury
Joseph C. Cook, Jr.
Patrick G. Enright
David L. Mahoney
Daniel N. Swisher, Jr.
Joseph L. Turner
Currently, we separate the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles.Board. The Chief Executive Officer is responsible for setting theCorcept’s strategic direction for our company and theits day-to-day leadership and performance of our company, while theperformance. The Chairman of the Board provides guidance to the Chief Executive Officer, and management and sets the agenda for Board meetings and presides over meetings of the full Board. Dr. Belanoff, our Chief Executive Officer, is an employee of our company and is therefore not “independent” under the rules of NASDAQ Stock Market. During 2015,Until June 2016, Mr. Wilson, our Chairman of the Board, was also an employee of our company and wasis therefore not “independent” under the rules of NASDAQ Stock Market. Mr. Wilson has not been an employee of the Company since June 2016. Our Board believes that theits current board leadership structure is appropriate for our companyCompany and our stockholders at this time.stockholders. Risk Oversight.The Board oversees our company’s risk exposures and risk management of various parts of the business, including appropriate guidelines and policies to minimize business risks and major financial risks and the steps management has undertaken to control them. In its risk oversight role, thebusiness and financial risks. The Board reviews our strategic plan at least annually which includes an assessment of potentialand assesses the risks facing our company. While the Board has the ultimate oversight responsibility for the Company’s risk management process, various committees of the Board also have responsibility for risk management. Our Audit Committee is responsible for overseeingoversees management of our risks relating to accounting matters, financial reporting and SEC compliance. Our Compensation Committee is responsible for overseeingoversees the management of risks relating to our executive compensation plans and arrangements.compensation. In addition, in setting compensation, the Compensation Committee strives to create incentives that do not encouragediscourage risk-taking behavior that is inconsistent with our company’s business strategy. Our Corporate Governance and Nominating Committee is responsible for overseeingoversees management of our risks associated with themaintaining independence of our Board and potentialpreventing conflicts of interest. Each committee regularly reports to the full Board. 8
COMMUNICATIONS WITH DIRECTORS Stockholders or other interested parties may communicate with any director or committee of our Board by writing to them c/o Secretary, Corcept Therapeutics Incorporated, 149 Commonwealth Drive, Menlo Park, California 94025. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to members of the Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to members of the Corporate Governance and Nominating Committee. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The current members of ourOur Compensation Committee areconsists of G. Leonard Baker, Jr. (Chairman), Daniel M. Bradbury Joseph C. Cook,and Daniel N. Swisher, Jr. and David L. Mahoney. None of the members of our Compensation Committee, none whom is currently, or has been, an officer or employee of our company. None of our named executive officers currently serves or in the past year has served as a member of the board of directors or compensation committee of any entity that has one or more named executive officers serving on our Board or Compensation Committee.
INFORMATION CONCERNING EXECUTIVE OFFICERS The names of our executive officers, their ages as of April 22, 201621, 2017 and certain other information about them are set forth below: | | | | | Name | | Age | | Position | Joseph K. Belanoff, M.D. | | 5859 | | Chief Executive Officer, President and Director | Robert S. Fishman | | 5455 | | Chief Medical Officer | G. Charles Robb | | 5354 | | Chief Financial Officer and Secretary |
Joseph K. Belanoff, M.D. Biographical information regarding Dr. Belanoff is set forth under “Nominees to Board of Directors.” Robert S. Fishman, M.D.has served as our Chief Medical OfficersinceOfficer since September 2015. FromMayFrom May 2012 to March 2015, Dr. Fishman served as the Senior Vice President of Clinical Development at InterMune, Inc., a biopharmaceutical company. Prior to his tenure at InterMune, Dr. Fishman served as Vice President of Clinical Development at Alexza Pharmaceuticals, a biopharmaceutical company, from September 2007 to May 2012. Before that, he held positions of increasing responsibility at Heatport, Aerogen and Anthera Pharmaceuticals. Dr. Fishman trained in internal medicine at Deaconess Hospital, Boston, completed a fellowship in pulmonary and critical care medicine at Massachusetts General Hospital and began his career as a member of the Stanford pulmonary medicine faculty. He earned an A.B. in Biology from Harvard and an M.D. from Stanford University School of Medicine. G. Charles Robb has served as our Chief Financial Officer since September 2011 and as our Secretary since January 2014. From April 2005 through August 2011, Mr. Robb served as the Senior Vice President of Operations, Administration and Finance of Fitness Anywhere, Inc. (FAI), a private fitness equipment and training company with operations in the United States, Europe and Asia. From 2003 to 2005, Mr. Robb was engaged in the private practice of law. From 2000 to 2002, he was Senior Vice President of Citadon, Inc. He also held positions in business development for Nomura Asset Capital Corporation from 1998 to 1999 and in sales and marketing for Legal Research Network, Inc. from 1996 to 1998. From 1992 to 1996, Mr. Robb practiced law at Howard, Rice, Nemerovski, Canady, Falk & Rabkin. Mr. Robb earned a B.A. in English and Political Philosophy from Yale and a J.D. from Harvard Law School. 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIALBENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information regarding ownership of our common stock as of March 31, 20162017 (or earlier date with respect to information regarding former employees or that is based on filings with the SEC) by (a) each person known to us to own more than 5% of the outstanding shares of our common stock, (b) our directors, (c) our Chief Executive Officer and each other named executive officer named in the compensation tables appearing later in this Proxy Statement and (d) all directors and named executive officers as a group. The information in this table is based solely on statements in filings with the SEC or other information we believe to be reliable. Percentage of ownership is based on 109,670,939113,112,210 shares of common stock outstanding as of March 31, 2016.2017. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to the shares. Shares of common stock subject to outstanding options and warrants exercisable within 60 days of March 31, 20162017 are deemed outstanding for computing the percentage of ownership of the person holding such options or warrants, but are not deemed outstanding for computing the percentage of any other person.person. | | | | | | | | | Name of Beneficial Owner(1) | | Number of Shares
Beneficially Owned (2) | | | Percentage of
Shares
Beneficially
Owned | | 5% Stockholders | | | | | | | | | Longitude Venture Partners, LP and affiliated entities and individuals(3) | | | 14,991,890 | | | | 13.7 | % | Federated Investors, Inc. and affiliated entities(4) | | | 14,189,245 | | | | 12.9 | % | Ingalls & Snyder, LLC and affiliated entities(5) | | | 8,933,637 | | | | 8.1 | % | Directors and Named Executive Officers | | | | | | | | | Patrick G. Enright(3) | | | 14,991,890 | | | | 13.7 | % | Joseph K. Belanoff(6) | | | 6,405,861 | | | | 5.8 | % | G. Leonard Baker, Jr.(7) | | | 4,515,527 | | | | 4.1 | % | James N. Wilson(8) | | | 3,524,400 | | | | 3.2 | % | Joseph C. Cook, Jr.(9) | | | 2,998,564 | | | | 2.7 | % | David L. Mahoney(10) | | | 1,534,320 | | | | 1.4 | % | G. Charles Robb(11) | | | 886,674 | | | | * | | Steven Lo(12) | | | 585,416 | | | | * | | Anne M. LeDoux(13) | | | 430,416 | | | | * | | Joseph L. Turner(14) | | | 340,000 | | | | * | | Daniel M. Bradbury(15) | | | 330,633 | | | | * | | Robert S. Fishman | | | — | | | | * | | Daniel N. Swisher, Jr. | | | — | | | | * | | | | | | | | | | | All directors and executive officers as a group (13 persons)(16) | | | 36,543,701 | | | | 33.3 | % | | | | | | | | | |
Name of Beneficial Owner (1) | | Number of Shares Beneficially Owned (2) | | | Percentage of Shares Beneficially Owned | | 5% Stockholders | | | | | | | | | Federated Investors, Inc. and affiliated entities (3) | | | 13,878,000 | | | | 12.3% | | Ingalls & Snyder, LLC and affiliated entities (4) | | | 8,083,697 | | | | 7.1% | | Longitude Venture Partners, L.P. and affiliated entities and individuals (5) | | | 6,143,547 | | | | 5.4% | | Directors and Named Executive Officers | | | | | | | | | Patrick G. Enright (5) | | | 6,143,547 | | | | 5.4% | | Joseph K. Belanoff (6) | | | 5,523,570 | | | | 4.8% | | G. Leonard Baker, Jr. (7) | | | 4,643,027 | | | | 4.1% | | James N. Wilson (8) | | | 3,451,195 | | | | 3.0% | | David L. Mahoney (9) | | | 1,531,820 | | | | 1.4% | | G. Charles Robb (10) | | | 1,032,508 | | | * | | Daniel M. Bradbury (11) | | | 343,075 | | | * | | Robert S. Fishman (12) | | | 214,583 | | | * | | Daniel N. Swisher, Jr. (13) | | | 79,374 | | | * | | Reneé D. Galá | | | — | | | * | | All directors and named executive officers as a group (10 persons) (14) | | | 22,962,699 | | | | 19.2% | |
* Less than 1% of our outstanding common stock. * | Less than 1% of our outstanding common stock. |
(1) | Unless otherwise indicated, the address of each of the named individuals is c/o Corcept Therapeutics, 149 Commonwealth Drive, Menlo Park, California 94025. |
(2) | Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has the right to acquire ownership within 60 days after March 31, 2016.2017. Except as otherwise noted, each person or entity has sole voting and investment power with respect to the shares shown. |
(3) | Consists of (a) 14,516,932 shares held by Longitude Venture Partners, LP, (b) 194,958 shares held by Longitude Capital Associates, L.P. and (c) 280,000 shares that may be acquired by Patrick Enright within 60 days of March 31, 2016 pursuant to options. Juliet Tammenoms Bakker and Mr. Enright may be deemed to have shared voting and investment power over |
| the shares held by Longitude Venture Partners, LP, and Longitude Capital Associates, L.P. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his or her pecuniary interest therein. The address for Longitude Capital is 800 El Camino Real, Suite 220, Menlo Park, California 94025. Mr. Enright is a member of our Board and a managing member of Longitude Capital Partners, LLC, the general partner of each of Longitude Venture Partners, LP, and Longitude Capital Associates, L.P. |
(4) | Consists of 14,189,24513,878,000 shares beneficially held by registered investment companies and separate accounts advised by subsidiaries of Federated Investors, Inc., or Federated, that have been delegated the power to direct investments and power to vote the securities by the registered investment companies’ board of trustees or directors and by the separate accounts’ principals. The foregoing beneficial ownership information is based on information obtained from the Amendment No. 78 to FormSchedule 13G filed by Federated Investors, Inc. with respect to its holdings as of December 31, 2015.2016. Federated is the parent holding company of Federated Equity Management Company of Pennsylvania and Federated Global Investment Management Corp., collectively referred to herein as the Investment Advisers, which act as investment advisers to registered investment companies and separate accounts that own shares of our common stock. The Investment Advisers are wholly owned subsidiaries of FII Holdings, Inc., which is wholly owned subsidiary of Federated. All of Federated’s outstanding voting stock is held in the Voting Shares Irrevocable Trust, or the Trust, for which John F. Donahue, Rhodora J. Donahue and J. Christopher Donahue act as trustees, collectively referred to herein as the Trustees. The Trustees exercise collective voting control over Federated. Each of Federated, the Trust and the Trustees disclaims beneficial ownership of all holdings reflected herein, except to the extent of his individual pecuniary interest therein. Federated’s address is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779. |
10
(5)(4)
| Consists of 8,933,6378,083,697 shares held by Ingalls & Snyder LLC, or Ingalls, for the benefit of Ingalls & Snyder Value Partners, L.P., or ISVP, or other investment advisory clients. Information regarding the holdings of Ingalls and ISVP is based on information obtained from the Amendment No. 78 to FormSchedule 13G filed by Ingalls with respect to its holdings as of December 31, 20154.2016. ISVP is an investment partnership managed under an investment advisory contract by Ingalls, a registered broker dealer and a registered investment advisor. Ingalls holds investment authority but not voting authority over shares held by its investment advisory clients. Mr. Thomas O. Boucher, Jr., a Managing Director of Ingalls, and Mr. Robert L. Gipson and Adam Janovic, Senior Directors of Ingalls, are the general partners of ISVP and share investment and voting power over the shares held by ISVP. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his individual pecuniary interest therein..therein. The address for Ingalls is 1325 Avenue of the Americas, New York, NY 10019. |
(5) | Consists of (a) 5,721,372 shares held by Longitude Venture Partners, L.P., (b) 114,675 shares held by Longitude Capital Associates, L.P. and (c) 307,500 shares that may be acquired by Patrick Enright within 60 days of March 17, 2017 pursuant to options. The foregoing beneficial ownership information is based on information obtained from Amendment No. 7 to Schedule 13D filed by Longitude Capital Partners, LLC with respect to its holdings as of March 17, 2017. Juliet Tammenoms Bakker and Mr. Enright may be deemed to have shared voting and investment power over the shares held by Longitude Venture Partners, L.P. and Longitude Capital Associates, L.P. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his or her pecuniary interest therein. The address for Longitude Capital Partners, LLC is 800 El Camino Real, Suite 220, Menlo Park, California 94025. Mr. Enright is a member of our Board and a managing member of Longitude Capital Partners, LLC, the general partner of each of Longitude Venture Partners, L.P. and Longitude Capital Associates, L.P. |
(6) | Includes (a) 3,641,6663,059,375 shares that may be acquired by Dr. Belanoff within 60 days of March 31, 20162017 pursuant to options (b) 300,000 shares held as custodian for Edward G. Belanoff and (c)(b) 300,000 shares held as custodian for Julia E. Belanoff under the California Uniform Transfers to Minors Act over which Dr. Belanoff has voting control. |
(7) | Includes (a) 207 shares held in Mr. Baker’s name, (b) 955,055 shares held in The Baker Revocable Trust of which Mr. Baker is a trustee, (c) 676,631776,631 shares held by a Roth IRA for the benefit of Mr. Baker, and(d) 2,613,634 shares held by Saunders Holdings, L.P. of which Mr. Baker is a trustee of a trust which is the general partner and (d) 270,000(e) 297,500 shares that may be acquired by Mr. Baker within 60 days of March 31, 20162017. |
(8) | Includes (a) 1,111,9371,140,625 shares that may be acquired by Mr. Wilson within 60 days of March 31, 20162017 pursuant to options, (b) 1,511,3961,409,503 shares held by the James N. Wilson and Pamela D. Wilson Trust and (c) 901,067 shares held by James and Pamela Wilson Family Partners. Mr. Wilson has voting power over the shares held by the James N. Wilson and Pamela D. Wilson Trust and James and Pamela Wilson Family Partners pursuant to voting agreements. Mr. Wilson disclaims beneficial ownership of all of such shares, except to the extent of his pecuniary interest therein. |
(9) | Consists of (a) 1,755,669 shares held jointly by Joseph C. Cook, Jr. and Judith Cook, (b) 488,054 shares held by the Joseph C. Cook, Jr., IRA Rollover, (c) 175,273 shares held by Farview Management, Co. L.P., a Tennessee limited partnership, (d) 339,568 shares held by the Judith E. and Joseph C. Cook, Jr. Foundation, Inc., and (e) 240,000 shares that may be acquired by Mr. Cook within 60 days of March 31, 2016 pursuant to options. Mr. Cook and Judith E. Cook may be deemed to have shared voting and investment power over the shares held by the Cook Foundation. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his or her pecuniary interest therein. Mr. Cook and Judith E. Cook may be deemed to have shared voting and investment power over the shares held in joint name. Mr. Cook is a member of our Board. |
(10) | Includes (a) 1,169,320 shares held by the David L. Mahoney and Winnifred C. Ellis 1998 Family Trust, (b) 55,000 shares held by the Black Dog Private Foundation, of which Mr. Mahoney is the president, and (c) 310,000307,500 shares that may be acquired by Mr. Mahoney within 60 days of DecemberMarch 31, 20152017 pursuant to options. Mr. Mahoney is a member of our Board. |
(11)(10)
| Includes 885,4161,031,250 shares that may be acquired by Mr. Robb within 60 days of March 31, 20162017 pursuant to options. |
(12)(11)
| Includes 585,416 shares that Mr. Lo had the right to acquire upon his departure from the Company on September 4, 2015 pursuant to options. |
(13) | Includes 380,416 shares that may be acquired by Ms. LeDoux within 60 days of March 31, 2016 pursuant to options. |
(14) | Includes 330,000 shares that may be acquired by Mr. Turner within 60 days of March 31, 2016 pursuant to options. |
(15) | Consists of (a) 177,925155,575 shares held in the name of BioBrit, LLC, over which Mr. Bradbury has voting and investment power, and (b) 152,708187,500 shares that may be acquired by Mr. Bradbury within 60 days of March 31, 20162017 pursuant to options. |
(16)(12)
| Includes 214,583 shares that may be acquired by Mr. Fishman within 60 days of March 31, 2017 pursuant to options. |
(13) | Includes 79,374 shares that may be acquired by Mr. Swisher within 60 days of March 31, 2017 pursuant to options. |
(14) | Total number of shares includes common stock held by directors, named executive officers and entities affiliated with directors and named executive officers. See footnotes 15 through 3 and 6 through 1413 above. |
11
CERTAIN RELATIONSHIPS ANDAND RELATED TRANSACTIONS As a matter of policy, all related-partyrelated party transactions between us and any of our officers, directors or principal stockholders are reviewed and approved by our Audit Committee, as set forth in our Audit Committeeits charter, or a majority of the independent and disinterested members of our Board, to ensure they are on terms no less favorable to us than could be obtained from unaffiliated third parties and are in connection withhave bona fide business purposes. In 2015,2016, there were no related-party transactions that required review by the Audit Committee.related party transactions. Severance and Change in Control Agreements.We have entered into severance and change in control agreements with our executive officers. The agreements provide that, if employment is terminated without cause or for good reason regardless of whether it is in connection with a change in control, the executive will be eligible for 12 months of his or her then current base salary and continued health insurance coverage for this same period. In addition, the agreements provide for the full vesting of all outstanding equity awards in the event the executive’s employment is terminated without cause or for good reason within 18 months following a change in control. Director Indemnification Agreements.We have entered into indemnification agreements with our directors and executive officers. Such agreements require us, among other things, to indemnify our officers and directors, other than for liabilities arising from willful misconduct of a culpable nature, and to advance their expenses incurred as a result of any proceedings against them as to which they could be indemnified. See “Director Compensation” for a discussion of our director compensation policy. CODE OF ETHICS We have adopted a Code of Ethics that applies to all of our directors, officers and employees, including our principal executive officer, our principal financial officer and our principal accounting officer, a copy of which is available on our website atwww.corcept.com. www.corcept.com. We intend to disclose on our website atwww.corcept.com any amendment to, or waiver of, any provision of our Code of Ethics applicable to our directors and executive officers required to be disclosed under the rules of the SEC and the NASDAQ Stock Market. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Under Section 16(a) of the Exchange Act and SEC rules, our directors, executive officers and beneficial owners of more than 10% of any class of our equity securities are required to file periodic reports of their ownership, and changes in that ownership, with the SEC. Based solely on our review of copies of these reports and representations of such reporting persons, we believe that, during the year ended December 31, 2015,2016, such reporting persons met all applicable Section 16(a) filing requirements, with the exception of Joseph C. Cook,(i) James N. Wilson, who filed late reports on July 19, 2016 and November 14, 2016 reporting seven transactions not reported on a timely basis, and (ii) Messrs. Fishman, Belanoff and Robb, who filed late reportreports on March 25, 2015February 14, 2017, July 19, 2016 and July 19, 2016, respectively, each reporting one transaction not reported on a timely basis, in each case in clauses (i) and (ii) above with respect to the exercisegrants and/or exercises of warrantsstock options to purchase shares of the Company’s common stock. 12
EXECUTIVE COMPENSATIONCOMPENSATION Compensation Discussion and Analysis The Compensation Committee of our Board is delegated thehas primary responsibility for the design and administration of our executive compensation program, whichprogram. The Compensation Committee’s goal is intended to provideensure that we offer compensation packages for our named executive officers that are appropriatelyis competitive, within our industry, provide rewards for significantgood corporate performance and areis appropriate for our stage of development.development as a company. Compensation packages areis designed to encourage a balanced focus on both short- and long-term goals. Direct compensation consists of a base salary, periodic cash bonuses for the achievement of significant corporate milestonesgoals and long-term equity incentive awards. This section discusses the principles underlying our policies and decisions with respect to the compensation of ourthe named executive officers who are named in the “2015“2016 Summary Compensation Table” and the material factors relevant to an analysis of these policies and decisions.that determined the compensation decisions we made in 2016. Our named executive officers for 20152016 were as follows: Joseph K. Belanoff, M.D., Chief Executive Officer and President,President; G. Charles Robb, Chief Financial Officer and Secretary; and Robert S. Fishman, Chief Medical Officer, Steven Lo, former Senior Vice President, Oncology, and Anne M. LeDoux, former Vice President, Controller and Chief Accounting Officer. Dr. Fishman was hired as our Chief Medical Officer effective September 28, 2015. Mr. Lo resigned effective September 4, 2015, and Ms. LeDoux retired effective July 1, 2015. She continues to provide consulting services to us on an as-needed basis.
Executive Summary During 2015,2016, we had significant development, operational and commercial accomplishments. A summary of our principal activities and accomplishments for the year follows:accomplishments: | • | | Increased revenue from the sale of Korlym® for the treatment of patients with Cushing’s syndrome from $26.6 million in 2014 to $50.3 million in 2015 to $81.3 million in 2016, an increase of 8962 percent. |
Generated GAAP net income of $1.0$8.1 million in the fourth quarter2016, compared to a loss of $6.4 million in 2015. | • | | Generated preliminaryencouraging efficacy results in our Phase 1/2 trial of Korlym® in combination with eribulin (Eisa Inc.’s drug, Halaven®) to treat patients with triple-negative breast cancer. |
Completed aBegan the Phase 1 study of the safety and tolerability2 trial of our next-generation selective cortisol modulator, CORT125134.CORT125134, to treat patients with Cushing’s syndrome.
| • | Began the Phase 1/2 trial of CORT125134 in combination with nab-paclitaxel (Celgene Corporation’s drug, Abraxane®) to treat patients with a variety of solid-tumor cancers. |
Advanced the pre-clinical development of other compounds from our proprietary series of selective cortisol modulators. Executive Compensation 20152016 Program Overview Based on our compensation philosophy, pay program structureprinciples and in light of both company and individual performance, ourthe Compensation Committee took the following actions with respect to the compensation for our named executive officers for 2015:2016: Base Salary. To recognize the increased complexity of the business,Salary. Effective March 1, 2016, the Compensation Committee increasedapproved limited 3.0% increases to the annual base salaries of each of our named executive officers by three to four percent as compared to 2014, other than Dr. Fishman’s base salary, which was established in arms-length negotiations in connection with his commencement of employment in September 2015.Belanoff, Mr. Robb, and Mr. Fishman.
Bonuses. In accordance with our practice of awarding bonuses to named executive officers only for the achievement of significant corporate goals, in April 2016, we did not pay cashpaid bonuses to our named executive officers in 2015 or for 2015 performance, withall employees of the exception of Ms. LeDoux, who received a bonus payment in February 2015 of $65,000 to recognize her contributions to the Company in light of her impending retirement and to compensate her in lieu of an annual equity grant. In March 2016, our Board approved a bonus program pursuant to which cash bonuses were payable to each ofcompany, including Drs. Belanoff and Fishman and Mr. Robb, upon the achievement of the first of certaina key clinical milestones. The size of these bonuses was based primarily on each such named executive officer’s contributions to the achievement of the milestones. Such bonuses were paid in April 2016. milestone.
Equity Awards. In February 2015,2016, the Board grantedapproved grants of options to Dr. Belanoff and Messrs. Robb and Lo.each of our named executive officers. These optionsoption awards vest monthly over a four-year period, at a rate of 2.08334 percent onsubject to the named executive officer’s continued employment through each monthly anniversary of their grant dates. Theapplicable vesting date. These awards were given to our named executive officers as an incentive toward their continued service to the company. The size of these stock awards was based on the compensation that the Chief Executive Officer and members of our Compensation Committee and Board believed was appropriate. 13
Strong Stockholder Support for our Compensation Decisions At our annual stockholder meeting in 2014, 99 percent of our stockholders approved the 2013 compensation of our named executive officers withand our practice of submitting the compensation of our named executive officers to a 99% approval rating.non-binding stockholder vote once every three years. In light of this support, the Compensation Committee did not change the design of our compensation programs during 2014, 2015 or 2015 as a result of the non-binding stockholder2016. We are seeking an advisory vote on the compensation of our named executive compensation. The Compensation Committee will continue to work to ensure that management’s interests are aligned with our stockholders’ interests to support long-term value creation. Taking into accountofficers and an advisory vote on the frequency of stockholder vote in favor of having a non-binding stockholder votevotes on executive compensation once every three years,at the Annual Meeting. Unless our Board changes its policy with respect to the frequency of stockholder votes on executive compensation, we expect that our next advisory vote to approve our named executive officers’ compensation will be held at our 20172020 annual stockholder meeting. Compensation Principles and Objectives Compensation for our named executive officers is intended to be performance-based, with the exception of the named executive officer’s base salaries. The Compensation Committee believes that compensation paid to our named executive officers should be closely aligned with our performance on both a short-term and long-term basis, should be linked to specific, measurable results that create value for stockholders, and should help us attract and retain key executives critical to our long-term success.
In establishing compensation for executive officers, these are the Compensation Committee’s objectives:
Align officer and stockholder interests by providing a portion of total compensation opportunities for senior management in the form of equity awards and bonuses tied to company and individual performance.
Ensure executive officer compensation is competitive within the marketplace in which we compete for executive talent by relying on the Compensation Committee’s judgment, expertise and personal experience with other similar companies, recognizing that because of the company’s business model and stage of development, there may be few directly comparable companies; and
Recognize that best compensation practices for a young company with relatively few employees may be substantially different than for a larger, more mature company and that we should make full use of our greater latitude and breadth of compensation opportunities.
Our overall compensation program is structuredmeant to attract, motivate and retain highly qualified executive officers by paying them competitively, consistent with our success and their contributioncontributions to that success. Given the long product development cycles in our business, we believe compensation should be structured to ensure that a portion of compensation opportunity is related to factors that directly and indirectly promote long-term stockholder value. Accordingly, weit. We set goals designed to link each named executive officer’s compensation to our corporate performance, such as the attainment of significant research, development, commercial, developmentoperational and operational goals and meeting agreed upon financial targets. Because pharmaceutical product development can take many years, a portion of our executives’ compensation is determined by achievements that increase stockholder value in the long term. Consistent with our performance-based philosophy, we reserve the largest potentialExcept for their salaries, compensation awards for performance- and incentive-based programs for our named executive officers commensurate with their greater responsibilities. Such programs include stock options grants designed to provide compensation opportunities if milestones are attained that increase our market value. Incentive-based programs provide compensation in the form
of both cash and equity, to reward for both short-term and long-term performance.is performance-based. The Compensation Committee allocates total compensation between cashdetermines the structure and equityamount of performance-based compensation based on the Compensation Committeeits members’ knowledge of compensationthe most effective practices in the biotechnology and specialty pharmaceutical industries.
These are the Compensation Committee’s objectives: Align executive and stockholder interests in both the short and long term by providing equity awards and bonuses that are tied to company and individual performance. Make sure compensation is competitive by relying on the Compensation Committee members’ deep expertise and many years’ experience with companies both in and outside of the pharmaceutical industry, recognizing that because of our business model and stage of development, there may be few directly comparable companies; and Recognize that optimum compensation practices for a company with relatively few employees may be substantially different than those for a larger, more mature company. To realize its objectives, the Compensation Committee has offered our executives stock option grants that reward significant, sustained increases in our stock market value and discretionary bonuses based on the achievement of key milestones. The balance between equity and cashCompensation Committee reviews our performance-based compensation for our named executive officers is evaluated annually to align the interests of management with stockholders through both short- and long-term incentives.offerings at least annually. The Chairman of the Board and the members of the Compensation Committee are seasoned executives of, consultants to, or venture capitalists with investments in, the biotechnology and specialty pharmaceutical industry. Collectively they have served as board and compensation committee members of many public and privately held companies including Amylin, Ironwood, NuGen, Neurex, Syntex,Jazz Pharmaceuticals, Aimune Therapeutics, Symantec, Illumina, Sunesis Pharmaceuticals and Cerus Corporation. As a result of this extensive involvement in the compensation of executives in these and other companies, we believe that the Chairman of the Board and the members of the Compensation Committee collectively have developed a clear understanding and knowledge ofclearly understand the compensation structures and amounts that are necessary to attract, motivate and retain management talent. 14
Determination of Compensation The Compensation Committee is charged withreviews the primary authority to determine and recommend the compensation awards available to our executive officers for approval by the Board. Based on the Compensation Committee members’ collective understandingperformance of compensation practices in similar companies in the biotechnology and specialty pharmaceutical industry, our executive compensation package consists of the following elements, in addition to the employee benefit plans in which all employees may participate: Base salary: compensation for ongoing service throughout the year.
Periodic performance-based cash compensation: awards to recognize and reward achievement of performance goals.
Long-term performance-based equity incentive program: equity compensation to provide an incentive to our named executive officers to manage us from the perspective of an owner with an equity stake in the business.
Severance and change in control benefits: remuneration paid to executives in the event of a change in control or involuntary employment termination.
annually. To aid the Compensation Committee in making its determination,deliberations, our Chief Executive Officer providesreviews the performance of all executives other than himself and makes compensation recommendations annually to theregarding them. The Compensation Committee regarding the compensation of all other executive officers (other than himself) basedbases its review on the overall corporateChief Executive Officer’s input and on its own evaluation of Corcept and the individual executives’ achievements during the period being assessed and his knowledge of the individual contributions to our success by each of the named executive officers.period. The Compensation Committee then sets salaries, performance of our named executive officers as a team is reviewed annually by the Compensation Committee. We set base salary structuresbonuses and grants of stock options, based on the Compensation Committeetaking into account its members’ collective understanding of compensation practices in the biotechnology and specialty pharmaceutical industry and suchthe members’ experiences as seasoned executives, consultants, board and compensation committee members, orand investors in similar biotechnology and specialty pharmaceutical industrysuch companies.
Tax Considerations In making its compensation determinations, our Compensation Committee considers the impact of Section 162(m) of the Internal Revenue Code of 1986, as amended, which limits the tax deductibility by us of annual compensation in excess of $1,000,000 paid to our Chief Executive Officer and any of our three other most highly compensated named executive officers, other than our Chief Financial Officer. While the tax impact of any compensation arrangement is one factor to be considered, such impact is evaluated in light of the Compensation Committee’s overall compensation philosophy and objectives. The
Compensation Committee will considerconsiders ways to maximize the deductibility of executive compensation, while retaining the discretion it deems necessaryflexibility to compensate officers in a manner commensurate with their performance and the competitive environmentmarket for executive talent. From time to time, theThe Compensation Committee may award compensation to our named executive officers that may not be fully deductible if it determines that such awardcompensation is in our stockholders’ best interests and is consistent with its philosophy and is in our and our stockholders’ best interests.compensation principles. Elements of Executive Compensation Base Compensation We pay baseThe Compensation Committee determines our executives’ salaries to provide fixed compensation based on the Compensation Committee’s assessmentits members’ many years of assessing competitive market practices. Duerates and the salaries required to the Compensation Committee’s collective experience with similar companies in the biotechnologyattract, motivate and specialty pharmaceutical industry,retain talented executives. Each year the Compensation Committee has intimate knowledgereviews the Chief Executive Officer’s salary to determine if a change is appropriate based on its assessment of market trends and understandingour company’s commercial and clinical performance. The Compensation Committee applies similar scrutiny to the salaries of whatour other officers, with input from the industry demands in orderChief Executive Officer. No formulaic salary increases are provided to motivate and retain our named executive officers. We provide each named executive officer with a base salary that was established by negotiations with each named executive officer when such individual first joined us as an employee or was promoted to the position of executive officer. To recognize the increased complexity of the business, theThe Compensation Committee increased the annual base salary for Dr. Belanoff, by 4.4%, for Mr. Robb, and Mr. Fishman each by 3.5%3.0%, for Mr. Lo by 3.5% and for Ms. LeDoux by 3.4%, in each case, effective March 1, 2015. Dr. Fishman’s annual base salary2016, to reflect its assessment of $400,000 was established in arms-length negotiations in connection with his commencementmarket trends for cost of employment with us in September 2015. While base salaries areliving increases.
Performance-Based Compensation Cash Bonus. Although we do not considered by the Internal Revenue Service to constitute performance-based compensation, each year the Compensation Committee reviews the Chief Executive Officer’s base salary to determine if a change is appropriate based on Company performance, such as providing Korlym to treat patients with Cushing’s syndrome, our progress on research and development programs and the development of the administrative infrastructure needed to support a growing business. Similarly, the Chief Executive Officer reviews the base salary of the other named executive officers and may propose changes in base salary based on performance to the Compensation Committee. Other than the annual merit increases that the Compensation Committee has approved, no formulaic base salary increases are provided to the named executive officers. Performance-Based Compensation
Performance Goals and Periodic Performance-Based Cash Compensation. We structure our compensation programs to reward executive officers based on our performance. To date, we have not instituted an annual performance-based cash compensation or annual performance-based equity compensation program.bonus program, we pay discretionary bonuses from time to time for the achievement of significant corporate goals. The Compensation Committee believes that the objectivebest way to ensure that executive officers’our executives’ compensation is aligned with our corporate strategies, business objectives and the long-term interests of our stockholders is achievedto pay bonuses when significant milestones are met, such as the approval of a new product, a significant increase in revenue, meeting the predetermined endpoints inadvancing our pre-clinical and clinical trials, demonstrating progress in our research and development programs, and completing financing transactions.successfully building our management and operational capabilities to support growth. The achievement of these types of milestones does not necessarily correspond with annual performance periods.
Performance-based cash compensation has been awarded in recent years primarily to recognize the accomplishment of certain value enhancingvalue-enhancing milestones such as successful financing transactions, initiationthe growth of clinical trialsour Cushing’s syndrome franchise and positive results in clinical trials. The Compensation Committee believes that performance-based compensation should be based onthe achievement of these types of milestone successes. The Chief Executive Officer reviews the performance of the other named executive officerspre-clinical and may propose bonus and equity compensation for these individuals to the Compensation Committee.clinical milestones. As discussed above, in In accordance with our practice of making bonus awardsawarding bonuses to named executive officers only onfor the achievement of significant milestones, we did not pay cash bonuses to our named executive officerscorporate goals, in 2015 or for 2015 performance, with the exception of Ms. LeDoux, who received a bonus payment in February 2015 of $65,000 to recognize her contributions to the Company in light of her impending retirement and to compensate her in lieu of an annual equity grant.
In March 2016, our Board approved a bonus program pursuant to which cash bonuses were payable to eachopportunity for all employees of the company, including Drs. Belanoff and Fishman and Mr. Robb, payable upon the achievement of the first of three milestonesa key clinical
15
milestone relating to the
advancement of our Cushing’s syndrome and oncology development programs, includingprogram. In April 2016, this milestone was achieved and bonuses were paid in the opening of an investigational new drug application for the company’s planned Phase 2 trial of its selective cortisol modulator CORT125134 to treat patients with Cushing’s syndrome, as well as patient enrollmentfollowing amounts: Dr. Belanoff: $400,000; Mr. Robb: $146,000; and screening milestones in our two Phase 1/2 oncology trials. Dr. Fishman: $40,000. The size of these bonuses was based primarily on each such named executive officer’s contributions to the achievement of these milestones. In April 2016, the patient screening milestone was attainedmilestones and, bonuses were paid in the following amounts: case of Dr. Belanoff: $400,000; Mr. Robb: $146,000; and Dr. Fishman: $40,000. Mr. Lo and Ms. LeDoux were not eligible to receive a bonus in April 2016 because they were not employed by us at that time.Fishman, his tenure with our company. Long-Term Performance-Based Equity Incentive Program.Program. Our named executive officers, along with all of our employees, are eligible to receive grants of stock options under our 2012 Incentive Award Plan. We believe with our performance-based approach to compensation, that equity ownership in our company is importantnecessary to link an executive officer’s compensation to the performance of our stock and stockholder gains while creating an incentive forour sustained growth. WeSo far, we have thus far, used stock options as theour only long-term performance-based equity incentive vehicle because the Compensation Committee believes that stock options maximize an executive officer’s incentive to increase our stock price and maximize stockholder value, since there is no financial gain to an executive officer unless our stock price appreciates. Equity compensation in the form of incentive or non-qualifiedThe Compensation Committee typically grants stock options is awarded byupon a named executive officer joining our company and once per year in connection with its determination of the named executive officer’s potential future performance. The Compensation Committee from time to time.also typically grants stock options following a significant change in job responsibility or in recognition of a significant achievement. The size andCompensation Committee determines the timingnumber of shares underlying each stock option grant is based on a number of factors, including the executive officer’s salary, such executive officer’s contributions to the achievement of our financial and strategic objectives, the value of the stock option at the time of grant, the possible value of the option if we achieve our objectives, and the Compensation Committee’s understanding of industry practices and norms from the collective knowledge of the Compensation Committee as seasoned executives of, consultants to, board and compensation members of, and venture capitalists with investments in similar companies in the industry.norms. The relative weight given to each of these factors varies among individualsis at the Compensation Committee’s discretion. There is no set formulaformula.
To maximize the incentive for the granting ofcontinued employment, stock options to individual executives and employees. Grants also may be made following a significant change in job responsibility or in recognition of a significant achievement. Stock options granted to our named executive officers generally have a multi-yearfour-year vesting schedule, in order to provide an incentive for continued employment. These vesting schedules are generally either four or five years depending onmeasured from around the date of the initial option grant. From time to time, weWe have alsooccasionally granted stock options that vest based on the attainment of performance goals. Stock option awards generally expire ten years from the date of the grant. This providesgrant, which allows the executive to focus on the creation and sustainment of long-term stockholder value and to have a reasonable time frame in whichopportunity to provide the executive officer with the possibility ofbenefit from price appreciation ofin our shares. The exercise price of such stock options is 100% of the fair market value of the underlying stock on the date of grant.
In February 2015,2016, the Board approved grants of options to our named executive officers in the following amounts: 450,000550,000 shares to Dr. Belanoff; 150,000 shares to Mr. Robb; and 100,000 shares to Mr. Lo.Fishman. These option awards vest in substantially equal monthly installments over a four-year period at the rate of 2.08334% on each monthly anniversary offrom the grant date, subject to the named executive officer’s continued employment through each applicable vesting date. These awards were given to our named executive officers as an incentive toward their continued service to the company. The size of the stockeach award was based on the level of compensation that the Chief Executive OfficerCompensation Committee’s and members of our Compensation Committee and Board believed was appropriate given the named executive officer’s degree of responsibility for the Company’s success. Ms. LeDoux did not receive an annual stock option grant in light of her impending retirement. Dr. Fishman was not employed by us in February 2015. In September 2015, in connection with Dr. Fishman’s commencement of employment as the Company’s Chief Medical Officer, the Board granted to Dr. Fishman an option to purchase 425,000 sharesBoard’s determination of the Company’s common stock. The option vests asrecipient’s ability to 25% of the shares subjectcontribute to the option on September 28, 2016 and at the rate of 2.08334% on each monthly anniversary thereafter, subject to Dr. Fishman’s continued employment through each applicable vesting date.
our future success.
Severance and Change in Control Arrangements We entered into Severance and Change in Control Agreements with each of our named executive officers to encourage continued attention and dedication to duties without distraction arising fromshould there arise the possibility of an involuntary termination of employment or change in control of our company and provide the business withto help ensure a smooth transition in the event ofshould such a termination of employment or change in control.control occur. The terms of the agreements are identical. For a detailed description of the Severance and Change in Control Agreements, see“Potential Payments Upon Termination or Change in Control – Severance and Change in Control Agreements” below. These severance and change in control arrangements are designed to retain these executives in these key positions as we compete for talented executives in the marketplace where such protections are commonly offered. These arrangements provide benefits to encourage the executives to continue to provide necessary or desirable service to us during a change in control and to ease the transition of the executives due to an unexpected employment termination by us due to changes in our employment needs.
Other Elements of Compensation Our executives are eligible to receive the following retirement and insurance benefits on the same terms as our other employees. Eligibility for all employees begins on the first day of the month coinciding with or immediately following the first day of employment. These benefits help us attract and retain talented employees in a competitive employment market, where such benefits are common. Each year, we review the benefit package we offer. 16
401(k) Plan.Plan. We have a Section 401(k) Savings/Retirement Plan, or 401(k) Plan, to cover eligible employees of the company and any designated affiliate. The 401(k) Plan permits our eligible employees to defer up to 100% of their annual compensation, subject to certain limitations imposed by the Internal Revenue Code. The employees’ elective deferralsAll contributions are immediately vested and non-forfeitable upon contribution to the 401(k) Plan.non-forfeitable. We currently make no matching contributions to the 401(k) Plan. Our employees are eligible to participate in the 401(k) Plan, as well as the insurance programs discussed below, on the first day of the month coinciding with or immediately following the first day of employment. Medical Insurance. We, atInsurance. At our sole cost, we provide to each eligible employee (including each named executive officer), and his or her spouse and children suchwith health, dental and optical insurance as we, in our sole discretion, may from time to time make available to our employees. Such insurance programs are part of a compensation program designed to facilitate our ability to attract and retain employees as we compete for talented individuals in the marketplace where such benefits are commonly offered.vision insurance. Life and Disability Insurance. We, atInsurance. At our sole cost, we provide each eligible employee (including each named executive officer) such disability and/orand life insurance as we, in our sole discretion, may from time to time make available to our employees. Such insurance programs are part of an overall broad-based total compensation program designed to facilitate our ability to attract and retain employees as we compete for talented individuals in the marketplace where such benefits are commonly offered.insurance. Policies with Respect to Equity Compensation Awards We grant all stock option awards based on the fair market value as of the date of grant. We do not have a policy of granting stock option awards at other than the fair market value of our common stock. The exercise price for each stock option grant is based on the last quoted price per share on the NASDAQ Capital Market on the date of grant. We do not have a policy and do not intend to have a policy or practice to select option grant dates for named executive officers in coordination with the release of material non-public information. We also have an insider trading policy that prohibits our named executive officers and Board members from engaging in short-term or speculative transactions in our stock, including short sales.
Summary Compensation Table The following table provides compensation information for the years ended December 31, 2016, 2015 2014 and 20132014 for each of our named executive officers. | Name and Principal Position | | Year | | Salary
($) | | | Bonus
($) | | Option
Awards(1)
($) | | | All Other
Compensation
($) | | Total
($) | | | Year | | Salary ($) | | Bonus ($) | | | Option Awards(1) ($) | | | All Other Compensation ($) | | | Total ($) | Joseph K. Belanoff, M.D., | | 2015 | | $ | 597,670 | | | | — | | | $ | 1,255,685 | | | | — | | | $ | 1,853,355 | | | 2016 | | 615,000 | | 400,000 | | | 1,382,390 | | | | — | | | 2,397,390 | Chief Executive Officer and | | 2014 | | $ | 571,250 | | | | — | | | | — | | | | — | | | $ | 571,250 | | | 2015 | | 597,670 | | | — | | | 1,255,685 | | | | — | | | 1,853,355 | President | | 2013 | | $ | 525,925 | | | $ | 400,000 | | | $ | 1,398,438 | | | | — | | | $ | 2,324,363 | | | 2014 | | 571,250 | | | — | | | | — | | | | — | | | 571,250 | G. Charles Robb, | | 2015 | | $ | 363,472 | | | | — | | | $ | 418,562 | | | | — | | | $ | 782,034 | | | 2016 | | 374,685 | | 146,000 | | | 377,015 | | | | — | | | 897,700 | Chief Financial Officer and | | 2014 | | $ | 350,908 | | | | — | | | | — | | | | — | | | $ | 350,908 | | | 2015 | | 363,472 | | | — | | | 418,562 | | | | — | | | 782,034 | Secretary | | 2013 | | $ | 337,417 | | | $ | 128,000 | | | $ | 510,561 | | | | — | | | $ | 975,978 | | | 2014 | | 350,908 | | | — | | | | — | | | | — | | | 350,908 | Robert S. Fishman, M.D. | | 2015 | | $ | 104,956 | | | | — | | | $ | 1,258,963 | | | | — | | | $ | 1,363,919 | | | 2016 | | 411,363 | | 40,000 | | | 234,067 | | | | — | | | 685,430 | Chief Medical Officer | | | | | | | | | | | | | | 2015 | | 104,956 | | | — | | | 1,258,963 | | | | — | | | 1,363,919 | Steven Lo, | | 2015 | | $ | 297,357 | | | | — | | | $ | 279,041 | | | | — | | | $ | 576,398 | | | Former Senior Vice President, | | 2014 | | $ | 397,375 | | | | — | | | | — | | | | — | | | $ | 397,375 | | | Oncology | | 2013 | | $ | 351,585 | | | $ | 231,000 | | | $ | 496,708 | | | | — | | | $ | 1,079,293 | | | Anne LeDoux, | | 2015 | | $ | 145,583 | | | $ | 65,000 | (2) | | $ | 48,990 | | | $ | 12,300 | (3) | | $ | 271,873 | | | Former Vice President and Controller and | | 2014 | | $ | 251,792 | | | | — | | | $ | 152,479 | | | | — | | | $ | 404,271 | | | Chief Accounting Officer | | 2013 | | $ | 243,176 | | | $ | 85,000 | | | $ | 174,805 | | | | — | | | $ | 502,981 | | |
(1) | Amounts shown do not reflect compensation actually received by the named executive officers or the actual value that may be recognized by the named executive officers with respect to these awards in the future. Instead, the amounts shown representAmounts reported constitute the grant date fair value of theoption awards as of the date of grant or, in respect of Ms. LeDoux, the incremental fair value of the modification to her stock option extending the exercise period.calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” in our Annual Report on Form 10-K for the year ended December 31, 2015.2016. |
(2) | Amount shown relates to the bonus approved by the Compensation Committee and Board in February 2015 to Ms. LeDoux in light of her impending retirement. |
(3) | For Ms. LeDoux, represents consulting fees paid for services rendered after her retirement. |
Grant17
Grants of Plan-Based AwardAwards During 20152016 The following table summarizes the grants of options awards we made to the named executive officers in 2015.2016. | | | | | | | | | | | | | | | Name | | Grant Date | | All Option Awards:
Number of Securities
Underlying Options (2)
(#) | | | Exercise Price of
Option Awards
($/Sh) | | | Grant Date Fair Value
of Stock and Option
Awards(1)
($) | | Joseph K. Belanoff, M.D. | | 2/18/2015 | | | 450,000 | | | $ | 3.29 | | | | 1,255,685 | |
| Name | | Grant Date | | All Option Awards:
Number of Securities
Underlying Options (2)
(#) | | | Exercise Price of
Option Awards
($/Sh) | | | Grant Date Fair Value
of Stock and Option
Awards(1)
($) | | | Grant Date | | All Other Option Awards: Number of Securities Underlying Options (2) (#) | | | Exercise Price or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards(1) ($) | | Joseph K. Belanoff, M.D. | | | 2/26/2016 | | | 550,000 | | | 3.88 | | | 1,382,390 | | G. Charles Robb | | 2/18/2015 | | | 150,000 | | | $ | 3.29 | | | | 418,562 | | | 2/26/2016 | | | 150,000 | | | 3.88 | | | 377,015 | | Robert S. Fishman, M.D. | | 9/28/15 | | | 425,000 | | | $ | 3.51 | | | | 1,258,963 | | | 2/26/2016 | | | 100,000 | | | 3.88 | | | 234,067 | | Steven Lo | | 2/18/2015 | | | 100,000 | | | | 3.29 | | | | 279,041 | | |
(1) | The amount reported constitutes the grant date fair value of the option award, is based on the fair value as of the grant date of the award multiplied by the number of shares.calculated in accordance with FASB ASC Topic 718. Refer to Note 8 “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” included in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 20152016 for the relevant assumptions used to determine the valuation of our option awards. |
(2) | The stock options vest over a four year period at the rate of 2.08334% on each monthly anniversary of the grant date until fully vested, subject to the terms and conditions of the option award agreement. |
Outstanding Equity Awards At Fiscal Year-End The following table summarizes unexercised options that have not vested and related information for each of our named executive officers as of December 31, 2015.2016. To date, no stock awards have been granted to any of our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | | Option
Exercise
Price | | | Option
Expiration | | | Name | | Grant Date | | | (#) | | | (#) | | | $ | | | Date | | Joseph K. Belanoff, M.D. | | | 4/16/2007 | | | | 1,000,000 | | | | — | | | $ | 1.50 | | | | 4/16/2017 | | | | | 3/26/2009 | | | | 1,000,000 | (3) | | | — | | | $ | 1.19 | | | | 3/26/2019 | | | | | 5/19/2011 | | | | 800,000 | (2) | | | — | | | $ | 4.42 | | | | 5/19/2021 | | | | | 1/30/2013 | | | | 583,333 | (2) | | | 216,667 | (2) | | $ | 2.08 | | | | 1/30/2023 | | | | | 2/18/2015 | | | | 93,750 | (2) | | | 356,250 | (2) | | $ | 3.29 | | | | 2/18/2025 | | G. Charles Robb | | | 9/1/2011 | | | | 600,000 | (1) | | | — | | | $ | 2.70 | | | | 9/1/2021 | | | | | 1/30/2013 | | | | 145,833 | (2) | | | 54,167 | (2) | | $ | 2.08 | | | | 1/30/2023 | | | | | 11/19/2013 | | | | 52,083 | (2) | | | 47,917 | (2) | | $ | 1.92 | | | | 11/19/2023 | | | | | 2/18/2015 | | | | 31,250 | (2) | | | 118,750 | (2) | | $ | 3.29 | | | | 2/18/2025 | | Anne LeDoux | | | 4/16/2007 | | | | 125,000 | (2) | | | — | | | $ | 1.50 | | | | 4/16/2017 | | | | | 3/26/2009 | | | | 75,000 | (2) | | | — | | | $ | 1.19 | | | | 3/26/2019 | | | | | 5/19/2011 | | | | 100,000 | (2) | | | — | | | $ | 4.42 | | | | 5/19/2021 | | | | | 1/30/2013 | | | | 60,416 | (2) | | | — | | | $ | 2.075 | | | | 1/30/2023 | | | | | 2/6/2014 | | | | 20,000 | (2) | | | — | | | $ | 3.020 | | | | 2/6/2024 | |
| | | | Number of Securities Underlying Unexercised Options Exercisable | | | Number of Securities Underlying Unexercised Options Unexercisable | | | Option Exercise Price | | Option Expiration | Name | | Vesting Commencement Date (1) | | (#) | | | (#) | | | ($) | | Date | Joseph K. Belanoff, M.D. | | 3/26/2009 | | | 1,000,000 | | | | — | | | 1.19 | | 3/26/2019 | | | 5/19/2011 | | | 800,000 | | | | — | | | 4.42 | | 5/19/2021 | | | 1/30/2013 | | | 783,333 | | | | 16,667 | | | 2.08 | | 1/30/2023 | | | 2/18/2015 | | | 206,250 | | | | 243,750 | | | 3.29 | | 2/18/2025 | | | 2/26/2016 | | | 114,583 | | | | 435,417 | | | 3.88 | | 2/26/2026 | G. Charles Robb | | 9/1/2011 | | | 600,000 | | | | — | | | 2.70 | | 9/1/2021 | | | 1/30/2013 | | | 195,833 | | | | 4,167 | | | 2.08 | | 1/30/2023 | | | 11/19/2013 | | | 77,083 | | | | 22,917 | | | 1.92 | | 11/19/2023 | | | 2/18/2015 | | | 68,750 | | | | 81,250 | | | 3.29 | | 2/18/2025 | | | 2/26/2016 | | | 31,250 | | | | 118,750 | | | 3.88 | | 2/26/2026 | Robert S. Fishman, M.D. | | 9/28/2015 | | | 132,812 | | | | 292,188 | | | 3.51 | | 9/29/2025 | | | 2/26/2016 | | | 20,833 | | | | 79,167 | | | 3.88 | | 2/26/2026 |
(1) | TheEeach unvested option vests atand becomes exercisable in substantially equal monthly installments through the rate of 25% at the firstfourth anniversary of the grantvesting commencement date, and, thereafter, atsubject to the rate of 2.08334% per month, until fully vested.named executive officer’s continued services through the applicable vesting date. |
(2) | The option vests at the rate of 2.08334% per month until fully vested. |
(3) | The stock option grants awarded to Joseph K. Belanoff, M.D. in 2009 were each comprised of 2 parts: 500,000 shares was a service-based award that vests prorata over a four-year period at the rate of 2.0834% on the monthly anniversary of the date of grant, until fully vested; 500,000 shares vested in its entirety in February 2012 upon the occurrence of the approval of the NDA for our first product by the FDA. |
Option Exercises in 20152016 The following table includes certain information with regard to options exercised by our named executive officers during 2015.2016. | | | | | | | | | Name | | Option Exercise | | | | | | | Number of Shares Acquired
On Exercise
(#) | | | Value Realized on Exercise
($)(1) | | Steven Lo | | | 706,249 | | | | 1,138,613 | | Anne M. LeDoux | | | 25,000 | | | | 85,500 | |
| | Option Exercise | | | | | | | Name | | Number of Shares Acquired On Exercise (#) | | | | Value Realized on Exercise ($)(1) | | Joseph K. Belanoff, M.D. | | | 1,000,000 | | | | | 7,143,297 | |
(1) | The value realized on the exercise represents the excess of the sales price or market price at close on the day of the exercise less the exercise price of the shares. |
Pension Benefits None of our named executive officers participate in or have account balances in qualified or non-qualified defined benefit plans sponsored by us. Nonqualified Deferred Compensation None of our named executives participate in or have account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us. Potential Payments Upon Termination or Change in Control Severance and Change in Control Agreements We have entered into Severance and Change in Control Agreements with each of our named executive officers. The terms of the agreements are identical. The agreements provide that, if the executive’s employment is terminated by us without “cause” or by the executive for “good reason” (as each term is defined in the agreements) prior to or more than 18 months following a change in control, the executive will be eligible to receive 12 months of his or her then current base salary, payable in substantially equal installments in accordance with the company’s customary payroll procedures and continued health insurance coverage for up to 12 months following the date of termination. In addition, the agreements provide that in the event the executive’s employment is terminated by us without “cause” or by the executive for “good reason” within 18 months following a change in control, the executive will be eligible to receive an amount equal to 12 months of his or her then current base salary payable in a lump sum, continued health insurance coverage for up to 12 months following the date of termination, and full vesting of all outstanding equity awards. The receipt of any severance will be subject to the executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to us within 60 days following executive’s termination of employment. No severance will be paid or provided until the separation agreement and release of claims becomes effective. 19
The following table reflects compensation payable to each of Dr. Belanoff, Mr. Robb and Dr. Fishman under a change in control or various employment termination events. The amounts shown below assume that (i) a change in control of our company occurred and each named executive officer experienced a qualifying termination on December 31, 20152016 or (ii) such named executive officer terminated employment with our companyexperienced a qualifying termination effective as of December 31, 2015, and estimate the value to the named executive officer as a result of each triggering event. Mr. Lo and Ms. LeDoux are not included in the tables below because they were not employed by us as of December 31, 2015. In connection with Ms. LeDoux’s retirement in July 2015, we entered into a consulting agreement under which we agreed to compensate her at the rate of $300 per hour in exchange for consulting services performed on an as-needed basis until July 1, 2016 or such earlier date as determined by us or Ms. LeDoux. In addition, the time available to Ms. LeDoux to exercise her vested options was extended by one year, to the earlier of four years following the date of her retirement as an employee or the expiration date of the option, which extension had an incremental fair value equal to $48,990. In 2015, payments to Ms. LeDoux under the consulting agreement totaled $12,300.2016.
| Name | | Benefit | | Termination
Without Cause or
For Good Reason
Outside of a Change
in Control | | | Termination Without
Cause or For Good
Reason Within 18
Months Following a
Change in Control | | | Benefit | | Termination Without Cause or For Good Reason Outside of a Change in Control | | | Termination Without Cause or For Good Reason Within 18 Months Following a Change in Control | | Joseph K. Belanoff, M.D. | | Base Salary | | | $600,000 | | | | $600,000 | | | Base Salary | | $615,000 | | | $615,000 | | | | Accelerated Vesting of Stock Options | | | — | | | | $1,230,397 | (1) | | | | Health Benefit | | | $35,156 | | | | $35,156 | | | | | | | | | | | | | Accelerated Vesting of Stock Options | | | — | | | $2,525,815 | (1) | | | Total | | | $635,156 | | | | $1,865,553 | | | Health Benefit | | $33,253 | | | $33,253 | | | | | | | | | | | | Total | | $648,253 | | | $3,174,068 | | G. Charles Robb | | Base Salary | | | $364,217 | | | | $364,217 | | | Base Salary | | $374,685 | | | $374,685 | | | | Accelerated Vesting of Stock Options | | | — | | | | $504,398 | (1) | | Accelerated Vesting of Stock Options | | | — | | | $867,920 | (1) | | | Health Benefit | | | $14,255 | | | | $14,255 | | | Health Benefit | | $12,112 | | | $12,112 | | | | | | | | | | | | Total | | $386,797 | | | $1,254,717 | | | | Total | | | $378,472 | | | | $882,870 | | | | | | | | | | | | | Robert S. Fishman, M.D. | | Base Salary | | | $400,000 | | | | $400,000 | | | Base Salary | | $411,363 | | | $411,363 | | | | Accelerated Vesting of Stock Options | | | — | | | | $624,750 | (1) | | Accelerated Vesting of Stock Options | | | — | | | $1,363,289 | (1) | | | Health Benefit | | | $33,154 | | | | $33,154 | | | Health Benefit | | $33,253 | | | $33,253 | | | | | | | | | | | | Total | | $444,616 | | | $1,807,905 | | | | Total | | | $433,154 | | | | $1,057,904 | | | | | | | | | | | | |
(1) | For unvested options held by named executive officers as of December 31, 2015,2016, the value ascribed to the change in control acceleration features under the Severance and Change in Control Agreements is calculated as follows: |
| a. | For option grants to these individuals where the closing trading price for our company’s common stock on the NASDAQ Capital Market as of December 31, 2015, $4.98,30, 2016, $7.26, exceeded the exercise price of the option grant, the value of the acceleration benefit on change in control has been calculated as the difference between these prices multiplied by the number of unvested shares in each of these option awards as of that date. |
| b. | There is no value ascribed to any unvested shares for any option grants to these individuals where the exercise price of the option grant equaled or exceeded $4.98,$7.26, which was the closing trading price for our company’s common stock on the NASDAQ Capital Market as of December 31, 2015.30, 2016. |
Risk Assessment of Compensation Programs Our Compensation Committee and Board have determined that our compensation policies, plans and practices are appropriately balanced and do not create risks that are reasonably likely towill have a material adverse effect on our company. To make this determination, they reviewed the company’s compensation policies, plans and practices for our executive officers and employees assessing such features aswith a focus on compensation program design, payment methodology, relationship to
our company’s performance and length of performance period, and oversight and controls as compared to the compensation practices that they have seen in similar companies in our stage of development.companies. During the review, severalthe Compensation Committee noted risk mitigating factors inherent in our company’s compensation practices, were noted, including the Compensation Committee’s and management’s discretion in approving executive and employee compensation and establishing performance goals for short- and long-term compensation plans, the balance between fixed and variable pay and the mix of short- and long-term incentives that encourage consistent performance over a sustained period, thus aligningand these factors aligned the interests of our named executive officers and employees with thatthose of our stockholders.
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EQUITY COMPENSATIONCOMPENSATION PLAN INFORMATION The following table provides information as of December 31, 20152016 with respect to the shares of our common stock that may be issued under all of our existing equity compensation plans, which consist of the 2012 Incentive Award Plan and the 2004 Equity Incentive Plan. | | | | (a) | | | (b) | | | (c) | | | (a) | | | (b) | | | (c) | | | Plan Category | | Number of
Securities to Be
Issued upon
Exercise of
Outstanding
Options | | | Weighted Average
Exercise Price of
Outstanding Options | | | Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column(a))(2) | | | Number of Securities to Be Issued upon Exercise of Outstanding Options | | | Weighted Average Exercise Price of Outstanding Options | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column(a))(2) | | | Equity compensation plans approved by stockholders | | | 16,195,592 | | | $ | 2.98 | | | | 8,159,474 | (1)(2) | | | 17,663,682 | | | $ | 3.63 | | | | 7,919,076 | | (1)(2) | Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | Total | | | 16,195,301 | | | $ | 2.98 | | | | 8,159,474 | | | | 17,663,682 | | | $ | 3.63 | | | | 7,919,076 | | | | | | | | | | | | | |
| (1) | Represents shares of common stock remaining available for future issuance under our 2012 Incentive Award Plan as of December 31, 2015.2016. |
| (2) | The 2012 Incentive Award Plan contains an “evergreen” provision that allows for increases on the first business day of each fiscal year beginning January 1,in 2013 and ending in 2022, the lesser of an additional (i) 8,000,000 shares of our common stock, (ii) 4% of the outstanding shares of common stock on the immediately preceding December 31 or (iii) an amountsuch smaller number of shares determined by the Board. None of our other plans has an “evergreen” provision. On February 26, 2016,10, 2017, the Board authorized an “evergreen” increase in the shares available for grant under the 2012 Plan to be equivalent to 4% of the shares of our common stock outstanding on December 31, 2015,2016, which represented an increase of 4,385,6854,508,404 shares to the plan. |
DIRECTOR COMPENSATION The following table provides compensation information, for the one yearone-year period ended December 31, 2015,2016, for each member of our Board. | | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid
in Cash ($) | | | Option Awards(1)
($) | | | All Other
Compensation
($) | | | Total ($) | | James N. Wilson(2) | | | — | | | $ | 697,603 | (2) | | $ | 397,776 | (2) | | $ | 1,095,379 | | Joseph K. Belanoff, M.D.(3) | | | — | | | | — | | | | — | | | | — | | G. Leonard Baker, Jr. (5) | | $ | 48,000 | | | $ | 166,429 | (4) | | | — | | | $ | 214,429 | | Daniel M. Bradbury(5) | | $ | 41,500 | | | $ | 166,429 | (4) | | | — | | | $ | 207,929 | | Daniel N. Swisher, Jr.(5) | | $ | 33,750 | | | $ | 388,334 | (6) | | | — | | | $ | 422,084 | |
| | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid
in Cash ($) | | | Option Awards(1)
($) | | | All Other
Compensation
($) | | | Total ($) | | Joseph C. Cook, Jr. (5) | | $ | 49,500 | | | $ | 166,429 | (4) | | | — | | | $ | 215,929 | | Patrick G. Enright(5) | | $ | 45,000 | | | $ | 166,429 | (4) | | | — | | | $ | 211,429 | | David L. Mahoney(5) | | $ | 51,500 | | | $ | 166,429 | (4) | | | — | | | $ | 217,929 | | Joseph L. Turner(5) | | $ | 54,500 | | | $ | 277,382 | (4) | | | — | | | $ | 331,882 | |
Name | | Fees Earned or Paid in Cash ($) | | | Option Awards(1)(2) ($) | | | All Other Compensation ($) | | | Total ($) | | James N. Wilson (3) | | 65,873 | | | 251,344 | | | 275,131 | | (3) | 592,348 | | Joseph K. Belanoff, M.D. (4) | | | — | | | | — | | | | — | | | | — | | G. Leonard Baker, Jr. | | 53,000 | | | 110,198 | | (5) | | — | | | 163,198 | | Daniel M. Bradbury | | 49,176 | | | 110,198 | | (5) | | — | | | 159,374 | | Daniel N. Swisher, Jr. | | 57,879 | | | 183,663 | | (5) | | — | | | 241,542 | | Patrick G. Enright | | 52,250 | | | 110,198 | | (5) | | — | | | 162,448 | | David L. Mahoney | | 57,250 | | | 110,198 | | (5) | | — | | | 167,448 | | Reneé D. Galá (6) | | 25,000 | | | 223,684 | | (6) | | — | | | 248,684 | |
| (1) | Amounts shown do not reflect compensation actually received by the directors or the actual value that may be recognized by the directors with respect to these awards in the future. Instead, the amounts shown represent the grant date fair value of the awards.awards as calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” in our Annual Report onForm 10-K for the year ended December 31, 2015.2016. |
| (2) | As of December 31, 2016, our non-employee directors and Mr. Wilson held options outstanding to purchase the following number of shares: Mr. Baker: 300,000; Mr. Bradbury: 190,000; Mr. Swisher: 120,000; Mr. Enright: 310,000; Mr. Mahoney: 310,000; Ms. Galá: 70,000 shares; and Mr. Wilson: 1,250,000 shares. |
21
| (3)During 2015, | From January 1, 2016 through March 1, 2016, Mr. Wilson was an employee director.director serving as the Chairman of our board of directors. He received compensation in his role as an employee providing advice and business insight. The entire amounts shown as Option Awards andamount in “All Other CompensationCompensation” column for Mr. Wilson representrepresents the value of the option grant,$91,000 in base salary and bonus he receivedpaid to Mr. Wilson for his services as an employee. He received no additionalemployee through March 1, 2016, and bonus compensation in his capacity asawarded to him by the Compensation Committee of $184,000, constituting a director. Asbonus for the achievement of December 31, 2015, Mr. Wilson holds outstanding options to purchase an aggregate of 1,400,000 shares.corporate performance goals. |
(3) | (4) | Dr. Belanoff is a full time employee and a named executive officer and is compensated in that capacity. His compensation as an employee is shown in the “Summary Compensation Table” above. He receives no additional compensation in his capacity as a director. See “Outstanding Equity Awards At Fiscal Year-End” table above for the aggregate number of shares represented by option awards outstanding that have been granted to Dr. Belanoff. |
(4) | (5) | During 2015,2016, Mr. Turner,Wilson, as chairman of the board, was granted an option to purchase 100,000 shares with a grant date fair value of $251,344, Mr. Swisher, as chairman of the Audit Committee, was granted an option to purchase 50,000 shares with a grant date fair value of $277,382$183,663, and MessrsMessrs. Baker, Bradbury, Cook, Enright and Mahoney were each granted an option to purchase 30,000 shares with a grant date fair value of $166,429.$110,198. All of these awards vest pro-rata over a one-year period at the rate of 8.3334% on the monthly anniversary of the date of grant, subject to continued service. |
(5) | As of December 31, 2015, our non-employee directors hold options outstanding to purchase the following number of shares: Mr. Baker: 270,000; Mr. Bradbury: 160,000; Mr. Swisher: 70,000; Mr. Cook: 240,000; Mr. Enright: 280,000; Mr. Mahoney: 320,000 and Mr. Turner: 330,000 shares. |
(6) | Ms. Galá was appointed to our board of directors in June 2016. On June 18, 2015, Mr. Swisher27, 2016, Ms. Galá was granted an option to purchase 70,000 shares of the Company’s common stock, at an exercise price of $6.55$5.11 per share, the closing price of the Company’s common stock on the Nasdaq Stock Market on the date of grant. The grant date fair value of this option was $223,684. This option will vest over a 4-year period, with 25 percent vesting on the first annual anniversary of the date of grant and the remainder vesting ratably on each monthly anniversary thereafter until fully vested, subject to Mr. Swisher’sMs. Galá’s continued service. |
For 2015,2016, non-employee directors received a director fee from us for their services as members of the Board in the amount of $35,000$40,000 per year, which fee was increased to $40,000 for 2016.year. In addition, the Chair and members of the Audit Committee receive fees of $15,000 and $10,000, respectively, per year; the Chair and members of the Compensation Committee receive fees of $13,000 and $6,500, respectively, per year; the Chair and members of the Corporate Governance & Nominating Committee receive fees of $8,000 and $4,500, respectively, per year. Commencing March 1, 2016, the chairman of our board of directors receives an annual cash retainer of $120,000 in lieu of any other fees. New directors are granted an option to purchase 70,000 shares of our common stock in connection with their initial election to the Board. In February 2017, the Board approved a reduction in the initial option grant to 60,000 shares. The initial director options vest with respect to 25% of the shares on the first anniversary of the date of the grant and, thereafter, at the rate of 2.08334% per month, until fully vested, subject to the director’s continued service. Non-employee directors who are reelected at the Annual Meeting each receive a stock option grant of 30,000 shares that vests over the one year term as director at the rate of 8.3334% per month from the date of the Annual Meeting until fully vested, subject to the director’s continued service. The ChairsBoard has also historically approved larger option awards for directors serving certain roles. In 2016, the Board approved an option covering 100,000 shares to Mr. Wilson for his service as Chairman of the Board and an option covering 50,000 shares to Mr. Swisher for his service as Chair of the Audit Committee, Corporate Governance and Nominating Committee and the Compensation Committee may each receive an additional grant of our common stock with a similar one-year vesting provision. The amounts of the annual grants are determined each year. In May 2015, Joseph L. Turner, the chairman of the Audit Committee was granted an option to purchase 50,000 shares of our common stock and all other non-employee directors that were reelected at the Annual Meeting in May 2015 were granted options to purchase 30,000 shares of our common stock. In addition, in June 2015, Mr. Swisher was granted an option to purchase 70,000 shares of our common stock. The vesting provisions for these awards are as outlined in the preceding paragraph. Directors are reimbursed for certain expenses in connection with attending Board and committee meetings.Committee.
We have entered into a Severance and Change in Control Agreement with James N. Wilson, Chairman of the Board. The agreement with Mr. Wilson provides that if his employment or service on the Board is terminated involuntarily by us without “cause” or by him for “good reason” (as each is defined in the agreement) within 18 months following a change in control all of his outstanding equity awards shall become fully vested. Mr. Wilson will only receive vesting acceleration under this agreement if he signs and does not revoke a separation agreement and release of claims in a form reasonably acceptable to our Company within 60 days following termination of employment. No vesting acceleration will be provided to Mr. Wilson until the separation agreement and release of claims becomes effective. 22
COMPENSATION COMMITTEECOMMITTEE REPORT* The Compensation Committee of the Board, or Compensation Committee, has furnished this report on executive compensation. None of the members of the Compensation Committee is currently our officer or employee and all are “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code. The Compensation Committee is responsible for designing, recommending to the Board for approval and evaluating our compensation plans, policies and programs and reviewing and approving the compensation of the Chief Executive Officer and other officers and directors. This report, filed in accordance with Item 407(e)(5) of Regulation S-K, should be read in conjunction with the other information relating to executive compensation, which is contained elsewhere in this Proxy Statement and is not repeated here. In this context, the Compensation Committee hereby reports as follows: 1. | The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K contained herein with management; and |
2. | Based on the review and discussions referred to in paragraph (1) above, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2015.2016. |
Compensation Committee
G. Leonard Baker, Jr., Chairman
Daniel M. Bradbury
Joseph C. Cook, Jr.
David L. Mahoney
* | The material in this report is not soliciting material, and is not deemed filed with the SEC.Compensation Committee | | G. Leonard Baker, Jr., Chairman | Daniel M. Bradbury | Daniel N. Swisher, Jr. |
* The material in this report is not soliciting material, and is not deemed filed with the SEC. 23
REPORT OF THE AUDITAUDIT COMMITTEE* Under the guidance of a written charter adopted by the Board, the purpose of the Audit Committee is to oversee the accounting and financial reporting processes of the Company and audits of its financial statements. The responsibilities of the Audit Committee include appointing and providing for the compensation of the Company’s independent registered public accounting firm. Each of the members of the Audit Committee meets the independence requirements of the rules of the NASDAQ Stock Market and the SEC. Management has primary responsibility for the system of internal controls and the financial reporting process. The independent registered public accounting firm has the responsibility to express an opinion on the financial statements and internal control over financial reporting based on an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB)(“PCAOB”). In this context and in connection with the audited financial statements contained in the Company’s Annual Report on Form 10-K, the Audit Committee: reviewed and discussed the audited financial statements as of and for the fiscal year ended December 31, 20152016 with the Company’s management and Ernst & Young LLP, the Company’s independent registered public accounting firm; discussed with Ernst & Young LLP the matters required to be discussed by Auditing StandardStandards No. 16,1301, “Communications with Audit Committees”Committees,” as adopted by the PCAOB; received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB regarding Ernst and Young LLP’s communications with the Audit Committee concerning independence and discussed with Ernst & Young LLP their independence; considered and discussed whether the non-audit services, if any, performed by Ernst & Young LLP are compatible with maintaining their independence; reviewed and discussed the reports of management and Ernst & Young LLP on their assessments of the effectiveness of the Company’s internal control over financial reporting as of the end of the most recent fiscal year; reviewed the disclosures regarding the Company’s system of internal controls required to be contained in the Company’s Form 10-K; based on the foregoing reviews and discussions, recommended to the Board that the audited financial statements and management’s report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 20152016 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20152016 filed with the Securities and Exchange Commission; and instructed Ernst & Young LLP that the Audit Committee expects to be advised if there are any subjects that require special attention. The Audit Committee has also recommended, subject to stockholder ratification in Proposal 2 in this Proxy Statement, the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.2017. AUDIT COMMITTEE Daniel N. Swisher, Jr., Chairman Patrick G. Enright Reneé D. Galá David L. Mahoney 24
* | The material in this report is not soliciting material, and is not deemed filed with the SEC. |
FEES OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Audit Fees Fees for audit services totaled approximately $1,154,000 in 2016 and $1,052,000 in 2015, and $914,000 in 2014, including fees for professional services provided by Ernst & Young LLP, our independent registered public accounting firm, in connection with the integrated annual audit of our financial statements and internal control over financial reporting in 20152016 and 2014 ,2015, respectively, review of our quarterly financial statements included in Quarterly Reports on Forms 10-Q, comfort letters to underwriters in connection with public financing transactions, consultations on matters addressed during the audit quarterly reviews, or reviews of financing transactions under consideration and services provided in connection with other statutory or regulatory filings, including consents. Audit-Related Fees, Tax Fees, and All Other Fees We did not incur fees for tax advisory services from our independent registered public accounting firm in 20152016 or 2014.2015. We did not incur audit-related fees for assurance and related services, or for any other products or services, from our independent registered public accounting firm in 20152016 or 2014.2015. Pre-approval of audit-related and non-audit services Our Audit Committee has adopted a policy and procedures for the pre-approval of audit and permissible non-audit services rendered by our independent registered public accounting firm, Ernst & Young LLP. Under this policy, our Audit Committee must pre-approve all audit and non-audit services performed by the Company’s independent auditor in order to ensure that the provision of such services does not impair the auditor’s independence. The policy permits the engagement of the independent registered public accounting firm for services that are approved by our Audit Committee in defined categories such as audit services, audit-related services and tax services. Pre-approval may be given as part of our Audit Committee’s annual review and approval of the scope and estimated cost of non-audit services that may be provided by the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The Audit Committee has also delegated to the Chair of the Audit Committee the authority to pre-approve audit and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees, provided that the Chair shall report any decision to pre-approve such audit or non-audit services and fees to the full Audit Committee at its next regular meeting. Our Audit Committee receives periodic reports on the scope of services provided and expected to be provided in the future by the independent registered public accounting firm. Consistent with this policy, in 20152016 and 20142015 all audit and non-audit services (including audit-related fees, tax fees and all other fees) performed by our independent registered public accounting firm, Ernst & Young LLP, were pre-approved by the Audit Committee. 25
PROPOSALS TO BE ACTED UPONUPON AT THE ANNUAL MEETING PROPOSAL 1 ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will vote on the election of seven directors, each to serve until the annual meeting of stockholders in 20172018 and until their successors are duly elected and qualified. The independent members of the Board have selected, and the Board has unanimously nominated, G. Leonard Baker, Jr., Joseph K. Belanoff, M.D., Daniel M. Bradbury, Patrick G. Enright,Reneé D. Galá, David L. Mahoney, Daniel N. Swisher, Jr. and James N. Wilson for election to the Board. The nominees have indicated that they are willing and able to serve as directors. If any of the nominees becomes unable or unwilling to serve, the accompanying proxy may be voted for the election of such other person as shall be designated by the Board. The proxies being solicited will be voted for the nominees at the Annual Meeting. Directors will be elected by a plurality of the votes cast, in person or by proxy, at the Annual Meeting, assuming a quorum is present. Stockholders do not have cumulative voting rights in the election of directors. Recommendation of the Board The Board of Directors unanimously recommends a vote “FOR” the election of the nominees as listed above. Unless otherwise instructed, it is the intention of the persons named in the accompanying proxy card to vote shares represented by properly executed proxy cards for the election of the nominees as listed above. PROPOSAL 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM At the Annual Meeting, the stockholders will be asked to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.2017. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will have the opportunity to make statements if they desire to do so. Such representatives are also expected to be available to respond to appropriate questions. Recommendation of the Board The Board of Directors unanimously recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 2017.PROPOSAL 3 ADVISORY VOTE ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS We intend for our executive compensation program to attract and retain a talented, entrepreneurial and creative team of executives who will provide leadership for our company’s success in promoting Korlym for the treatment of patients with Cushing’s syndrome and successfully managing the pre-clinical and clinical development of our cortisol modulation platform. We accomplish this goal in a manner consistent with our strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. We believe the compensation program for the named executive officers is closely aligned with the long-term interests of our stockholders and was instrumental in helping us perform well in 2016. Stockholders are urged to read the Executive Compensation section of this Proxy Statement, including the Compensation Discussion and Analysis, or CD&A, section which discusses our compensation policies and 26
procedures, and the 2016 compensation for our named executive officers. The Compensation Committee and the Board believe that our compensation policies and procedures are effective in advancing our goals and furthering the interests of our stockholders. In accordance with Section 14A of the Securities Exchange Act, we are including in this Proxy Statement a separate, non-binding stockholder vote on executive compensation. We are asking you to approve, on an advisory basis, the compensation of our named executive officers listed in the 2016 Summary Compensation Table included in this Proxy Statement, as described in the Executive Compensation section of this Proxy Statement, including the CD&A and the related compensation tables and other narrative executive compensation disclosure contained therein. Stockholders have the opportunity to vote “for” or “against” or to “abstain” from voting on the following non-binding resolution relating to executive compensation: “RESOLVED, that the stockholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, compensation tables and narrative discussion of this Proxy Statement.” Although the advisory vote is non-binding, the Compensation Committee and the Board will review the results of the vote. The Compensation Committee will consider our stockholders’ concerns to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement and take them into account in future determinations concerning our executive compensation program. The Board therefore recommends that you indicate your support for our compensation policies and procedures for our named executive officers, as outlined above. Unless our Board changes its policy with respect to the frequency of stockholder votes on executive compensation, we expect to hold our next such vote at the 2020 Annual Meeting of Stockholders. Recommendation of the Board The Board unanimously recommends that stockholders vote, on an advisory basis, FOR the approval of the compensation of the named executive officers as described in the CD&A, the compensation tables and the narrative discussion of this Proxy Statement. PROPOSAL 4 ADVISORY VOTE ON THE FREQUENCY OF THE VOTE ON COMPENSATION OF NAMED EXECUTIVE OFFICERS In accordance with Section 14A of the Securities Exchange Act, we are including in this Proxy Statement a separate stockholder vote on how frequently the advisory vote described under Proposal No. 3 — the “Advisory Vote on Compensation of Named Executive Officers”, or the “say on pay” advisory vote, should occur, which is referred to herein as the “frequency advisory vote”. We are providing stockholders the option of selecting a frequency of one, two or three years, or abstaining. As with the say on pay advisory vote, the vote described in this Proposal No. 4 is non-binding. The Board has determined that providing stockholders with the say on pay advisory vote once every three years will be the most effective means for conducting and responding to the say on pay advisory vote based on a number of considerations, including the following: Our compensation program is designed to induce and reward performance over a multi-year period; A three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation strategies and the related business outcome of the Company; 27
A three-year vote cycle gives the Board and the Compensation Committee sufficient time to thoughtfully respond to stockholders’ sentiments and to implement any necessary changes to our executive compensation policies and procedures; and The Board will continue to engage with our stockholders on executive compensation during the period between stockholder votes. As discussed under “Communications with Directors,” the Company provides stockholders an opportunity to communicate with the Board, including on issues of executive compensation. Based on the factors discussed, the Board has determined to recommend that future say on pay advisory votes occur every three years until the next frequency advisory vote. Stockholders are not being asked to approve or disapprove the Board’s recommendation, but rather to indicate their choice among the following frequency options: one year, two years or three years, or to abstain from voting. While the Board has determined that providing stockholders with the say on pay advisory vote once every three years is advisable, and therefore recommends that you approve a triennial vote, the Compensation Committee and the Board will consider our stockholders’ concerns and take them into account in determining how frequently the say on pay advisory vote occurs. Recommendation of the Board The Board unanimously recommends that stockholders select every “three years” on the proposal recommending the frequency of the say on pay advisory vote. OTHER MATTERS As of the time of preparation of this Proxy Statement, neither the Board nor management intends to bring before the meeting any business other than the matters referred to in the Notice of Annual Meeting and this Proxy Statement. If any other business should properly come before the meeting, or any adjournment or postponement thereof, the persons named in the proxy will vote on such matters according to their discretion. 28
STOCKHOLDER PROPOSALS FOR THE 20172018 ANNUAL MEETING Pursuant to Rule 14a-8 under the Exchange Act, stockholder proposals for inclusion in the proxy statement of the Board of Directors for the 20172018 Annual Meeting of Stockholders must be received by us at 149 Commonwealth Drive, Menlo Park, California 94025, on or before December 15, 201625, 2017 and must otherwise comply with Rule 14a-8 under the Exchange Act.However, if the date of the 20172018 Annual Meeting of Stockholders is changed by more than 30 days from the anniversary date of our 20162017 Annual Meeting of Stockholders, such deadline pursuant to Rule 14a-8 under the Exchange Act will instead be a reasonable time before we begin to print and send our proxy materials. If we are not notified by the deadline under Rule 14a-8 under the Exchange Act of a proposal to be brought before the 20172018 Annual Meeting of Stockholders by a stockholder, then proxies held by management may provide the discretion to vote against such proposal even though it is not discussed in the proxy statement for such meeting. In addition, regardless of whether a proposal is included in our proxy statement, our Amended and Restated Bylaws provide that advance notice of a stockholder’s proposal to be brought before the 20172018 Annual Meeting of Stockholders, including director nominations, must be delivered to the Secretary of our company at our principal executive offices not earlier than November 15, 2016 (oneone hundred fifty (150) days),twenty (120) days (December 25, 2017) and not later than December 15, 2016 (one hundred twenty (120) days),ninety (90) days (January 24, 2018) prior to the anniversary of the mailing date of the proxy materials for the previous year’s annual meeting. Our Amended and Restated Bylaws also provide that in the event that the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the anniversary date of the preceding year’s annual meeting, this advance notice must be received not later than the close of business on the later of (i) the 150th120th day prior to such annual meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made. In the event that the number of directors to be elected to the Board is increased and we do not make a public announcement naming all of the nominees for director or specifying the size of the increased Board by March 25, 2017, which is 55 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by our Amended and Restated Bylaws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of our company at our principal executive offices not later than the close of business on the 10th day following the day on which such public announcement is first made by us. 29
Each stockholder’s notice must contain the following information as to each matter the stockholder proposes to bring before the annual meeting: (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and appropriate biographical information and a statement as to the qualification of the nominee; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of such stockholdereach Proposing Person (as defined in the Company’s Amended and Restated Bylaws), (b) the beneficial owner, if any, on whose behalftext of the proposal is made;or business (including the text of any resolutions proposed for consideration), (c) a reasonably detailed description of all agreements, arrangements and (c) asunderstandings (i) between or among any of the Proposing Persons or (ii) between or among any Proposing Person and any other record or beneficial holder(s) or persons(s) who have a right to acquire beneficial ownership at any time in the stockholder givingfuture of the notice andshares of any class or series of the beneficial owner, if any, on whose behalfCorporation (including their names) in connection with the nomination or proposal is made (i) the name and address of such stockholder, as they appear on our books, and of such beneficial owner, (ii) the number of shares of our common stock which are owned beneficially and of recordbusiness by such stockholder, and (d) any other information relating to such beneficial owner, and (iii) whether either such stockholder or beneficial owner intendsitem of business that would be required to deliverbe disclosed in a proxy statement and formor other filing required to be made in connection with solicitations of proxyproxies in support of the business proposed to holdersbe brought before the meeting pursuant to Section 14(a) of in the case of a proposal, at least the percentage of our voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of our voting shares to elect such nominee or nominees.Exchange Act. A copy of the full text of the provisions of our Amended and Restated Bylaws dealing with stockholder nominations and proposals is available to stockholders from our Secretary upon written request. 30
AVAILABLE INFORMATIONINFORMATION We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, file reports, proxy statements and other information with the U.S. Securities and Exchange Commission. Reports, proxy statements and other information filed by us may be inspected without charge and copies obtained upon payment of prescribed fees from the Public Reference Section of the U.S. Securities and Exchange Commission at 100 F Street, NE, Washington, D.C. 20549, or by way of the U.S. Securities and Exchange Commission’s website atwww.sec.gov. We will provide without charge to each person to whom a copy of the proxy statement is delivered, upon the written or oral request of any such persons, additional copies of our Annual Report on Form 10-K for the year ended December 31, 20152016 or the 20162017 proxy materials. Requests for such copies should be made by written request to Corcept Therapeutics Incorporated, 149 Commonwealth Drive, Menlo Park, California 94025, Attention: Secretary, or by oral request by calling (650) 327-3270. G. Charles Robb By Order of the Board of Directors, /s/ G. Charles Robb G. Charles Robb Chief Financial Officer and Secretary Menlo Park, California April 22, 201621, 2017 YOUR VOTE IS IMPORTANT! WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE YOUR SHARES BY INTERNET, BY TELEPHONE OR BY COMPLETING, SIGNING, DATING AND MAILING PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON EVEN IF YOU HAVE PREVIOUSLY SENT IN YOUR PROXY CARD. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME. 31
 
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet or Telephone - QUICKQ UICK ... EASY IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail CORCEPT THERAPEUTICS INCORPORATED PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE. . FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED . PROXY The Board of Directors recommends that you vote “FOR” the election of each of the following nominees, “FOR” Proposals 2 and 3 and “THREE YEARS” for Proposal 4. 1. To elect seven directors, to hold office until the 2018 Annual Meeting of Stockholders and until their successors are duly qualified and elected, the nominees listed below: 01 James N. Wilson 05 Reneé D. Galá 02 G. Leonard Baker, Jr. 06 David L. Mahoney 03 Joseph K. Belanoff, M.D. 07 Daniel N. Swisher, Jr. 04 Daniel M. Bradbury FOR All nominees WITHHOLD listed (except AUTHORITY as indicated to vote (as to all below) nominees) (INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name on the line provided below.) 2. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017. FOR AGAINST ABSTAIN As a stockholder of Corcept Therapeutics Incorporated, you have the option of voting your shares electronically through the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern Time, on May 18, 2016.23, 2017. INTERNET/MOBILE – www.cstproxyvote.com Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares. PHONE – 1 (866) 894-0537 Use a touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares. MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE. FOLD HERE DO NOT SEPARATE INSERT IN ENVELOPE PROVIDED PROXY3. To conduct a non-binding advisory vote to approve the compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement. 4. To conduct a non-binding advisory vote on the frequency of future advisory votes by the stockholders to approve the compensation of the Company’s named executive officers. Please mark your votes like this The Board of Directors recommends that you voteX FOR the election of the following nominees: 1. To elect seven directors, to hold office until the 2017 Annual Meeting of Stockholders and until their successors are duly qualified and elected, the nominees listed below: 01 G. Leonard Baker, Jr. 02 Joseph K. Belanoff, M.D. 03 Daniel M. Bradbury 04 Daniel N. Swisher, Jr. 05 Patrick G. Enright 06 David L. Mahoney 07 James N. Wilson FOR All nominees listed (except as indicated below) WITHHOLD AUTHORITY to vote (as to all nominees) 2. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016. FOR AGAINST ABSTAIN 3 YEARS 2 YEARS 1 YEAR ABSTAIN PROPOSALS. This proxy may be revoked by the undersigned at any time, prior to the time it is voted, by any of the means described in the accompanying proxy statement. (INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name on the line provided below.): COMPANY ID: PROXY NUMBER: ACCOUNT NUMBER: Signature Signature Date, 2016.Signature______________________________________ Signature__________________________________________________ Date_____________, 2017. Date and sign exactly as name(s) appear(s) on this proxy. If signing for estates, trusts, corporationstr usts, cor porations or other entities, title or capacity should be stated. If shares are held jointly, each holder should sign.
 
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 19, 201624, 2017 The 20162017 Proxy Statement and our 20152016 Annual Report are available at http://www.corcept.com/proxymaterials/20162017 . FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED . PROXY CORCEPT THERAPEUTICS INCORPORATED Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders to be Held on May 19, 201624, 2017 The undersigned hereby appoints Joseph K. Belanoff, M.D., G. Charles Robb and James N. Wilson, or any one of them, with full power of substitution, as proxies to vote at the Annual Meeting of Stockholders of Corcept Therapeutics Incorporated (the “Company”) to be held on May 19, 201624, 2017 at 8:00 a.m., local time, at 149 Commonwealth Drive, Menlo Park, CA 94025, and at any adjournment or postponement thereof, hereby revoking any proxies heretofore given, to vote all shares of common stock of the Company held or owned by the undersigned as directed on the reverse side of this proxy card, and in their discretion upon such other matters as may come before the meeting. The Board recommends that you vote FOR the proposals on the reverse side. This proxy, when properly executed, will be voted in the manner directed. WHEN NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED “FOR” EACH NOMINEE FOR THE PROPOSALS.DIRECTOR IN PROPOSAL 1, “FOR” PROPOSALS 2 AND 3 AND FOR “THREE YEARS” FOR PROPOSAL 4. This proxy may be revoked by the undersigned at any time, prior to the time it is voted by any of the means described in the accompanying proxy statement. (Continued, and to be marked, dated and signed, on the other side) |
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