To help ensure that we have a productive and efficient meeting, and in fairness to all stockholders in attendance, you will also find posted our rules of conduct for the Annual Meeting when you log in prior to its start. These rules of conduct will include the following guidelines:
•
You may submit questions and comments electronically through the meeting portal during the Annual Meeting.
•
Only stockholders of record as of April 12, 2021, the record date for the Annual Meeting, and their proxy holders may submit questions or comments.
•
Please direct all questions to Derek Chalmers, Ph.D., D.Sc., our President and Chief Executive Officer.
•
Please include your name and affiliation, if any, when submitting a question or comment.
•
Limit your remarks to one brief question or comment that is relevant to the Annual Meeting and/or our business.
•
Questions may be
found at http://www.sheratonstamford.com.Information on howgrouped by topic by our management.
•
Questions may also be ruled as out of order if they are, among other things, irrelevant to voteour business, related to pending or threatened litigation, disorderly, repetitious of statements already made, or in person atfurtherance of the speaker’s own personal, political or business interests.
•
Be respectful of your fellow stockholders and Annual Meeting participants.
•
No audio or video recordings of the Annual Meeting
is discussed below.Admissionare permitted.
What if I have technical difficulties or trouble accessing the virtual Annual Meeting?
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting. If you encounter any difficulties accessing the virtual Annual Meeting will open at 10 A.M. Eastern Daylight Time. Seatingduring the check-in or meeting time, please call the technical support number that will be limited. Each stockholder should be prepared to present: | 1. | Valid government issued photo identification, such as a driver’s license or passport; and
|
| 2. | Beneficial stockholders holding their shares through a broker, bank, trustee, or other nominee will need to bring proof of beneficial ownership as of Wednesday, April 17, 2019, the record date, such as their most recent account statement reflecting their stock ownership prior to Wednesday, April 17, 2019, a copy of the voting instruction card provided by their broker, bank, trustee or other nominee, or similar evidence of ownership.
|
Stockholders who do not present the required information set forth above, may not be admitted to the Annual Meeting.
Photography, video and the use of cameras, recording devices, computers and other electronic devices, such as smart phones and tablets, will not be permittedposted at the Annual Meeting.
Please allow ample time forcheck-in.www.virtualshareholdermeeting.com/CARA2021 Please note that large bags and packages will not be allowed or at the Annual Meeting. Persons may be subject to search due to security reasons.
www.proxyvote.com.
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on the record date, Wednesday, April
17, 2019,12, 2021, will be entitled to vote at the Annual Meeting. On the record date, there were
39,738,84650,041,626 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on the record date your shares were registered directly in your name with Cara’s transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote
in person atonline during the meeting or vote by proxy. Whether or not you plan to attend the meeting, to ensure your vote is counted, we urge you to
fillvote your shares electronically through the internet, by telephone or by filling out and
returnreturning the proxy card that you may request or that we may elect to deliver at a later time as described under the question titled “Will I receive any other proxy materials by mail?” above.
Beneficial Owner: Shares Registered in the Name of a Broker,
Bank or
BankOther Agent
If on the record date your shares were held, not in your name, but rather in an account at a
brokerage firm,broker, bank,
dealer or other
similar organization,agent, then you are the beneficial owner of shares held in “street name” and the Notice
isbeingis being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker,
bank or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares
in person atonline during the meeting unless you request and obtain a valid proxy from your broker,
bank or other agent.
| | | Internet proxy voting is provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies. | | |
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of the record date, Wednesday, April
17, 2019.12, 2021.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote online during the meeting, through the internet, by telephone or by completing your proxy card, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent
If you are a beneficial owner and do not instruct your broker, bank or other agent how to vote your shares, the question of whether your broker, bank or other agent will still be able to vote your shares depends on whether, pursuant to stock exchange rules, the particular proposal is deemed to be a “routine” matter. Brokers, banks and other agents can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. “Non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation, and certain corporate governance proposals, even if management-supported. Accordingly, your broker, bank or other agent may not vote your shares on Proposals 1 and 2 without your instructions. Your broker, bank or other agent may only vote your shares on Proposal 3 (Ratification of Auditors) in the absence of your instruction.
Please instruct your bank, broker or other agent to ensure that your vote will be counted.
What are “broker non-votes”?
When a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other agent holding the shares as to how to vote on matters deemed to be “non-routine” under stock exchange rules, the broker, bank or other agent cannot vote the shares. These unvoted shares are counted as “broker non-votes.” Only Proposal 3 (Ratification of Auditors) is considered a routine matter under applicable stock exchange rules, and without your instruction, your broker, bank or other agent may vote your shares in its discretion. Proposals 1 and 2 are considered non-routine under applicable stock exchange rules, and without your instruction, your broker, bank or other agent cannot vote your shares on this these matter. Please instruct your broker, bank or other agent so your vote can be counted.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections,but do not make specific choices, your shares will be voted in accordance with the recommendations of our Board as follows:
•
FOR the Board of Directors recommends, which is “For” Proposal 1 (electionelection each of the two nominees for director to serve untildirector;
•
FOR the 2022 Annual Meetingapproval, on a non-binding advisory basis, of Stockholders), and “For” Proposal 2 (ratificationthe compensation of our named executive officers, as disclosed in this proxy statement;
•
FOR the ratification of the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as our independent registered public accounting firm of the Company for itsour fiscal year ending December 31, 2019). 2021.
If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We will also reimburse
brokerage firms,brokers, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the Notices to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
You may submit another properly completed proxy card with a later date.
•
You may grant a subsequent proxy by telephone or through the internet.
| • | | You may send a timely written notice that you are revoking your proxy to Cara’s Secretary at 4 Stamford Plaza, 107 Elm Street, 9th Floor, Stamford, CT 06902.
|
•
You may send a timely written notice that you are revoking your proxy to Cara’s Secretary at 4 Stamford Plaza, 107 Elm Street, 9th Floor, Stamford, CT 06902.
•
You may attend the Annual Meeting and vote in person.online during the meeting. Simply attending the Annual Meeting will not, by itself, revoke your proxy.
Your most current proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of
BrokerBrokers, Bank or
BankOther Agents
If your shares are held by your broker,
bank or
bank as a nominee orother agent, you should follow the instructions provided by your broker,
bank or
bank.other agent.
How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately count: (1) with respect to Proposal 1, votes “For,” “Withhold” and broker non-votes, (2) with respect to Proposal 2, votes “For,” “Against,” abstentions and broker non-votes, and (3) with respect to Proposal 3, votes “For,” “Against” and abstentions. Abstentions will be counted towards the vote total for Proposals 2 and 3, and will have the same effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.
How many votes are needed to approve each proposal?
•
Proposal 1 — Election of Directors: The two nominees for directors that receive the highest number of FOR votes of the holder of the shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on Proposal 1 will be elected.
•
Proposal 2 — Advisory Vote on the Compensation of our Named Executive Officers: This proposal, commonly referred to as the “say-on-pay” vote, must receive FOR votes from the holders of a majority in voting power of the shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on Proposal 2. Since Proposal 2 is an advisory vote, the result will not be binding on our Board. However, our Board values our stockholders’ opinions, and our Board and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions. If you “Abstain” from voting, it will have the same effect as an “Against” vote.
•
Proposal 3 — Ratification of Auditors: The ratification of the selection of our independent registered public accounting firm must receive FOR votes from the holders of a majority in voting power of the shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on the proposal. If you “Abstain” from voting, it will have the same effect as an “Against” vote.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present at the meeting by virtual attendance or represented by proxy.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other agent) or if you vote online during the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting by virtual attendance or represented by proxy may adjourn the meeting to another date.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K (“Form 8-K”) that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
When are stockholder proposals and director nominations due for next year’s annual meeting?
To be included in our Proxy Statementproxy statement for the 20192022 Annual Meeting of Stockholders, your proposals must comply with the requirements ofRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, your proposal must be received in writing by our Corporate Secretary at 4 Stamford Plaza, 107 Elm Street, 9th Floor, Stamford, CT 06902 by Saturday,Friday, December 26, 2019,24, 2021, which is 120 calendar days before the anniversary date of our Proxy Statementproxy statement release to stockholders for the 20192021 Annual Meeting. If you wish to bring a matter before the Stockholders that is not included in next year’s proxy materials, you must notify our Corporate Secretary in writing at the address above no earlier than Wednesday, February 5, 20204, 2022 and no later than Friday, March 6, 2020,5, 2022, in accordance with our Bylaws.amended and restated bylaws (“Bylaws”). You are advised to review our Bylaws, which contain a description of the information required to be submitted as well as additional requirements about advance notice of stockholder proposals and director nominations.How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately count, (1) with respect to Proposal 1, votes “For,” “Withhold” and brokernon-votes, and (2) with respect to Proposal 2, votes “For,” “Against,” abstentions and, if applicable, brokernon-votes. Abstentions will be counted towards the vote total for Proposal 2, and will have the same effect as “Against” votes. Brokernon-votes have no effect and will not be counted towards the vote total for any proposal.
What are “brokernon-votes”?
When a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be“non-routine” under stock exchange rules, the broker or nominee cannot vote the shares. These unvoted shares are counted as “brokernon-votes.” Only Proposal 2 (ratification of the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as independent registered public accounting firm of the Company for its fiscal year ending December 31, 2019) is considered a routine matter under applicable stock exchange rules, and without your instruction, your broker may vote your shares in its discretion. Proposal 1 (election of the nominees for director to serve until the 2022 Annual Meeting of Stockholders) is considerednon-routine under applicable stock exchange rules, and without your instruction, your broker cannot vote your shares on this these matter. Please instruct your broker so your vote can be counted.
How many votes are needed to approve each proposal?
For Proposal 1, the director nominees receiving the most “For” votes from the holders of shares present in person or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “For” or “Withhold” will affect the outcome. Brokernon-votes will not be counted as having been voted on Proposal 1.
For Proposal 2, the matter must receive “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter. If you“Abstain” from voting, it will have the same effect as an “Against” vote. Brokernon-votes will have no effect.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholdersholdingat least a majority of the outstanding shares entitled to vote are present at the meeting in person or represented by proxy.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and brokernon-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the meeting in person or represented by proxy may adjourn the meeting to another date.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form8-K that we expect to file within four business days after the Annual Meeting. If final voting results are not available to us in time to file aForm 8-K within four business days after the Annual Meeting, we intend to file aForm 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additionalForm 8-K to publish the final results.
What are the implications of being an “emerging growth company?”
Cara is an “emerging growth company,” as defined in Section 101(a)(19)(C) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, under SEC rules, we are not required to include a Compensation Discussion and Analysis section in this Proxy Statement, have elected to comply with reduced compensation disclosure requirements, as permitted under the JOBS Act, and are not required to give our stockholdersnon-binding advisory votes on executive compensation or golden parachute arrangements. We will cease to be an emerging growth company on December 31, 2019.
6
Our Board
of Directors (the “Board”) is divided into three classes. Each class consists, as nearly as possible, of
one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified.
The Board presently has
fivemembers.six members. There are two directors
currently serving on the Board in the class whose term of office expires in
2019. The nominees listed below currently serve on the Board. Each2021, both of
the individuals listed below haswhom have been recommended for nomination to the Board by the Nominating and Corporate Governance Committee of the
Board.Board: Dr. Shiff and Mr. Bains. If elected at the
annual meeting,Annual Meeting, each of these nominees would serve until the
20222024 Annual Meeting of Stockholders and until his
or her successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal.
Each of our directors is expected to attend the 2019 Annual Meeting of Stockholders, either in person or telephonically. All of the directors attended the 2018 Annual Meeting of Stockholders.Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the nominees receiving the highest number of affirmative votes will be elected.Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named below. If either nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee proposed by Cara. Each person nominated for election has agreed to serve if elected. Our management has no reason to believe that the nominees will be unable to serve.
Nominees for Election for a Three-Year Term Expiring at the
20222024 Annual Meeting
Jeffrey L. Ives, Ph.D. Dr. Ives
Harrison M. Bains, Jr. has served as a member of the Board since July 2014. Dr. Ives currently is a Venture Partner at New Leaf Venture Partners, healthcare technology venture firm, and a Principal at NeuroPharma Advisors, LLC., an advisory group focused on companies developing therapeutics for the CNS. Dr. Ives is also currently a director at private pharmaceutical and biotechnology companies, Astrocyte Pharmaceuticals Inc., Acumen Pharmaceuticals, Inc., Pinteon Therapeutics Inc. and Orthogonal Neurosciences, private. Previously, Dr. Ives served as the Chief Executive Officer of Satori Pharmaceuticals, Inc., a neurodegenerative disease company focused on discovery and development of breakthrough therapies for the treatment and prevention of Alzheimer’s disease from 2008 until 2013. Prior to Satori, Dr. Ives led the CNS, pain and oncology research teams at Pfizer for over two decades and, from 2001 to 2007, he served as a Senior Vice President leading the global Pharmacokinetics, Dynamics and Metabolism organization. Dr. Ives received his doctorate and master degrees from Yale University and received his bachelor of arts degree from Colgate University. His extensive experience leading research and drug development provides him with the qualifications to serve on the Board.Christopher Posner.Mr. Posner has served as a member of the Board since August 2018. Mr. Posner has broad experience in commercial and marketing operations and product management at both large and specialty pharmaceutical companies, where he has focused on products for autoimmune, inflammatory and pain conditions, including Xeljanz® and Enbrel®. Since July 2017, he has been the Chief Executive Officer of LEO Pharma, Inc. US, a subsidiary of LEO Pharma A/S, a global healthcare company specializing in dermatology and critical care, including such conditions as psoriasis and atopic dermatitis. Prior to joining LEO, he was the Head of Worldwide Commercial Operations atR-Pharma-US, LLC, a specialty pharmaceutical company focused on oncology and chronic immune disorders, from 2014 until 2017. Previously, Mr. Posner held a variety of senior management positions in commercial and marketing operations at Bristol-Myers Squibb Company, Pfizer Inc., Wyeth Pharmaceuticals, Inc. and Endo Pharmaceuticals plc. Mr. Posner holds an M.B.A. from Fuqua School of Business, Duke University and a B.A. in Economics from Villanova University. Mr. Posner’s extensive experience in the pharmaceutical industry, including in commercial and marketing operations, provides him with the qualifications to serve on the Board.
Dr. Ives is a current member of the Board who was previously elected by our stockholders. Mr. Posner was appointed to the Board in August 2018, and was identified as a candidate for the Board by a third-party search firm and interviewed and recommended by Mr. Vogelbaum and Dr. Chalmers, based on his extensive executive-level experience in the pharmaceutical industry, particularly in the commercialization of novel pharmaceutical products.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE NAMED NOMINEES.
Directors Continuing in Office Until the 2020 Annual Meeting
Derek Chalmers, Ph.D., D.Sc.Dr. Chalmers, one of our founders, has served as our President and Chief Executive Officer since September 2004 and has served as a member of the Board since July 2004. Dr. Chalmers has over 25 years’ experience in the biotechnology industry with increasing levels of corporate and business responsibilities. Prior to founding Cara, Dr. Chalmersco-founded Arena Pharmaceuticals, Inc. (Nasdaq: ARNA), a drug discovery and development company, and served as its Vice President and Executive Director from June 1997 until May 2004. Dr. Chalmers holds a D.Sc. and Ph.D. in Pharmacology from the University of Glasgow. Dr. Chalmers’ qualifications to sit on the Board include his leadership, executive, managerial and business experience, historical knowledge of our company and his background and experience in the biotechnology industry, including having been a founder of a prior biotechnology company.
Martin Vogelbaum.Mr. Vogelbaum has served as a member of the Board since July 2010. He currently serves as Managing Partner of Inning One Ventures, a life science venture capital fund. Previously, Mr. Vogelbaum served as Corporate Vice President, Business Development at Celgene Corporation from 2015 to 2017. Mr. Vogelbaum served as a partner of Rho Ventures from 2005 until 2015 and again from 2017 to 2018, where he focused on investments in biotechnology, biopharmaceuticals and medical devices. He has more than 25 years of experience investing in the life sciences sector, having been involved with companies at all stages of development, includingco-founding more than a half dozen companies. Prior to his venture capital career, he was a research associate in the bone marrow transplantation unit at Memorial-Sloan Kettering Hospital, where he conducted research in graft-versus-host-disease. Mr. Vogelbaum previously served as a director of Inotek Pharmaceuticals Corporation (Nasdaq: ITEK) from 2010 to 2016 and NephroGenex, Inc. (Nasdaq: NRX) from 2013 to 2014. He currently serves on the Healthcare Advisory Board for the Partnership Fund for New York City as well as the Scientific Advisory Committee for Weill Cornell Medical College’s Daedalus Fund for Innovation. Mr. Vogelbaum received his A.B. in biology and history from Columbia University. Mr. Vogelbaum’s experience in the life sciences industry as a venture capitalist provides him with the qualifications and skills to serve on the Board.
Director Continuing in Office Until the 2021 Annual Meeting
Harrison M. Bains, Jr. Mr. Bains has served as a member of the Board since July 2014. Mr. Bains served in multiple roles at Bristol Myers Squibb Company, including Vice President, Treasurer and acting Chief Financial Officer from 1988 through his retirement in 2004. Mr. Bains’s career also includes serving as Senior Vice President of the Primary Industries group at Chase Manhattan Bank and 11 years with RJR Nabisco and two of its predecessor companies as Senior Vice President and Treasurer. He currently serves as a director and chairchairman of the Audit Committee of the Mercer Funds, Inc., a registered investment company. He has previously served as a member of the board of trustees of the Park Avenue Armory sincefrom October 2007 andto June 2020, as a member of the board of trustees of the Civil War Trust sincefrom September 2007 and previously servedto September 2019, as a member of the board of trustees of the University of Redlands from October 1989 to May 2013, as a member of the board of directors of BG Medicine, Inc. from 2007 to 2015 and as a member of the board of directors of Bank of America Funds from 2010 to 2016. Mr. Bains earned an M.B.A from the University of California, Berkeley and a B.A. in economics from the University of Redlands. He also completed the Advanced Management Program at Harvard Business School. His extensive experience in the biotechnology industry provides him with the qualifications to serve on our Board.
Susan Shiff, Ph.D. has served as a member of our Board since June 2020. Currently, Dr. Shiff is the President of Ontada, McKesson’s oncology technology and insights business. Ontada delivers real-world insights to transform the fight against cancer and focuses on its world-class suite of oncology provider technologies, while leveraging the business’ deep expertise in oncology insights, data and real-world evidence (RWE) to improve patient outcomes. Previous to Ontada, from 2014 to 2021, Dr. Shiff served as Senior Vice President and Head of the Center for Observational and Real-World Evidence (“CORE”) at Merck & Co., Inc. In 2018, CB Insights named CORE as one of the most innovative Corporate Labs in healthcare. Prior to joining Merck, Dr. Shiff was the Global Vice President, Health Economics Research and Evidence Based Medicine at Teva, Inc. Prior to Teva, she spent seven years at Pfizer, including several years as a Vice President in the areas of outcomes research, epidemiology, health economics, and access and pricing. She also led the global risk management group and US HEOR group at Roche and spent four years at the U.S. Centers for Disease Control and Prevention (“CDC”). In 2016, Dr. Shiff was named one of the top 15 women in Biopharma by FiercePharma, in 2017 Proclinical named her as one of today’s most inspiring women in the pharmaceutical industry, and in 2019 GNS Healthcare named Dr. Shiff as an International Women's Day Healthcare Innovator. Dr. Shiff received her Ph.D. degree from UCLA, and an MBA degree from Cornell University. Dr. Shiff currently serves on the New Jersey Symphony Orchestra Board of Trustees and Co-Chair of the Education Committee, is a Non-Executive Director of Synthace Ltd, and is a non-Executive Director of Q-Centrix, a TPG Company. Her extensive experience in the pharmaceutical industry as a leader in the development and implementation of evidence, access, and pricing strategies for products globally provides her with the qualifications to serve on our Board.
Dr. Shiff was appointed to the Board in June 2020, and was identified as a candidate for the Board by a third-party search firm and interviewed and recommended by Mr. Vogelbaum and Dr. Chalmers, based on her extensive experience in the pharmaceutical industry as a leader in the development and
implementation of evidence, access, and pricing strategies for products globally. We believe that Dr. Shiff meets the criteria for independence under the Nasdaq rules.
Vote Required: Directors are elected by a plurality of the votes of the holders of shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on the election of directors. Accordingly, the nominees receiving the highest number of “FOR” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named above. Broker non-votes will have no effect on the outcome of Proposal 1.
If either nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee proposed by Cara. Each person nominated for election has agreed to be named in this proxy statement and to serve if elected. Our management has no reason to believe that the nominees will be unable to serve.
The Board of Directors Unanimously Recommends a Vote For Each of The Named Nominees.
Directors Continuing in Office Until the 2022 Annual Meeting
Jeffrey L. Ives, Ph.D. has served as a member of our Board since July 2014. Dr. Ives currently is an Advisor to Access Biotechnology, a healthcare technology venture firm, and a Principal at NeuroPharma Advisors, LLC, an advisory group focused on companies developing therapeutics for the central nervous system. Dr. Ives also serves as a board member for Acumen Pharmaceuticals, Pinteon Therapeutics, Orthogonal Neuroscience and Astrocyte Pharmaceuticals, all companies targeting therapies for neurodegenerative diseases. Dr. Ives served as the Chief Executive Officer of Satori Pharmaceuticals, Inc., a company focused on discovery and development of breakthrough therapies for the treatment and prevention of Alzheimer’s disease from 2008 until 2013. Prior to Satori, Dr. Ives led the CNS, pain and oncology research teams at Pfizer for over two decades and, from 2001-2007, served as a Senior Vice President leading the global Pharmacokinetics, Dynamics and Metabolism organization. Dr. Ives received his doctorate and master degrees from Yale University and received his bachelor of arts degree from Colgate University. His extensive experience leading research and drug development provides him with the qualifications to serve on our Board.
Christopher Posner has served as a member of our Board since August 2018. He has broad experience in commercial and marketing operations and product management at both large and specialty pharmaceutical companies, where he has focused on products for autoimmune, inflammatory and pain conditions, including Xeljanz® and Enbrel®. Since July 2017, he has been the Chief Executive Officer of LEO Pharma, Inc. US, a subsidiary of LEO Pharma A/S, a global healthcare company specializing in dermatology and critical care, including such conditions as psoriasis and atopic dermatitis. Prior to joining LEO, he was the Head of Worldwide Commercial Operations at R-Pharma-US, LLC, a specialty pharmaceutical company focused on oncology and chronic immune disorders, from 2014 until 2017. Previously, Mr. Posner held a variety of senior management positions in commercial and marketing operations at Bristol-Myers Squibb Company, Pfizer Inc., Wyeth Pharmaceuticals, Inc. and Endo Pharmaceuticals plc. Mr. Posner holds an M.B.A. from Fuqua School of Business, Duke University and a B.A. in Economics from Villanova University.
Directors Continuing in Office Until the 2023 Annual Meeting
Derek Chalmers, Ph.D., D.Sc., one of our founders, has served as our President and Chief Executive Officer since September 2004 and has served as a member of the Board since July 2004. Dr. Chalmers has over 25 years’ experience in the biotechnology industry with increasing levels of corporate and business responsibilities. Prior to founding Cara, Dr. Chalmers co-founded Arena Pharmaceuticals, Inc. (Nasdaq: ARNA), a drug discovery and development company, and served as its Vice President and Executive Director from June 1997 until May 2004. Dr. Chalmers holds a D.Sc. and Ph.D. in Pharmacology from the University of Glasgow. Dr. Chalmers’ qualifications to sit on the Board include his leadership, executive, managerial and business experience, historical knowledge of our company and his background and experience in the biotechnology industry, including having been a founder of a prior biotechnology company.
PROPOSAL 2RATIFICATIONTABLE OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. In 2006, Ernst & Young LLP first audited the Company’s financial statements, which included the financial statements for the period from May 2004 (inception) to December 31, 2004 and the year ended December 31, 2005. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither the Company’s Bylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the annual meeting will be required to ratify the selection of Ernst & Young LLP. Abstentions will be counted towards the vote total, and will have the same effect as “Against” votes. Brokernon-votes have no effect and will not be counted towards the vote total.
CONTENTSIndependent Registered Public Accounting Firm’s Fees
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2018 and 2017, by Ernst & Young LLP, the Company’s principal accountant:
| | | | | | | | |
| | | Year Ended December 31, | |
| | | 2018 | | | 2017 | |
| | | (in thousands) | |
Audit fees(a) | | $ | 361 | | | $ | 348 | |
Audit-related fees(b) | | | 35 | | | | 15 | |
Tax fees | | | — | | | | — | |
All other fees | | | — | | | | — | |
| | | | | | | | |
Total | | $ | 396 | | | $ | 363 | |
| | | | | | | | |
(a) | Audit fees for the years ended December 31, 2018 and 2017 consist of the aggregate fees billed for professional services rendered for (i) the audit of our Annual Report on Form10-K for that year; (ii) the review of our Quarterly Reports on Form10-Q for each of the first three quarters of that year; (iii) accounting consultations. For the year ended December 31, 2017, audit fees also included procedures in connection with the filing of FormS-3 with the Securities and Exchange Commission for ourfollow-on offering of our common stock. See “Equity Compensation Plan Compensation” below.
|
(b) | Audit-related fees for the year ended December 31, 2018 include fees billed for review of the accounting for the VFMCRP license agreement. Audit-related fees for the year ended December 31, 2017 include fees billed for review of the preparation and disclosure of our adoption of Accounting Standards Codification Topic 606,Revenue from Contracts with Customers.
|
All fees described above for the years ended December 31, 2018 and 2017 werepre-approved by the Audit Committee.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy and procedures for thepre-approval of audit andnon-audit services rendered by the Company’s independent registered public accounting firm, Ernst & Young LLP. The policy generallypre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit,case-by-case basis before the independent auditor is engaged to provide each service. Thepre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
The Audit Committee has determined that the rendering of services other than audit services by Ernst & Young LLP is compatible with maintaining the principal accountant’s independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
EXECUTIVE OFFICERS AND DIRECTORS OF CARA
Executive Officers
The following table sets forth certain information with respect to our executive officers as of April
17, 2019:12, 2021:| Name | | | Age | | | Position(s) | |
Name
| | Age
| | Position(s)
|
Derek Chalmers, Ph.D., D.Sc. | | 55 | 57 | | | President, Chief Executive Officer and Director | |
Mani Mohindru,Frédérique Menzaghi, Ph.D.
| | 47 | 54 | | | Chief FinancialScientific Officer and Chief Strategy Officer |
Frederique Menzaghi, Ph.D.
| | 52 | | Senior Vice President, – Research and Development | |
Joana Goncalves, M.D. | | 45 | 47 | | | Chief Medical Officer | |
Scott M. Terrillion | | 56 | 58 | | | General Counsel, Secretary and Chief Compliance Officer | |
| Thomas Reilly | | | 49 | | | Chief Financial Officer | |
Derek Chalmers, Ph.D., D.Sc.
Biographical information for our President, Chief Executive Officer and director, Dr. Chalmers, is included above with the director biographies under the caption “Directors Continuing in Office Until the
20202023 Annual Meeting” and is incorporated by reference herein.
Mani Mohindru, Ph.D.Dr. Mohindru has served as our Chief Financial Officer and Chief Strategy Officer since August 2017. Prior to joining Cara, Dr. Mohindru served as Senior Vice President and Chief Strategy Officer at Curis, Inc., a biotechnology company, from March 2016 to July 2017. From April 2015 to February 2016, Dr. Mohindru served as Senior Vice President of Corporate Strategy and Investor Relations and from June 2013 to March 2015, Dr. Mohindru served as Vice President of Corporate Strategy and Investor Relations, each at Curis, Inc. From October 2012 to March 2016, Dr. Mohindru was the
co-founder of ImmTox, Inc., a biotechnology company. From June 2011 to September 2012, Dr. Mohindru was a Senior Biotechnology Analyst at ThinkEquity, LLC, a research and investment banking firm. Previously, from June 2009 to May 2011, Dr. Mohindru was a Partner at Axon Healthcare Company, a strategic pharmaceutical and biotechnology consultancy firm that sheco-founded. Dr. Mohindru was also a Managing Director at Capstone Investments in its investment banking division, a Vice President at Credit Suisse, and an Associate Research Analyst at global financial services firm, UBS. Dr. Mohindru completed her Ph.D. in Neurosciences at Northwestern University and she received both her B.S. in Human Biology and Masters in Biotechnology from the All India Institute of Medical Sciences, New Delhi, India.Frédérique Menzaghi, Ph.D.Dr. Menzaghi,, one of our founders, has led our preclinical research and pruritic clinical program since 2004. Since 2017, sheShe has served as our Senior Vice President, Research and Development since 2017 and was promoted toour Chief Scientific Officer onsince March 6, 2019. Dr. Menzaghi has over 25 years of drug development and management experience in biotechnology in the field of ion channels and G protein-coupled receptors. Her expertise ranges from exploratorynon-clinical research through clinical development. From 2003 to 2004, she served as Vice President, Pharmacology and Business Development at Psychogenics Inc., a preclinical contract research organization. From 1999 to 2003, she was the Research Director of In Vivo Pharmacology at Arena Pharmaceuticals, Inc. (Nasdaq: ARNA), leading a multidisciplinary research team. Prior to that, Dr. Menzaghi established and directed a preclinical research laboratory at SIBIA Neurosciences (acquired by Merck). Her research expertise ranged from the development of small molecules to small peptides. She has extensive experience with corporate partnering with large U.S. and Asian pharmaceutical companies including Eli Lilly, Merck and J&J. Dr. Menzaghi received her Ph.D. in Neurosciences from the University of Louis Pasteur, Strasbourg, France and her M.Sc. in clinical psychology from the University of Nancy, France, after which she conducted her post-doctoral research at the Scripps Research Institute, San Diego, California. She has over 55 peer-reviewed publications and book chapters, 100 international meeting presentations and is listed as an inventor on numerous patents.
Joana Goncalves, M.D.Dr. Goncalves has served as our Chief Medical Officer since October 2018. Prior to joining Cara, Dr. Goncalves worked at Celgene Corporation from April 2014 to October 2018, where she most recently served as Vice President, Medical Affairs for Dermatology and Neurology and was instrumental in planning and executing medical support activities for a number of programs, including OTEZLA®OTEZLA® for psoriasis. Previously, Dr. Goncalves held the position of Vice President, Medical Strategy and Scientific Affairs at LEO Pharma Inc., the U.S.
subsidiary of LEO Pharma A/S, a global healthcare company specializing in dermatology and critical care, from February 2012 to April 2014. She began her pharmaceutical career at Novartis Pharmaceuticals, working on a range of products across various therapeutic areas from 2001 to 2012. Dr. Goncalves received her M.D. from the University of Cape Town, South Africa.
Scott M. Terrillion. Mr. Terrillion has served as our General Counsel, Secretary and Chief Compliance Officer since November 2016. Mr. Terrillion brings over 20 years of diverse pharmaceutical industry experience from varying legal and business roles in the public, private andnot-for-profit sectors. Mr. Terrillion spent 15 years at Boehringer Ingelheim Pharmaceuticals, Inc., a research-driven pharmaceutical company, where he served as Vice President, Associate General Counsel. At Boehringer, Mr. Terrillion built and led the legal team supporting the global company’s U.S. human pharmaceutical business during a period of rapid, industry-leading growth. Mr. Terrillion also spent two years at Mesoblast, Inc., a publicly traded emerging biotech, as the company’s Vice President, Associate General Counsel and Head of Compliance. Mr. Terrillion began his legal career at Nixon, Hargrave, Devans & Doyle (now Nixon Peabody LLP), a large general practice law firm, where he was an associate in the Health Care and Technology/Intellectual Property Practice groups. A licensed pharmacist, Mr. Terrillion began his professional career as a community pharmacist and later served as Director of Pharmacy for Preferred Care, Inc., an HMO
SECURITY OWNERSHIPTABLE OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENTCONTENTS
and 38,000 shares granted to Dr. Shiff on June 26, 2020 under the terms of the 2014 Plan and calculated in accordance with ASC 718, excluding the effect of estimated forfeitures. Each option granted on June 4, 2020 has an exercise price of $15.62 per share and vests in full on the earlier of (i) June 4, 2021 and (ii) immediately prior to the Annual Meeting, subject to the director’s continued service through such date. Assumptions used in the calculation of the grant date fair values of such options are set forth in Note 13. Stock-Based Compensation in the notes to our financial statements in the Form 10-K. Each option granted on June 26, 2020 has an exercise price of $17.03 and vests over a period of three years, in twelve equal quarterly installments.
(4)
The following table sets forth certain information regarding the ownershipaggregate number of RSUs and the aggregate number of shares underlying stock options held by each non-employee director as of December 31, 2020:
| Director | | | RSUs(a) | | | Number of Shares
Underlying Options | |
| Martin Vogelbaum | | | | | 14,400 | | | | | | 112,100(b) | | |
| Harrison M. Bains, Jr. | | | | | 7,200 | | | | | | 101,300(c) | | |
| Jeffrey Ives, Ph.D. | | | | | 7,200 | | | | | | 72,800(c) | | |
| Christopher Posner | | | | | 7,200 | | | | | | 54,800(d) | | |
| Susan Shiff, Ph.D. | | | | | — | | | | | | 38,000(e) | | |
(a)
All RSUs remained unvested as of December 31, 2020.
(b)
21,600 shares underlying such options remained unvested as of December 31, 2020. The remainder of such shares were vested and immediately exercisable.
(c)
10,800 shares underlying such options remained unvested as of December 31, 2020. The remainder of such shares were vested and immediately exercisable.
(d)
22,490 shares underlying such options remained unvested as of December 31, 2020. The remainder of such shares were vested and immediately exercisable.
(e)
31,667 shares underlying such options remained unvested as of December 31, 2020. The remainder of such shares were vested and immediately exercisable.
(5)
Dr. Shiff joined the Board effective June 26, 2020.
Directors who are also full-time officers or employees of Cara do not receive any additional compensation for serving as directors. Therefore, Dr. Chalmers, our Chief Executive Officer and one of our directors, does not receive any additional compensation for his service as a director. Dr. Chalmers’ compensation as an executive officer is set forth below under “Executive Compensation.”
The Board has adopted a non-employee director compensation policy. Under our director compensation policy, we pay each of our non-employee directors a cash retainer for service on the Board and for service on each committee on which the director is a member. These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on the Board. The retainers paid during 2020 to non-employee directors for service on the Board and for service on each committee of the Board on which the director is a member were as follows:
| | | | Member
Annual Service
Retainer | | | Chairperson / Lead Independent
Director and Committee Chair
Annual Service Retainer | |
| Board of Directors | | | | $ | 40,000 | | | | | $ | 75,000 | | |
| Audit Committee | | | | | 10,000 | | | | | | 20,000 | | |
| Compensation Committee | | | | | 7,500 | | | | | | 15,000 | | |
| Nominating and Corporate Governance Committee | | | | | 5,000 | | | | | | 10,000 | | |
PROPOSAL 2
NON-BINDING, ADVISORY VOTE ON EXECUTIVE COMPENSATION
In accordance with the SEC. Unless otherwise indicatedrequirements of Section 14A of the Exchange Act, we are providing our stockholders the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers, or “say-on-pay vote,” as disclosed under the section titled “Executive Compensation.”
This vote is advisory only, which means that the vote on executive compensation is not binding on the Company, the Board, or the Compensation Committee. However, both the Board and the Compensation Committee will consider and evaluate the results of the vote, together with feedback from stockholders. To the extent there is any significant vote against our named executive officer compensation as disclosed in this proxy statement, the Board and the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.
The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive officers, as described in this proxy statement. The compensation of our named executive officers subject to the vote is disclosed in section titled “Executive Compensation,” including the compensation tables and related narrative disclosures. As discussed in those disclosures, our Board believes that its compensation philosophy and decisions support our key business objectives of creating value for, and promoting the interests of, our stockholders.
Accordingly, the Board is asking the stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement by casting a non-binding, advisory vote “FOR” the following resolution:
“RESOLVED, that the compensation of the named executive officers, as disclosed in the footnotes to this tableCompany’s proxy statement for its 2021 Annual Meeting of Stockholders, including the Compensation Discussion and subject to community property laws where applicable, we believe that eachAnalysis, compensation tables and related narrative disclosures, is hereby APPROVED.”
Vote required: The affirmative vote of the stockholders namedholders of a majority of the shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to adopt the foregoing resolution. Abstentions will be counted towards the vote total, and will have the same effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total.
The Board of Directors Unanimously Recommends a Vote For Proposal 2.
We focus on providing a competitive compensation package to our executive officers which provides significant short and long-term incentives for the achievement of measurable corporate objectives. We believe that this approach provides an appropriate blend of short-term and long-term incentives to maximize stockholder value.
We do not have any formal policies for allocating compensation among salary, performance bonus awards and equity grants, short-term and long-term compensation or among cash and non-cash compensation. Instead, the Compensation Committee uses its judgment to establish a total compensation program for each named executive officer that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation, that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, historically we have structured a significant portion of the Exchange Act requiresnamed executive officers’ total target compensation so that it is comprised of performance-based bonus opportunities and long-term equity awards, in order to align the executive officers’ incentives with the interests of our stockholders and our corporate goals.
How We Determine Executive Compensation
Role of our Compensation Committee, Management and the Board
The Compensation Committee is appointed by the Board and has responsibilities related to the compensation of the Company’s directors, officers, and employees and the development and administration of the Company’s compensation plans. For details on the Compensation Committee’s oversight of the executive compensation program, see the section titled “Information Regarding Committees of the Board of Directors — Compensation Committee.” Our Compensation Committee consists solely of independent members of the Board.
The Compensation Committee reviews all compensation paid to our executive officers, including our named executive officers. The Chief Executive Officer evaluates and provides to the Compensation Committee performance assessments and compensation recommendations. While the Chief Executive Officer discusses his recommendations with the Compensation Committee, he does not participate in the deliberations concerning, or the determination of, his own compensation. The Compensation Committee discusses and makes final determinations with respect to executive compensation matters without the Chief Executive Officer present during discussions of the Chief Executive Officer’s compensation. From time to time, various other members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in the Compensation Committee meetings.
The Compensation Committee meets periodically throughout the year to manage and evaluate our executive compensation program, and generally determines the principal components of compensation (base salary, performance bonus and equity awards) for our executive officers on an annual basis; however, decisions may occur at other times for new hires, promotions or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does not delegate authority to approve executive officer compensation. The Compensation Committee does not maintain a formal policy regarding the timing of equity awards to our executive officers.
Role of Compensation Consultant
The Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. The Compensation Committee has retained Radford, which is part of the Rewards Solution practice at Aon plc, as its compensation consultant. Radford developed a group of peer companies to use as a reference in making executive compensation decisions, evaluating current executive pay practices and considering different compensation programs to aid making executive pay decisions for 2020. Radford also conducted market research and analysis to assist the Compensation Committee in developing executive compensation levels, including appropriate salaries, target bonus amounts and equity awards for our executives, including the named executive officers. Radford also periodically conducts a review of our director compensation policies and practices.
The Compensation Committee has analyzed whether the work of Radford as compensation consultant raises any conflict of interest, taking into account relevant factors in accordance with SEC guidelines. Based on its analysis, our Compensation Committee determined that the work of Radford and the individual compensation advisors employed by Radford does not create any conflict of interest pursuant to the SEC rules and Nasdaq listing standards.
Use of Competitive Market Compensation Data
The Compensation Committee believes that it is important when making its compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, the Compensation Committee directed Radford to develop a proposed list of our peer group companies to be used in connection with assessing the compensation practices of the publicly traded companies with whom we compete.
Radford proposed, and the Compensation Committee approved, a group of companies that would be appropriate peers based on our Company’s industry focus and size (based on employee headcount and market capitalization). Specifically, based on input from the Compensation Committee, Radford compiled a list of companies that are publicly traded, pre-commercial bio/pharma companies with, a focus on companies in phase 3 clinical development or early new drug application (“NDA”) submission. These companies generally had market capitalizations of between $500 million and $3 billion (with a median market capitalization of $1.0 billion), and a median of 147 employees. The peer group with respect to 2020 is as follows:
•
Acceleron Pharma
•
Aimmune Therapeutics
•
Akebia Therapeutics
•
AnaptysBio
•
ArQule
•
Biohaven Pharmaceuticals
•
Blueprint Medicines
•
ChemoCentryx
•
Deciphera Pharmaceuticals
•
Dermira
•
Epizyme
•
Esperion Therapeutics
•
FibroGen
•
Flexion Therapeutics
•
Global Blood Therapeutics
•
Karyopharm Therapeutics
•
Reata Pharmaceuticals
•
Revance Therapeutics
•
TG Therapeutics
•
Zogenix
Using data compiled from the peer companies (“peer data”), Radford completed an assessment of our executive compensation to inform the Compensation Committee’s determinations regarding executive compensation for 2020. Radford prepared and the Compensation Committee reviewed, a range of market data reference points (generally at the 25th, 50th, and 75th percentiles of the market data) with respect to base salary, performance bonuses, equity compensation (valued based both on an approximation of grant date fair value and as well as ownership percentage), total target cash compensation (base salary and the annual target performance bonus) and total direct compensation (total target cash compensation and equity compensation) with respect to our named executive officers. Although market data is only one of the factors that the Compensation Committee considers in making compensation decisions, the Compensation Committee generally targets executive compensation at approximately the 50th percentile. In addition to market data, the Compensation Committee considers other factors as described below under “Factors Used in Determining Executive Compensation” and, as a result, actual executive compensation may be above or below the 50th percentile.
Factors Used in Determining Executive Compensation
Our Compensation Committee sets the compensation of our executive officers at levels they determine to be competitive and appropriate for each named executive officer, using their professional experience and judgment. Although as noted above, the Compensation Committee’s general philosophy is to target executive compensation at approximately the 50th percentile, pay decisions are not made by use of a
formulaic approach. The Compensation Committee believes that executive pay decisions require consideration of a multitude of relevant factors which may vary from year to year. In making executive compensation decisions, the Compensation Committee generally takes into consideration the factors listed below:
•
Company performance and existing business needs
•
Each named executive officer’s individual performance, scope of job function and the criticality of the named executive officer to the company’s future performance
•
The need to attract new talent to our executive team and retain existing talent in a highly competitive industry
•
A range of market data reference points, as described above under “Use of Competitive Market Compensation Data”
•
Recommendations from consultants on compensation policy determinations for the executive officer group
2020 Executive Compensation Program
Base Salary
In February 2020, the Compensation Committee reviewed the base salaries of the Company’s executive officers, including the named executive officers. It was determined that the base salary for the Chief Executive Officer was modestly above the 25th percentile of peer companies, while the base salaries for the remaining named executive officers was generally between the 50th and 75th percentile. Set forth below are the 2020 base salaries for our named executive officers:
| Executive | | | 2020 Base
Salary | | | Percentage
Increase in Base
Salary from 2019 | |
| Derek Chalmers, Ph.D., D.Sc. | | | | $ | 576,800 | | | | | | 3% | | |
| Frédérique Menzaghi, Ph.D. | | | | $ | 451,200 | | | | | | 3% | | |
| Joana Goncalves, M.D. | | | | $ | 451,200 | | | | | | 3% | | |
| Scott Terrillion | | | | $ | 412,000 | | | | | | 3% | | |
| Richard Makara | | | | $ | 292,800 | | | | | | 3% | | |
Mr. Reilly’s initial annual base salary, which was negotiated in connection with his hiring in October 2020, was $400,000. In addition, pursuant to his employment agreement, Mr. Reilly received a signing bonus of $30,000, which amount is subject to recoupment in the event that Mr. Reilly’s employment with the Company terminates before October 1, 2021, which is the one year anniversary of his hiring. This amount is included in the “Bonus” column of the Summary Compensation Table.
Annual Performance-Based Cash Compensation
Pursuant to our executive bonus plan, each executive officer is eligible to receive a target bonus determined as a percentage of his or her annual base salary. Annual performance-based cash compensation is variable and its purpose is to motivate and reward our executive officers for achievement of annual goals and align management and stockholder interests by linking pay and performance. Our Compensation Committee determines these target bonus percentages for each executive officer position primarily based on the range of target bonus percentages for similar positions at peer companies. Our Compensation Committee periodically reviews and evaluates each executive officer’s target bonus percentage.
The 2020 target bonus percentages, and resulting target bonuses, for each of our named executive officers were as follows:
Named Executive Officers
| | | | Target Bonus as
Percentage of
Base Salary (%) | | | Target
Bonus ($) | |
| Derek Chalmers, Ph.D., D.Sc. | | | | | 60 | | | | | | 346,080 | | |
| Frédérique Menzaghi, Ph.D. | | | | | 40 | | | | | | 180,480 | | |
| Joana Goncalves, M.D. | | | | | 40 | | | | | | 180,480 | | |
| Scott Terrillion | | | | | 40 | | | | | | 164,800 | | |
| Richard Makara | | | | | 40 | | | | | | 117,120 | | |
Thomas Reilly(1) | | | | | 40 | | | | | | 40,000 | | |
(1)
Pursuant to the terms of his employment agreement, Mr. Reilly was eligible to earn a pro-rated annual bonus based on the number of days he served as Chief Financial Officer.
In February 2020, the Compensation Committee established a mix of predefined performance objectives for our then-serving executive officers, other than Mr. Makara, and assigned weights to each objective. These performance objectives were based on the achievement of various research, clinical and regulatory milestones related to our clinical development programs. The actual performance-based bonus paid, if any, is calculated by multiplying the executive’s annual base salary, target bonus percentage and percentage achievement of the respective performance objectives. In the case of Mr. Makara, because it was anticipated that the Company would hire a new Chief Financial Officer during 2020, no formal performance objectives were established, with Mr. Makara’s 2020 bonus being discretionary based on the overall determination of Mr. Makara’s performance for the year.
The 2020 performance objectives for each of these named executive officers, and persons who own morethe respective weighting thereof, were as set forth below.
Derek Chalmers, Ph.D., D.Sc.
For Dr. Chalmers, the 2020 performance goals, and respective weightings of each, were:
•
Complete follow-on financing and/or corporate partnership that extends the Company’s operating runway through the end of 2022 (50%)
•
Submit the NDA for KORSUVA Injection to the U.S. Food and Drug Administration (“FDA”) by the end of 2020 (30%)
•
Recruit Chief Financial Officer by the end of 2020 (10%)
•
Achieve additional research analyst coverage by end of 2020 (5%)
•
Execute corporate development activities (5%)
Frédérique Menzaghi, Ph.D.
For Dr. Menzaghi, the 2020 performance goals, and respective weightings of each, were:
•
Submit the NDA for KORSUVA Injection by the end of 2020 (60%)
•
Initiate Oral CKD Phase 3 clinical program by the end of 2020 (15%)
•
Ensure commercial supply of KORSUVA Injection by the end of 2020 (15%)
•
Execute on key scientific communication initiatives, including authoring peer-reviewed publication of the results of the Company’s human abuse liability study of KORSUVA (10%)
Joana Goncalves, M.D.
For Dr. Goncalves, the 2020 performance goals, and respective weightings of each, were:
•
Complete enrollment of our Phase 2 clinical trial in atopic dermatitis by the end of 2020 (50%)
•
Submit the NDA for KORSUVA Injection by the end of 2020 (30%)
•
Complete qualitative validation of, and finalize the trial design for a Phase 2 clinical trial in notalgia parasthetica by the end of 2020 (10%)
•
Execute on key scientific communication initiatives, including publications and abstracts for the NDA for KORSUVA Injection by the end of 2020 (10%)
Scott Terrillion
For Mr. Terrillion, the 2020 performance goals, and respective weightings of each, were:
•
Execute corporate and business development objectives, including successfully leading the Company’s compliance and regulatory initiatives and legal diligence for corporate partnership with Vifor Pharma (50%)
•
Oversee KORSUVA end-stage renal disease reimbursement plan, including interaction with Centers for Medicare and Medicaid Services (“CMS”), and completion of at least three meetings with government stakeholders by end of 2020 (20%)
•
Submit the NDA for KORSUVA Injection by the end of 2020 (30%)
In March 2021, the Compensation Committee reviewed our 2020 performance and determined that the performance objectives under the 2020 executive bonus plan for each named executive officer were achieved at 100%.
In addition, the Compensation Committee took note of additional, exceptional performance by Dr. Chalmers during 2020 that was not fully captured by Dr. Chalmers’ original performance objectives, including his efforts in securing the expansion of the Company’s collaboration with Vifor Pharma and the strategic importance of that collaboration. As a result, the Compensation Committee approved an additional incremental bonus above his target bonus. Also, in light of the fact that Mr. Makara was no longer serving as an executive officer of the Company as of year-end, his performance was assessed, and his bonus determined, by Dr. Chalmers, rather than 10%the Compensation Committee. Based on this performance and these assessments, the named executive officers were paid the following bonuses under the 2020 executive bonus plan:
| Named Executive Officer | | | Annual Bonus
Payment ($) | | | Percent of
Target
Bonus
(%) | |
| Derek Chalmers, Ph.D., D.Sc. | | | | | 432,600(1) | | | | | | 125 | | |
| Frédérique Menzaghi, Ph.D. | | | | | 180,480 | | | | | | 100 | | |
| Joana Goncalves, M.D. | | | | | 180,480 | | | | | | 100 | | |
| Scott Terrillion | | | | | 164,800 | | | | | | 100 | | |
| Richard Makara | | | | | 117,120(2) | | | | | | 100 | | |
| Thomas Reilly | | | | | 40,000(3) | | | | | | 100 | | |
(1)
As described above, a portion of this bonus payment represented a discretionary bonus based on additional achievements by Dr. Chalmers in the amount of 25% of Dr. Chalmers’ target bonus. This discretionary bonus is included in the “Bonus” column of the Summary Compensation Table.
(2)
As described above, the Compensation Committee did not establish performance objectives for Mr. Makara, but Dr. Chalmers, as the Company’s Chief Executive Officer, evaluated Mr. Makara’s performance for the year 2020 on a holistic basis. In consideration of Mr. Makara’s service to the Company during the year, including his service on an interim basis as the Company’s principal financial officer, while continuing to fulfil his primary responsibility as Vice President of Finance and Controller, Dr. Chalmers determined that his performance merited a bonus equal to his target bonus. This discretionary bonus is included in the “Bonus” column of the Summary Compensation Table.
(3)
As described above, Mr. Reilly was eligible to earn a prorated portion of his target bonus. Based on the Compensation Committee’s assessment of Mr. Reilly’s contributions to the Company’s performance during the time period following his hiring, the Compensation Committee determined to award Mr. Reilly a prorated bonus equal to his target bonus, multiplied by a fraction representing the portion of the year that he was employed by us. This bonus is included in the “Bonus” column of the Summary Compensation Table.
In addition to the amounts payable to our named executive officers under the 2020 executive bonus plan in the table above, Dr. Menzaghi received an additional $52,560 bonus during 2020 as a result of achievement, during the first half of 2020, of a registered class“stretch” goal related to the 2019 executive bonus plan. Because the goal was met in 2020, this amount is reported in the Summary Compensation Table as “Non-Equity Incentive Plan Compensation” for Dr. Menzaghi in 2020, despite the fact that it relates to the 2019 executive bonus plan.
Special NDA Bonuses
In addition to the 2020 executive bonus plan, in November 2020, the Compensation Committee established a special bonus program for Drs. Menzaghi and Goncalves to recognize their significant responsibility with respect to the NDA for KORSUVA Injection, and to reward them for the submission of the NDA by year-end and the FDA’s acceptance of the NDA for filing by the first half of 2021. Under this program, the Compensation Committee approved the payment of a special bonus of up to $180,618 to each of Drs. Menzaghi and Goncalves. This special bonus would be payable in two tranches upon the achievement of performance objectives as follows:
•
One-half, or $90,309, in the event that the NDA for KORSUVA Injection was submitted to the FDA before the end of 2020; and
•
One-half, or $90,309, in the event that the NDA for KORSUVA Injection was accepted for filing by the FDA during the first half of 2021.
The NDA was submitted in late December 2020, and accordingly, the first half of this special bonus became payable to Drs. Menzaghi and Goncalves at that time. These amounts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
The NDA was accepted for filing in the first quarter of 2021, and accordingly, the second half of this special bonus became payable to Drs. Menzaghi and Goncalves at that time. These amounts will be included as 2021 compensation in the Summary Compensation Table of next year’s proxy statement.
Long-Term Incentive Equity Awards
We use equity awards to motivate our equity securities,executive officers, including the named executive officers, to file withincrease the SEC initial reportslong-term value of ownership and reports of changes in ownership ofour common stock and, otherthereby, to align the interests of our executive officers with those of our stockholders. These equity securitiesawards are intended to further our success by ensuring that sustainable value creation is a key factor in our executive officers’ management of our business.
The size and form of these equity awards is determined by the Compensation Committee in its discretion. As described below, in 2020, we granted equity awards in the form of stock options, time-based RSUs and performance-based RSUs to our named executive officers as part of our long-term incentive compensation program.
Stock Options. The Compensation Committee uses stock options as a key tool in serving to align the interests of our executive officers and our stockholders. Stock options are inherently performance based, and automatically link executive pay to stockholder return, as the value realized, if any, by the executive from an award of stock options, is dependent upon, and directly proportionate to, appreciation in stock price. Executives will only receive value from the stock option awards if the price of the Company. Officers, directorsstock increases above the price at time of grant, and greater than 10%remains above as the stock options continue to vest. Stock options also do not have downside protection, and the awards will not provide value to the holder when the stock price is below the exercise price.
| | | | Performance-based
RSUs (# shares) | |
| Executive | | | Target(1) | | | Stretch(2) | |
| Derek Chalmers, Ph.D., D.Sc. | | | | | 50,000 | | | | | | 10,000 | | |
| Frédérique Menzaghi, Ph.D. | | | | | 16,000 | | | | | | 10,000 | | |
| Joana Goncalves, M.D. | | | | | 16,000 | | | | | | 10,000 | | |
| Scott Terrillion | | | | | 16,000 | | | | | | 10,000 | | |
(1)
The Target performance-based RSUs issued to Dr. Chalmers and Mr. Terrillion vest as follows:
•
25% upon the Phase 2 clinical trial of Oral KORSUVA in atopic dermatitis meeting its pre-specified primary endpoint (this achievement of this milestone is still to be determined);
•
37.5% upon the submission of the NDA for KORSUVA Injection to the FDA (this milestone was achieved in December 31, 20182020); and
•
37.5% upon the FDA’s acceptance of the NDA for KORSUVA Injection for filing (this milestone was achieved in the first quarter of 2021).
The Target performance-based RSUs issued to Dr. Menzaghi vest as follows:
•
50% upon the submission of the NDA for KORSUVA Injection to the FDA (this milestone was achieved in December 2020); and
•
50% upon the FDA’s acceptance of the NDA for KORSUVA Injection for filing (this milestone was achieved in the first quarter of 2021).
The Target performance-based RSUs issued to Dr. Goncalves vest as follows:
•
50% upon the Phase 2 clinical trial of Oral KORSUVA in atopic dermatitis meeting its pre-specified primary endpoint (this achievement of this milestone is still to be determined);
•
25% upon the submission of the NDA for KORSUVA Injection to the FDA (this milestone was achieved in December 2020); and
•
25% upon the FDA’s acceptance of the NDA for KORSUVA Injection for filing (this milestone was achieved in the first quarter of 2021).
(2)
The Stretch performance-based RSUs issued to each of the named executive officers vest upon the FDA’s granting of priority review designation to the NDA for KORSUVA Injection. This stretch objective was met in the first quarter of 2021, resulting in the vesting in full of the stretch performance-based RSUs.
Consideration of 2020 Say-on-Pay Vote
At the Company’s 2020 annual meeting of stockholders, the Company’s advisory vote to approve executive compensation (“say-on-pay vote”) for fiscal year 2019 received stockholder support of over 97% of the shares present or represented by proxy. Given the strong level of support evidenced by last year’s say-on-pay vote, the Compensation Committee determined that our former Chief Medical Officer. We referstockholders were generally supportive of the executive compensation philosophy and program set forth in our 2020 proxy statement. Accordingly, we have generally maintained our approach to these individuals asour executive compensation program.
Other Features of Our Executive Compensation Program
Employment Agreements with our Named Executive
Officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary | | | Bonus(1) | | | Stock
Awards
(2) | | | Option
Awards(3) | | | Non-Equity
Incentive Plan
Compensation
(4) | | | All Other
Compensation
(5) | | | Total
Compensation | |
Derek Chalmers, Ph.D., D.Sc.(6) | | | 2018 | | | $ | 542,100 | | | $ | — | | | $ | — | | | $ | 1,997,623 | | | $ | 238,524 | | | $ | 10,799 | | | $ | 2,789,046 | |
President and Chief Executive Officer | | | 2017 | | | | 526,300 | | | | — | | | | — | | | | 2,753,848 | | | | 233,400 | | | | 8,100 | | | $ | 3,521,648 | |
| | | 2016 | | | | 511,000 | | | | — | | | | — | | | | 736,837 | | | | 204,400 | | | | 7,950 | | | | 1,460,187 | |
| | | | | | | | |
Joana Goncalves, M.D.(7) | | | 2018 | | | | 82,639 | | | | 60,000 | | | | — | | | | 3,560,536 | | | | 32,603 | | | | 413 | | | | 3,736,191 | |
Chief Medical Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Frédérique Menzaghi, Ph.D. | | | 2018 | | | | 400,000 | | | | — | | | | — | | | | 615,428 | | | | 212,000 | | | | 10,799 | | | | 1,238,227 | |
Chief Scientific Officer and Senior | | | 2017 | | | | 379,935 | | | | — | | | | — | | | | 917,949 | | | | 200,000 | | | | 8,100 | | | | 1,505,984 | |
Vice President, R&D | | | 2016 | | | | 357,000 | | | | — | | | | — | | | | 246,878 | | | | 168,682 | | | | 7,950 | | | | 780,510 | |
| | | | | | | | |
Joseph Stauffer, D.O.(8) | | | 2018 | | | | 368,900 | | | | 141,895 | | | | — | | | | 615,428 | | | | — | | | | 567,627 | | | | 1,693,850 | |
Former Chief Medical Officer | | | 2017 | | | | 426,000 | | | | — | | | | — | | | | 917,949 | | | | 170,400 | | | | 8,875 | | | | 1,523,224 | |
| | | 2016 | | | | 414,000 | | | | — | | | | — | | | | 250,676 | | | | 223,560 | | | | 8,199 | | | | 896,435 | |
(1) | The amount disclosed in this column represent aone-time bonus, payable on the first regularly scheduled payroll date following the executive officer’s start date.
|
(2) | In accordance with SEC rules, these amounts reflect the grant date fair values of the restricted stock units, or RSUs, granted to each of Drs. Chalmers, Menzaghi and Stauffer in 2018, calculated in accordance with ASC Topic 718 for stock-based compensation transactions, based on the probable outcome of the vesting conditions of these RSUs as of the grant date. Each RSU represented the contingent right to receive one share of our common stock upon the achievement of certain performance targets through the first quarter of 2019, subject to the recipient’s continuous service through the vesting events. As of the grant date, the performance vesting condition was considered not probable of occurring and, as a result, the grant date fair value of the RSUs, for purposes of this table, is $0. Assuming that the performance vesting condition of these RSUs was met as of the grant date, the value of these RSUs would have been $772,446 for Dr. Chalmers and $238,054 for each of Drs. Menzaghi and Stauffer. The performance vesting condition for these RSUs was met in December 2018, and the actual value of these RSUs upon vesting in full was $495,344 for Dr. Chalmers and $152,656 for each of Drs. Menzaghi and Stauffer. See Note 13 to our financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2018 for a further description of our valuation methodology for equity awards.
|
(3) | The amounts disclosed in this column are the fair value on the grant date of each award granted under our 2014 Plan, computed in accordance with ASC 718, using the valuation methodology for equity awards set forth in Note 13 of our financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2018. All of the options awards reported in the table above were granted under our 2014 Plan and have a term of ten years from the date of grant. Stock options granted to officers and employees in 2018, 2017 and 2016, who had previously been granted stock options, vest monthly over a four-year period from the grant date. The initial grant of stock options to officers and employees vests 25% after the first year and ratably thereafter during the following 36 months.
|
(4) | The amounts disclosed in this column represent the annual cash incentive bonus earned by the named executive officer for services performed in 2018, 2017 and 2016. The 2018 annual incentive bonus was paid in March 2019. The 2017 annual incentive bonus was paid in February 2018. The 2016 annual incentive bonus was paid in March 2017. The annual cash incentive bonus for each executive officer is based on the Board’s assessment of each such officer’s individual performance and our overall performance against objectives determined by the Board and communicated to such officer. For the fiscal years ended December 31, 2018, 2017 and 2016, the annual cash incentive bonuses were based on our achievement of clinical, regulatory, financial and operational objectives. See “-Executive Employment Arrangements and Potential Payments upon Termination or Change in Control” below for additional information regarding assigned bonus targets, expressed as a percentage of each executive officer’s base salary.
|
Officers (5) | All other compensation for 2017 and 2016 includes $8,100 and $7,950, respectively, for 401(k) Employee Benefit Plan contributions we made to the account of each of Drs. Chalmers, Menzaghi and Stauffer under the ERISA Safe Harbor Rules, representing the same percentage of salary as contributed to all employee accounts, up to a maximum amount of salary. For 2017 and 2016, all other compensation also includes $775 and $249 for taxgross-ups for Dr. Stauffer related to hotel accommodations close to our headquarters for 2017 and 2016. For our named executive officers other than Dr. Stauffer, this column also includes the following for 2018: (i) $8,250 for 401(k) Employee Benefit Plan contributions we made to the account of each of Drs. Chalmers and Menzaghi under the ERISA Safe Harbor Rules; (ii) $1,800 for parking for each of Dr. Chalmers and Dr. Menzaghi; (iii) $300 for parking for Dr. Goncalves; (iv) $749 for life insurance payments for each of Dr. Chalmers and Dr. Menzaghi; and (v) $113 for life insurance payments for Dr. Goncalves.
|
(6) | Dr. Chalmers is also a member of the Board but does not receive any additional compensation in his capacity as a director.
|
(7) | Dr. Goncalves joined Cara on October 22, 2018. For the year ended December 31, 2018, the amounts reported as salary andnon-equity incentive plan compensation, represents Dr. Goncalves’s base salary paid from October 22, 2018 to December 31, 2018 and her prorated annual cash incentive bonus.
|
(8) | Dr. Stauffer served as our Chief Medical Officer until October 22, 2018 (the “Separation Date”). Salary reported for Dr. Stauffer for 2018 represents his salary earned through the Separation Date. Bonus reported for Dr. Stauffer for 2018 represents the prorated amount of his 2018 target bonus, which was payable pursuant to the Separation and Consulting Agreement we entered into with Dr. Stauffer as of the Separation Date. All other compensation for Dr. Stauffer for 2018 includes: (i) the intrinsic value of stock options for which vesting was accelerated to the Separation Date in the amount of $465,432; (ii) $85,000 of consulting fees payable to Dr. Stauffer for services provided to us from the Separation Date through December 31, 2018; (iii) $5,968 of COBRA insurance premium reimbursements; (iv) $8,250 for 401(k) Employee Benefit Plan contributions we made to the account of Dr. Stauffer under the ERISA Safe Harbor Rules; (v) $1,500 for parking; (vi) $624 for life insurance payments and (vii) $853 for taxgross-ups for Dr. Stauffer related to hotel accommodations close to our headquarters for 2018.
|
Outstanding Equity Awards at December 31, 2018
Derek Chalmers, Ph.D., D.Sc.
Under an executive employment agreement entered into in February 2014, Derek Chalmers serves as our President and Chief Executive Officer. The
following table shows certain information regarding outstanding equity awards heldagreement provides that Dr. Chalmers was entitled to receive an initial annual base salary of $440,000, subject to adjustment by our
Named Executive Officers at December 31, 2018. | | | | | | | | | | | | | | | | |
Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | | Option
Exercise
Price | | | Option
Expiration
Date | |
Derek Chalmers, Ph.D., D.Sc. | | | 80,000 | | | | — | (1) | | $ | 11.00 | | | | 1/30/2024 | |
President and Chief Executive Officer | | | 158,125 | | | | 6,875 | (2) | | | 10.82 | | | | 6/15/2025 | |
| | | 130,375 | | | | 60,625 | (2) | | | 6.00 | | | | 3/30/2026 | |
| | | 98,437 | | | | 126,563 | (2) | | | 17.41 | | | | 3/8/2027 | |
| | | 35,156 | | | | 152,344 | (2) | | | 14.39 | | | | 3/9/2028 | |
| | | | |
Joana Goncalves, M.D. | | | — | | | | 250,000 | (1) | | | 19.27 | | | | 10/22/2028 | |
Chief Medical Officer | | | | | | | | | | | | | | | | |
| | | | |
Frédérique Menzaghi, Ph.D. | | | 40,000 | | | | — | (1) | | | 11.00 | | | | 1/30/2024 | |
Chief Scientific Officer and Senior Vice President, R&D | | | 57,500 | | | | 2,500 | (2) | | | 10.82 | | | | 6/15/2025 | |
| | | 44,687 | | | | 20,313 | (2) | | | 6.00 | | | | 3/30/2026 | |
| | | 32,812 | | | | 42,188 | (2) | | | 17.41 | | | | 3/8/2027 | |
| | | 10,828 | | | | 46,922 | (2) | | | 14.39 | | | | 3/9/2028 | |
| | | | |
Joseph Stauffer, D.O. | | | 180,000 | | | | — | | | | 8.74 | | | | 12/1/2024 | (4) |
Former Chief Medical Officer | | | 66,000 | | | | — | | | | 6.00 | | | | 3/30/2026 | (4) |
| | | 64,008 | | | | 10,992 | (3) | | | 17.41 | | | | 3/8/2027 | (4) |
| | | 10,827 | | | | 46,923 | (3) | | | 14.39 | | | | 3/9/2028 | (4) |
(1) | Shares underlying these stock options vest over a four-year period as follows: 25% of the shares underlying the option vest on the first anniversary of the date of grant, with the remainder vesting in equal monthly installments over the 36 months thereafter.
|
(2) | Shares underlying these stock options vest monthly over a four-year period from the grant date.
|
Board. Dr. Chalmers received (3) | The exercisable shares give effect to the acceleration of vesting of certain stock options in connection with Dr. Stauffer’s separation as our Chief Medical Officer during 2018. The remaining unvested shares underlying these options continue vesting during the term of Dr. Stauffer’s consulting agreement with us, which we expect will end on July 22, 2019, in accordance with the original vesting terms of the award, with 1/48th of the total shares subject to each grant vesting on a monthly basis through the termination of Dr. Stauffer’s consulting term. See “—Executive Employment Arrangements and Potential Payments upon Termination or Change in Control-Separation With Dr. Stauffer.”
|
(4) | Based on the term of Dr. Stauffer’s consulting agreement, it is expected that these awards will expire on October 22, 2019, three months after the expected conclusion of his consulting term, if not previously exercised.
|
32
Section 162(m). Under Section 162(m) of the Internal Revenue Code (“Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date. Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the Company’s named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.
Policy Regarding Hedging and Pledging of Our Common Stock
Our executive officers and directors are also subject to our insider trading policy, which prohibits all employees and directors from purchasing financial instruments designed to hedge or offset any decrease in the market value of the Company’s common stock or engage in any transaction that would have the effect of reducing or eliminating the economic risk of holding the Company’s common stock and which prohibits all employees and directors from engaging in short-term or speculative transactions in the Company’s securities, including pledging and pledging Cara securities as collateral for margin loans.
Risk Analysis of Our Compensation Policies and Practices
The Compensation Committee has reviewed the Company’s compensation policies and practices, in consultation with Radford and outside Company counsel, to assess whether they encourage employees to take inappropriate risks. After reviewing and assessing the Company’s compensation philosophy, terms and practices, including the mix of fixed and variable, short and long-term incentives and overall pay, incentive plan structures, and the checks and balances built into, and oversight of, each plan and practice, the Compensation Committee determined that any risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on our Company as a whole. The Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks; the mix of short-term compensation (in the form of salary and annual bonus, if any, which is based on a variety of performance factors), and long-term compensation (in the form of stock options or RSUs) prevents undue focus on short-term results and helps align the interests of the Company’s executive officers with the interests of our stockholders. In addition, the Company’s insider trading policy’s prohibition against hedging and pledging in Company stock protects against short-term decision making.
Executive Compensation Tables
2020 Summary Compensation Table
The table below shows for the periods presented, compensation awarded to or paid to, or earned by, our named executive officers.
| Name and Principal Position | | | Year | | | Salary | | | Bonus | | | Stock
Awards(1) | | | Option
Awards(2) | | | Non-Equity
Incentive Plan
Compensation(3) | | | All Other
Compensation(4) | | | Total | |
Derek Chalmers, Ph.D., D.Sc.
President and Chief Executive Officer | | | | | 2020 | | | | | $ | 576,800 | | | | | $ | 86,520(5) | | | | | $ | 818,000 | | | | | $ | 1,075,130 | | | | | $ | 346,080 | | | | | $ | 11,079 | | | | | $ | 2,913,609 | | |
| | | | 2019 | | | | | | 560,000 | | | | | | — | | | | | | — | | | | | | 2,551,783 | | | | | | 310,800 | | | | | | 11,034 | | | | | | 3,433,617 | | |
| | | | 2018 | | | | | | 542,100 | | | | | | — | | | | | | — | | | | | | 1,997,623 | | | | | | 238,524 | | | | | | 10,799 | | | | | | 2,789,046 | | |
Thomas Reilly(6)
Chief Financial Officer | | | | | 2020 | | | | | | 100,000(7) | | | | | | 70,000(8) | | | | | | — | | | | | | 1,417,868 | | | | | | — | | | | | | 590 | | | | | | 1,588,458 | | |
Frédérique Menzaghi, Ph.D.
Chief Scientific Officer and Senior Vice President, Research and Development | | | | | 2020 | | | | | | 451,200 | | | | | | — | | | | | | 261,760 | | | | | | 344,042 | | | | | | 323,349 | | | | | | 10,959 | | | | | | 1,391,310 | | |
| | | | 2019 | | | | | | 438,000 | | | | | | — | | | | | | — | | | | | | 1,628,797 | | | | | | 148,920 | | | | | | 10,914 | | | | | | 2,226,631 | | |
| | | | 2018 | | | | | | 400,000 | | | | | | — | | | | | | — | | | | | | 615,428 | | | | | | 212,000 | | | | | | 10,799 | | | | | | 1,238,227 | | |
| Name and Principal Position | | | Year | | | Salary | | | Bonus | | | Stock
Awards(1) | | | Option
Awards(2) | | | Non-Equity
Incentive Plan
Compensation(3) | | | All Other
Compensation(4) | | | Total | |
Joana Goncalves, M.D.(6)
Chief Medical Officer | | | | | 2020 | | | | | | 451,200 | | | | | | — | | | | | | 261,760 | | | | | | 344,042 | | | | | | 270,789 | | | | | | 10,911 | | | | | | 1,338,702 | | |
Scott Terrillion(6)
General Counsel, Secretary and Chief Compliance Officer | | | | | 2020 | | | | | | 412,000 | | | | | | — | | | | | | 261,760 | | | | | | 344,042 | | | | | | 164,800 | | | | | | 11,079 | | | | | | 1,193,681 | | |
| | | | 2019 | | | | | | 400,000 | | | | | | — | | | | | | — | | | | | | 814,399 | | | | | | 160,000 | | | | | | 11,034 | | | | | | 1,385,433 | | |
Richard Makara(6)
VP, Head of Accounting and Controller | | | | | 2020 | | | | | | 292,800 | | | | | | 117,120 | | | | | | — | | | | | | 322,539 | | | | | | — | | | | | | 10,509 | | | | | | 742,968 | | |
(1)
Stock awards represent RSUs granted to the named executive officers. Each RSU represents the contingent right to receive one share of our common stock upon the satisfaction of the vesting conditions of the award, subject to the recipient’s continuous service through the vesting events. For 2020, the RSU grants consisted of a combination of time-based RSUs, which vest based on time of service, and performance-based RSUs, which vest upon the achievement of certain performance conditions. For years prior to 2020, RSUs consisted entirely of performance-based awards. In accordance with SEC rules, these amounts reflect the grant date fair values of the RSUs granted, calculated in accordance with ASC 718 for stock-based compensation transactions. In the case of performance-based awards, this grant date fair value is based on the probable outcome of the vesting conditions of these RSUs, determined as of the grant date.
For 2020, as of the grant date, the performance vesting conditions for the RSUs granted to our named executive officers were considered not probable of occurring and, as a result, the grant date fair value of those RSUs, for purposes of this table, is $0. Accordingly, the amounts in this table represent the grant date fair values of time-based RSUs granted to the named executive officers. Assuming that all of the performance vesting conditions of the performance-based RSUs were met as of the grant date, the value of all RSUs granted during 2020 would have been $1,799,600 for Dr. Chalmers, $687,120 for Dr. Menzaghi, $687,120 for Dr. Goncalves, and $687,120 for Mr. Terrillion. See Note 13. Stock-Based Compensation to our financial statements included in the Form 10-K for a further description of our valuation methodology for equity awards.
For 2019, as of the grant date, the performance vesting conditions for the RSUs granted to our named executive officers were considered not probable of occurring and, as a result, the grant date fair value of those RSUs, for purposes of this table, is $0. Assuming that all of the performance vesting conditions of these RSUs were met as of the grant date, the value of these RSUs would have been $966,000 for Dr. Chalmers, $1,207,500 for Dr. Menzaghi, and $402,500 for Mr. Terrillion. See Note 13. Stock-Based Compensation to our financial statements included in our Form 10-K for a further description of our valuation methodology for equity awards.
For 2018, as of the grant date, the performance vesting condition for the RSUs granted to Drs. Chalmers and Menzaghi was considered not probable of occurring and, as a result, the grant date fair value of those RSUs, for purposes of this table, is $0. Assuming that the performance vesting condition of these RSUs was met as of the grant date, the value of these RSUs would have been $772,446 for Dr. Chalmers and $238,054 for Dr. Menzaghi.
See Note 13. Stock-Based Compensation in the notes to our financial statements included in the Form 10-K for a further description of our valuation methodology for equity awards.
(2)
Amounts reflect the grant date fair value of each option award granted, calculated in accordance with ASC 718, excluding the effect of estimated forfeitures. All of the options awards reported in the table above were granted under our 2014 Plan and have a term of ten years from the date of grant. Shares underlying these stock options vest monthly over a four-year period from the grant date, subject to the executive officer’s continuous service through each such date. Assumptions used in the calculation of the grant date fair values of these awards are set forth in Note 13. Stock-Based Compensation in the notes to our financial statements in the Form 10-K.
(3)
Amounts reflect annual performance-based cash bonus awards earned by each executive officer based on the Board’s assessment of each such officer’s individual performance and our overall performance against objectives determined by the Board and communicated to such officer at the beginning of the fiscal year. For the fiscal years presented, the annual cash incentive bonuses were based on our achievement of clinical, regulatory, financial and operational objectives. The amounts also include an additional $90,309 paid to each of Drs. Menzaghi and Goncalves upon the achievement of the first of two performance objectives under a special “NDA Bonus” program, as described in “Compensation Discussion and Analysis — 2020 Executive Compensation Program — Special NDA Bonuses.” The 2020 amount for Dr. Menzaghi also includes an additional $52,560 bonus payable as a result of our achievement during the first half of 2020 certain “stretch” goals from our 2019 executive bonus plan. Because the goal was met in 2020, this amount is reported in the summary compensation table for Dr. Menzaghi in 2020, despite the fact that it relates to the 2019 executive bonus plan, rather than the 2020 executive bonus plan. For additional information concerning these bonuses, see “Compensation Discussion and Analysis — 2020 Executive Compensation Program — Annual Performance-Based Cash Compensation” and “— Special NDA Bonuses.”
(4)
Amounts reflect for 2020: (a) for Dr. Chalmers, $1,800 for parking, $8,550 for 401(k) Employee Benefit Plan contributions, and $729 of life insurance premiums; (b) for Mr. Reilly, $450 for parking and $140 of life insurance premiums; (c) for Dr. Menzaghi, $1,800 for parking, $8,550 for 401(k) Employee Benefit Plan contributions, and $609 of life insurance premiums, (d) for Dr. Goncalves, $1,800 for parking, $8,550 for 401(k) Employee Benefit Plan contributions, and $561 of life insurance premiums; (e) for Mr. Terrillion, $1,800 for parking, $8,550 for 401(k) Employee Benefit Plan contributions, and $729 of life insurance premiums; and (f) for Mr. Makara, $1,350, for parking, $8,550 for 401(k) Employee Benefit Plan contributions, and $609 of life insurance premiums.
(5)
This amount represents a discretionary bonus in the amount of 25% of Dr. Chalmers’ target bonus that was awarded in recognition of exceptional performance by Dr. Chalmers during 2020 that was not fully captured by Dr. Chalmers’ original performance objectives, as described in greater detail in “Compensation Discussion and Analysis — 2020 Executive Compensation Program — Annual Performance-Based Cash Compensation.”
(6)
2018 and 2019 compensation information is omitted for each of Dr. Goncalves and Messrs. Makara and Reilly, and 2018 compensation information is omitted for Mr. Terrillion, as these individuals were not named executive officers (as defined in Item 402 of Regulation S-K promulgated under the Exchange Act) for such years.
(7)
The amount included for Mr. Reilly’s base salary reflects the prorated amount of compensation he received during the year ended December 31, 2020, calculated from the date he was appointed as Chief Financial Officer in October 2020.
(8)
Consists of (a) a $30,000 signing bonus, which amount is subject to recoupment in the event that Mr. Reilly’s employment with the Company terminates before October 1, 2021; and (b) a $40,000 bonus for 2020, representing a prorated portion of Mr. Reilly’s target bonus, as described in “Compensation Discussion and Analysis — 2020 Executive Compensation Program — Annual Performance-Based Cash Compensation.”
| | | | Option Awards | | | Stock Awards | |
| Name | | | Grant
date | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | | Option
Exercise
Price | | | Option
Expiration
Date | | | Number of
Shares or
Units of Stock
That Have Not
Vested(3) | | | Market Value
of Shares of
Units of Stock
That Have Not
Vested(4) | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (5) | | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested
($)(4) | |
Richard Makara
Vice President, Head of Accounting & Controller | | | | | 10/17/2014 | | | | | | 25,000 | | | | | | — | | | | | | 8.03 | | | | | | 10/17/2024 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 3/30/2016 | | | | | | 9,167 | | | | | | — | | | | | | 6.00 | | | | | | 3/30/2026 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 3/8/2017 | | | | | | 18,750 | | | | | | 1,250(1) | | | | | | 17.41 | | | | | | 3/8/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 8/17/2017 | | | | | | 16,666 | | | | | | 3,334(1) | | | | | | 13.51 | | | | | | 8/17/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 3/6/2018 | | | | | | 13,750 | | | | | | 6,250(1) | | | | | | 14.18 | | | | | | 3/6/2028 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 3/6/2019 | | | | | | 13,125 | | | | | | 16,875(1) | | | | | | 16.10 | | | | | | 3/6/2029 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | 2/24/2020 | | | | | | 6,250 | | | | | | 23,750(1) | | | | | | 16.36 | | | | | | 2/24/2030 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
(1)
Shares underlying these stock options vest monthly over a four-year period from the grant date, subject to the executive officer’s continuous service through each such date.
(2)
Shares underlying these stock options vest over a four-year period as follows: 25% of the shares underlying the option vest on the first anniversary of the date of grant, with the remainder vesting in equal monthly installments over the 36 months thereafter, subject to the executive officer’s continuous service through each such date.
(3)
Awards in this column consist of time-based RSUs that were unvested as of December 31, 2020 that vest in three equal annual installments on the first, second and third anniversary date of the grant, subject to the officer’s continuous employment with the Company.
(4)
Market value is calculated based on the closing price of our common stock on December 31, 2020, which was $15.13 per share, as reported on Nasdaq.
(5)
Awards in this column consist of performance-based RSUs that were unvested as of December 31, 2020.
2020 Option Exercises and Stock Vested
The following table provides information regarding vesting of stock awards held by our named executive officers in 2020. Our named executive officers did not exercise any stock options during 2020.
| | | | Stock Awards | |
| Name | | | Number of Shares
Acquired on Vesting
(#) | | | Value Realized
on Vesting
($) | |
| Derek Chalmers, Ph.D., D.Sc. | | | | | 38,750 | | | | | | 587,575 | | |
| Thomas Reilly | | | | | — | | | | | | — | | |
| Frédérique Menzaghi, Ph.D. | | | | | 45,500 | | | | | | 675,350 | | |
| Joana Goncalves, M.D. | | | | | 34,000 | | | | | | 556,300 | | |
| Scott M. Terrillion | | | | | 14,334 | | | | | | 216,376 | | |
| Richard Makara | | | | | — | | | | | | — | | |
Potential Payments Upon Termination or Change in Control
Dr. Chalmers, Dr. Menzaghi, Dr. Goncalves, and Mr. Reilly are eligible for severance benefits in specified circumstances pursuant to their respective employment agreements. Under the terms of the agreements, upon execution and effectiveness of a general release of claims, each executive officer will be entitled to severance payments if we terminate his or her employment without cause, or in the case of Dr. Chalmers, he terminates employment with us for good reason. For Dr. Chalmers, the severance period is
twelve months. For Dr. Goncalves, the severance period is nine months. For Dr. Menzaghi the severance period is six months. For Mr. Reilly, the severance period is three months prior to the one year anniversary of his employment, after which time it increases to nine months.
The following table sets forth the estimated incremental payments and benefits that would be payable to Dr. Chalmers, Dr. Menzaghi, Dr. Goncalves, and Mr. Reilly upon termination of employment without “cause” and, in the case of Dr. Chalmers, for “good reason,” including in connection with a “change in control” (as these terms are defined in the applicable employment agreement), assuming that the triggering event occurred on December 31, 2020. Neither Mr. Terrillion nor Mr. Makara is entitled to any severance or change in control benefits. Due to the number of factors that affect the nature and amount of any potential payments or benefits, actual payments and benefits may differ from those presented in the table below.
| Name | | | Benefit(1) | | | Termination
without Cause(1) | | | Resignation for
Good Reason(1) | | | CIC
Termination(1) | |
| Derek Chalmers, Ph.D., D.Sc. | | | Severance Payments | | | | $ | 576,800 | | | | | $ | 576,800 | | | | | $ | 576,800 | | |
| | Payment of Employer Health
Insurance Continuation | | | | | 729 | | | | | | 729 | | | | | | 729 | | |
| | Target Bonus | | | | | 346,080 | | | | | | 346,080 | | | | | | 346,080 | | |
| | Vesting Acceleration | | | | | — | | | | | | — | | | | | | 1,423,972 | | |
| | Benefit Total | | | | $ | 923,609 | | | | | $ | 923,609 | | | | | $ | 2,347,581 | | |
| Frédérique Menzaghi, Ph.D. | | | Severance Payments | | | | $ | 225,600 | | | | | | — | | | | | $ | 225,600 | | |
| | Payment of Employer Health
Insurance Continuation | | | | | 609 | | | | | | — | | | | | | 609 | | |
| | Target Bonus | | | | | 180,480 | | | | | | — | | | | | | 180,480 | | |
| | Vesting Acceleration | | | | | — | | | | | | — | | | | | | 527,775 | | |
| | Benefit Total | | | | $ | 406,689 | | | | | | — | | | | | $ | 934,464 | | |
Joana Goncalves, M.D.(2) | | | Severance Payments | | | | $ | 338,400 | | | | | | — | | | | | $ | 338,400 | | |
| | Payment of Employer Health
Insurance Continuation | | | | | 561 | | | | | | — | | | | | | 561 | | |
| | Target Bonus | | | | | 180,480 | | | | | | — | | | | | | 180,480 | | |
| | Vesting Acceleration | | | | | — | | | | | | — | | | | | | 574,940 | | |
| | Benefit Total | | | | $ | 519,441 | | | | | | — | | | | | $ | 1,094,381 | | |
Thomas Reilly(3) | | | Severance Payments(3) | | | | $ | 100,000 | | | | | | — | | | | | $ | 100,000 | | |
| | Payment of Employer Health
Insurance Continuation(3) | | | | | 140 | | | | | | — | | | | | | 140 | | |
| | Target Bonus(3) | | | | | 40,000 | | | | | | — | | | | | | 40,000 | | |
| | Vesting Acceleration | | | | | — | | | | | | — | | | | | | 418,250 | | |
| | Benefit Total | | | | $ | 140,140 | | | | | | — | | | | | $ | 558,390 | | |
(1)
Subject to the execution of a general release by the relevant executive officer, on the 60th day following termination without cause or, in the case of Dr. Chalmers, resignation for good reason, we will pay such payments relating to base salary, target bonus and health insurance premiums in a lump sum that this executive officer would have received on or prior to such date under the original schedule (less applicable withholdings and deductions), with the balance of such payments being paid as originally scheduled.
(2)
The amount included in the table for Dr. Goncalves reflects 100% accelerated vesting in the event that the Company terminates Dr. Goncalves’ employment without cause between six and twelve months after a Change in Control. In the event that the Company terminates Dr. Goncalves’ employment without cause in less than six months after a Change in Control, then 50% of the unvested portion of equity awards will vest in full.
(3)
The amounts included in the table for Mr. Reilly reflect a triggering event occurring before the first anniversary of his start date at the Company, reducing his severance, health insurance and target bonus
period to three months, pursuant to the terms of his employment agreement. If Mr. Reilly’s employment is terminated on or after the first anniversary of his start date, his severance, health insurance and target bonus period is nine months, pursuant to the terms of his employment agreement.
Pay Ratio Disclosure
Under SEC rules, we are required to calculate and disclose the annual total compensation of our median employee, excluding our CEO, and the ratio of the annual total compensation of our median employee as compared to the annual total compensation of our CEO (“CEO Pay Ratio”). To identify our median employee, we used the following methodology:
•
To determine our total population of employees, we included all full-time, part-time, and temporary employees as of December 31, 2020.
•
To identify our median employee from our employee population, we calculated the aggregate amount of each employee’s 2020 base compensation, 2020 employee bonuses, and the value of equity awards granted in 2020.
•
We calculated the value of 2020 equity awards as follows:
•
stock option awards were calculated in accordance with generally accepted accounting principles (i.e., ASC 718); and
•
RSU awards were calculated based on the grant date fair value of the awards determined in accordance with the U.S. generally accepted accounting principles (i.e., ASC 718)
•
We annualized the base compensation of all permanent (full-time and part-time) employees who were employed by us for less than the entire calendar year.
Using this approach, we determined our median employee. Once the median employee was identified, we then calculated the annual total compensation of this employee for 2020 in accordance with the requirements of the Summary Compensation Table.
For 2020, the median of the annual total compensation of our employees (other than Dr. Chalmers) was $269,000 and the annual total compensation of Dr. Chalmers, as reported in the Summary Compensation Table included in this proxy statement, was $2,913,609. Based on this information, the ratio of Dr. Chalmers’s annual total compensation to the median of the annual total compensation of all employees was 11:1.
Indemnification Agreements with Executive Officers and Directors
Our amended and restated certificate of incorporation
(the “Charter”) limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability for any:
breach of their duty of loyalty to the corporation or its stockholders;
•
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
•
unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or
•
transaction from which the directors derived an improper personal benefit.
Our amended and restated certificate of incorporationCharter does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms ofnon-monetary relief, remain available under Delaware law. These limitations also do not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Our amended and restated bylawsBylaws provide that we will indemnify our directors and executive officers, and may indemnify other officers, employees and other agents, to the fullest extent permitted by law. Our amended and restated bylawsBylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding and also permit us to secure
TABLE OF CONTENTSDIRECTOR COMPENSATIONThe following table shows certain information with respect to the compensation of all of ournon-employee directors for the fiscal year ended December 31, 2018:
| | | | | | | | | | | | |
Director | | Fees paid
in cash(1) | | | Option
awards(2) | | | Total | |
Martin Vogelbaum | | $ | 108,000 | | | $ | 224,261 | | | $ | 332,261 | |
Harrison M. Bains, Jr. | | | 60,000 | | | | 224,261 | | | | 284,261 | |
Jeffrey Ives, Ph.D. | | | 57,000 | | | | 224,261 | | | | 281,261 | |
Christopher Posner (3) | | | 24,000 | | | | 470,289 | | | | 494,289 | |
Dean Slagel (4) | | | 10,000 | | | | — | | | | 10,000 | |
(1) | This column includes the annual fees paid to allnon-employee directors for their service on the Board as well as for their committee membership and chairmanship.
|
(2) | The amounts disclosed in this column represent the aggregate grant date fair value of the stock options granted, computed in accordance with FASB ASC Topic 718, using the valuation methodology for equity awards set forth in Note 13 of our financial statements included in our Annual Report on Form10-K for the fiscal year ended December 31, 2018. The options granted to Mr. Vogelbaum, Mr. Bains and Dr. Ives have an exercise price per share of $16.07 and were granted on June 6, 2018 in connection with our 2018 Annual Meeting of Stockholders. The options granted to Mr. Posner have an exercise price of $17.94 and were granted on August 2, 2018 in connection with his appointment to the Board.
|
(3) | Mr. Posner was appointed to the Board, effective August 2, 2018.
|
(4) | Mr. Slagel resigned from the Board, effective March 7, 2018.
|
The options for Mr. Vogelbaum, Mr. Bains and Dr. Ives described in the table above vest on theone-year anniversary of the grant date, subject to the director’s continued service as a director through such date. The options for Mr. Posner described in the table above vest over a three-year period in equal installments from the date of the grant, subject to Mr. Posner’s continued service as a director through each such vesting date. As of December 31, 2018, options to purchase 81,500 shares of common stock were held by Mr. Vogelbaum, Mr. Bains and Dr. Ives, of which 63,500 underlying shares were vested and immediately exercisable, and an option to purchase 35,000 shares of common stock was held by Mr. Posner, of which none of the underlying shares were vested or immediately exercisable.
Directors who are also full-time officers or employees of Cara do not receive any additional compensation for serving as directors. Therefore, Dr. Chalmers, our Chief Executive Officer and one of our directors, does not receive any additional compensation for his service as a director. Dr. Chalmers’ compensation as an executive officer is set forth above under “2018 Summary Compensation Table.”
The Board has adopted anon-employee director compensation policy. Under our director compensation policy, we will pay each of ournon-employee directors a cash retainer for service on the Board and for service on each committee on which the director is a member. These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment will be prorated for any portion of such quarter that the director is not serving on the Board. The retainers paid during 2018 tonon-employee directors for service on the Board and for service on each committee of the Board on which the director is a member were as follows:
| | | | | | | | |
| | | Member
Annual Service
Retainer | | | Chairman
Additional
Annual Service
Retainer | |
Board of Directors | | $ | 40,000 | | | $ | 35,000 | (1) |
Audit Committee | | | 10,000 | | | | 10,000 | |
Compensation Committee | | | 7,500 | | | | 7,500 | |
Nominating and Corporate Governance Committee | | | 4,000 | | | | 4,000 | |
(1) | During the year ended December 31, 2018, the Board had a Lead Independent Director rather than a Chairman. For the year ended December 31, 2018, the Lead Independent Director received an additional retainer of $35,000.
|
We also reimburse ournon-employee directors for reasonable travel andout-of-pocket expenses incurred in connection with attending the Board and committee meetings. In addition, under our director compensation policy, upon initial election to the Board, eachnon-employee director will receive an option to purchase 35,000 shares with an exercise price equal to the fair market value of our common stock on the date of grant. Such option vests over three years in equal annual installments, subject to the director’s continued service as a director through each such vesting date. Further, on the date of each annual meeting of stockholders, eachnon-employee director that continues to serve as anon-employee member on the Board will receive an option to purchase 18,000 shares of our common stock with an exercise price equal to the fair market value of our common stock on the date of grant. Such option will vest on the earlier of the first-year anniversary of the date of grant and our next annual meeting of stockholders, subject to the director’s continued service as a director through such vesting date.
This policy is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes our equity compensation plan information as of December 31, 2018.2020. Information is included for equity compensation plans approved by our stockholders. We do
| Plan Category | | | Number of securities
to be issued upon
exercise of outstanding
options (a) | | | Weighted-average
exercise price of
outstanding
options, warrants and
rights (b)(2) | | | Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding shares
of common stock
reflected in
column (a))(c) | |
Equity compensation plans approved by
security holders(1) | | | | | 5,421,893 | | | | | $ | 14.93 | | | | | | 284,380(3) | | |
Equity compensation plans not approved by
security holders(4) | | | | | 47,500 | | | | | $ | 25.88 | | | | | | 252,500 | | |
| Total | | | | | 5,469,393 | | | | | $ | 15.02 | | | | | | 536,880 | | |
(1)
Includes our 2014 Equity Incentive Plan.
(2)
The weighted average exercise price is calculated based solely on outstanding stock options, and does not take into account stock underlying RSUs, which have any equity compensation plansno exercise price.
(3)
All of these shares are available for future issuance under the 2014 Plan. Further, pursuant to the terms of the 2014 Plan, the aggregate number of shares of common stock reserved for issuance under the 2014 Plan automatically increases on January 1 of each year, through and including January 1, 2024, by 3% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Board. Accordingly, on January 1, 2021, the number of shares of common stock available for issuance under our 2014 Plan increased by 1,496,166 shares. This increase is not reflected in the table above.
(4)
Includes our 2019 Inducement Plan.
2019 Inducement Plan
The Board adopted the 2019 Inducement Plan (the “Inducement Plan”) effective as of November 20, 2019. The Inducement Plan is a non-stockholder approved
by our stockholders. | | | | | | | | | | | | |
Plan Category | | Number of shares of
common stock to be
issued upon exercise
of outstanding
options (a) (1) | | | Weighted-average
exercise price of
outstanding
options (b) (2) | | | Number of shares of
common stock
remaining available
for future issuance
under equity
compensation plans
(excluding shares
of common stock
reflected in
column (a))(c) (3) | |
Equity compensation plans approved by stockholders (1) (2) | | | 4,004,422 | | | $ | 13.34 | | | | 236,182 | |
Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | |
| | | | | | | | | | | | |
Total | | | 4,004,422 | | | | | | | | 236,182 | |
| | | | | | | | | | | | |
(1) | Columns (a) and (b) relate to options granted under the 2014 Plan and the 2004 Plan. Since the effectiveness of the 2014 Plan in January 2014, no further awards have been allowed to be granted under the 2004 Plan. The number of securities in column (c) relates only to the 2014 Plan.
|
(2) | The weighted average exercise price is calculated based solely on outstanding stock options, and does not take into account stock underlying restricted stock units, which have no exercise price.
|
(3) | The aggregate number of shares of common stock reserved for issuance under the 2014 Plan has automatically increased on January 1 of each year, beginning on January 1, 2015 and will continue to increase on January 1 of each year through and including January 1, 2024, by 3% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Board. Accordingly, on January 1, 2019, the number of shares of common stock available for issuance under our 2014 Plan increased by 1,186,426 shares pursuant to this provision. This increase is not reflected in the table above.
|
stock plan adopted pursuant to the “inducement exception” provided under Nadsaq Listing Rule 5635(c)(4) for the purpose of awarding (i) non-statutory stock options, (ii) restricted stock awards, (iii) restricted stock unit awards, and (iv) other stock awards to new employees as inducement material to such new employees entering into employment with us. The only persons eligible to receive grants of awards under the Inducement Plan are individuals who satisfy the standards for inducement grants in accordance with the Nasdaq listing rules, including individuals who were not previously an employee or director of Cara, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with Cara. An aggregate of 300,000 shares of common stock were reserved for issuance under the Inducement Plan.
2014 Equity Incentive Plan
The Board and our stockholders approved and adopted our 2014 Equity Incentive Plan
or the 2014 Plan,(the “2014 Plan”) in January 2014. The 2014 Plan provides for the grant of incentive stock options,
non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of equity compensation, or collectively, stock awards. Additionally, the 2014 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers,
non-employee directors and consultants.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2020 and 2019, by Ernst & Young LLP, the Company’s principal accountant:
| | | | Year Ended December 31, | |
| | | | 2020 | | | 2019 | |
| | | | (in thousands) | |
Audit fees(a) | | | | $ | 616 | | | | | $ | 776 | | |
| Audit-related fees | | | | | — | | | | | | — | | |
| Tax fees | | | | | — | | | | | | — | | |
| All other fees | | | | | — | | | | | | — | | |
| Total | | | | $ | 616 | | | | | $ | 776 | | |
(a)
Audit fees for the years ended December 31, 2020 and 2019 consist of the aggregate fees billed for professional services rendered for (i) the audit of our officers, directors, employees, consultantsannual report on Form 10-K for that year; (ii) the review of our quarterly reports on Form 10-Q for each of the first three quarters of that year; and advisors(iii) accounting consultations. For the year ended December 31, 2019, audit fees also included procedures in connection with the filing of incentive and nonqualified stock options to purchaseForm S-3 with the SEC for our follow-on offering of our common stock, and also providesstock.
All fees described above for the outright issuanceyears ended December 31, 2020 and 2019 were pre-approved by the Audit Committee.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by the Company’s independent registered public accounting firm, Ernst & Young LLP. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
The Audit Committee has determined that the rendering of services other than audit services by Ernst & Young LLP is compatible with maintaining the principal accountant’s independence.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of our common stock through restricted share awards. Sinceas of April 5, 2021 by: (1) each director; (2) each of our named executive officers; (3) all of our current executive officers and directors as a group; and (4) all those known by us to be beneficial owners of more than 5% of our common stock.
| Name of beneficial owner | | | Number of Shares
Beneficially Owned | | | Percentage of Shares
Beneficially Owned | |
| 5% stockholders: | | | | | | | | | | | | | |
T. Rowe Price(1) | | | | | 2,429,235 | | | | | | 4.9% | | |
Blackrock, Inc.(2) | | | | | 3,632,266 | | | | | | 7.3 | | |
Rho Ventures VI, LP(3) | | | | | 2,799,058 | | | | | | 5.6 | | |
First Manhattan Co.(4) | | | | | 3,212,796 | | | | | | 6.4 | | |
Vifor (International) Ltd.(5) | | | | | 4,114,379 | | | | | | 8.2 | | |
| Directors and named executive officers: | | | | | | | | | | | | | |
Derek Chalmers, Ph.D., D.Sc.(6) | | | | | 1,889,448 | | | | | | 3.7 | | |
| Thomas Reilly | | | | | — | | | | | | — | | |
Frédérique Menzaghi, Ph.D.(7) | | | | | 486,954 | | | | | | 1.0 | | |
Scott M. Terrillion(8) | | | | | 264,446 | | | | | | * | | |
Joana Goncalves(9) | | | | | 192,735 | | | | | | * | | |
Richard Makara(10) | | | | | 117,250 | | | | | | * | �� | |
Martin Vogelbaum(11) | | | | | 126,500 | | | | | | * | | |
Harrison M. Bains, Jr.(12) | | | | | 114,500 | | | | | | * | | |
Jeffrey Ives, Ph.D.(13) | | | | | 83,500 | | | | | | * | | |
Christopher Posner(14) | | | | | 54,310 | | | | | | * | | |
Susan Shiff, Ph.D.(15) | | | | | 9,500 | | | | | | * | | |
All current executive officers and directors as a group (10 persons)(16) | | | | | 3,221,893 | | | | | | 6.2% | | |
*
Less than 1%.
This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the effectivenessSEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the 2014 Planstockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 50,028,188 shares outstanding on April 5, 2021. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we have deemed outstanding shares of common stock subject to options held by that person that are exercisable within 60 days after April 5, 2021. We have not deemed these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
Except as otherwise noted below, the address for each person or entity listed in the table is c/o Cara Therapeutics, Inc., 4 Stamford Plaza, 107 Elm Street, Stamford, Connecticut 06902.
(1)
Based solely on Schedule 13G filed by T. Rowe Price Associates, Inc. on February 16, 2021. T. Rowe Price Associates, Inc. has sole voting power as to 355,830 of the shares and sole dispositive power as to all of the shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202.
(2)
Based solely on Schedule 13G filed by BlackRock, Inc. on January 2014, no further awards have been allowed29, 2021. BlackRock, Inc. has sole voting power as to 3,581,193 of the shares and sole dispositive power as to all of the shares. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
(3)
Based solely on Schedule 13G filed on February 12, 2021 by Rho Ventures VI, L.P. The general partner of Rho Ventures VI, L.P. (“RV VI”) is RMV VI, L.L.C., a Delaware limited liability company, and the managing member of RMV VI, L.L.C. is Rho Capital Partners LLC, a Delaware limited liability company (“RCP LLC”). Each of Habib Kairouz, Mark Leschly and Joshua Ruch is a managing member of RCP LLC, and in their capacity as such may be deemed to exercise voting and investment power over the shares held by the Rho Funds. Martin Vogelbaum is one of our directors and is a non-managing member of RMV VI, L.L.C. The address of Rho Capital Partners, LLC, RMV VI, L.L.C. and RV VI is 152 West 57th Street, 23rd Floor, New York, NY 10019.
(4)
Based solely on Schedule 13G filed by First Manhattan Co. on February 16, 2021. First Manhattan Co. has sole voting and dispositive power as to 3,099,096 of the shares and shared voting and dispositive power as to 113,700 of the shares. The address of First Manhattan Co. is 399 Park Avenue, New York, NY 10022.
(5)
Based solely on Schedule 13G filed by Vifor (International) Ltd., Vifor Fresenius Medical Care Renal Pharma Ltd., and Vifor Pharma Ltd. (collectively, the “Reporting Persons”) on October 23, 2020. Vifor Fresenius Medical Care Renal Pharma Ltd.’s beneficial ownership of the common stock referred to herein is being reported solely because Vifor Fresenius Medical Care Renal Pharma Ltd. may be deemed to beneficially own such shares as a result of its right to acquire such shares upon exercise of an option granted underto it by Vifor (International) Ltd. Vifor Pharma Ltd.’s beneficial ownership of the 2004 Plan.common stock referred to herein is being reported solely because Vifor Pharma Ltd. may be deemed to beneficially own such shares as a result of its indirect ownership of 100% of the equity interests of Vifor (International) Ltd. and 55% of the equity interests of Vifor Fresenius Medical Care Renal Pharma Ltd. The address of the Reporting Persons is Rechenstrasse 37 CH-9014, St. Gallen Switzerland.
(6)
Consists of 917,178 shares held directly by Dr. Chalmers and 972,270 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(7)
Consists of 108,653 shares held directly by Dr. Menzaghi and 378,301 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(8)
Consists of 40,676 shares held directly by Mr. Terrillion and 223,770 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(9)
Consists of 19,944 shares held directly by Dr. Goncalves and 172,791 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(10)
Consists of 1,000 shares held directly by Mr. Makara and 116,250 shares of common stock underlying options held by Mr. Makara that are vested and exercisable within 60 days of April 5, 2021.
(11)
Consists of 14,400 RSUs that vest within 60 days of April 5, 2021, and 112,100 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(12)
Consists of 13,200 RSUs that vest within 60 days of April 5, 2021, and 101,300 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(13)
Consists of 10,700 RSUs that vest within 60 days of April 5, 2021, and 72,800 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(14)
Consists of 11,200 RSUs that vest within 60 days of April 5, 2021, and 43,100 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(15)
Consists of 9,500 shares of common stock underlying options that are vested and exercisable within 60 days of April 5, 2021.
(16)
Consists of the shares listed in footnotes (6), (7), (8), (9), (11), (12), (13), (14) and (15).
Upon U.S. regulatory approval of KORSUVA Injection, Cara will also be eligible to receive an additional $50 million common stock investment at a 20% premium to the 30-day trailing average price of Cara’s common stock as of such date. In addition, pursuant to the Vifor Agreement, Cara is eligible to receive payments of up to $240 million upon the achievement of certain sales-based milestones. In connection with the Vifor Agreement, the parties entered into a securities purchase agreement (the “Purchase Agreement”) dated October 15, 2020, governing the issuance of the common stock described herein.
The Vifor Agreement provides full commercialization rights in dialysis clinics to Vifor Pharma in the United States under a profit-sharing arrangement. Pursuant to the profit-sharing arrangement, Cara will generally be entitled to 60% of the net profits (as defined in the Vifor Agreement) from sales of KORSUVA Injection in the United States (excluding sales to Fresenius Medical Center dialysis clinics, compensation for which is governed by a separate license agreement dated May 17, 2018 between Cara and Vifor Fresenius Medical Care Renal Pharma Ltd. (“VFMCRP”)) and Vifor Pharma is entitled to 40% of such net profits, subject to potential temporary adjustment in future years based on certain conditions. Under the Vifor Agreement, in consideration of Vifor Pharma’s conduct of the marketing, promotion, selling and distribution of KORSUVA Injection in the United States, Cara will pay a marketing and distribution fee to Vifor Pharma based on the level of annual net sales. This fee will be deducted from product sales in calculating the net profits that are subject to the profit-sharing arrangement under the agreement. Vifor Pharma has simultaneously entered into an option agreement with VFMCRP pursuant to which the license may be transferred from Vifor Pharma to VFMCRP.
The Vifor Agreement shall continue in effect until its expiration upon the cessation of commercial sale of KORSUVA Injection in the United States by Vifor Pharma and its affiliates and sublicensees, or until the earlier termination of the Vifor Agreement.
In addition, upon the earlier of: (1) the acceptance for filing of a new drug application covering KORSUVA Injection submitted to the FDA; or (2) October 15, 2023, the Vifor Agreement may be terminated by Vifor Pharma in its entirety, with such termination effective upon 12 months’ notice.
Securities Purchase Agreement
Pursuant to the Purchase Agreement, Vifor Pharma will not, and will not cause any direct or indirect affiliate to, during the period beginning on October 15, 2020 and ending at the close of business on the earlier of (A) October 15, 2022 and (B) the date that Cara publicly discloses the receipt of a complete response letter from the FDA with respect to Cara’s NDA for KORSUVA Injection (such period, the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock of Cara or any securities convertible into or exercisable or exchangeable for common stock of Cara (including without limitation, common stock or such other than compensation arrangementssecurities which may be deemed to be beneficially owned by Vifor Pharma in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant) owned by Vifor Pharma as of the date hereof or acquired prior to the end of the Restricted Period (collectively with the Common Stock, “Lock-Up Securities”), except any such sale, option or contract by and between Vifor Pharma and one of its affiliates (including Vifor Pharma Group Ltd. or VFMCRP), (2) enter into any hedging, swap or other agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise, (3) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities, or (4) publicly disclose the intention to do any of the foregoing.
Under the Purchase Agreement, the parties also agreed that, in certain circumstances, upon the request of Vifor Pharma, the parties will enter into a registration rights agreement prior to the end of the Restricted Period that would provide Vifor Pharma (or its affiliate transferee) customary registration rights with respect to the shares of common stock issued pursuant to the Purchase Agreement following the expiration of the Restricted Period.
![[MISSING IMAGE: lg_caratmtherap-4c.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-054479/lg_caratmtherap-4c.jpg)
![[MISSING IMAGE: sg_derekchalmers-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-054479/sg_derekchalmers-bw.jpg){kind=small}
![[MISSING IMAGE: sg_scottmterrillion-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-054479/sg_scottmterrillion-bw.jpg){kind=small}
![[MISSING IMAGE: tm212641d1-pc_01proxybw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-054479/tm212641d1-pc_01proxybw.jpg)
![[MISSING IMAGE: tm212641d1-pc_02proxybw.jpg]](https://files.docoh.com/DEF 14A/0001104659-21-054479/tm212641d1-pc_02proxybw.jpg)