| UNITED STATES |
| SECURITIES AND EXCHANGE COMMISSION |
| Washington, D.C. 20549 |
| |
| SCHEDULE 14A |
| |
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) |
|
| Filed by the Registrant [X] |
| |
Filed by a Partyparty other than the Registrant [ ] |
| |
| Check the appropriate box: |
| [ ] | Preliminary Proxy Statement |
| [ ] | Confidential, for Use of the CommissionCommisauditsion Only (as permitted by Rule 14a-6(e)(2)) |
| [X] | Definitive Proxy Statement |
| [ ] | Definitive Additional Materials |
| [ ] | Soliciting Material under §240.14a-12 |
| |
| CHROMADEX CORPORATION |
| (Name of Registrant as Specified In Its Charter) |
| |
|
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
|
| Payment of Filing Fee (Check the appropriate box): |
| [X] | No fee required. |
| [ ] | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| | (1) | Title of each class of securities to which transaction applies: |
| | | |
| | (2) | Aggregate number of securities to which transaction applies: |
| | | |
| | (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| | | |
| | (4) | Proposed maximum aggregate value of transaction: |
| | | |
| | (5) | Total fee paid: |
| | | |
| [ ] | Fee paid previously with preliminary materials. |
| [ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| | (1) | Amount Previously Paid: |
| | | |
| | (2) | Form, Schedule or Registration Statement No.: |
| | | |
| | (3) | Filing Party: |
| | | |
| | (4) | Date Filed: |
| | | |
| | | |
ChromaDex Corporation
10005 Muirlands10900 Wilshire Blvd, Suite G650
Irvine,Los Angeles, CA 9261890024
NOTICE OF 20162019 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 2, 201621, 2019
April 12, 201623, 2019
To the stockholders of ChromaDex Corporation:
Notice is hereby given thatYou are cordially invited to attend the 20162019 Annual Meeting of Stockholders (the “Annual Meeting”) of ChromaDex Corporation, a Delaware corporation (the(“we,” “us,” “our,” “ChromaDex,” or the “Company”), which will be held on June 2, 2016,21, 2019, at 9:11:00 ama.m. local time, at 10005 Muirlandsthe Company’s office located at 10900 Wilshire Blvd, Suite G, Irvine,650, Los Angeles, CA 9261890024, for the following purposes, as more fully described in the accompanying proxy statement (the “Proxy Statement”):
| (1) | To elect seven directors;the eight nominees for director named herein; |
(2) | To ratify the appointment of Marcum LLP as the Company'sCompany’s independent registered public accounting firm for the year ending December 31, 2016; |
(3)
| To authorize the adjournment of the Annual Meeting if necessary or appropriate, including to solicit additional proxies in the event that there are not sufficient votes at the time of the Annual Meeting or adjournment or postponement thereof to approve any of the foregoing proposals;2019; and
|
(4)(3) | To transact other business that may properly come before the meeting and any postponement(s) or adjournment(s) thereof. |
Pursuant to the bylaws of the Company, the Board of Directors has fixed the close of business on April 8, 201622, 2019 as the record date (the “Record Date”) for determination of stockholders entitled to notice and to vote at the Annual Meeting and any adjournment thereof. Holders of the Company’s Common Stock are entitled to vote at the Annual Meeting.
In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide our beneficial owners and stockholders of record access to our proxy materials over the Internet. Beneficial owners are stockholders whose shares are held in the name of a broker, bank or other agent (i.e., in “street name”). Accordingly, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be mailed on or about April 15, 201629, 2019 to our beneficial owners and stockholders of record who owned our Common Stock at the close of business on April 8, 2016.22, 2019. Beneficial owners and stockholders of record will have the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials be sent to them by following the instructions in the Notice. Beneficial owners and stockholders of record who have previously requested to receive paper copies of our proxy materials will receive paper copies of the proxy materials instead of a Notice.
Your vote is important. Whether or not you plan to attend the Annual Meeting, please vote your shares by promptly completing, signing and returning the enclosed proxy card using the enclosed envelope. The enclosed envelope requires no postage if mailed within the United States. You may also vote your shares over telephone or the internet in accordance with the instructions on the proxy card. Any stockholder attending the Annual Meeting may vote in person, even if you have already returned a proxy card or voting instruction card.
| | BY ORDER OF THE BOARD OF DIRECTORS /s/ Stephen AllenFrank L. Jaksch Jr. Executive Chairman of the Board |
You are cordially invited to attend the meeting in person. Whether or not you expect to attend the meeting, please complete, date, sign and return the proxy mailed to you, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. A return envelope (which is postage prepaid if mailed in the United States) has been provided for your convenience. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
ChromaDex Corporation
10005 Muirlands10900 Wilshire Blvd, Suite G650
Irvine,Los Angeles, CA 9261890024
PROXY STATEMENT
FOR
20162019 ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 201621, 2019
The enclosed proxy is solicited by the boardBoard of directorsDirectors (“Board of Directors” or “Board”) of ChromaDex Corporation (the “Company”), in connection with the 20162019 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company, to be held on June 2, 2016,21, 2019, at 9:11:00 ama.m. local time, at 10005 Muirlandsthe Company’s office located at 10900 Wilshire Blvd, Suite G, Irvine,650, Los Angeles, CA 92618.
90024.
At the Annual Meeting, you will be asked to consider and vote upon the following matters:
| (1) | To elect seven directors;the eight nominees for director named herein; |
(2) | To ratify the appointment of Marcum LLP as the Company's independent registered public accounting firm for the year ending December 31, 2016; |
(3) | To authorize the adjournment of the Annual Meeting if necessary or appropriate, including to solicit additional proxies in the event that there are not sufficient votes at the time of the Annual Meeting or adjournment or postponement thereof to approve any of the foregoing proposals;2019; and
|
(4)(3) | To transact other business that may properly come before the meeting and any postponement(s) or adjournment(s) thereof. |
The Board of Directors has fixed the close of business on April 8, 201622, 2019 as the record date (the “Record Date”) for determining stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment thereof.
In accordance with rules and regulations adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide our beneficial owners and stockholders of record access to our proxy materials over the Internet. Beneficial owners are stockholders whose shares are held in the name of a broker, bank or other agent (i.e., in “street name”). Accordingly, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be mailed on or about April 15, 201629, 2019 to our beneficial owners and stockholders of record who owned our Common Stock at the close of business on April 8, 2016.22, 2019. Beneficial owners and stockholders of record will have the ability to access the proxy materials on a website referred to in the Notice or request a printed set of the proxy materials be sent to them by following the instructions in the Notice. Beneficial owners and stockholders of record who have previously requested to receive paper copies of our proxy materials will receive paper copies of the proxy materials instead of a Notice.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 2, 2016:21, 2019: THE NOTICE, PROXY STATEMENT, PROXY CARD AND THE ANNUAL REPORT ARE AVAILABLE ATWWW.CHROMADEX.COM, INVESTOR RELATIONS SECTION.
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why did I Receivereceive in the Mailmail a Notice of Internet Availability of Proxy Materials this Yearyear instead of a Full Setfull set of Proxy Materials?
We are pleased to take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly, we have sent to our beneficial owners and stockholders of record a Notice of Internet Availability of Proxy Materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. Our stockholders may request to receive proxy materials in printed form by mail or electronically on an ongoing basis. A stockholder’s election to receive proxy materials by mail or electronically by email will remain in effect until the stockholder terminates its election.
Why did I Receive a Full Set of Proxy Materials inWe intend to mail the Mail instead of a Notice of Internet Availability of Proxy Materials?
We are providing paper copies of the proxy materials instead of a Noticeon or about April 29, 2019 to our beneficial owners orall stockholders of record who have previously requestedentitled to vote at the Annual Meeting.
Will I receive paper copies of our proxy materials. If you are a beneficial owner or stockholder of record who received a paper copy of theany other proxy materials and you would like to reduce the environmental impact and the costs incurred by us in mailing proxy materials, you may elect to receive all future proxy materials electronically via email or the Internet.mail?
You can choose to receive futureWe may send you a proxy materials electronically by sending an electronic mail message to proxy@equitystock.comcard, along with a second Notice, on or call 212-575-5757. Your choice to receive proxy materials electronically will remain in effect until you instruct us otherwise.after May 9, 2019.
How do I attend the Annual Meeting?
The SEC has enacted rules that permit usmeeting will be held on Friday, June 21, 2019 at 11:00 a.m. local time at the Company’s office located at 10900 Wilshire Blvd, Suite 650, Los Angeles, CA 90024. Directions to make available to stockholders electronic versions of the proxy materials even if the stockholder has not previously elected to receive the materials in this manner. We have chosen this option in connection with the Annual Meeting with respectmay be found at www.chromadex.com. Information on how to both our beneficial owners and stockholders of record.
I Share an Address with Another Stockholder, and We Received Only One Paper Copy of the Proxy Materials. How May I Obtain An Additional Copy of the Proxy Materials?
The Company has adopted a procedure called “householding,” which the SEC has approved. Under this procedure, the Company is delivering a single copy of the Notice to multiple stockholders who share the same address unless the Company has received contrary instructions from one or more of the stockholders. This procedure reduces the Company’s printing and mailing costs, and the environmental impact of the Company’s annual meetings. Stockholders who participatevote in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, the Company will deliver promptly a separate copy of the Notice and other Proxy Materials to any stockholder at a shared address to which the Company delivered a single copy of any of these documents.
To receive a separate copy of the Notice, stockholders may write or speak to the Companyperson at the following address and phone number:
ChromaDex Corporation
10005 Muirlands Blvd, Suite G
Irvine, CA 92618
Attention: Corporate Secretary
Telephone: 949-419-0288
Stockholders who hold shares in “street name” (as described below) may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
Annual Meeting is discussed below.
Who Is Entitled to Vote?can vote at the Annual Meeting?
Our Board has fixedOnly stockholders of record at the close of business on April 8, 2016 as the Record Date for a determination of stockholders22, 2019 will be entitled to notice of, and to vote at the Annual Meeting or any adjournment thereof. Each shareMeeting. On this record date, there were 55,514,322 shares of the Company’s common stock represents, one vote that may be voted on each proposal that may come before the Annual Meeting (the “Voting Capital”). On the Record Date, there were 109,658,547 shares of Common Stock outstanding. outstanding and entitled to vote.
What Is the Difference Between HoldingStockholder of Record: Shares as a Record Holder and as a Beneficial Owner (Holding SharesRegistered in Street Name)?Your Name
If on April 22, 2019 your shares arewere registered directly in your name with ourthe Company’s transfer agent, Equity Stock Transfer,Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on April 22, 2019 your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the “record holder”beneficial owner of those shares. If you are a record holder, these proxy materials have been provided directly to you by the Company.
If your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, these proxy materials have beenname” and the Notice is 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 thea beneficial owner, you have the right to instruct this organization ondirect your broker or other agent regarding how to vote the shares in your shares.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 at the meeting unless you request and obtain a valid proxy from your broker or other agent.
What am I voting on?
There are two matters scheduled for a vote:
●
To elect the eight nominees for director named herein; and
●
To ratify the appointment of Marcum LLP as the Company's independent registered public accounting firm for the year ending December 31, 2019;
What if another matter is properly brought before the meeting?
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
Who May Attend the Annual Meeting?
Record holders and beneficial owners may attend the Annual Meeting. If your shares are held in street name, you will need to bring a copy of a brokerage statement or other documentation reflecting your stock ownership as of the Record Date.
How Do I Vote?
StockholdersYou may either vote “For” all the nominees to the Board of RecordDirectors or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.
For your convenience, our record holders have four methodsThe procedures for voting are fairly simple:
Stockholder of voting:
| 1. Vote by Internet. The website address for Internet voting is on your vote instruction form.
2. Vote by mail. Mark, date, sign and mail promptly the enclosed proxy card (a postage-paid envelope is provided for mailing in the United States).
3. Vote by telephone. You may vote by proxy by calling the toll free number found on the vote instruction form.
4. Vote in person. Attend and vote at the Annual Meeting.
|
| | |
Beneficial Owners ofRecord: Shares HeldRegistered in StreetYour Name
ForIf you are a stockholder of record, you may vote in person at the Annual Meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using a proxy card that you may request or that we may elect to deliver at a later time. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your convenience, our beneficial ownersvote is counted. You may still attend the meeting and vote in person even if you have four methods of voting:already voted by proxy.
| 1. Vote by Internet. The website address for Internet voting is on your vote instruction● To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive. ● To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct. ● To vote over the telephone, dial toll-free 1-800-652-VOTE (8683) using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice. Your telephone vote must be received by 5:00 p.m., Eastern Time on June 20, 2019 to be counted. To vote through the internet, go to www.envisionreports.com/CDXC to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice. Your internet vote must be received by 5:00 p.m., Eastern Time on June 20, 2019 to be counted. Beneficial Owner: Shares Registered in the Name of Broker or Bank If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a Notice containing voting instructions from that organization rather than from the Company. Simply follow the voting instructions in the Notice to ensure that your vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form. How many votes do I have? On each matter to be voted upon, you have one vote for each share of common stock you own as of April 22, 2019. 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 by completing your proxy card, by telephone, through the internet or in person at the Annual Meeting, your shares will not be voted. Beneficial Owner: Shares Registered in the Name of Broker or Bank 2. Vote by mail. Mark, date, sign and mail promptly your vote instruction form (a postage-paid envelope is provided for mailing in the United States).
3. Vote by telephone. You may vote by proxy by calling the toll free number found on the vote instruction form.
4. Vote in person. Obtain a valid legal proxy from the organization that holds your shares and attend and vote at the Annual Meeting.
|
| | |
If you are a beneficial owner and do not instruct your broker, bank, or other agent how to vote by Internetyour shares, the question of whether your broker or by telephone, please DO NOT mailnominee will still be able to vote your proxy card.shares depends on whether the New York Stock Exchange (“NYSE”) deems the particular proposal to be a “routine” matter. Brokers and nominees 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. Under the rules and interpretations of the NYSE, “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 (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares on Proposal 1 without your instructions, but may vote your shares on Proposal 2 even in the absence of your instruction.
All shares entitled to vote and represented by a properly completed and executed proxy received before the meeting and not revoked will be voted at the Annual Meeting as you instruct in
What if I return a proxy delivered before the Annual Meeting. card or otherwise vote but do not make specific choices?
If you do not indicate howreturn a signed and dated proxy card or otherwise vote without marking voting selections, your shares should be voted on a matter, the shares represented by your properly completed and executed proxy will be voted, as applicable, “For” the Board recommends on eachelection of all eight nominees for director, and “For” the enumerated proposals and with regardproposal to ratify the appointment of Marcum LLP as the Company's independent registered public accounting firm for the year ending December 31, 2019. If any other matters that may bematter is properly presented at the Annual Meetingmeeting, 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 may also reimburse brokerage firms, 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 matters incident toof 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 conduct offinal vote at the meeting. If you are a registered stockholder and attend the meeting,record holder of your shares, you may deliverrevoke your proxy in any one of the following ways:
●
You may submit another properly completed proxy card with a later date.
●
You may send a timely written notice that you are revoking your proxy to the Company’s Secretary at 10900 Wilshire Blvd. Suite 650, Los Angeles, CA 90024.
●
You may attend the Annual Meeting and vote in person. “Street name” stockholders who wish to vote atSimply attending the meeting will neednot, 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 Broker or Bank
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals and director nominations due for next year’s Annual Meeting?
To be considered for inclusion in the Company’s proxy materials for next year’s annual meeting, your proposal must be submitted in writing by December 31, 2019, to obtainChromaDex Corporation, Attn: Secretary, at 10900 Wilshire Blvd. Suite 650, Los Angeles, CA 90024. If you wish to submit a proposal (including a director nomination) at the annual meeting that is not to be included in the Company’s proxy form frommaterials for next year’s annual meeting, such proposal must be received no earlier than the institution that holds their shares. Allclose of business on March 23, 2020 nor later than the close of business on April 22, 2020. You are also advised to review the Company’s Bylaws, which contain additional requirements relating to advance notice of stockholder proposals and director nominations.
How are votes counted?
Votes will be tabulatedcounted by the inspector of electionselection appointed for the meeting, who will separately tabulate affirmative and negativecount, for the proposal to elect directors, votes abstentions“For,” “Withhold” and broker non-votes.non-votes; and, with respect to Proposal 2, votes “For” and “Against,” and abstentions. Abstentions will be counted towards the vote total for Proposal 2 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.
Is My Vote Confidential?What are “broker non-votes”?
Yes, your vote is confidential. Only the following persons have access to your vote: the inspectorAs discussed above, when a beneficial owner of elections, individuals who help with processing and counting your votes, and persons who need access for legal reasons. Occasionally, stockholders provide written comments on their proxy cards, which may be forwardedshares held in “street name” does not give instructions to the Company’s management andbroker or nominee holding the Board of Directors.shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
How Many Votes Are Needed for Each Proposal to Pass?
| Proposal | | Vote Required for Approval | | Effect of Abstention | | Effect of Broker Non-Vote |
| | | | | | |
| Election of eight (8) members to our Board of Directors | | Plurality of the votes cast (the eight directors receiving the most “For” votes) | | None. | | None. |
Ratification of the Appointment of Marcum LLP as our Independent Registered Public Accounting Firm for our Fiscal Year Ending December 31, 2019 | | “For” votes from the holders of a majority of shares present in person or represented by proxy and entitled to vote on the matter | | Against. | | None. |
What Constitutes a Quorum?
To carry on business at the Annual Meeting, we must have a quorum. A quorum is present when a majority of the shares entitled to vote, as of the Record Date, are represented in person or by proxy. Thus, holders of the Voting Capital representing at least 54,829,274 27,757,162 votes must be represented in person or by proxy to have a quorum. 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 Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. Shares owned by us are not considered outstanding or considered to be present at the Annual Meeting. If there is not a quorum at the Annual Meeting, our stockholders may adjourn the meeting.
What is a Broker Non-Vote?
If your shares are held in street name, you must instruct the organization who holds your shares how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker non-vote.” If you sign your proxy card but do not provide instructions on how your broker should vote, your broker will vote your shares as recommended by our Board. Broker non-votes are not included in the tabulation of the voting results of any of the proposals and, therefore, do not effect these proposals.
For the ratification of the appointment of Marcum LLP, brokers can use discretionary authority to vote shares. However, brokers cannot use discretionary authority to vote shares on the proposal to elect directors at the Annual Meeting if they have not received instructions from their clients. Please submit your vote instruction form so your vote is counted.
Which Proposals Are Considered “Routine” or “Non-Routine”?
Proposal 2, the ratification of the appointment of Marcum LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2016 is considered routine. Proposal 1, the election of seven directors is considered non-routine.
What is an Abstention?
An abstention is a stockholders affirmative choice to decline to vote on a proposal. Abstentions are not included in the tabulation of the voting results of any of the proposals and, therefore, do not affect these proposals.
How Many Votes Are Needed for Each Proposal to Pass?
Proposal | | Vote Required | | Broker
Discretionary
Vote Allowed
|
| | | | |
Election of seven (7) members to our Board of Directors
| | Plurality of the votes cast (the seven directors receiving the most “For” votes)
| | No |
Ratification of the Appointment of Marcum LLP as our Independent Registered Public Accounting Firm for our Fiscal Year Ending December 31, 2016
| | A majority of the votes cast | | Yes |
What Are the Voting Procedures?
In voting by proxy with regard to the election of directors, you may vote in favor of all nominees, withhold your votes as to all nominees, or withhold your votes as to specific nominees. With regard to the ratification of the appointment of Marcum LLP, you may vote in favor of or against the proposal, or you may abstain from voting on the proposal. You should specify your respective choices on the accompanying proxy card or your vote instruction form.
All shares represented by proxy will be voted at the Annual Meeting in accordance with the choices specified on the proxy, and where no choice is specified, in accordance with the recommendations of the Board of Directors. Thus, where no choice is specified, the proxies will be voted for the election of directors and for the ratification of the appointment of an independent registered public accounting firm.
Is My Proxy Revocable?
You may revoke your proxy and reclaim your right to vote at any time before it is voted by giving written notice to the Secretary of the Company, by delivering a properly completed, later-dated proxy card or vote instruction form or by voting in person at the Annual Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed to: ChromaDex Corporation, 10005 Muirlands Blvd, Suite G, Irvine, CA 92618, Attention: Secretary.
Who Is Paying for the Expenses Involved in Preparing and Mailing this Proxy Statement?
All of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be paid by us. In addition to the solicitation by mail, proxies may be solicited by our officers and other employees by telephone or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements will also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the shares held of record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred by them in so doing.
Do I Have Dissenters’ Rights of Appraisal?
The Company’s stockholders do not have appraisal rights under Delaware law or under the governing documents of the Company with respect to the matters to be voted upon at the Annual Meeting.
How can I find out the Results of the Voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K, which we will file within four business days of the meeting.
What Is the Deadline to Propose Actions for Consideration or to Nominate Individuals to Serve as Directors at the 2017 Annual Meeting?PROPOSAL 1:
ELECTION OF DIRECTORS
Requirements for Stockholder ProposalsEach director to Be Considered for Inclusionbe elected at the Annual Meeting will serve until the next annual meeting of stockholders and until his or her successor is elected, or, if sooner, until such director’s death, resignation or removal. Unless otherwise instructed, the persons named in the Company’s Proxy Materials. Any appropriate proposal submittedaccompanying proxy intend to vote the shares represented by a stockholder and intended to be presented at the 2016 Annual Meeting must be submitted in writing to the Company’s Secretary at 10005 Muirlands Blvd, Suite G, Irvine, CA 92618, and received no later than December 13, 2016, to be includable in the Company’s Proxy Statement and related proxy for the 2017 Annual Meeting. A stockholder proposal will need to comply with the SEC regulations under Rule 14a-8election of the Securities Exchange Act of 1934,eight nominees listed below. Although it is not contemplated that any nominee will decline or be unable to serve as amended (the “Exchange Act”), regardinga director, in such event, proxies will be voted by the inclusion of stockholder proposals in company-sponsored proxy materials. Althoughholder for such other persons as may be designated by the Board of Directors, will consider stockholder proposals, we reserveunless the rightBoard of Directors reduces the number of Directors to omit from our Proxy Statement, orbe elected. Election of a director to vote against, stockholder proposalsthe Board of Directors requires a plurality of the votes cast at the Annual Meeting.
The current Board of Directors consists of Frank Jaksch, Jr., Stephen Block, Jeff Baxter, Robert Fried, Kurt Gustafson, Steven Rubin, Wendy Yu and Tony Lau. The Board of Directors has determined that wea majority of its members, including Stephen Block, Jeff Baxter, Kurt Gustafson, Steven Rubin, Wendy Yu and Tony Lau are not requiredindependent directors within the meaning of the applicable NASDAQ rules.
The following table sets forth the director nominees. It also provides certain information about the nominees as of the Record Date.
Nominees for Election to include under the Exchange Act, including Rule 14a-8.Board of Directors
| | | | | | Director |
| Name | | Age | | | Since |
| Frank Jaksch, Jr. | | 50 | | | 2000 |
| Stephen A. Block | | 74 | | | 2007 |
| Jeff Baxter | | 57 | | | 2015 |
| Robert Fried | | 59 | | | 2015 |
| Kurt Gustafson | | 51 | | | 2016 |
| Steven Rubin | | 58 | | | 2017 |
| Wendy Yu | | 43 | | | 2017 |
| Tony Lau | | 30 | | | 2017 |
RequirementsFrank L. Jaksch Jr., 50, is a Co-Founder of the Company and has served as a member of the Board since February 2000. Mr. Jaksch served as Chairman of the Board from May 2010 to October 2011 and was its Co-Chairman from February 2000 to May 2010. In June 2018, Mr. Jaksch transitioned from Chief Executive Officer to Executive Chairman of the Board. Mr. Jaksch oversees research, strategy and operations for Stockholder Proposalsthe Company with a focus on scientific and novel products for pharmaceutical and nutraceutical markets. From 1993 to Be Brought Before1999, Mr. Jaksch served as International Subsidiaries Manager of Phenomenex, a life science supply company where he managed the 2017 Annual Meetinginternational subsidiary and international business development divisions. Mr. Jaksch earned a B.S. in Chemistry and Biology from Valparaiso University. The Nominating and Corporate Governance Committee believes that Mr. Jaksch’s years of Stockholdersexperience working in chemistry-related industries, his extensive sales and Director Nominations. Stockholders intending to present a proposal atmarketing background, and his knowledge of international business bring an understanding of the 2017 Annual Meeting of Stockholders but not intending to have includedindustries in which the Proxy Statement and form of proxy relating to the 2017 annual meeting of stockholders,Company operates as well as any director nominations, must submit such proposalsscientific expertise to ChromaDex Corporation, ATTN: Chief Executive Officer, 10005 Muirlands Blvd, Suite G, Irvine, CA 92618, no earlier than March 4, 2017 and no later than April 3, 2017.the Board.
What Interest Do Officers and Directors Have in Matters to Be Acted Upon?
MembersStephen A. Block, 74, has been a director of the Company since October 2007 and Chair of the Compensation Committee and a member of the Audit Committee since October 2007. From May 2010 to October 2011, Mr. Block served as Lead Independent Director to the Board. Until November 2018, when Senomyx, Inc. was sold to Firmenich, Inc., an unaffiliated third party, Mr. Block was a director and chair of the nominating and corporate governance committee and a member of the audit committee of Senomyx, Inc., where he had served on the board of directors since 2005. He also is, and since September 2015 has been, a director of myLAB Box, Inc., a privately held company. Until December 2011, he also served as the chairman of the board of directors of Blue Pacific Flavors and executive officersFragrances, Inc., and, until March 2012, as a director of Allylix, Inc. He served on the boards of directors of these privately held companies since 2008, and 2007, respectively. Mr. Block retired as senior vice president, general counsel and secretary of International Flavors and Fragrances Inc., a leading creator, manufacturer and seller of flavors and fragrances (“IFF”) in December 2003, having been IFF’s chief legal officer since 1992. During his eleven years at IFF he also led the company’s Regulatory Affairs Department. Prior to 1992, Mr. Block served as senior vice president, general counsel, secretary and director of GAF Corporation, a company specializing in specialty chemicals and building materials, and its publicly traded subsidiary International Specialty Products Inc., held various management positions with Celanese Corporation, a company specializing in synthetic fibers, chemicals and plastics, and practiced law with the New York firm of Stroock & Stroock & Lavan. Mr. Block received his B.A. cum laude in Russian Studies from Yale University and his law degree from Harvard Law School. The Nominating and Corporate Governance Committee believes that Mr. Block’s experience as the chief legal officer of one of the Company do not have any interest in any other Proposal that is not shared by all other stockholdersworld’s leading flavor and fragrance companies contributes to the Board’s understanding of the Company, other than Proposal 1,flavor industry, including the election to our boardBoard’s perspective on the strategic interests of potential collaborators, the regulation of the seven nominees set forth herein.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Asindustry, and the viability of April 8, 2016, there were approximately 109,658,547 sharesvarious commercial strategies. In addition, Mr. Block’s experience in the area of our Common Stock outstanding. The following table sets forth certain information regarding our Common Stock, beneficially owned as of April 8, 2016, by each person knowncorporate governance and public company financial reporting is especially valuable to us to beneficially own more than 5% of our Common Stock, each executive officer and director, and all directors and executive officersthe Board in his capacity as a group. We calculated beneficial ownership according to Rule 13d-3member of both the Exchange Act as of that date. Shares issuable upon exercise of options or warrants that are exercisable or convertible within 60 days after April 8, 2016 are included as beneficially owned byAudit Committee and the holder. Beneficial ownership generally includes voting and dispositive power with respect to securities. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole dispositive power with respect to all shares beneficially owned.
| Name of Beneficial Owner (1) | | Shares of Common Stock Beneficially Owned (2) | | | Aggregate Percentage Ownership | |
| | | | | | | |
| Dr. Phillip Frost (3) | | | 16,052,941 | | | | 14.60 | % |
| Michael Brauser (4) | | | 9,166,388 | | | | 8.33 | % |
| Barry Honig (5) | | | 8,772,832 | | | | 7.99 | % |
| Black Sheep, FLP (6) | | | 6,225,155 | | | | 5.68 | % |
| Directors | | | | | | | | |
| Stephen Allen (7) | | | 376,458 | | | | * | |
| Stephen Block (8) | | | 653,106 | | | | * | |
| Reid Dabney (9) | | | 713,533 | | | | * | |
| Hugh Dunkerley (10) | | | 557,650 | | | | * | |
| Jeff Baxter (11) | | | 245,208 | | | | * | |
| Robert Fried (12) | | | 360,836 | | | | * | |
| Frank L. Jaksch Jr. (13) | | | 11,930,988 | | | | 10.53 | % |
| Named Executive Officers | | | | | | | | |
| Frank L. Jaksch Jr., Chief Executive Officer | | (See above) | | | | | |
| Thomas C. Varvaro, Chief Financial Officer (14) | | | 2,458,895 | | | | 2.20 | % |
| Troy Rhonemus, Chief Operating Officer (15) | | | 571,771 | | | | * | |
| All directors and executive officers as a group | | | | | | | | |
| (7 Directors plus Chief Financial Officer | | | | | | | | |
and Chief Operating Officer) (16) | | | 17,868,445 | | | | 15.08 | % |
* Represents less than 1%.Compensation Committee.
(1) | Addresses for the beneficial owners listed are: Dr. Phillip Frost, 4400 Biscayne Blvd., Suite 1500, Miami, FL 33137; Michael Brauser, 4400 Biscayne Blvd., Suite 850, Miami, FL 33137; Barry Honig, 555 South Federal Highway, #450, Boca Raton, FL 33432; and Black Sheep, FLP 6 Palm Hill Drive, San Juan Capistrano, CA 92675. |
(2) | Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or dispositive power with respect to shares beneficially owned. Unless otherwise specified, reported ownership refers to both voting and dispositive power. Shares of Common Stock issuable upon the conversion of stock options or the exercise of warrants within the next 60 days are deemed to be converted and beneficially owned by the individual or group identified in the Aggregate Percentage Ownership column. |
(3) | Includes 6,386,273 shares of Common Stock and 266,668 warrants exercisable within 60 days held by Frost Gamma Investments Trust and 9,400,000 shares of Common Stock held by Phillip and Patricia Frost Philanthropic Foundation, Inc. Dr. Phillip Frost is the trustee of Frost Gamma Investments Trust. Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. Dr. Phillip Frost is President of Phillip and Patricia Frost Philanthropic Foundation, Inc. Dr. Frost is a stockholder and chairman of the board of Ladenburg Thalmann Financial Services, Inc. (NYSE:LTS), parent company of Ladenburg Thalmann & Co., Triad Advisors, Inc. and Investacorp Inc., each registered broker-dealers.
|
Jeff Baxter,57, has served as a director of the Company since April 2015 and has served as a member of the Audit Committee and the Nominating and Corporate Governance Committee since April 2015. Mr. Baxter has served as President and CEO and a Director of VBI Vaccines, Inc. (NASDAQ:VBIV) since 2009. Previously, he was managing partner for the venture capital firm, The Column Group, where he played a pivotal role in the creation of several biotech companies including Immune Design Corp., a vaccine company based on the Lentiviral vector platform and TLR adjuvant technologies. Until July 2006, Mr. Baxter was SVP, R&D Finance and Operations, of GlaxoSmithKline (GSK). In his 19 years of pharma experience at GSK, he has held line management roles in R&D, commercial, manufacturing, finance and the office of the CEO. His most recent position in the global R&D organization included responsibility for finance, pipeline resource planning and allocation, business development deal structuring and SROne (GSK's in-house venture capital fund). He also chaired GSK's R&D Operating Board. Prior to GSK, he worked at Unilever and British American Tobacco. Mr. Baxter was educated at Thames Valley University and is a Fellow of the Chartered Institute of Management Accountants. The Nominating and Corporate Governance Committee believes that Mr. Baxter’s past experience in the pharmaceutical industry bring financial expertise, industry knowledge, and research and development experience to the Board.
(4) | Direct ownership of (i) 1,209,098 shares of common stock; and (ii) through Michael & Betsy Brauser TBE, 3,626,428 shares of common stock. Indirect ownership through (i) 871,270 shares held by Grander Holdings, Inc. 401K Profit Sharing Plan of which Mr. Brauser is a trustee; (ii) 342,857 shares held by the Brauser 2010 GRAT of which Mr. Brauser is a trustee; (iii) 342,857 shares held by Birchtree Capital, LLC of which Mr. Brauser is the manager; (iv) 1,692,856 shares held by BMB Holdings, LLLP of which Mr. Brauser is the manager of its general partner; and (v) 714,284 shares held by Betsy Brauser Third Amended Trust Agreement beneficially owned by Mr. Brauser's spouse which are disclaimed by him. Includes 246,738 stock options exercisable within 60 days held by Mr. Brauser and 120,000 warrants exercisable within 60 days held by Grander Holdings, Inc. 401K Profit Sharing Plan.
|
(5) | Direct ownership of 4,912,059 shares of common stock. Indirect ownership includes (i) 230,000 shares owned by GRQ Consultants, Inc. Defined Benefits Plan for the benefit of Mr. Honig; (ii) 943,966 shares owned by GRQ Consultants, Inc. 401K of which Mr. Honig is the beneficiary; (iii) 2,103,571 shares owned by GRQ Consultants Inc. Roth 401K FBO Renee Honig, Mr. Honig's spouse, of which Mr. Honig has voting and investment power and disclaims beneficial ownership; (iv) 413,336 shares owned by GRQ Consultants Inc. Roth 401K FBO Barry Honig, of which Mr. Honig has voting and investment power; and (v) 89,900 shares owned by GRQ Consultants, Inc., of which Mr. Honig is the President. Includes 80,000 stock options held by Mr. Honig exercisable within 60 days. Excludes (i) 206,664 shares of common stock underlying warrants held by GRQ Consultants, Inc. 401K and (ii) 206,668 shares of common stock underlying warrants held by GRQ Consultants, Inc. Roth 401K FBO Barry Honig, both of which contain a 4.99% beneficial ownership blocker. |
Robert Fried, 59, became Chief Executive Officer in June 2018. He has served as a director of the Company since July 2015, President and Chief Operating Officer from January to June 2018 and President and Chief Strategy Officer from March 2017 to January 2018. Mr. Fried also served as a member of the Nominating and Corporate Governance Committee from July 2015 to March 2017. Mr. Fried has served as Chairman of the Board of Directors of Tiger Media, Inc., (AMEX: IDI), an information solutions provider focused on the data fusion market and formerly a Chinese advertising company prior to its merger with the parent company of Interactive Data, LLC, from 2011 until June 2015. From 2007 through 2009, he was the president, Chief Executive Officer and a director of Ideation Acquisition Corporation, a special purpose acquisition company. From 2007 to 2017, Mr. Fried was the founder and Chief Executive Officer of Spiritclips LLC, now called Hallmark Movies Now, a subscription streaming video service, which was acquired by Hallmark Cards Inc. in 2012. Mr. Fried is an Academy Award winning motion picture producer whose credits include Rudy, Collateral, Boondock Saints, So I Married an Axe Murderer, Godzilla, and numerous others. From December 1994 until June 1996, he was President and Chief Executive Officer of Savoy Pictures, a unit of Savoy Pictures Entertainment, Inc., which was sold in 1996 to Silver King Communications, which is now a part of InterActive Corp. Mr. Fried has also held several executive positions including Executive Vice President in charge of Production for Columbia Pictures, Director of Film Finance and Special Projects for Columbia Pictures, and Director of Business Development at Twentieth Century Fox. Mr. Fried holds an M.S. from Cornell University and an M.B.A. from the Columbia University Graduate School of Business. The Nominating and Corporate Governance Committee believes that Mr. Fried’s past experience as Chairman of the Board of Directors of another public company brings financial expertise and industry knowledge to the Board.
(6) | Black Sheep, FLP is a family limited partnership the co-general partners of which are Frank L. Jaksch, Jr. and Tricia Jaksch and the sole limited partners of which are Frank L. Jaksch, Jr., Tricia Jaksch and the Jaksch Family Trust. |
Kurt A. Gustafson, 51, has been a director of the Company and Chair of the Audit Committee since October 2016 and a member of the Compensation Committee since March 2017. In April 2018, the Board of Directors appointed Mr. Gustafson as lead independent director of the Board of Directors. Mr. Gustafson has more than 25 years of diverse experience in corporate finance. He currently serves as chief financial officer, principal accounting officer and executive vice president of Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI). From 2009 to 2013, he served as the chief financial officer of Halozyme Therapeutics, Inc. (Nasdaq: HALO). From 1991 to 2009, Mr. Gustafson worked at Amgen Inc. (Nasdaq: AMGN), holding various financial roles as vice president finance, chief financial officer of Amgen International and treasurer. Prior to joining Amgen Inc., he worked in public accounting as staff auditor at Laventhol & Horwath in Chicago. Mr. Gustafson is currently a member of the Board of Directors of Xencor, Inc. (Nasdaq: XNCR), a clinical-stage biopharmaceutical company. Mr. Gustafson serves as Chair of Xencor, Inc.’s Audit Committee. Mr. Gustafson holds a Bachelors of Arts degree in Accounting from North Park University in Chicago and a Masters in Business Administration from University of California, Los Angeles. The Nominating and Corporate Governance Committee believes that Mr. Gustafson’s past experience as chief financial officer of a public company and his extensive experience pharmaceutical industry qualify him to chair the Audit Committee and that Mr. Gustafson brings financial, merger and acquisition experience, and a background working with public marketplaces to the Board.
(7) | Includes 376,458 stock options exercisable within 60 days. |
(8) | Includes 603,106 stock options exercisable within 60 days. |
(9) | Includes 703,533 stock options exercisable within 60 days. |
(10) | Includes 547,650 stock options exercisable within 60 days. |
(11) | Includes 245,208 stock options exercisable within 60 days. |
(12) | Direct ownership of 155,937 shares of common stock. Indirect ownership through 20,232 shares held by Jeremy Fried and 18,000 shares held by Benjamin Fried, who are both sons of Robert Fried. Includes 166,667 stock options exercisable within 60 days. |
(13) | Includes 1,429,000 shares owned by the FMJ Family Limited Partnership, beneficially owned by Frank L Jaksch Jr. because Mr. Jaksch Jr. has shared voting power for such shares. Includes 6,225,155 shares owned by Black Sheep, FLP beneficially owned by Mr. Jaksch Jr. because he has shared voting power and shared dispositive power for such shares. Includes 594,165 shares directly owned by Mr. Jaksch Jr. Includes 3,682,668 stock options exercisable within 60 days. |
(14) Includes 1,951,895 stock options exercisable within 60 days.
(15) | Direct ownership of 5,000 shares of Common Stock. Indirect ownership through Toni Rhonemus IRA of 10,000 shares beneficially owned by Toni Rhonemus who is Mr. Rhonemus’ wife. Includes 556,771 stock options exercisable within 60 days. |
Steven D. Rubin, 58, has been a director of the Company and a member of the Nominating and Corporate Governance Committee since March 2017 and Chair of Nominating and Corporate Governance Committee since March 2018. Mr. Rubin has served as OPKO Health, Inc.’s (NASDAQ: OPK) Executive Vice President – Administration since May 2007 and as a director since February 2007. Mr. Rubin is a member of The Frost Group, LLC, a private investment firm. He has extensive experience as a practicing lawyer, and as general counsel and board member to multiple public companies. Mr. Rubin currently serves on the board of directors for the following companies: Non-Invasive Monitoring Systems, Inc. (OTCBB:NIMU), a medical device company; Cocrystal Pharma, Inc. (NASDAQ GM:COCP), a biotechnology company developing new treatments for viral diseases; Eloxx Pharmaceuticals (NASDAQ: ELOX), a company committed to treating patients suffering from rare and ultra-rare diseases caused by premature termination codon (PTC) nonsense mutations; Castle Brands, Inc. (NYSE American:ROX), a developer and marketer of premium brand spirits; Neovasc, Inc. (NASDAQ CM:NVCN), a company developing and marketing medical specialty vascular devices; and Red Violet, Inc. (NASDAQ CM:RDVT), a software and services company. Mr. Rubin previously served as the Senior Vice President, General Counsel and Secretary of IVAX from August 2001 until September 2006. Mr. Rubin previously served as a director of the following companies: VBI Vaccines Inc. (NASDAQ CM: VBIV), a biopharmaceutical company developing a next generation of vaccines; Dreams, Inc. (NYSE MKT: DRJ), a vertically integrated sports licensing and products company; BioCardia, Inc. (OTC US:BCDA), a clinical-stage regenerative medicine company developing novel therapeutics for cardiovascular diseases, Cogint, Inc. (NASDAQ GM:COGT), now known as Fluent, Inc. (NASDAQ:FLNT), an information solutions provider focused on the data-fusion market, prior to the spin-off of its data and analytic operations and assets into Red Violet, Inc.; and Kidville, Inc. (OTCBB:KVIL), an operator of large, upscale facilities, catering to newborns through five-year-old children and their families and offers a wide range of developmental classes for newborns to five-year-olds. The Nominating and Corporate Governance Committee believes that Mr. Rubin’s past experience as general counsel and board member of multiple public companies bring financial expertise, industry knowledge, and a background working with public marketplaces to the Board.
(16) Includes 8,833,956 stock options exercisable within 60 days.Wendy Yu
, 43, has been a director of the Company since August 2017 and a member of the Nominating and Corporate Governance Committee since March 2018. Since 2012, Ms. Yu has served as the Chief Digital Officer of Horizons Digital Group Limited (affiliate of Horizons Ventures Limited, a Hong Kong based investment firm), overseeing the Asia expansion of Horizons’ portfolio companies and directing public relations, communications, marketing and events. Ms. Yu graduated from University of Toronto, majoring in Commerce and Psychology. Ms. Yu serves as the director nominated by Pioneer Step Holdings Limited pursuant to rights granted to Pioneer Step Holdings Limited pursuant to that certain Securities Purchase Agreement, dated April 26, 2017, by and among the Company and the certain purchasers named therein (the “April 2017 Purchase Agreement”). The Nominating and Corporate Governance Committee believes that Ms. Yu’s experience in management, marketing and communications bring valuable expertise to the Board.
Tony Lau, 30, has been a director of the Company since August 2017 and a member of the Compensation Committee since March 2018. Since September 2014, Mr. Lau has been with Horizons Ventures Limited, building the consumer and retail segment and China market of the Hong Kong based investment firm. Prior to joining Horizons Ventures Limited, Mr. Lau was with Goldman Sachs Asia from June 2011 to August 2014. Mr. Lau has a Bachelor of Arts degree in Finance from the Guanghua School of Management in Peking, China. Mr. Lau serves as the director nominated by Champion River Ventures Limited pursuant to rights granted to Champion River Ventures Limited pursuant to the April 2017 Purchase Agreement. The Nominating and Corporate Governance Committee believes that Mr. Lau’s experience in the finance and consumer products industry bring valuable experience to the Board.
Family Relationships
There are no family relationships between any of our directors and executive officers.
Involvement in Certain Legal Proceedings
During the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.
VOTE REQUIRED
Under applicable Delaware law, the election of each nominee requires the affirmative vote by a plurality of the voting power of the shares present and entitled to vote on the election of directors at the Annual Meeting at which a quorum is present.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
MANAGEMENT AND CORPORATE GOVERNANCE
Executive Officers
The names of our executive officers and their ages, positions, and biographies as of April 8, 2016 are set forth below. Mr.Frank Jaksch’s background isand Robert Fried's backgrounds are discussed under the section Nominees for Election to Board of Directors.
| Name | | Age | | Position |
| Frank Jaksch, Jr. (1) | | 50 | | Executive Chairman of the Board |
| Robert Fried (2) | | 59 | | Chief Executive Officer and Director |
| Kevin Farr | | 61 | | Chief Financial Officer |
| Mark Friedman (3) | | 61 | | General Counsel and Corporate Secretary |
| Lisa Bratkovich (4) | | 52 | | Chief Marketing Officer |
| Matthew Roberts (5) | | 50 | | Chief Scientific Officer and Senior Vice President of Innovation |
| Troy Rhonemus (6) | | 46 | | Executive Vice President |
(1)
Mr. Jaksch transitioned from Chief Executive Officer to Executive Chairman of the Board effective as of June 22, 2018.
(2)
Mr. Fried transitioned from President and Chief Operating Officer to Chief Executive Officer effective as of June 22, 2018.
(3)
Mr. Friedman began serving on January 22, 2018.
(4)
Ms. Bratkovich began serving on June 4, 2018.
(5)
Mr. Roberts began serving on November 8, 2018.
(6)
Mr. Rhonemus resigned effective as of November 20, 2018.
The persons listed below are our executive officers as of the date hereof:
| Name | | Age | | Position |
| Frank Jaksch, Jr. | | 4750 | | Executive Chairman of the Board |
| Robert Fried | | 59 | | Chief Executive Officer and Director |
Thomas VarvaroKevin Farr | | 4661 | | Chief Financial Officer |
Troy RhonemusMark Friedman | | 4361 | | General Counsel and Corporate Secretary |
| Lisa Bratkovich | | 52 | | Chief OperatingMarketing Officer |
| Matthew Roberts | | 50 | | Chief Scientific Officer and Senior Vice President of Innovation |
Thomas C. VarvaroKevin Farr, 46,61, has served as Chief Financial Officer since October 2017. Mr. Farr previously served as the Chief Financial Officer of Mattel, Inc. (NASDAQ:MAT) from February 2000 through September 2017, and prior to that served in multiple leadership roles at Mattel since 1991. Before joining Mattel, Mr. Farr spent 10 years at PricewaterhouseCoopers. Mr. Farr serves on the Corporate Advisory Board of the Marshall School of Business at the University of Southern California, and as a board member of Polaris Industries Inc. Mr. Farr received his Master of Business Administration from Northwestern University J. L. Kellogg Graduate School of Business, and his B.S. in Accounting from Michigan State University.
Mark Friedman, 61, has served as the Company’s General Counsel and Corporate Secretary since January 2018. From 2013 to January 2018, Mr. Friedman held various positions at Herbalife Ltd. (NYSE:HLF) including Executive Vice President, General Counsel and Counsel to the Executive Chairman. Mr. Friedman served as General Counsel and Senior Vice President of Business Development at Pinkberry from 2008 to 2013, Senior Vice President and General Counsel at American Golf Corporation from 2003 to 2008 and Senior Counsel and Associate Corporate Secretary for BP (NYSE:BP) and Atlantic Richfield Company from 1994 to 2003. Mr. Friedman received his Juris Doctor degree from the University of Southern California and his Bachelor of Arts degree from the University of California, Davis.
Lisa Bratkovich, 52, has served as the Company’s Chief FinancialMarketing Officer since January 2004June 2018. Ms. Bratkovich joined ChromaDex from Direct Upside Group, a direct-to-consumer marketing and Secretary since March 2006. He alsocustomer experience transformation consulting firm, where she served as a director from March 2006 until May 2010. Mr. Varvaro is responsible for overseeing allCEO and Principal since April 2016. Prior to starting her own firm, Ms. Bratkovich spent 13 years at Guthy|Renker, where she served as Senior Vice President of Company’s operations including all aspects of accounting, information technology, inventory, distribution, and human resources management. Since April 2015, Mr. Varvaro has served on the board of directors of MabVax Therapeutics Holdings, Inc. (OTCQB:MBVX), which heMarketing. Ms. Bratkovich is a board member of the audit, compensationGirls in Tech, Los Angeles, which empowers women with education, resources and nominating and governance committees. Mr. Varvaro has extensive process mapping and business process improvement skills, along withtools to help advance their careers in technology. She is also a solid information technology background that includes management and implementation experiences rangingboard member of Organization of Women Executives, a Southern California peer network of high-achieving, executive-level women. Ms. Bratkovich earned her B.A. in Design from custom application design to enterprise wide system deployment. Mr. Varvaro also has hands-on experience in integrating acquisitions and in new facility startups. In working with manufacturing organizations Mr. Varvaro has overseen plant automation, reporting and bar code tracking implementations. Mr. Varvaro also has broad legal experience in intellectual property (IP), contract and employment law. From 1998 to 2004, Mr. Varvaro was employed by Fast Heat Inc., a Chicago, Illinois based global supplier to the plastics, HVAC, packaging, and food processing industries, where he began as controller and was promoted to chief information officer and then chief financial officer during his tenure. During his time there Mr. Varvaro was responsible for all financial matters including accounting, risk management and human resources. From 1993 to 1998, Mr. Varvaro was employed by Maple Leaf Bakery, Inc., Chicago, Illinois, during its rise to becoming a leader in specialty bakery products. During his tenure Mr. Varvaro served in information technology and accounting roles while helping to shepherd the company from a single facility to national leader in specialty bakery products. Mr. Varvaro has a B.S. in Accounting from University of Illinois, Urbana-Champaign and has been certified as a Certified Public Accountant.California – Los Angeles.
Troy RhonemusMatthew Roberts,, 43,50, has served as the Company’s Chief OperatingScientific Officer and Senior Vice President of Innovation since March 2014 and a Director of NewNovember 2018. From May 2017 to May 2018, Dr. Roberts served as Chief Technology and Supply ChainQuality Officer at Pharmavite, LLC, a consumer packaged goods manufacturer of vitamins, minerals and supplements under Nature Made® brand. Dr. Roberts also served as Chief Scientific Officer from January 2013May 2015 to February 2014. Mr. Rhonemus is responsible for overseeing allAugust 2016 at NBTY, Inc., a manufacturer of Company’s operations including all aspectsvitamins and nutritional supplements. From 2010 to 2015, Dr. Roberts held leadership roles at Abbott Nutrition as Vice President of sales, marketing, supply chain management, distribution,Global Product Research and new technology development. Mr. Rhonemus also consults with customersDevelopment and Vice President of Strategic Research. From 1994 to improve the supply chain management of raw materials to meet government regulations, which includes developing supply chain strategies, auditing manufacturers and developing an understanding of how to manage supplies from countries outside the Unites States. Mr. Rhonemus has extensive experience in managing operations and supply chain, business strategies, and the roll-out of new processes, technologies and products. From 2006 to 2012, Mr. Rhonemus2009, Dr. Roberts held severalvarious positions at Cargill, Inc. As Truvia®Nestle S.A, Nestle USA and Nestle Purina Pet Care, including Assistant Vice President of Confectionary Strategic Business Process Manager, he served asUnit. Dr. Roberts received his Ph.D. in Environmental and Comparative Toxicology from Cornell University, his Master of Business Administration from the product line lead for managing the operationsOlin School of Business at Washington University and supply chain of the Truvia® enterprise from leaf to consumer products. As Technology Manger, Mr. Rhonemus served as technical lead for process and product development for Truvia® consumer products and ingredient business. From 2004 to 2006, Mr. Rhonemus served as Principal Research Scientist at E&J Gallo Winery, where he developed experimental designs to ensure that all project work was statistically valid in the lab, pilot and production wineries. From 1998 to 2004, Mr. Rhonemus served as Senior Research Scientist and as Process Technology Manager at Cargill, Inc. In these positions, Mr. Rhonemus solved technical problems and implemented new technologies into production. He identified potential tolling facilities, coordinated tolling efforts, directly supervised and developed new processes and solved technical issues in existing business units in Cargill. Mr. Rhonemus has earned a M.A. in Chemistry and ahis B.S. in ChemistryPlant Molecular Biology and Physiology from Ball StatePurdue University.
Code of Business Conduct and Ethics
The Board has established a corporate Code of Business Conduct and Ethics that applies to all officers, directors and employees and which qualifiesis intended to qualify as a “code of ethics” as defined by Item 406 of Regulation S-K of the Exchange Act. Among other matters, theThe Code of Business Conduct and Ethics is designed to deter wrongdoing and to promote:
honest and ethical conduct, includingavailable on the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;
compliance with applicable governmental laws, rules and regulations;
prompt internal reporting of violations ofCompany’s website at www.chromadex.com. If the Code of Conduct to appropriate persons identified in the code; and
accountability for adherenceCompany makes any substantive amendments to the Code of Conduct.
Waivers to the Code ofBusiness Conduct may be granted only by the Board. In the event that the Boardand Ethics or grants any waivers of the elements listed above to any of our officers, we expect to announce the waiver within four business days on a Current Report on Form 8-K.
The Code of Conduct applies to all of the Company’s employees, including our principal executive officer, the principal financial and accounting officer, and all employees who perform these functions. A full text of our Code of Conduct is published on our website at www.chromadex.com under the tab “Investor Relations-Corporate Governance-Highlights.” If we amend our Code of Conduct as it applies to the principal executive officer, principal financial officer, principal accounting officer or controller (or persons performing similar functions) or grant a waiver from anya provision of the code of conductCode to any such person, we shallexecutive officer or director, the Company will promptly disclose suchthe nature of the amendment or waiver on our website at www.chromadex.com under the tab “Investor Relations-Corporate Governance-Highlights.”its website.
Public Availability of Corporate Governance Documents
Our key corporate governance documents, including our Code of Conduct and the charters of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are:
●
available on our corporate website at www.chromadex.com; and
●
available in print to any stockholder who requests them from our corporate secretary.
Director Attendance
The Board held 85 meetings during 2015.2018. Each director attended at least 75% of Board meetings and meetings of the committees on which he served except as follows: Hugh Dunkerley attended 50% of Board meetings during 2015.or she served.
Board Qualification and Selection Process
The Nominating and Corporate Governance Committee does not have a specific written policy or process regarding the nominations of directors, nor does it maintain minimum standards for director nominees or consider diversity in identifying nominees for director. However, the Nominating and Corporate Governance Committee does consider the knowledge, experience, integrity and judgment of potential candidates for nominations to the Board. The Nominating and Corporate Governance Committee will consider persons recommended by stockholders for nomination for election as directors. The Nominating and Corporate Governance Committee will consider and evaluate a director candidate recommended by a stockholder in the same manner as a committee-recommended nominee. Stockholders wishing to recommend director candidates must follow the prior notice requirements as described herein.
Board Leadership Structure and Risk Oversight
The leadership of the Board of Directors is currently structured so that it is led by non-executivean Executive Chairman, Stephen Allen. The NominatingFrank Jaksch, who has authority, among other things, to call and Corporate Governance Committee believes it is in the best interestpreside over meetings of the CompanyBoard of Directors, to have an independent directorset meeting agendas and to determine materials to be distributed to the Board of Directors. As Executive Chairman, Mr. Jaksch will serve as Chairman of the Board considering past experienceand will continue to serve as an employee and executive officer of Mr. Allen, whothe Company. Kurt Gustafson serves as lead independent director.
The Board of Directors has determined that the leadership structure, in which there is an extensive businessExecutive Chairman and management expertisean independent director acting as lead independent director, ensures that the appropriate level of oversight, independence, and responsibility is applied to all Board decisions, including risk oversight, and is in foodthe best interests of the Company and nutrition industry.those of the Company’s stockholders. The lead independent director serves as the liaison between the Executive Chairman and the independent directors and his responsibilities, among other things, include facilitating communication with the Board and presiding over regularly conducted executive sessions of the independent directors and establishing the agenda for meetings of the independent directors. The Board of Directors believes that its strong corporate governance policies and practices, including the substantial percentage of independent directors on the Board of Directors, and the robust duties that will be delegated to the lead independent director, empower the Board of Directors to effectively oversee the Company’s Chief Executive Officer and Executive Chairman and provide an effective and appropriately balanced Board of Directors governance structure.
The entire Board of Directors, as well as through its various committees, is responsible for oversight of our Company’s risk management process. Management furnishes information regarding risk to the Board of Directors as requested. The Audit Committee discusses risk management with the Company’s management and independent public accountants as set forth in the Audit Committee’s charter. The Compensation Committee reviews the compensation programs of the Company to make sure economic incentives are tied to the long-term interests of the stockholders. The Company believes that innovation and the building of long-term stockholder value are impossible without taking risks. We recognize that imprudent acceptance of risk and the failure to identify risks could be a detriment to stockholder value. The executive officers of the Company are responsible for assessing these risks on a day-to-day basis and for how to best identify, manage and mitigate significant risks that the Company may face.
Board Committees
The Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Other committees may be established by the Board from time to time. The following table provides membership and meeting information for the fiscal year ended December 31, 2018 for each of our Board committees:
| Name | | Audit | | Compensation | | Nominating and Corporate Governance |
| Stephen Allen (1) | | | | X | | X |
| Jeff Baxter | | X | | | | X |
| Stephen Block | | X | | X(5) | | |
| Kurt Gustafson | | X(5) | | X | | |
| Tony Lau (2) | | | | X | | |
| Steven Rubin (3) | | | | | | X(5) |
| Wendy Yu (4) | | | | | | X |
| Total meetings in fiscal year ended December 31, 2018 | | 6 | | 4 | | 3 |
(1)
Mr. Allen did not stand for re-election at the 2018 Annual Meeting of Stockholders and served as a member of the Compensation Committee and Nominating and Corporate Governance Committee until March 13, 2018.
(2)
On March 13, 2018, Mr. Lau was appointed as a member of the Compensation Committee.
(3)
On March 16, 2018, Mr. Rubin was appointed as Chairperson of the Nominating and Corporate Governance Committee.
(4)
On March 13, 2018, Ms. Yu was appointed as a member of the Nominating and Corporate Governance Committee.
(5)
Committee Chairperson.
The following is a description of each of the committees and their compositioncomposition:
Audit Committee
The Audit Committee provides assistance toof the Board of Directors was established by the Board of Directors in fulfillingaccordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to oversee the Company’s corporate accounting and financial reporting processes and audits of its responsibilitiesfinancial statements. For this purpose, the Audit Committee performs several functions, including, among other things:
●
evaluates the performance of and assesses the qualifications of the independent auditors;
●
determines and approves the engagement of the independent auditors;
●
determines whether to retain or terminate the existing independent auditors or to appoint and engage new independent auditors;
●
reviews and approves the retention of the independent auditors to perform any proposed permissible non-audit services;
●
monitors the rotation of partners of the independent auditors on the Company’s audit engagement team as required by law;
●
reviews and approves or rejects transactions between the company and any related persons;
●
confers with management and the independent auditors regarding the effectiveness of internal control over financial reporting;
●
establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and
●
meets to its shareholders,review the investment communityCompany’s annual audited financial statements and other stakeholdersquarterly financial statements with respect to its oversight ofmanagement and the following: (1) the quality and integrityindependent auditor, including a review of the Company’s accountingdisclosures under “Management’s Discussion and reporting practicesAnalysis of Financial Condition and controls, and the financial statements and reportsResults of the Company, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence andOperations.”
(4) the performance of the Company’s internal audit function and independent auditors.
The Audit Committee currently consists of three directors: Messrs. Reid DabneyKurt Gustafson (chairman), Stephen Block and Jeff Baxter. The Audit Committee met six times during the last fiscal year. The Board of Directors has adopted a written Audit Committee charter that is available to stockholders on the Company’s website at www.chromadex.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report for fiscal year 2018.
The Board of Directors reviews the NASDAQ listing standards definition of independence for Audit Committee members on an annual basis and has determined that:that all members of the Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A) of the NASDAQ listing standards and Rule 10A-3 of the Exchange Act).
The Board of Directors has also determined that Mr. DabneyGustafson also qualifies as an “audit committee financial expert,” as defined by thein applicable SEC in Item 407(d)(5)rules. The Board made a qualitative assessment of Regulation S-K;Mr. Gustafson’s level of knowledge and
experience based on a number of factors, including his formal education and experience as a chief financial officer for public reporting companies.
all membersReport of the Audit Committee (i) are “independent” under the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc., (ii) meet the criteria for independence as set forth in the Exchange Act, (iii) have not participated in the preparation of our financial statements at any time during the past three years and (iv) are financially literate and have accounting and finance experience.
The designation of Mr. Dabney as an “audit committee financial expert” will not impose on him any duties, obligations or liability that are greater than those that are generally imposed on him as a member of our Audit Committee and our Board, and his designation as an “audit committee financial expert” will not affect the duties, obligations or liability of any other member of our Audit Committee or Board. The Audit Committee had 5 meetings during the fiscal year ending January 2, 2016.
Compensation Committee
The Compensation Committee is appointed by the Board to establish policies with respect to the compensation of the Company’s officers. The Compensation Committee has overall responsibilities for approving and evaluating officer and director compensation plans, policies and programs for the Company. Our Compensation Committee currently consists of three directors: Messrs. Stephen Block (chairman), Hugh Dunkerley and Stephen Allen. The Board has determined that:
all members of the Compensation Committee qualify as “independent” under the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc.;
all members of the Compensation Committee qualify as “non-employee directors” under Exchange Act Rule 16b-3; and
all members of the Compensation Committee qualify as “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
The Compensation Committee had one meeting during the fiscal year ending January 2, 2016.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Nominating and Corporate Governance Committee
The primary purposes of the Nominating and Governance Committee are to (1) assist the Board by identifying individuals qualified to serve on the Board and its committees; (2) recommend to the Board the Director nominees for the next annual meeting of stockholders or to fill vacancies on the Board, as necessary; (3) lead the Board in its annual performance review; (4) recommend to the Board, members and chairpersons for each committee; (5) develop and recommend to the Board, and to review from time to time, a set of company corporate governance principles and monitor compliance with such principles. The Nominating and Governance Committee shall also serve in an advisory capacity on matters of organizational and governance structure and the conduct of the Board. Our Nominating and Corporate Governance Committee currently consists of three directors: Stephen Allen (chairman), Jeff Baxter and Robert Fried. The Board has determined that all members of the Nominating and Corporate Governance Committee qualify as “independent” under the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc. The Nominating and Corporate Governance Committee had two meetings during the fiscal year ending January 2, 2016.
Stockholder Communication
Any stockholder may communicate in writing by mail at any time with the entire Board of Directors or any individual director (addressed to “Board of Directors” or to a named director), c/o ChromaDex Corporation, ATTN: Chief Financial Officer, 10005 Muirlands Blvd, Suite G, Irvine, CA 92618. All communications will be promptly relayed to the appropriate Directors. The Corporate Secretary will coordinate all responses.
Policy Regarding Attendance at Annual Meetings of Stockholders
The Company does not have a policy with regard to Board members’ attendance at annual meetings. Seven directors attended the Company’s most recent annual meeting of shareholders held on June 4, 2015.
Director Independence
Under the NASDAQ Stock Market Marketplace Rules, a director will only qualify as an independent director if, in the opinion of our Board, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that each of Stephen Allen, Stephen Block, Reid Dabney, Hugh Dunkerley, Jeff Baxter and Robert Fried has no material relationship with our Company and is independent within the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc. Frank L. Jaksch Jr. does not meet the independence standards because of he is the Chief Executive Officer of our Company.
EXECUTIVE COMPENSATION
Compensation Committee Report
This report of the compensationaudit committee is required by the SEC and, in accordance with the SEC's rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act, of 1933, as amended (“Securities Act”), or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed "soliciting material" or "filed" under either the Securities Act or the Exchange Act.
The CompensationAudit Committee has reviewed and discussed the following Compensation Discussionaudited financial statements for the fiscal year ended December 31, 2018 with management of the Company. The Audit Committee has discussed with the Company’s independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301,Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee has also received the written disclosures and Analysisthe letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with management.the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on this review and these discussions, the Compensationforegoing, the Audit Committee has recommended to the Board of Directors that the following Compensation Discussion and Analysisaudited financial statements be included in itsthe Company’s Annual Report on Form 10-K and this proxy statement.for the fiscal year ended December 31, 2018.
The Audit Committee of
The Board of Directors
Kurt Gustafson (Chairman)
Stephen Block
Jeff Baxter
Compensation Committee
Our Compensation Committee currently consists of three directors: Stephen A. Block Chairman
Hugh Dunkerley
(chairman), Kurt Gustafson and Tony Lau. Stephen Allen
served on the Compensation Discussion and AnalysisCommittee until March 13, 2018. All members of the Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the NASDAQ listing standards. The Compensation Committee met four times during fiscal year 2018. The Board has adopted a written Compensation Committee charter that is available to stockholders on the Company’s website at www.chromadex.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report for fiscal year 2018.
The following discussionCompensation Committee acts on behalf of the Board to review, modify (as needed) and analysisapprove the Company’s compensation strategy, policies, plans and programs. For this purpose, the Compensation Committee performs several functions, including, among other things:
●
establishment of corporate and individual performance objectives relevant to the compensation arrangements of our namedthe Company’s executive officers for 2015 should be read together with the compensation tables and related disclosures set forth below.
We believe our success depends on the continued contributionsevaluation of our named executive officers. Personal relationships and experience are very importantperformance in our industry. Our named executive officers are primarily responsible for many of our critical business development relationships. The maintenancelight of these relationships is critical to ensuring our future success as is experience in managing these relationships. Therefore, it is important to our success that we retain the services of these individuals.stated objectives;
●
General Philosophy
Our overall compensation philosophy is to provide an executive compensation package that enables us to attract, retainreview and motivate executive officers to achieve our short-term and long-term business goals. The goals of our compensation program are to align remuneration with business objectives and performance, and to enable us to retain and competitively reward executive officers who contributeapproval (or recommend to the long-term successBoard of Directors for approval) of the Company. We attempt to pay our executive officers competitively in order that we will be able to retain the most capable people in the industry. In making executive compensation and other terms of employment compensation decisions, the Compensation Committee considers achievement of certain criteria, some of which relate to our performanceor service, including severance and others of which relate to the performancechange-in-control arrangements, of the individual employee. Awards to executive officers are based on achievement of Company and individual performance criteria.
The Compensation Committee will evaluate our compensation policies on an ongoing basis to determine whether they enable us to attract, retain and motivate key personnel. To meet these objectives, the Compensation Committee may from time to time increase salaries, award additional stock grants or provideCompany’s Chief Executive Officer, other short and long-term incentive compensation to executive officers and non-employee directors; and
●
administration of the Company’s equity compensation plans, pension and profit-sharing plans, deferred compensation plans and other employees.
similar plan and programs.
Compensation Program and Forms of Compensation
We provide our executive officers with a compensation package consisting of base salary, bonus, equity incentives and participation in benefit plans generally available to other employees. In setting total compensation,If applicable, the Compensation Committee considers individualwill review with management the Company’s Compensation Discussion and company performance, as well as market information regardingAnalysis and will consider whether to recommend that it be included in proxy statements and other filings.
The Compensation Committee has the sole authority to retain, in its sole discretion, compensation paid byconsultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other companies in our industry. All executive officers have employment agreements that establish their initial base salaries and set pre-approved goals -- and minimum and maximum opportunities -- for the bonuses and equity incentive awards. Bothretention terms. In March 2018, the Compensation Committee retained a consulting firm, Exequity LLP (“Exequity”) directly, although in carrying out assignments, the consulting firm may interact with Company management when necessary and the Board have approved these agreements.appropriate. Exequity is a nationally recognized provider of executive compensation advisory services and was deemed independent pursuant to SEC rules.
Base Salary. SalariesThe Compensation Committee generally does not have a specific target amount of compensation for our executive officers are initially set based on negotiation with individual executive officers atrelative to a peer group of companies, but it considers peer data for purposes of assessing the timecompetitiveness of recruitment and with reference to salaries for comparable positions in the industry for individuals of similar education and background to the executive officers being recruited. We also considercompensation program. An individual executive officer may earn more or less than the market median depending on factors described below, including the individual’s experience reputationand background, role, and past and future performance.
The Company paid cash bonuses to its executive officers in 2019 for 2018 performance based upon achievements of certain goals. For additional information regarding the performance bonus amounts, see “Executive Compensation.”
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee currently consists of three directors: Steven Rubin (chairman), Jeff Baxter and Wendy Yu. Stephen Allen served on the Nominating and Corporate Governance Committee until March 13, 2018. All members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the NASDAQ listing standards). The Nominating and Corporate Governance Committee met three times during the last fiscal year. The Board has adopted a written Nominating and Corporate Governance Committee charter that is available to stockholders on the Company’s website at www.chromadex.com. The information on the website is not incorporated by reference into this Proxy Statement or the Annual Report for fiscal year 2018.
The Nominating and Corporate Governance Committee is responsible for identifying, reviewing and evaluating candidates to serve as directors of the Company consistent with criteria approved by the Board of Directors, reviewing and evaluating incumbent directors, selecting or recommending to the Board of Directors for selection candidates for election to the Board of Directors, making recommendations to the Board of Directors regarding the membership of the committees of the Board of Directors, assessing the performance of the Board of Directors, and developing a set of corporate governance principles for the Company.
The Nominating and Corporate Governance Committee believes that candidates for director nominees should have certain minimum qualifications, including the ability to read and understand basic financial statements and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her industryfield, having the ability to exercise sound business judgment and expected contributionshaving the commitment to rigorously represent the Company. Base salary is regularly evaluated by competitive pay and individual job performance. In each case, we take into account the results achieved by the executive, his or her future potential, scope of responsibilities and experience, and competitive salary practices. In some circumstances our executive officers have elected to take less than market salaries. These salaries may be increased in the future to market conditions with a competitive base salary that is in line with his or her role and responsibilities when compared to peer companies of comparable size in similar locations.
Bonuses. We design our bonus programs to be both affordable and competitive in relation to the market. Our bonus program is designed to motivate employees to achieve overall corporate goals. Our programs are designed to avoid entitlements, to align actual payouts with the actual results achieved and to be easy to understand and administer. The Compensation Committee and the executive officer, with input from the other executive officers, work together to identify targets and goals for the executive officer; however, the targets and goals themselves are established after deliberation by the Compensation Committee alone. Upon completion of the fiscal year, the Compensation Committee assesses the executive officer’s performance and, with input from management and the Board, determines the achievement of the bonus targets and the amount to be awarded within the parameters of the executive officer’s agreement with us subject to the impact paying such bonuses will have on the Company’s financial position.
In 2015, we paid bonuses of $85,890, $56,219 and $33,731, respectively to our executive officers Frank L. Jaksch Jr., Thomas C. Varvaro and Troy A. Rhonemus. These bonus amounts were calculated based upon achievementslong-term interests of the Company’s salesstockholders. However, the Nominating and Earnings Before Interest, Taxes, Depreciation, AmortizationCorporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the Board of Directors, the operating requirements of the Company and Share-based compensation (“EBITDAS”) targetsthe long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needs of the Board of Directors and the Company, to maintain a balance of knowledge, experience and capability.
In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for NASDAQ purposes, which determination is based upon applicable NASDAQ listing standards, applicable SEC rules and regulations and the fiscal year 2014.advice of counsel, if necessary. The salesNominating and EBITDAS targets were fromCorporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the Company’s 2014 budget. Tables below illustrate howbackgrounds and qualifications of possible candidates after considering the bonus amounts were calculated for Mr. Jaksch, Mr. Varvarofunction and Mr. Rhonemus
Bonus calculation for Mr. Jaksch – for fiscal year 2014, paid in 2015
| Metric | | Floor (in 1,000s) | | | Target (in 1,000s) | | | Actual (in 1,000’s) | | | Achievement % from Floor to Target (1) | | | Target Bonus % (2) | | | Payout Bonus % (3) | | | Base Salary | | | Bonus Payment (4) | |
| Sales | | $ | 14,149 | | | $ | 18,865 | | | $ | 15,313 | | | | 24.7 | % | | | 25.0 | % | | | 6.2 | % | | $ | 275,000 | | | $ | 16,973 | |
| EBITDAS | | | N/A | | | $ | (1,885 | ) | | $ | (1,880 | ) | | | 100.2 | % | | | 25.0 | % | | | 25.1 | % | | $ | 275,000 | | | $ | 68,917 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | $ | 85,890 | |
Bonus calculation for Mr. Varvaro – for fiscal year 2014, paid in 2015
| Metric | | Floor (in 1,000s) | | | Target (in 1,000s) | | | Actual (in 1,000’s) | | | Achievement % from Floor to Target (1) | | | Target Bonus % (2) | | | Payout Bonus % (3) | | | Base Salary | | | Bonus Payment (4) | |
| Sales | | $ | 14,149 | | | $ | 18,865 | | | $ | 15,313 | | | | 24.7 | % | | | 20.0 | % | | | 4.9 | % | | $ | 225,000 | | | $ | 11,109 | |
| EBITDAS | | | N/A | | | $ | (1,885 | ) | | $ | (1,880 | ) | | | 100.2 | % | | | 20.0 | % | | | 20.0 | % | | $ | 225,000 | | | $ | 45,110 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | $ | 56,219 | |
Bonus calculation for Mr. Rhonemus – for fiscal year 2014, paid in 2015
| Metric | | Floor (in 1,000s) | | | Target (in 1,000s) | | | Actual (in 1,000’s) | | | Achievement % from Floor to Target (1) | | | Target Bonus % (2) | | | Payout Bonus % (3) | | | Base Salary | | | Bonus Payment (4) | |
| Sales | | $ | 14,149 | | | $ | 18,865 | | | $ | 15,313 | | | | 24.7 | % | | | 15.0 | % | | | 3.7 | % | | $ | 180,000 | | | $ | 6,665 | |
| EBITDAS | | | N/A | | | $ | (1,885 | ) | | $ | (1,880 | ) | | | 100.2 | % | | | 15.0 | % | | | 15.0 | % | | $ | 180,000 | | | $ | 27,066 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | $ | 33,731 | |
(1) | Achievement % for sales is calculated by linearly interpolating the actual amount from floor to target, with floor being 0% and target being 100%. Achievement % for EBITDAS is calculated by following formula: Achievement % = 1-((Target – Actual)/Target) |
(2) | Per employment agreement, Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus are entitled to receive a bonus up to 50%, 40% and 30% of base salary, respectively. For each metric, 50% of this amount was allocated. |
(3) | Payout bonus % is calculated by multiplying achievement % to target bonus %. |
(4) | Bonus payment is calculated by multiplying payout bonus % to base salary |
In 2016, we are paying bonuses of $55,000, $36,000 and $22,800, respectively to Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus for services performed during 2015. These amounts were calculated based upon the Company's overall performance, including achievement of sales and profitability targets for the fiscal year 2015. Unlike the bonuses paid in 2015, which were based on the Company's financial performance for fiscal year 2014, the amounts to be paid out in 2016 were determined on a discretionary basis by our Compensation Committee. The bonus pay out % was determined as 20%, 16% and 12% of base salary for Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus, respectively. These amounts represent payouts of 40% of the total bonus opportunity for each executive. When determining the bonus pay out %, our Compensation Committee considered numerous factors including the following milestones that the Company achieved during 2015: (i) first year to achieve net sales of $20 million or more; (ii) our top selling ingredient, nicotinamide riboside ("NR") was recognized by the FDA as a "New Dietary Ingredient." NR was also "Generally Recognized As Safe" by an independent panel of expert toxicologists; (iii) successful launch of "Quality Seal Verification" program, which brought a revenue of $400,000; and (iv) entering into joint development agreement with The Procter & Gamble Company ("P&G") for use of our proprietary ingredient in P&G branded products, for which P&G will make payments based on achievement of various milestones.
Equity-Based Rewards
We design our equity programs to be both affordable and competitive in relation to the market. We monitor the market and applicable accounting, corporate, securities and tax laws and regulations and adjust our equity programs as needed. Stock options and other forms of equity compensation are designed to reflect and reward a high level of sustained individual performance over time. We design our equity programs to align employees’ interests with those of our stockholders. The Compensation Committee and the executive officer, with input from the other executive officers, work together to identify targets and goals for the executive officer; however, the targets and goals themselves are established after deliberation by the Compensation Committee alone. Upon completion of the fiscal year, the Compensation Committee assesses the executive officer’s performance and, with input from management and the Board, determines the achievement of the vesting targets and the amount to be awarded within the parameters of the executive officer’s agreement with us.
On June 6, 2012, Frank L. Jaksch Jr. and Thomas C. Varvaro were each awarded 250,000 shares of restricted stock. In addition, on January 2, 2014, Mr. Jaksch and Mr. Varvaro were each awarded 250,000 shares each of restricted stock. These shares were to originally vest upon the earlier to occur of the following: (i) the market price of the Company’s stock exceeds a certain price, or (ii) one of other certain triggering events, including the termination of the officers and members of the board of directors without cause for any reason. These awarded shares were not vested as of January 2, 2016. On March 7, 2016, the Company and each of the executives amended the restricted stock awards to provide that the awards shall not vest upon the market price of the Company’s stock exceeding a certain price or listing of the Company’s stock on a national securities exchange.
Timing of Equity Awards
Only the Board may approve stock option grants to our executive officers, which grants are recommended to it by the Compensation Committee. Stock options are generally granted at predetermined meetings of the Board. On limited occasions, grants may occur upon unanimous written consent of the Board, which occurs primarily for the purpose of approving a compensation package for a newly hired or promoted executive under an employment agreement with the executive. The exercise price of a newly granted option is the average price of our Common Stock on the date of grant.
Benefits Programs
We design our benefits programs to be both affordable and competitive in relation to the market while conforming to local laws and practices. We monitor the market, local laws and practices and adjust our benefits programs as needed. We design our benefits programs to provide an element of core benefits, and to the extent possible, offer options for additional benefits, be tax-effective for employees in each country and balance costs and cost sharing between us and our employees. One of the benefits programs we offer is a broad-based 401(k) plan to which we make contributions in cash.
Performance-Based Compensation and Financial Restatement
We have implemented a policy regarding retroactive adjustments to any cash or equity-based incentive compensation paid to our executives where such payments were predicated upon the achievement of certain financial results that were subsequently the subject of a financial restatement and have included this policy in the employment contracts with our executives.
Tax and Accounting Considerations
In the review and establishment of our compensation programs, we consider the anticipated accounting and tax implications to us and our executives. Section 162(m) of the Code imposes a limit on the amount of compensation that we may deduct in any one year with respect to our chief executive officer and each of our next four most highly compensated executive officers, unless certain specific and detailed criteria are satisfied. Performance-based compensation, as defined in the Code, is fully deductible if the programs are approved by stockholders and meet other requirements. We believe that grants of equity awards under our Second Amended and Restated 2007 Equity Incentive Plan, or the 2007 Plan, may qualify as performance-based for purposes of satisfying the conditions of Section 162(m), thereby permitting us to receive a federal income tax deduction, if applicable, in connection with such awards. In general, we have determined that we will not seek to limit executive compensation so that it is deductible under Section 162(m). From time to time, however, we monitor whether it might be in our interests to structure our compensation programs to satisfy the requirements of Section 162(m). We seek to maintain flexibility in compensating our executives in a manner designed to promote our corporate goals and therefore our compensation committee has not adopted a policy requiring all compensation to be deductible. Our compensation committee will continue to assess the impact of Section 162(m) on our compensation practices and determine what further action, if any, is appropriate.
Severance and Change in Control Arrangements
Several of our executives have employment and other agreements that provide for severance payment arrangements and/or acceleration of stock option vesting in the event of an acquisition or other change in control of our company. See “Employment and Consulting Agreements” below for a description of the severance and change in control arrangements for our named executive officers.
Role of Executives in Executive Compensation Decisions
The Board and our Compensation Committee generally seek input from our executive officers when discussing the performance of, and compensation levels for, executives. The Compensation Committee also works with our Chief Executive Officer and our Chief Financial Officer to evaluate the financial, accounting, tax and retention implications of our various compensation programs. None of our other executives participates in deliberations relating to his or her compensation.
Summary Compensation Table
The following table setsNominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth information concerningabove, based on whether or not the annual and long-term compensation earnedcandidate was recommended by our Chief Executive Officer (the principal executive officer), our Chief Financial Officer (the principal financial officer) and our Chief Operating Officer, each of whom served during the year ended January 2, 2016 as our executive officers.
| Name | Year | | Salary | | | Bonus | | | Stock Awards (1) | | | Option Awards (2) | | | All Other Compensation (3) | | | Total ($) | |
| Frank L. Jaksch Jr. | 2015 | | $ | 275,000 | | | $ | 85,890 | | | | - | | | $ | 114,857 | (4) | | $ | 8,642 | | | $ | 484,389 | |
| | 2014 | | $ | 275,000 | | | $ | 30,000 | | | $ | 352,500 | (5) | | $ | 138,518 | (6) | | $ | 7,748 | | | $ | 803,766 | |
| | 2013 | | $ | 225,000 | | | $ | 51,242 | | | | - | | | | - | | | $ | 6,827 | | | $ | 283,069 | |
| Thomas C. Varvaro | 2015 | | $ | 225,000 | | | $ | 56,219 | | | | - | | | $ | 96,229 | (7) | | $ | 8,437 | | | $ | 385,885 | |
| | 2014 | | $ | 225,000 | | | $ | 24,200 | | | $ | 352,500 | (8) | | $ | 115,807 | (9) | | $ | 6,816 | | | $ | 724,323 | |
| | 2013 | | $ | 175,000 | | | $ | 29,891 | | | | - | | | | - | | | $ | 3,900 | | | $ | 208,791 | |
| Troy A. Rhonemus(10) | 2015 | | $ | 186,962 | | | $ | 33,731 | | | | - | | | $ | 76,091 | (11) | | $ | 6,642 | | | $ | 303,426 | |
| | 2014 | | $ | 179,039 | | | | - | | | | - | | | $ | 358,723 | (12) | | $ | 5,371 | | | $ | 543,133 | |
| | 2013 | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
(1) | The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of restricted stock awards. These restricted stock awards originally had following vesting conditions: the earlier to occur of (A) the average closing market price of the Company’s common stock exceeds $2.50 per share over any six month period, (B) the Company experiences a change in control, (C) the Company’s common stock or assets are acquired by, or the Company merges with, another entity or engages in another form of reorganization as a result of which it is not the surviving corporation, (D) service is terminated without cause for any reason, or (E) the Company’s stock is listed on a national securities exchange. The fair values of these restricted stock awards were based on the trading price of the Company’s common stock on the date of grant. On March 7, 2016 the Company and each of the executives amended the restricted stock awards to provide that the awards shall not vest upon the market price of the Company’s common stock exceeding $2.50 per share or listing of the Company’s stock on a national securities exchange. |
(2) | The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal years ended January 2, 2016 and January 3, 2015. See Note 9 of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
|
(3) | The amounts in this column titled “All Other Compensation” above reflect matching 401(k) contributions. |
(4) | On July 6, 2015, Frank L. Jaksch Jr. was granted options to purchase 150,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter. |
(5) | On January 2, 2014, Frank L. Jaksch Jr. was awarded 250,000 shares of restricted stock. These shares vest upon the achievement of certain milestones. As of January 2, 2016, these shares have not vested. |
(6) | On June 18, 2014, Frank L. Jaksch Jr. was granted options to purchase 150,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter. |
(7) | On July 6, 2015, Thomas C. Varvaro was granted options to purchase 125,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter. |
(8) | On January 2, 2014, Thomas C. Varvaro was awarded 250,000 shares of restricted stock. These shares vest upon the achievement of certain milestones. As of January 2, 2016, these shares have not vested. |
(9) | On June 18, 2014, Thomas C. Varvaro was granted options to purchase 125,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter. |
(10) | Troy A. Rhonemus became the Company’s Chief Operating Officer on March 6, 2014. |
(11) | On July 6, 2015, Troy A. Rhonemus was granted options to purchase 100,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter. |
(12) | On February 21, 2014, Troy A. Rhonemus was granted options to purchase 250,000 shares of ChromaDex common stock at an exercise price of $1.75. These options expire on February 21, 2024 and 33% of the options vested on February 21, 2015 and the remaining 67% vest 2.778% monthly thereafter. In addition, on June 18, 2014, Troy A. Rhonemus was granted options to purchase 75,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter. |
Employment and Consulting Agreements
The material terms of employment agreements with the named executive officers previously entered intoa stockholder. Stockholders who wish to recommend individuals for consideration by the Company are described below.
Employment Agreement with Frank L. Jaksch Jr.
On April 19, 2010,Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: ChromaDex Corporation, Attn: Secretary, at 10900 Wilshire Blvd. Suite 650, Los Angeles, CA 90024, no later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting. Submissions must include the name and address of the Company entered into an Amended and Restated Employment Agreement (the “Amended Jaksch Agreement”) with Frank L. Jaksch Jr. The Amended Jaksch Agreement has a three year term, beginningstockholder on whose behalf the submission is made; the number of Company shares that are owned beneficially by such stockholder as of the date of the Agreement, that automatically renews unlesssubmission; the Amended Jaksch Agreement is terminatedfull name of the proposed candidate; a description of the proposed candidate’s business experience for at least the previous five years; complete biographical information for the proposed candidate; and a description of the proposed.
Stockholder Communication
Any stockholder may communicate in accordancewriting by mail at any time with its terms. The Amended Jaksch Agreement provides forthe entire Board of Directors or any individual director (addressed to “Board of Directors” or to a base salarynamed director), c/o ChromaDex Corporation, ATTN: Secretary, 10900 Wilshire Blvd. Suite 650, Los Angeles, CA 90024. All communications will be compiled by the Secretary of $225,000 (subjectthe Company and promptly submitted to an increasethe Board of $50,000 inDirectors or the event the Company’s common stock is listedindividual directors on a stock exchange), and provides for an annual cash bonus (based on performance targets)periodic basis.
Policy Regarding Attendance at Annual Meetings of up to 40% of his base salary, and two option grants of 800,000 shares of Common Stock in aggregate. The option grants were awarded on May 20, 2010.
On January 2, 2014, the Board approved the recommendations of the Company’s Compensation Committee raising the annual base salary of Mr. Jaksch to $275,000 per year and raising the annual cash bonus target for Mr. Jaksch up to 50% of his base salary. In January 2016, the Board approved the recommendations of the Company’s Compensation Committee paying Mr. Jaksch a bonus of $55,000 for services provided to the Company during the fiscal year ending January 2, 2016. On March 14, 2016, the Board increased the base salary of Mr. Jaksch to $320,000.
The severance termsCompany does not have a policy with regard to Board members’ attendance at annual meetings. Eight directors attended the Company’s most recent annual meeting of stockholders held on June 22, 2018.
Director Independence
As required under the NASDAQ Stock Market listing standards, a majority of the Amended Jaksch Agreement provide that in the event Mr. Jaksch’s employment with the Company is terminated voluntarily by Mr. Jaksch, he will be entitled to any accrued but unpaid base salary, any stock vested through the datemembers of his termination and a pro-rated portionlisted company’s board of 50% of his salary (50% of his salary being the “Maximum Annual Bonus”) for the year of termination. In addition, if Mr. Jaksch leaves the Company for “Good Reason” he will also be entitled to severance equal to the Maximum Annual Bonus, and he will be deemed to have been employed for the entirety of such year. “Good Reason” means any of the following: (A) the assignment of duties materially inconsistent with those of other employees in similar employment positions, and Mr. Jaksch provides written notice to the Company within 60 days of such assignment that such duties are materially inconsistent with those duties of such similarly-situated employees and the Company fails to release Mr. Jaksch from his obligation to perform such inconsistent duties and to re-assign Mr. Jaksch to his customary duties within 20 business days after the Company’s receipt of such notice; or (B) if, without the consent of Mr. Jaksch, Mr. Jaksch’s normal place of work is or becomes situated more than 50 linear miles from Mr. Jaksch’s personal residencedirectors must qualify as of the effective date of the Amended Jaksch Agreement, or (C) a failure by the Company to comply with any other material provision of the Amended Jaksch Agreement which has not been cured within 60 days after notice of such noncompliance has been given by Mr. Jaksch to the Company, or if such failure is not capable of being cured in such time, a cure shall not have been diligently pursued by the Company within such 60 day period. Severance will then consist of 16 weeks of paid salary, unless Mr. Jaksch signs a release, in which case he will receive compensation equal to the lesser of the remainder of the term of the agreement, or up to 12 months paid salary.
In the event Mr. Jaksch’s employment terminates“independent,” as a result of his death or disability, he, or his estate, as the case may be, will be entitled to his accrued but unpaid base salary, stock vested through the date of his termination and, notwithstanding any policy of the Company to the contrary, any annual bonus that would be due to him for the fiscal year in which termination pursuant to death or disability took place in an amount no less than the prorated portion of his Maximum Annual Bonus. At the option of the Board, Mr. Jaksch’s bonus will be either prorated or paid in full to him, or his estate, as the case may be, at the time he would have received such bonus had he remained an employee of the Company.
In the event that Mr. Jaksch is terminated by the Company for “Cause” (as defined in the Amended Jaksch Agreement), he will only be entitled to his accrued but unpaid base salary, and any stock vested through the date of his termination.
In the event that Mr. Jaksch is terminated due to “Cessation of Business” (as defined in the Amended Jaksch Agreement), Mr. Jaksch will be entitled to a lump sum payment of base salary and an amount equal to the Maximum Annual Bonus, and continuation of health benefits until the earlier of the last to occur of the term or renewal term of the agreement or 12 months from the date of termination.
In the event the Company terminates Mr. Jaksch’s employment “without Cause”, Mr. Jaksch will be entitled to severance in the form of any stock vested through the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Jaksch enters into a standard separation agreement, Mr. Jaksch will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided to other executive employees until the last to occur of the expiration of the term or renewal term then in effect or 24 months from the date of termination (the “Severance Period”), and he will receive his Maximum Annual Bonus if the Severance Period is equal to 24 months or a pro rata portion thereof if less, as well as the full vesting of any otherwise unvested stock.
Employment Agreement with Thomas C. Varvaro
On April 19, 2010, the Company entered into an Amended and Restated Employment Agreement (the “Amended Varvaro Agreement”) with Thomas C. Varvaro. The Amended Varvaro Agreement has a three year term beginning on the date of the agreement that automatically renews unless the Amended Varvaro Agreement is terminated in accordance with its terms. The Amended Varvaro Agreement provides for a base salary of $175,000 (subject to an increase of $50,000 in the event the Company’s common stock is listed on a stock exchange), and provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary, and provides for two option grants of 400,000 shares of Common Stock in aggregate. The option grants were awarded on May 20, 2010.
On January 2, 2014, the Board approved the recommendations of the Company’s Compensation Committee raising the annual base salary of Mr. Varvaro to $225,000 per year and raising the annual cash bonus target for Mr. Varvaro up to 40% of his base salary. In January 2016, the Board approved the recommendations of the Company’s Compensation Committee paying Mr. Varvaro a bonus of $36,000 for services provided to the Company during the fiscal year ending January 2, 2016. On March 14, 2016, the Board increased the base salary of Mr. Varvaro to $250,000.
The severance terms of the Amended Varvaro Agreement provide that in the event Mr. Varvaro’s employment with us is terminated voluntarily by Mr. Varvaro he will be entitled to any accrued but unpaid base salary, any stock vested through the date of his termination and a pro-rated portion of 40% of his salary (40% of this salary being the “Maximum Annual Bonus”) for the year of termination. In addition, if Mr. Varvaro leaves the Company for Good Reason he will also be entitled to severance equal to the Maximum Annual Bonus, and he shall be deemed to have been employed for the entirety of such year. “Good Reason” means any of the following: (A) the assignment of duties materially inconsistent with those of other employees in similar employment positions, and Mr. Varvaro provides written notice to the Company within 60 days of such assignment that such duties are materially inconsistent with those duties of such similarly-situated employees and the Company fails to release Mr. Varvaro from his obligation to perform such inconsistent duties and to re-assign Mr. Varvaro to his customary duties within 20 business days after the Company’s receipt of such notice; or (B) the termination of Frank Jaksch as the Company’s Chief Executive Officer either by the Company without “Cause” or by the Mr. Jaksch for “Good Reason,” and Mr. Varvaro provides written notice within 60 days of such termination, or (C) a failure by the Company to comply with any other material provision of the Amended Varvaro Agreement which has not been cured within 60 days after notice of such noncompliance has been given by Mr. Varvaro to the Company, or if such failure is not capable of being cured in such time, a cure will not have been diligently pursued by the Company within such 60 day period. Severance will then consist of 16 weeks of paid salary, unless Mr. Varvaro signs a release, in which case he will receive compensation equal to the lesser of the remainder of his agreement or 12 months paid salary.
In the event Mr. Varvaro is terminated as a result of his death or disability he will be entitled to his accrued but unpaid base salary, stock vested through the date of his termination and, notwithstanding any policy of the Company to the contrary, any annual bonus that would be due to him for the fiscal year in which termination pursuant to death or disability took place in an amount no less than the prorated portion of his Maximum Annual Bonus. Mr. Varvaro’s bonus will be either prorated or paid in full to him, or his estate, as the case may be, at the time he would have received such bonus had he remained an employee of the Company.
In the event that Mr. Varvaro is terminated by the Company for “Cause” (as defined in the Amended Varvaro Agreement), he will only be entitled to his accrued but unpaid base salary, and any stock vested through the date of his termination.
In the event that Mr. Varvaro is terminated due to a “Cessation of Business” (as defined in the Amended Varvaro Agreement), Mr. Varvaro will be entitled to a lump sum payment of base salary and an amount equal to the Maximum Annual Bonus, and continuation of health benefits until the last to occur of the term or renewal term of the agreement or 12 months from the date of termination.
In the event the Company terminates Mr. Varvaro’s employment “without Cause,” Mr. Varvaro will be entitled to severance in the form of any stock vested through the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Varvaro enters into a standard separation agreement, Mr. Varvaro will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided to other executive employees until the last to occur of the expiration of the term or renewal term then in effect or 24 months from the date of termination (the “Severance Period”), will receive his Maximum Annual Bonus if the Severance Period is equal to 24 months or a pro rata portion thereof if less, as well as the full vesting of any otherwise unvested stock.
Employment Agreement with Troy Rhonemus
On March 6, 2014, the Company entered into an Employment Agreement (the “Rhonemus Agreement”) with Troy Rhonemus. The Rhonemus Agreement has a one year term beginning on the date of the agreement that automatically renews unless the Rhonemus Agreement is terminated in accordance with its terms. The Rhonemus Agreement provides for a base salary of $180,000, and provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary (30% of this salary being the “Maximum Annual Bonus”), and provides for option grants of 250,000 shares of Common Stock. The option grants were awarded on February 21, 2014.
On March 17, 2015, the Board increased the base salary of Mr. Rhonemus to $190,000. In addition, on April 16, 2015, the Board approved increasing the base salary of Mr. Rhonemus to $215,000, effective upon the listing of the Company’s common stock on a national securities exchange. In January 2016, the Board approved the recommendations of the Company’s Compensation Committee paying Mr. Rhonemus a bonus of $22,800 for services provided to the Company during the fiscal year ending January 2, 2016. On March 14, 2016, the Board increased the base salary of Mr. Rhonemus to $210,000.
The severance terms of the Rhonemus Agreement provide that in the event Mr. Rhonemus’ employment with us is terminated voluntarily by Mr. Rhonemus, he will be entitled to any accrued but unpaid base salary and any accrued but unpaid welfare and retirement benefits. In addition, if Mr. Rhonemus leaves the Company for Good Reason he will also be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary. “Good Reason” means a failure by the Company to comply with any other material provision of the Rhonemus Agreement which has not been cured within 60 days after notice of such failure has been given by Mr. Rhonemus to the Company, or if such failure is not capable of being cured in such time, a cure will not have been diligently pursued by the Company within such 60 day period.
In the event Mr. Rhonemus is terminated as a result of his death or disability he will be entitled to his accrued but unpaid base salary, and, notwithstanding any policy of the Company to the contrary, any annual bonus that would be due to him for the fiscal year in which termination pursuant to death or disability occurs will be prorated to Mr. Rhonemus (or his estate, as the case may be) at the time Mr. Rhonemus would have received such bonus had he remained an employee of the Company.
In the event that Mr. Rhonemus is terminated by the Company for “Cause” (as defined in the Rhonemus Agreement), he will only be entitled to his accrued but unpaid base salary, and any accrued but unpaid welfare and retirement benefits.
In the event that Mr. Rhonemus is terminated due to a “Cessation of Business” (as defined in the Rhonemus Agreement), Mr. Rhonemus will be entitled to a lump sum payment of (i) base salary until the last to occur of (A) the expiration of the remaining portion of the initial term or the then applicable renewal term, as the case may be, or (B) the expiration of the 12-month period commencing on the date Employee is terminated, and (ii) the Maximum Annual Bonus.
In the event the Company terminates Mr. Rhonemus’ employment “without Cause,” Mr. Rhonemus will be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary, or, if Mr. Rhonemus enters into a standard separation agreement, Mr. Rhonemus will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided until the expiration of the term or renewal term then in effect, however, that in the case of medical and dental insurance, until the expiration of 12 months from the date of termination.
2015 Director Compensation
From time to time, non-employee directors receive a stock award or a grant of options to buy our common stock. These stock awards and options are granted under the Second Amended and Restated 2007 Equity Incentive Plan of the Company, or the 2007 Plan. The number of shares awarded or the number of options granted and the vesting conditions areaffirmatively determined by the Compensation Committee of the Board of Directors. The vesting schedule onBoard of Directors consults with the options awarded forCompany’s counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding the fiscal year ended January 2, 2016 isdefinition of “independent,” including those set forth in pertinent listing standards of NASDAQ, as follows: 8.333% of the options vest monthly.in effect from time to time.
TheConsistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board of Directors has affirmatively determined that the following table providesdirectors are independent directors within the meaning of the applicable NASDAQ listing standards: Stephen Block, Jeff Baxter, Kurt Gustafson, Steven Rubin, Wendy Yu and Tony Lau. Frank L. Jaksch Jr. and Robert Fried do not meet the independence standards because of their employment with the Company.
Please see “Proposal 1: Election of Directors” for more information concerning compensationregarding our Board of our non-employee directors who were directors during the fiscal year ended January 2, 2016. The compensation reported is for services as directors for the fiscal year ended January 2, 2016.Directors.
EXECUTIVE COMPENSATION
Summary Compensation Table
| Name | | Fees Earned or Paid in Cash ($) | | | | | | | | | Non-Equity Incentive Plan Compensation ($) | | | Non-Qualified Deferred Compensation Earnings ($) | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Stephen Allen (3) | | | - | | | | - | | | | 74,548 | | | | - | | | | - | | | | - | | | | 74,548 | |
| Stephen Block (4) | | | - | | | | - | | | | 60,002 | | | | - | | | | - | | | | - | | | | 60,002 | |
| Reid Dabney (5) | | | - | | | | - | | | | 58,184 | | | | - | | | | - | | | | - | | | | 58,184 | |
| Hugh Dunkerley (6) | | | - | | | | - | | | | 49,093 | | | | - | | | | - | | | | - | | | | 49,093 | |
| Jeff Baxter (7) | | | - | | | | - | | | | 194,552 | | | | - | | | | - | | | | - | | | | 194,552 | |
| Robert Fried (8) | | | - | | | | - | | | | 134,384 | | | | - | | | | - | | | | - | | | | 134,384 | |
| Mark S. Germain (9) | | | - | | | | 153,750 | | | | - | | | | - | | | | - | | | | - | | | | 153,750 | |
| Glenn L. Halpryn (10) | | | - | | | | - | | | | 54,547 | | | | - | | | | - | | | | - | | | | 54,547 | |
| Barry Honig (11) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Michael Brauser (12) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
(1) | The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of 125,000 shares of fully vested Company’s common stock awarded to Mark Germain on April 16, 2015. The fair value of the stock award was based on the trading price of the Company’s common stock on the date of award. |
| | | | | | | |
| Robert Fried | 2018 | $379,121 | $468,330 | $1,255,003(4) | $3,057,990(5) | - | $5,160,444 |
| | 2017 | $230,769 | $163,945 | $2,539,999(6) | $876,014(7) | - | $3,810,727 |
| Mark Friedman | 2018 | $281,967(8) | $87,974 | - | $1,768,274(9) | $6,231 | $2,144,446 |
| | 2017 | - | - | - | - | - | - |
| Lisa Bratkovich | 2018 | $204,645(10) | $41,023 | - | $432,989(11) | - | $678,657 |
| 2017 | - | - | - | - | - | - |
| | | | | | | |
(1)
(2) | The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal year ended January 2, 2016. See Note 9 of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options. Except as stated below with respect to options awarded to Mr. Fried, the options have an exercise price of $1.22 and, except as stated below with respect to options held by Mr. Halpryn, vest 1/12th every month for 12 months commencing in August 2015. |
The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of restricted stock awards.
(3) | On July 6, 2015, Stephen Allen was awarded the option to purchase 102,500 shares of the Company’s common stock. |
(4) | On July 6, 2015, Stephen Block was awarded the option to purchase 82,500 shares of the Company’s common stock. |
(5) | On July 6, 2015, Reid Dabney was awarded the option to purchase 80,000 shares of the Company’s common stock. |
(6) | On July 6, 2015, Hugh Dunkerley was awarded the option to purchase 67,500 shares of the Company’s common stock. |
(2)
The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal years ended December 31, 2018 and December 30, 2017. See Note 12 of the ChromaDex Corporation Consolidated Financial Report included in the Form 10-K for the year ended December 31, 2018, filed with the SEC on March 7, 2019, for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
-24-
(3)
The amount in this column titled “All Other Compensation” above reflect matching 401(k) contributions.
(4)
166,667 shares of Common Stock were awarded on each of June 22, 2018 and November 7, 2018 pursuant to Mr. Fried’semployment agreement, which provided the stock grant upon the achievement of certain performance goals.
(5)
On January 21, 2018, Robert Fried was granted options to purchase 300,000 shares of ChromaDex common stock at an exercise price of $5.85. These options expire on January 21, 2028 and 10/36thof the options vested on January 21, 2018 and thereafter 1/36thvest on 12thof each month for the next 26 months. Also, on June 22, 2018, Mr. Fried was granted options to purchase 744,097 shares at an exercise price of $3.83. These options expire on June 22, 2028 and 1/3rdof the options vest on June 22, 2019 and the remaining options vest in a series of 24 equal monthly installments thereafter.
(6)
On March 12, 2018, Robert Fried was awarded 166,667 shares of restricted Common Stock, which vested on December 20, 2018 in connection with an amendment to his employment agreement. In addition, Mr. Fried received 333,333 shares of restricted stock on December 20, 2018, which were fully vested.
(7)
On March 12, 2018, Robert Fried was granted options to purchase 500,000 shares of ChromaDex common stock at an exercise price of $2.715. These options expire on March 12, 2027 and 1/36thof the options vest monthly from the grant date.
(8)
Mark Friedman began serving as General Counsel and Corporate Secretary on January 22, 2018.
(9)
On January 22, 2018, Mark Friedman was granted options to purchase 500,000 shares of ChromaDex common stock at an exercise price of $5.65. These options expire on January 22, 2028 and 1/3rdof the options vest on January 22, 2019 and the remaining shares vest in a series of 24 equal monthly installments thereafter.
(10)
Lisa Bratkovich began serving as Chief Marketing Officer on June 4, 2018.
(11)
On June 4, 2018, Lisa Bratkovich was granted options to purchase 200,000 shares of ChromaDex common stock at an exercise price of $3.45. These options expire on June 4, 2028 and 1/3rdof the options vest on June 4, 2019 and the remaining shares vest in a series of 24 equal monthly installments thereafter.
(7) | On July 6, 2015, Jeff Baxter was awarded the option to purchase 267,500 shares of the Company’s common stock. |
Employment Agreements
The material terms of employment agreements with the named executive officers previously entered into by the Company are described below.
(8) | On July 30, 2015, Robert Fried was awarded the option to purchase 200,000 shares of the Company’s common stock with an exercise price of $1.10 per share. |
Employment Agreement with Robert Fried
(9) | On April 16, 2015, Mark Germain resigned from the Board of Directors and was awarded 125,000 shares of common stock. Mr. Germain’s unvested restricted stock and options became fully vested upon his resignation fromOn June 22, 2018, the Company and Robert Fried, entered into an Amended and Restated Executive Employment Agreement (the “Fried Agreement”). The Fried Agreement amends the Executive Employment Agreement by and between the Company and Mr. Fried, dated March 12, 2017, as amended on December 20, 2017. Pursuant to the Fried Agreement, Mr. Fried is entitled to: (i) an annual base salary of $450,000; (ii) starting in fiscal year 2019, an increased annual base salary of $500,000; (iii) an annual cash bonus for fiscal year 2018 based on direct-to-customer net sales for 2018 and the Company’s gross profit for 2018; (iv) starting in fiscal year 2019, an annual cash bonus based on the achievement of individual and corporate performance targets and metrics to be determined by the Board of Directors of the Company or the Compensation Committee thereof after reasonable consultation with Mr. Fried (the “Performance Bonus”), with such Performance Bonus set at (a) a target of 60% of base salary (based on a performance achievement of 100%), (b) a threshold Performance Bonus of 30% of base salary (based on a performance achievement of 75%) and (c) a maximum Performance Bonus of 90% (based on a performance achievement of 150%); (v) an option to purchase up to 744,097 shares of Company common stock under the Amended 2017 Plan (the “Option”); (vi) up to 333,333 shares of fully-vested restricted Company common stock that will be granted upon the achievement of certain performance goals and (vii) starting in fiscal year 2019, annual equity grants in amounts commensurate with Mr. Fried’s position with the Company, in the discretion of the Company’s Board of Directors. |
(10) | On July 6, 2015, Glenn Halpryn was awarded the option to purchase 75,000 shares of the Company’s common stock. On July 9, 2015, Mr. Halpryn resigned from the Board of Directors and his unvested restricted stock and options became fully vested upon his resignation from the Board of Directors. |
Any unvested shares subject to the Option will vest in full upon termination by the Company of Mr. Fried’s employment without cause (and other than as a result of Mr. Fried’s death or disability) or Mr. Fried’s resignation for good reason. If Mr. Fried’s employment is terminated by the Company without cause (and other than as a result of Mr. Fried’s death or disability) or Mr. Fried resigns for good reason, then subject to executing a release, Mr. Fried will receive (i) continuation of his base salary for 18 months, (ii) COBRA premiums for 12 months, (iii) accelerated vesting of any unvested time-based vesting equity awards that would have otherwise become vested had Mr. Fried performed continuous service through the one year anniversary of such termination date (provided that vesting for the Option shall accelerate as described above), (iv) an extended exercise period for his options and stock appreciation rights and (v) a prorated Performance Bonus. In the case of Mr. Fried’s death or disability, Mr. Fried will be eligible to receive a prorated Performance Bonus.
(11) | Effective February 25, 2015, all of Mr. Honig’s unvested restricted stock and options became fully vested upon his resignation from the Board of Directors. |
Employment Agreement with Mark Friedman
(12) | Effective February 25, 2015, all of Mr. Brauser’s unvested restricted stock and options became fully vested upon his resignation from the Board of Directors. |
On January 22, 2018, the Company entered into an Employee Agreement (the "Friedman Agreement") with Mark Friedman, who was appointed by the Board to serve as General Counsel and Corporate Secretary. Mr. Friedman is entitled to receive certain severance payments per the terms of the Friedman Agreement. The key terms of the Friedman Agreement, including the severance terms, are as follows:Mr. Friedman is entitled to: (i) an annual base salary of $300,000 and (ii) a discretionary annual bonus based on the achievement of certain performance goals to be determined by the Board. Pursuant to the Friedman Agreement, Mr. Friedman also received an option to purchase up to 500,000 shares of ChromaDex common stock under the ChromaDex 2017 Equity Incentive Plan, subject to monthly vesting over a three-year period, with an exercise price equal to $5.65 per share. Any unvested options will vest in full upon a change of control of the Company, subject to Mr. Friedman’s continuous service through such change of control or upon termination by the Company of Mr. Friedman’s employment without cause or Mr. Friedman’s resignation for good reason within 90 days before the change of control.
If Mr. Friedman’s employment is terminated by the Company without cause or Mr. Friedman resigns for good reason, then, subject to executing a release, Mr. Friedman will receive (i) continuation of his base salary for 12 months, (ii) COBRA premiums for 12 months, (iii) a prorated annual cash bonus, based on the good faith determination of the Board of the actual results and period of employment during the year of such termination, (iv) accelerated vesting of time-based equity that would have otherwise become vested by the one year anniversary of such termination date and (v) an extended exercise period for his options.
Employment Agreement with Lisa Bratkovich
On June 4, 2018, the Company entered into an Employee Agreement (the "Bratkovich Agreement") with Lisa Bratkovich, who was hired by the Company to serve as Chief Marketing Officer. Ms. Bratkovich is entitled to receive certain severance payments per the terms of the Bratkovich Agreement. The key terms of the Bratkovich Agreement, including the severance terms, are as follows:
Ms. Bratkovich is entitled to: (i) an annual base salary of $350,000, (ii) an annual bonus in 2018 of up to 70% of salary based on sales of TRU Niagen® and (iii) beginning 2019, a discretionary annual bonus calculated and paid commensurate with other executive officers of the Company. Pursuant to the Bratkovich Agreement, Ms. Bratkovich also received an option to purchase up to 200,000 shares of ChromaDex common stock under the ChromaDex 2017 Equity Incentive Plan, subject to monthly vesting over a three-year period, with an exercise price equal to $3.45 per share. Any unvested options will vest in full upon a change of control of the Company, subject to Ms. Bratkovich’s continuous service through such change of control or upon termination by the Company of Ms. Bratkovich’s employment without cause or Ms. Bratkovich’s resignation for good reason within 90 days before the change of control.
If Ms. Bratkovich’s employment is terminated by the Company without cause or Ms. Bratkovich resigns for good reason, then, subject to executing a release, Ms. Bratkovich will receive (i) continuation of her base salary for 12 months, (ii) COBRA premiums for 12 months, (iii) a prorated annual cash bonus, based on the good faith determination of the Board of the actual results and period of employment during the year of such termination, (iv) accelerated vesting of time-based equity that would have otherwise become vested by the one year anniversary of such termination date and (v) an extended exercise period for her options.
2018 Director Compensation
Grants
Amended and Restated Director Compensation Policy
Under our Non-Employee Director Compensation Policy, each of Plan-Based Awards
our current non-employee directors is eligible to receive an annual retainer of $40,000 for serving on the Board and, if applicable, an additional annual retainer of $30,000 for serving as the Lead Independent Director. The chairpersons of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee receive an additional $20,000, $15,000, and $10,000, respectively, per year for service as chairperson for such committee. Members of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee each receive an additional $10,000, $7,500 and $5,000, respectively, per year for service on such committee.
Any non-employee director who is first elected to the Board will be granted an option to purchase 40,000 shares of our common stock on the date of his or her initial election to the Board. In addition, on the date of each annual meeting, each person who continues to serve as a non-employee member of the Board following such annual meeting will be granted a stock option to purchase 20,000 shares of our common stock. All option grants will have an exercise price per share equal to the fair market value of our common stock on the date of grant. Each initial grant for a non-employee director will vest over a three year period, and each annual grant for a non-employee director will vest over a one year period, in each case subject to the director’s continuing service on our Board.
The following table summarizesprovides information concerning compensation of our non-employee directors who were directors during the fiscal year ended December 31, 2018. The compensation reported is for services as directors for the fiscal year ended December 31, 2018.
Director Compensation Table
| Fees Earned or Paid in Cash ($) | | | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | |
| | | | | | | | |
| Stephen Allen | 32,242 | - | - | - | - | - | 32,242 |
| Stephen Block (2) | 60,250 | - | 46,011 | - | - | - | 106,261 |
| Jeff Baxter (3) | 50,250 | - | 46,011 | - | - | - | 96,261 |
| Kurt Gustafson (4) | 78,500 | - | 46,011 | - | - | - | 124,511 |
| Steven Rubin (5) | 44,208 | - | 46,011 | - | - | - | 90,219 |
| Wendy Yu (6) | 39,255 | - | 46,011 | - | - | - | 85,266 |
| Tony Lau (7) | 41,258 | - | 46,011 | - | - | - | 87,269 |
(1)
The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards granted to our named executive officers duringfor the fiscal year ended December 31, 2018. See Note 12 of the ChromaDex Corporation Consolidated Financial Report included in the Form 10-K for the year ended January 2, 2016:December 31, 2018, filed with the SEC on March 7, 2019, for a description of certain assumptions in the calculation of the fair value of the Company’s stock options. The options have an exercise price of $3.83 and vest 100% on June 22, 2019.
| Name | | Grant Date | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise or Base Price of Option Awards ($/Share)(1) | | | Grant Date Fair Value of Stock and Option Awards($)(2) | |
| Frank L. Jaksch Jr. | 7/6/2015 | | | 150,000 | | | $ | 1.22 | | | $ | 114,857 | |
| Thomas C. Varvaro | 7/6/2015 | | | 125,000 | | | $ | 1.22 | | | $ | 96,229 | |
| Troy A. Rhonemus | 7/6/2015 | | | 100,000 | | | $ | 1.22 | | | $ | 76,091 | |
(1) | The exercise price of the stock options awarded was determined in accordance with our Second Amended and Restated 2007 Equity Incentive Plan, which provides that the exercise price for an option granted be the average of the highest and lowest trading prices of our common stock on the date of grant.
|
(2)
On June 22, 2018, Mr. Block was awarded the option to purchase 20,000 shares of the Company’s common stock.
(2) | Based upon the aggregate grant date fair value of stock option awards. See Note 9 of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
|
Option Exercises and Stock Vested(3)
On June 22, 2018, Mr. Baxter was awarded the option to purchase 20,000 shares of the Company’s common stock.
The following table summarizes, with respect(4)
On June 22, 2018, Mr. Gustafson was awarded the option to our named executive officers, all options that were exercised and restricted stock vested duringpurchase 20,000 shares of the year ended January 2, 2016. Our named executive officers did not exercise any options and restricted stockCompany’s common stock.
(5)
On June 22, 2018, Mr. Rubin was awarded the option to executive officers were not vested:purchase 20,000 shares of the Company’s common stock.
| Option Awards | | | Restricted Stock | |
Name | | Number of Shares Acquired on Exercise(#) | | Value Realized(6) On June 22, 2018, Ms. Yu was awarded the option to purchase 20,000 shares of the Company’s common stock. (7) On June 22, 2018, Mr. Lau was awarded the option to purchase 20,000 shares of the Company’s common stock. on Exercise ($)
| | | Number of Shares Vested (#) | | | Value Realized
on Vesting ($)
| |
Frank L. Jaksch Jr. | - | | $ | - | | | | - | | | $ | - | |
Thomas C. Varvaro | - | | $ | - | | | | - | | | $ | - | |
Troy A. Rhonemus | - | | $ | - | | | | - | | | $ | - | |
Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information regarding stock options and restricted stock granted to our named executive officers outstanding as of January 2, 2016.December 31, 2018.
Outstanding Stock Options at 20152018 Fiscal Year-End
| | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | |
| Frank L. Jaksch Jr. | | | 300,000 | | | | — | | | | — | | | | 1.50 | | | | 12/1/2016 | |
| | | | 700,000 | | | | — | | | | — | | | | 1.50 | | | | 4/21/2018 | |
| | | | 150,000 | | | | — | | | | — | | | | 1.50 | | | | 4/21/2018 | |
| | | | 100,000 | | | | — | | | | — | | | | 0.50 | | | | 5/13/2019 | |
| | | | 100,000 | | | | — | | | | — | | | | 1.70 | | | | 5/20/2020 | |
| | | | 125,000 | | | | — | | | | — | | | | 1.54 | | | | 5/10/2021 | |
| | | | 208,333 | | | | 41,667 | (1) | | | — | | | | 0.64 | | | | 8/28/2022 | |
| | | | 1,901,418 | | | | — | | | | — | | | | 0.945 | | | | 9/15/2022 | |
| | | | 56,250 | | | | 93,750 | (2) | | | — | | | | 1.25 | | | | 6/18/2024 | |
| | | | — | | | | 150,000 | (3) | | | — | | | | 1.22 | | | | 7/6/2025 | |
| Thomas C. Varvaro | | | 250,000 | | | | — | | | | — | | | | 1.50 | | | | 12/1/2016 | |
| | | | 100,000 | | | | — | | | | — | | | | 1.50 | | | | 4/21/2018 | |
| | | | 75,000 | | | | — | | | | — | | | | 0.50 | | | | 5/13/2019 | |
| | | | 336,700 | | | | — | | | | — | | | | 1.545 | | | | 5/20/2020 | |
| | | | 75,000 | | | | — | | | | — | | | | 1.545 | | | | 5/20/2020 | |
| | | | 4,288 | | | | — | | | | — | | | | 1.54 | | | | 5/10/2021 | |
| | | | 166,667 | | | | 33,333 | (4) | | | — | | | | 0.64 | | | | 8/28/2022 | |
| | | | 863,511 | | | | — | | | | — | | | | 0.945 | | | | 9/15/2022 | |
| | | | 46,875 | | | | 78,125 | (5) | | | — | | | | 1.25 | | | | 6/18/2024 | |
| | | | — | | | | 125,000 | (6) | | | — | | | | 1.22 | | | | 7/6/2025 | |
| Troy A. Rhonemus | | | 291,667 | | | | 108,333 | (7) | | | — | | | | 0.63 | | | | 1/25/2023 | |
| | | | 152,778 | | | | 97,222 | (8) | | | — | | | | 1.75 | | | | 2/21/2024 | |
| | | | 28,125 | | | | 46,875 | (9) | | | — | | | | 1.25 | | | | 6/18/2024 | |
| | | | — | | | | 100,000 | (10) | | | — | | | | 1.22 | | | | 7/6/2025 | |
| Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date |
| Robert Fried | 66,667 | — | | — | 3.30 | 7/30/2025 |
| | 20,000 | — | | — | 2.605 | 11/16/2026 |
| | 291,667 | 208,333 | (1) | — | 2.715 | 3/12/2027 |
| | 175,000 | 125,000 | (2) | — | 5.85 | 1/21/2028 |
| | — | 744,097 | (3) | — | 3.83 | 6/22/2028 |
| Mark Friedman | — | 500,000 | (4) | — | 5.65 | 1/22/2028 |
| Lisa Bratkovich | — | 200,000 | (5) | — | 3.45 | 6/4/2028 |
| (1) | 5,20813,889 of Mr. Jaksch’sFried’s options vest on 28th 12thof every month through August 28, 2016.March 12, 2020. |
| (2) | 3,1258,333 of Mr. Jaksch’sFried’s options vest on 18th 12thof every month through June 18, 2018.March 12, 2020. |
| (3) | 37,500 1/3rdof Mr. Jaksch’sFried’s options vest on July 6, 2016June 22, 2019 and 3,125the remaining options vest in a series of his24 equal monthly installments thereafter. |
| (4) | 1/3rdof Mr. Friedman’s options vested on January 22, 2019 and the remaining options vest in a series of 24 equal monthly installments thereafter. |
| (5) | 1/3rdof Ms. Bratkovich’s options vest on 6th of every month thereafter through July 6, 2019. |
(4) | 4,167 of Mr. Varvaro’sJune 4, 2019 and the remaining options vest on 28thin a series of every month through August 28, 2016. |
(5) | 2,604 of Mr. Varvaro’s options vest on 18th of every month through June 18, 2018. |
(6) | 31,250 of Mr. Varvaro’s options vest on July 6, 2016 and 2,604 of his options vest on 6th of every month thereafter through July 6, 2019. |
(7) | 8,333 of Mr. Rhonemus’ options vest on 25th of every month through January 25, 2017. |
(8) | 6,944 of Mr. Rhonemus’ options vest on 21st of every month through February 21, 2017. |
(9) | 1,563 of Mr. Rhonemus’ options vest on 18th of every month through June 18, 2018. |
(10) | 25,000 of Mr. Rhonemus’ options vest on July 6, 2016 and 2,083 of his options vest on 6th of every month thereafter through July 6, 2019. |
(11) | 3,125 of Mr. Jaksch’s options vest on 18th of every month through June 18, 2018.24 equal monthly installments thereafter. |
Outstanding Restricted Stock at 20152018 Fiscal Year-End
| Name | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares of Units of Stock That Have Not Vested ($) | | | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) (1) | | | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (2) | |
| Frank L. Jaksch Jr. | | | — | | | | — | | | | 500,000 | | | $ | 610,000 | |
| Thomas C. Varvaro | | | — | | | | — | | | | 500,000 | | | $ | 610,000 | |
| Troy A. Rhonemus | | | — | | | | — | | | | — | | | $ | — | |
(1)Name | On June 6, 2012, Frank L. Jaksch Jr. and Thomas C. Varvaro were each awarded 250,000Number of Shares or Units of Stock That Have Not Vested (#)
| Market Value of Shares of Units of Stock That Have Not Vested ($)
| Equity incentive plan awards: Number of unearned shares, of restricted stock. In addition, on January 2, 2014, Mr. Jaksch and Mr. Varvaro were each awarded 250,000 shares each of restricted stock. These shares were to originally vest upon the earlier to occur of the following: (i) the market price of the Company’s stock exceeds a certain price,units or (ii) one of other certain triggering events, including the termination of the officers and members of the board of directors without cause for any reason. On March 7, 2016, the Company and each of the executives amended the restricted stock awards to providerights that the awards shallhave not vest upon the market price of the Company’s stock exceeding a certain price or listing of the Company’s stock on a national securities exchange. |
vested (#)
(2) | The amounts in the column titled “EquityEquity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested” above reflect the aggregate market value based on the closing market price of the Company’s stock on January 2, 2016. vested ($)
|
Robert Fried | — | — | — | $— |
Mark Friedman | — | — | — | $— |
Lisa Bratkovich | — | — | — | $— |
Equity Compensation Plan Information
The following table provides information about our equity compensation plans as of January 2, 2016:December 31, 2018:
| | A | B | C |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) |
| | | | |
| Equity compensation plans approved by security holders | 8,589,379 | $3.68 | 4,946,497 |
| | | | |
| Equity compensation plans not approved by security holders | 500,000 | $5.65 | - |
| | | | |
| Total | 9,089,379 | $3.79 | 4,946,497 |
| | | | A | | | | B | | | | C | |
| | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted- average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A)) | |
| | | | | | | | | | | | | |
| Equity compensation plans approved by security holders | | | 15,734,755 | | | $ | 1.15 | | | | 3,321,226 | (1) |
| | | | | | | | | | | | | |
| Equity compensation plans not approved by security holders | | | - | | | | - | | | | - | |
| | | | | | | | | | | | | |
| Total | | | 15,734,755 | | | $ | 1.15 | | | | 3,321,226 | (1) |
(1) | Pursuant to our Second Amended and Restated 2007 Equity Incentive Plan, we are authorized to issue shares under this plan that total no more than 20% of our shares of Common Stock issued and outstanding, as determined on a fully diluted basis. |
REPORT OF AUDIT COMMITTEE
This report of the audit committee is required by the SEC and, in accordance with the SEC's rules, will not be deemed to be part of or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act, or under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed "soliciting material" or "filed" under either the Securities Act or the Exchange Act.
The Audit Committee reviews our financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. Our independent registered public accounting firm is responsible for expressing an opinion on the conformity of the audited financial statements with generally accepted accounting principles.
In this context, the Audit Committee has reviewed and discussed with management our audited consolidated financial statements for the fiscal year ended January 2, 2016 (our 2015 fiscal year) and the notes thereto. It has discussed with Marcum, LLP, our independent registered public accounting firm for the 2015 fiscal year, the matters required to be discussed by Statement of Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee also received the written disclosures and the letter from Marcum, LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding Marcum’s communications by the Audit Committee concerning independence and discussed with Marcum, LLP its independence from us. Based on such review and discussions, the Audit Committee recommended to the Board that our audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended January 2, 2016 and be filed with the SEC.
Submitted by:
The Audit Committee Of
The Board of Directors
Reid Dabney (Chairman)
Stephen Block
Jeff Baxter
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 1616(a) of the Exchange Act of 1934, as amended (the “Exchange Act”) requires our executive officers, directors and persons who own more than 10% of a registered class of our common stockequity securities to file initial reports of ownership and reports of changes in ownership with the SEC and to furnish us with copies of such reports. BasedTo our knowledge, and based solely on our review of the copies of such forms furnished to us and written representations by our officers and directors regarding their compliance with applicable reporting requirements under Section 16(a) of the Exchange Act,that no other reports were required, we believe that all Section 16(a) filing requirements forapplicable to our executive officers, directors and 10% stockholders were met during the year ended January 2, 2016December 31, 2018 except as follows: Jeff Baxter wasMatthew Roberts filed a late in filing Initial StatementForm 3 on December 11, 2018 after being appointed as an executive officer of Beneficial Ownership of Securitiesthe Company on Form 3.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Related Persons
The following is a description of transactions since January 1, 2017 to which the Company has been a party, in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any of the Company’s executive officers, directors or holders of more than 5% of its common stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than compensation, termination and change of control arrangements, which are described under "Executive Compensation."
Asset acquisition
On August 28, 2015,March 12, 2017, the Company entered into an Exclusive Supply Agreement (the “Supply Agreement”) withacquired all of the outstanding equity interests of Healthspan Research LLC (“Healthspan”("Healthspan") from Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the "Sellers"). UnderAt the termstime of the Supply Agreement, Healthspan agreed to purchase NIAGEN® fromacquisition, Robert Fried was a member of the Board, a position he has held since July 2015.
Upon the closing of, and as consideration for, the acquisition, the Company andissued an aggregate of 367,648 shares of the Company’s common stock to the Sellers. The fair value of these shares was approximately $1.0 million based on the closing price of $2.72 per share on March 12, 2017. Also on March 12, 2017, the Company grantedappointed Robert Fried as President and Chief Strategy Officer, effective immediately. Mr. Fried continues to serve as a member of the Board, but resigned as a member of the Nominating and Corporate Governance Committee of the Board.
Healthspan was formed in August 2015 to offer and sell finished bottle product TRU NIAGEN® directly to consumers through internet-based selling platforms. TRU NIAGEN® is currently the Company's leading product. Prior to the acquisition, the Company has supplied certain amount of NIAGEN® to Healthspan worldwide rights for resale of specific dietary supplements containing NIAGEN® in certain markets.
Pursuant to the terms of the Supply Agreement,as a raw material inventory in exchange for a 4% equity interest in Healthspan, the Company agreed to initially supply NIAGEN® to Healthspan free of charge and thereafter at a fixed price and, in exchange for anHealthspan. An additional 5% equity interest in Healthspan, the Company will grant to Healthspanwas received for granting certain exclusive rights to resell NIAGEN® in certain direct response channels.prior to the total acquisition on March 12, 2017.
In cancellation of a loan owed by Healthspan will payto Mr. Fried prior to the acquisition, the Company royaltiesrepaid $32,500 to Mr. Fried on March 13, 2017 and also repaid $100,000 on March 9, 2018. No interest was paid for the cumulative worldwide net sales$100,000 repaid on March 9, 2018.
Sale of its finishedconsumer products containing NIAGEN®. The exclusivity rights will remain for so long as Healthspan meets certain minimum purchase requirements. In the event that, during the initial term,
During July 2017, the Company terminates the exclusivity rights due to failure to meet the minimum purchase requirements or for any reason other than a material breach of the Supply Agreement by Healthspan, then the 5% equity interest shall be automatically redeemed for a purchase price of $1.00 effective upon the date of termination of the exclusivity rights.
In connection with the foregoing, also on August 28, 2015, the Company and Healthspan entered into an interest purchaseexclusivity agreement (the "Watsons Agreement") with A.S. Watson Retail (HK) Limited (“Watsons”), whereby the Company agreed to exclusively sell its TRU NIAGEN® dietary supplement product to Watsons in certain territories in Asia. During the years ended December 30, 2017 and limited liability company agreementDecember 31, 2018, the Company sold approximately $4.1 million and $2.9 million, respectively, of TRU NIAGEN® dietary supplement product pursuant to the Watsons Agreement. As of December 30, 2017 and December 31, 2018, the trade receivable from Watsons were approximately $1.0 million and $0.7 million, respectively.
Li Ka Shing, who beneficially owns more than 10% of the Company's common stock, beneficially owns approximately 30% of an entity that beneficially owns approximately 75% of Watsons. In accordance with the Company's Related-Person Transactions Policy, the Audit Committee ratified the terms of the Watsons Agreement.
During the year ended December 31, 2018, the Company sold approximately $0.4 million of TRU NIAGEN® dietary supplement product to Horizon Ventures, which beneficially owns more than 10% of the Company’s common stock. In accordance with the Company’s Related-Person Transactions Policy, the Audit Committee ratified the sale to Horizon Ventures.
Financings
In April 2017, the Company entered into a Securities Purchase Agreement with certain purchasers named therein, pursuant to which the Company was issued 9%agreed to sell and issue up to $25.0 million of the outstanding equity interests of Healthspan. Robert Fried, a director of the Company, is the manager of Healthspan and owns 91% of the outstanding equity interests of Healthspan. The Supply Agreement, interest purchase agreement and limited liability company agreement were unanimously approved by the independent directors of the Company.
As of January 2, 2016, the Company had not shipped any NIAGEN® to Healthspan and Healthspan did not issue any equity interests to the Company. Accordingly, there is no accounting recognition of this arrangement for the twelve-month period ended on January 2, 2016.
On November 4, 2015, the Company entered into securities purchase agreements with Barry Honig, Michael Brauser and Frost Gamma Investments Trust, each beneficial owners of over 5% of ourits common stock to raise an aggregate of $2,000,000 in a registered direct offering. Pursuant to the purchase agreements, the Company sold a total of 200,000 Units at a purchase price of $10.00$2.60 per Unit, with each Unit consistingshare in three tranches of eightapproximately $3.5 million, $16.4 million and $5.1 million, respectively. The following table sets forth the number of shares of common stock purchased by holders of more than 5% of the Company’s common stock or entities affiliated with them:
| Name | |
| Champion River Ventures Limited | 5,769,230 |
| Pioneer Step Holdings Limited | 3,846,155 |
In November 2017, the Company entered into a Securities Purchase Agreement with certain purchasers named therein, pursuant to which the Company agreed to sell and issue up to $23.0 million of its common stock at a warrant to purchase fourprice of $4.10 per share. The following table sets forth the number of shares of common stock at an exercise pricepurchased by holders of $1.50 and a termmore than 5% of 3 years. The offering was made pursuant to a prospectus supplement dated November 4, 2015 and an accompanying prospectus dated May 8, 2015 pursuant to the Company’s shelf registration statement on Form S-3 that was filed with the Securities and Exchange Commission on May 8, 2015 and became effective on June 5, 2015 (File No. 333-203204). The prospectus supplement registered the shares of common stock issued in the offering and the common stock underlying the warrants.or entities affiliated with them:
| Name | |
| Champion River Ventures Limited | 731,707 |
| Pioneer Step Holdings Limited | 487,805 |
| Winsave Resources Limited | 1,219,512 |
Employment Arrangements
The Company did not havecurrently maintains written employment agreements with its named executive officers, as described in "Executive Compensation."
Equity Granted to Executive Officers and Directors
The Company has granted equity to its named executive officers and directors, as more fully described in "Executive Compensation."
Indemnification Agreements
The Company has entered, and intends to continue to enter, into indemnification agreements with its directors and executive officers, in addition to the indemnification provided for in the Company’s bylaws. These agreements, among other things, require the Company to indemnify directors and executive officers for certain expenses incurred by a director or executive officer in any transactions with related persons duringaction or proceeding arising out of their services as one of the years ended January 2, 2016, January 3, 2015 and December 28, 2013 except as set forth above.Company’s directors or executive officers.
Review, approval or ratification of transactions with related persons.
On an ongoing basis, the Audit Committee reviews all “related party transactions” (those transactions that are required to be disclosed in this Annual Report on Form 10-K by SEC Regulation S-K, Item 404 and under Nasdaq’sNASDAQ rules), if any, for potential conflicts of interest and all such transactions must be approved by the Audit Committee.
PROPOSAL 1:
ELECTION OF DIRECTORS
Directors are to be elected at In November 2016, the Annual Meeting to serve until the next annual meeting of stockholders. Unless otherwise instructed, the persons named in the accompanying proxy intend to vote the shares represented by the Proxy for the election of the seven nominees listed below. Although it is not contemplatedCompany adopted a written Related-Person Transactions Policy that any nominee will decline or be unable to serve as a director, in such event, proxies will be voted by the proxy holder for such other persons as may be designated by the Board of Directors, unless the Board of Directors reduces the number of Directors to be elected. Election of a Board of Directors requires a plurality of the votes cast at the Annual Meeting.
The current Board of Directors consists of Frank Jaksch, Jr., Stephen Block, Reid Dabney, Hugh Dunkerley, Stephen Allen, Jeff Baxter and Robert Fried. The Board of Directors has determined that a majority of its members, being Stephen Allen, Stephen Block, Reid Dabney, Hugh Dunkerley, Jeff Baxter and Robert Fried, are independent directors within the meaning of the applicable NASDAQ rules.
The following table sets forth the director nominees. It also provides certain information aboutCompany’s policies and procedures regarding the nominees asidentification, review, consideration and approval or ratification of “related-persons transactions.” For purposes of the Record Date.
Nominees for Election to Board of Directors
| | | | | | Director | |
| Name | | Age | | | Since | |
| Frank Jaksch, Jr. | | | 47 | | | | 2000 | |
| Stephen A. Block | | | 71 | | | | 2007 | |
| Reid Dabney | | | 64 | | | | 2007 | |
| Hugh Dunkerley | | | 42 | | | | 2005 | |
| Stephen Allen | | | 66 | | | | 2014 | |
| Jeff Baxter | | | 54 | | | | 2015 | |
| Robert Fried | | | 56 | | | | 2015 | |
Frank L. Jaksch Jr., 47,Company’s policy only, a “related-person transaction” is a co-foundertransaction, arrangement or relationship (or any series of the Company and has served as a member of Board since February 2000. Mr. Jaksch served as Chairman of the Board from May 2010 to October 2011 and was its Co-Chairman from February 2000 to May 2010. Mr. Jaksch currently serves as our Chief Executive Officer. Mr. Jaksch oversees research, strategy and operations for the Company with a focus on scientific and novel products for pharmaceutical and nutraceutical markets. From 1993 to 1999, Mr. Jaksch served as International Subsidiaries Manager of Phenomenex, a life science supply company where he managed the international subsidiary and international business development divisions. Mr. Jaksch earned a B.S. in Chemistry and Biology from Valparaiso University. The Nominating and Corporate Governance Committee believes that Mr. Jaksch’s years of experience working in chemistry-related industries, his extensive sales and marketing background, and his knowledge of international business bring an understanding of the industriessimilar transactions, arrangements or relationships) in which the Company operates as well as scientific expertiseand any “related person” are participants involving an amount that exceeds $120,000. Transactions involving compensation for services provided to the Board.
Stephen A. Block, 71, has beenCompany as an employee, director, consultant or similar capacity by a related person are not covered by this policy. A related person is any executive officer, director, or more than 5% stockholder of the Company, since October 2007including any of their immediate family members, and Chair ofany entity owned or controlled by such persons. Under the Compensation Committee andpolicy, where a member oftransaction has been identified as a related-person transaction, management must present information regarding the proposed related-person transaction to the Audit Committee since October 2007. From May 2010(or, where Audit Committee approval would be inappropriate, to October 2011, Mr. Block served as Lead Independent Director to the Board. Mr. Block is also a director and chairanother independent body of the nominatingBoard of Directors) for consideration and corporate governance committee and a member of the audit committee of Senomyx, Inc. (NASDAQ:SNMX). He has served on the board of directors of Senomyx, Inc. since 2005. Until December 2011, he also served as the chairman of the board of directors of Blue Pacific Flavors and Fragrances, Inc., and, until March 2012, as a director of Allylix, Inc. He served on the boards of directors of these privately held companies since 2008, and 2007, respectively. Mr. Block retired as senior vice president, general counsel and secretary of International Flavors and Fragrances Inc., a leading creator, manufacturer and seller of flavors and fragrances (IFF) in December 2003, having been IFF’s chief legal officer since 1993. During his eleven years at IFF he also led the company’s Regulatory Affairs Department. Prior to 1993, Mr. Block served as senior vice president, general counsel, secretary and director of GAF Corporation, a company specializing in specialty chemicals and building materials, and its publicly traded subsidiary International Specialty Products Inc., held various management positions with Celanese Corporation, a company specializing in
synthetic fibers, chemicals and plastics, and practiced law with the New York firm of Stroock & Stroock & Lavan. Mr. Block currently serves as an industry consultant and as a Venture Partner of K5 Venture Partners, LLC, an Orange County early stage venture firm. He is also a Managing Director of K5 Venture Partner, LLC’s affiliated accelerator K5 Launch and a member of the executive committee of the Orange County network of Tech Coast Angels, a leading investing group. Mr. Block received his B.A. cum laude in Russian Studies from Yale University and his law degree from Harvard Law School. The Nominating and Corporate Governance Committee believes that Mr. Block’s experience as the chief legal officer of one of the world’s leading flavor and fragrance companies contributes to the Board’s understanding of the flavor industry, including the Board’s perspective on the strategic interests of potential collaborators, the regulation of the industry, and the viability of various commercial strategies. In addition, Mr. Block’s experience in the area of corporate governance and public company financial reporting is especially valuable to the Board in his capacity as a member of both the Audit Committee and the Compensation Committee.
Reid Dabney, 64, has served as a director of the Company and has chaired the Audit Committee since October 2007. Mr. Dabney is the Company’s audit committee financial expert. Since November 2014 to the present, he has served as the chief financial officer and secretary of Code Rebel Corporation (NASDAQ: CDRB) (a Software As A Service (SaaS) and Systems Integration technology provider). From December 2014 to December 2015, he served as a managing director and chief compliance officer of CVCapital Securities, LLC. From October 2012 to November 2013, he served as a managing director of Merriman Capital, Inc. From May 2008 to July 2012, he served as a managing director of Monarch Bay Associates, LLC. From March 2005 to November 2008, Mr. Dabney served as Cecors, Inc.'s (OTC Markets: CEOS) (a SaaS technology provider) senior vice president and chief financial officer. From July 2003 to the present, Mr. Dabney has been engaged by CFO911 as a managing director and business and financial consultant. From January 2003 to August 2004, Mr. Dabney served as vice president of National Securities, a broker-dealer firm specializing in raising equity for private operating businesses that have agreed to become public companies through reverse merger transactions with publicly traded shell companies. From June 2002 to January 2003, Mr. Dabney was the chief financial officer of House Ear Institute in Los Angeles, California. Mr. Dabney received a B.A. from Claremont McKenna College and an M.B.A. in Finance from the University of Pennsylvania's Wharton School. Mr. Dabney also holds Series 7, 24, 63, 79 and 99 licenses from the Financial Industry Regulatory Authority (FINRA). The Nominating and Corporate Governance Committee believes that Mr. Dabney's experience as chief financial officer of a public company and his extensive experience dealing with financial markets qualify him to chair the Audit Committee and that Mr. Dabney brings financial, merger and acquisition experience, and a background working with public marketplaces to the Board.approval or ratification.
Hugh Dunkerley, 42, has served as a director of the Company since December 2005 and has served on the Compensation Committee since May 2010 and has served on the Nominating and Governance Committee from October 2007 to December 2013. From October 2002 to December 2005, Mr. Dunkerley served as Director of Corporate Development at ChromaDex. Currently Mr. Dunkerley is President of Fondinvest Capital SAS, a 20 year old Paris based Private Equity Fund of Funds business. Mr. Dunkerley has been a Managing Director of Burnham Securities Inc., a New York based investment bank, from September 2013 to December 2015. Prior to Burnham, Mr. Dunkerley was an EVP, Capital Markets of COR Capital LLC, an investment fund based in Santa Monica, CA. Mr. Dunkerley has also been the President and Director of The Valor Group, a Bermudian based and listed company that oversees a portfolio of insurance assets in the EU. Mr. Dunkerley was a Manager of Capital Markets for the FDIC, Division of Resolutions and Receiverships, from February 2009 to March 2011 where he was active in implementing the Dodd-Frank Wall Street Reform Act, along with the oversight of securities and derivatives portfolios for large money center banks. He was president and chief executive officer of Cecors, Inc. (OTCBB:CEOS.OB), a Software As A Service (SaaS) technology provider, from October 2007 to February 2009. He had served as Cecor's chief operating officer and as vice president of corporate finance starting in June 2006. During 2006 Mr. Dunkerley also served as VP of Small-Mid Cap Equities at Hunter Wise Financial Group, LLC, specializing in investment banking advisory services to US and EU companies. Mr. Dunkerley received his undergraduate degree from the University of Westminster, London and earned a MBA from South Bank University, London. Mr. Dunkerley also holds Series 7, 24, 66 and 79 licenses from FINRA. The Nominating and Corporate Governance Committee believe that Mr. Dunkerley's experience as the chief executive officer of a public company and his extensive financial market experience qualify him to sit on the Compensation Committee and that Mr. Dunkerley brings financial and mergers and acquisitions experience, and experience with public marketplaces and regulatory oversight to the Board. His previous experience as an employee of the Company also allows him to provide a unique perspective of and extensive knowledge on the industries in which the Company operates.
Stephen R. Allen, 66, has served as Chairman of the Board since February 2015, and as a director of the Board, Chair of the Nominating and Corporate Governance Committee and member of the Compensation Committee since January 2014. Until 2009, Mr. Allen worked for Nestlé, at which point he retired from a 30 year career where he served in various sales, marketing and management roles, including 7 years serving in Nestlé’s Mergers and Acquisitions department. Until 2012, Mr. Allen served on the Advisory Board of Vitamin Angels, an organization focused on eliminating childhood malnutrition in Africa and the Middle East. Currently, Mr. Allen serves as the non-executive Vice Chairman of 6 Pacific group, a Los Angeles based boutique advisory and investment firm. Mr. Allen also serves as the Managing Partner of California Agricultural Orchards LLC and California Nut Orchards LLC which, along with growing almonds and grapes, manages the assets of high net-worth individuals. Mr. Allen also serves as the President of the Board of the North American Foundation for the University of Leeds where Mr. Allen plays a key role in fundraising efforts. Mr. Allen received his B.Sc. with honors from the University of Leeds and his M.Sc. at the University of London, School of Hygiene & Tropical Medicine. The Nominating and Corporate Governance Committee believes that Mr. Allen’s past experience in the nutritional industry bring financial expertise, industry knowledge, and merger and acquisition experience to the Board.
Jeff Baxter, 54, has served as a director of the Company since April 2015 and has served as a member of the Audit Committee and the Nominating and Corporate Governance Committee since April 2015. Mr. Baxter has served as President and CEO and a Director of VBI Vaccines, Inc. (NASDAQ:VBIV) since 2009. Previously, he was managing partner for the venture capital firm, The Column Group, where he played a pivotal role in the creation of several biotech companies including Immune Design Corp., a vaccine company based on the Lentiviral vector platform and TLR adjuvant technologies. Until July of 2006, Mr. Baxter was SVP, R&D Finance and Operations, of GlaxoSmithKline (GSK). In his 19 years of pharma experience at GSK, he has held line management roles in R&D, commercial, manufacturing, Finance and The Office of the CEO. His most recent position in the global R&D organization included responsibility for finance, pipeline resource planning and allocation, business development deal structuring and SROne (GSK's in-house $125 million venture capital fund). He also chaired GSK's R&D Operating Board. Prior to GSK, he worked at Unilever and British American Tobacco. Mr. Baxter was educated at Thames Valley University and is a Fellow of the Chartered Institute of Management Accountants (FCMA). The Nominating and Corporate Governance Committee believes that Mr. Baxter’s past experience in the pharmaceutical industry bring financial expertise, industry knowledge, and research and development experience to the Board.
Robert Fried, 56, has served as a director of the Company since July 2015 and has served as a member of the Nominating and Corporate Governance Committee since July 2015. Mr. Fried served as Chairman of the Board of Directors of IDI, Inc. (NYSE MKT:IDI) (formerly Tiger Media, Inc.), an information solutions provider focused on the multi-billion dollar data fusion market and formerly a Chinese advertising company prior to its merger with the parent company of Interactive Data, LLC, from 2011 until June 2015. From 2007-2009, he was the president, CEO and a director of Ideation Acquisition Corporation, a special purpose acquisition company. Mr. Fried is the founder and CEO of Feeln, a subscription streaming video service, which was acquired by Hallmark Cards Inc. in 2012. Since then, he manages digital businesses for Hallmark including Feeln, Hallmark e-cards, and Hallmark Print on Demand. Mr. Fried is also an Academy Award winning motion picture producer whose credits include Rudy, Collateral, Boondock Saints, So I Married an Axe Murderer, Godzilla, and numerous others. From December 1994 until June 1996, he was President and CEO of Savoy Pictures, a unit of Savoy Pictures Entertainment, Inc., which was sold in 1996 to Silver King Communications, which is now a part of InterActive Corp. Mr. Fried has also held several executive positions including Executive Vice President in charge of Production for Columbia Pictures, Director of Film Finance and Special Projects for Columbia Pictures, and Director of Business Development at Twentieth Century Fox. Mr. Fried holds an M.S. from Cornell University and an M.B.A. from the Columbia University Graduate School of Business. The Nominating and Corporate Governance Committee believes that Mr. Fried’s past experience as Chairman of the Board of Directors of another public company bring financial expertise and industry knowledge to the Board.
Family Relationships
There are no family relationships between any of our directors, executive officers or directors.
Involvement in Certain Legal Proceedings
During the past ten years, none of our officers, directors, promoters or control persons have been involved in any legal proceedings as described in Item 401(f) of Regulation S-K.
VOTE REQUIRED
Under applicable Delaware law, the election of each nominee requires the affirmative vote by a plurality of the voting power of the shares present and entitled to vote on the election of directors at the Annual Meeting at which a quorum is present.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL 2:
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our BoardThe Audit Committee has appointed Marcum LLP (“Marcum”), to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2016 2019and our Board of Directors has further directed that management submit the selection of its independent registered public accountantsaccountant firm for ratification by the stockholders at the annual meeting.Annual Meeting. Marcum has audited the Company’s financial statements since 2013. Representatives of Marcum are not expected to be present at the annual meeting.Annual Meeting.
Stockholder ratification of the selection of Marcum as the Company’s independent registered public accountants is not required by Delaware law, the Company’s certificate of incorporation, or the Company’s bylaws. However, the Audit Committee is submitting the selection of Marcum to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent registered public accountants at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company and 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 at the annual meeting will be required to ratify the selection of Marcum. Abstentions will be counted toward the tabulation of votes cast on Proposal 2 and will have the same effect as negative votes. Broker non-votes will be counted towards a quorum, but will not be counted for any purpose in determining whether Proposal 2 has been approved.
Audit Fees
The following table sets forth aggregate fees billed to us by Marcum LLP, our independent registered public accounting firm during the fiscal years ended January 2, 2016December 31, 2018 and January 3, 2015.December 30, 2017.
| | | |
| Marcum, LLP | | 2015 | | 2014 | | | |
| | | | | | | | $350,000 | $435,000 |
| | | | | | | | |
| | | | | | | | |
| Audit-Related Fees | | $— |
| Tax Fees | | $— |
| | | | | | | | $— |
| (1) | Audit fees relate toconsist of fees billed for professional services rendered by Marcum in connection with the audit of the Company’s annual financial statements and internal control over financial reporting and quarterly review of financial statements included in the Company’s Quarterly Reports on Form 10-Q. |
(2) | Audit-related fees include costs incurred for reviews10-Q, review of our registration statements and consultations on various accounting mattersrelated services that are normally provided in support of the Company’s financial statements.connection with statutory and regulatory filings or engagements. |
(3) | Tax fees consist of fees for tax compliance matters. |
All fees described above were pre-approved by the Audit Committee. In connection with the audit of the financial statements for the fiscal year ended December 31, 2018, the Company entered into an engagement agreement with Marcum that sets forth the terms by which Marcum will perform audit services for the Company. That agreement is subject to alternative dispute resolution procedures and an exclusion of punitive damages.
Policy for Pre-Approval of Independent Auditor Services
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent auditor.Marcum. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the specific service or category of service and is generally subject to a specific budget. The independent auditor and management are required to periodically communicate to the Audit Committee regarding the extent of services provided by the independent auditor in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF MARCUM LLP AS INDEPENDENT PUBLIC ACCOUNTANT, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
PROPOSAL 3:
ADJOURNMENTSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AtAs of April 22, 2019, there were approximately 55,514,322 shares of our Common Stock outstanding. The following table sets forth certain information regarding the Annual Meeting, we may askownership of our stockholdersCommon Stock as of April 22, 2019 by: each person known to vote onus to beneficially own more than 5% of our Common Stock; each director; each of our executive officers; and all directors and executive officers as a proposalgroup. We calculated beneficial ownership according to adjournRule 13d-3 of the Annual Meeting if necessaryExchange Act as of that date. Shares issuable upon exercise of options or appropriatewarrants that are exercisable or convertible within 60 days after April 22, 2019 are included as beneficially owned by the holder. Beneficial ownership generally includes voting and dispositive power with respect to securities. Unless otherwise indicated below, the persons and entities named in the table have sole discretionvoting and sole dispositive power with respect to all shares beneficially owned. This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated, the address for the following shareholders is c/o ChromaDex Corporation, 10900 Wilshire Blvd., Suite 650, Los Angeles, CA 90024.
| Name of Beneficial Owner (1) | Shares of Common Stock Beneficially Owned (2) | Aggregate Percentage Ownership |
| | | |
| Champion River Ventures (3) | 6,500,937 | 11.71% |
| Pioneer Step Holdings (4) | 4,333,960 | 7.81% |
| Dr. Phillip Frost (5) | 3,251,521 | 5.86% |
| Directors | | |
| Stephen Block (6) | 249,996 | * |
| Jeff Baxter (7) | 129,167 | * |
| Kurt Gustafson (8) | 46,667 | * |
| Steven Rubin (9) | 46,667 | * |
| Wendy Yu (10) | 13,333 | * |
| Tony Lau (11) | 13,333 | * |
| Frank L. Jaksch Jr. (12) | 3,264,573 | 5.78% |
| Robert Fried (13) | 2,130,985 | 3.79% |
| Executive Officers | | |
| Frank L. Jaksch Jr. | (See above) | |
| Robert Fried | (See above) | |
| Kevin Farr (14) | 592,181 | 1.06% |
| Mark Friedman (15) | 225,222 | * |
| Lisa Bratkovich (16) | 66,667 | * |
| Matthew Roberts (17) | 10,000 | * |
| All directors and executive officers as a group | | |
(12 persons) (18) | | |
| | 6,788,790 | 11.60% |
*
Represents less than 1%.
(1)
Addresses for the beneficial owners listed are: Champion River Ventures, 7/F, Cheung Kong Center, 2 Queen's Road Central, Hong Kong; Pioneer Step Holdings, 29th Floor, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong; and Dr. Phillip Frost, 4400 Biscayne Blvd., Suite 1500, Miami, FL 33137.
(2)
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or dispositive power with respect to shares beneficially owned. Unless otherwise specified, reported ownership refers to both voting and dispositive power. Shares of Common Stock issuable upon the conversion of stock options or the exercise of warrants within the next 60 days are deemed to be converted and beneficially owned by the individual or group identified in the Aggregate Percentage Ownership column.
(3)
Based on beneficial ownership reported on Schedule 13D/A filed with SEC on November 21, 2017, (i) Champion River Ventures Limited (“Champion River”) beneficially owned and had sole voting and dispositive power with respect to 6,500,937 shares (the “Champion Shares”), (ii) Prime Tech Global Limited (“Prime Tech”), by virtue of being the sole shareholder of Champion River, may be deemed to beneficially own and have sole voting and dispositive power with respect to the Champion Shares, (iii) Mayspin Management Limited (“Mayspin”), by virtue of being the sole shareholder of Prime Tech, may be deemed to beneficially own and have sole voting and dispositive power with respect to the Champion Shares, and (iv) Li Ka Shing, by virtue of being the sole shareholder of Mayspin, may be deemed to beneficially own and have sole voting and dispositive power with respect to the Champion Shares. Champion River has exercised its right to designate for appointment one director to our Board of Directors including to solicit additional proxies in the event that there are not sufficient votes at the time of the Annual Meeting or any adjournment or postponement of the Annual Meeting to approve any of the other proposals.
If at the Annual Meeting the number of shares of our Voting Capital present or represented by proxy and voting in favor of a proposal is insufficient to approve such proposal, thenhas designated, and our Board of Directors has appointed, Tony Lau to fill such seat. In addition, Mr. Li is one of 14 directors of Li Ka Shing (Overseas) Foundation (“LKSOF”), which is the sole stockholder of Winsave Resources Limited (“Winsave”), which holds 1,219,512 shares of common stock. However, Mr. Li does not report as having Section 13(d) beneficial ownership over any of the shares owned by Winsave. Investment decisions by LKSOF are made by the majority vote of a board of directors currently consisting of 14 persons, of which Li Ka Shing (“Mr. Li”) is the Chairman. Investment decisions by Winsave are made by the majority vote of a board of directors currently consisting of five persons. Mr. Li is not a director or officer of Winsave. The registered office address for Champion River and Mayspin is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands and the registered office address for PrimeTech is P.O. Box 901, East Asia Chambers, Road Town, Tortola, British Virgin Islands, and the correspondence address for each of Champion River, PrimeTech, and Mayspin is c/o 7/F, Cheung Kong Center, 2 Queen’s Road Central, Hong Kong.
(4)
Based on beneficial ownership reported on Schedule 13D/A filed with SEC on November 21, 2017, (i) Pioneer Step Holdings Limited (“Pioneer Step”) beneficially owned and had sole voting and dispositive power with respect to 4,333,960 shares (the “Pioneer Shares”) and (ii) Chau Hoi Shuen Solina Holly, by virtue of being the sole shareholder of Pioneer Step, may hold a vote on each proposal that has garnered sufficient votes, if any,be deemed to beneficially own and then move to adjourn the Annual Meeting ashave sole voting and dispositive power with respect to the remaining proposals in orderPioneer Shares. Pioneer Step has exercised its right to solicit additional proxies in favor of those remaining proposals.
Alternatively, even if there are sufficient shares of our Voting Capital present or represented by proxy voting in favor of all of the proposals,designate for appointment one director to our Board of Directors may hold a voteand has designated, and our Board of Directors has appointed, Wendy Yu to fill such seat. The registered office address for Pioneer Step is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands and its correspondence address is c/o 29th Floor, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong. The business address of Solina Chau is c/o 29th Floor, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong.
(5)
Based on beneficial ownership reported on form Schedule 13D/A filed with SEC on February 14, 2019. Includes 1,321,979 shares of common stock held by Frost Gamma Investments Trust of which Dr. Phillip Frost is the adjournment proposal if,trustee. Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. Includes 1,929,542 shares held by Phillip and Patricia Frost Philanthropic Foundation, Inc. of which Dr. Phillip Frost is President.
(6)
Includes 16,667 shares of common stock directly owned by Mr. Block. Includes 233,329 stock options exercisable within 60days of April 22, 2019.
(7)
Includes 129,167 stock options exercisable within 60 days of April 22, 2019.
(8)
Includes 46,667 stock options exercisable within 60 days of April 22, 2019.
(9)
Includes 46,667 stock options exercisable within 60 days of April 22, 2019.
(10)
Includes 13,333 stock options exercisable within 60 days of April 22, 2019.
(11)
Includes 13,333 stock options exercisable within 60 days of April 22, 2019.
(12)
Includes 2,075,052 shares owned by Black Sheep, FLP beneficially owned by Mr. Jaksch because he has shared voting power and shared dispositive power for such shares. Includes 220,501 shares directly owned by Mr. Jaksch. Includes 969,020 stock options exercisable within 60 days of April 22, 2019.
(13)
Includes 1,431,574 shares of common stock directly owned by Mr. Fried. Includes 6,744 shares held by Jeremy Fried and 6,000 shares held by Benjamin Fried, who are both sons of Robert Fried. Includes 686,667 stock options exercisable within 60 days of April 22, 2019.
(14)
Includes 36,625 shares of common stock directly owned by Mr. Farr. Includes 555,556 stock options exercisable within 60 days of April 22, 2019.
(15)
Includes 3,000 shares of common stock directly owned by Mr. Friedman. Includes 222,222 stock options exercisable within 60 days of April 22, 2019.
(16)
Includes 66,667 stock options exercisable within 60 days of April 22, 2019.
(17)
Includes 10,000 stock options exercisable within 60 days of April 22, 2019.
(18)
Includes the shares and stock options included above in its sole discretion, it determinesfootnotes (6) through (17).
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that it is necessarypermit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements Notices of Internet Availability of Proxy Materials or appropriate for any reason to adjourn theother Annual Meeting materials with respect to two or more shareholders sharing the same address by delivering a later datesingle Notice of Internet Availability of Proxy Materials or other Annual Meeting materials addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for shareholders and time. In that event, the Company will ask its stockholders to vote only upon the adjournment proposal and not any other proposal.cost savings for companies.
Any adjournment mayThis year, a number of brokers with account holders who are Company stockholders will be made without“householding” the Company’s proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice (if the adjournment is not for more than thirty days and a new record date is not fixed for the adjourned meeting), other than by an announcement made at the Annual Meeting of the time, date and place of the adjourned meeting.
Any adjournment of the Annual Meetingfrom your broker that they will allow our stockholders who have already sent in their proxiesbe “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke themyour consent. If, at any time, prioryou no longer wish to their useparticipate in “householding” and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker or the Company. Direct your written request to ChromaDex Corporation, ATTN: Secretary, 10900 Wilshire Blvd. Suite 650, Los Angeles, CA 90024 or contact the Secretary at the Annual Meeting as adjourned.
If we adjourn the Annual Meeting to a later date, we will transact the same business and, unless we must fix a new record date, only the stockholders310-388-6706. Stockholders who were eligible to vote at the original meeting will be permitted to vote at the adjourned meeting.
VOTE REQUIRED
The affirmative vote of a majoritycurrently receive multiple copies of the Voting Capital presentNotices of Internet Availability of Proxy Materials at the Annual Meeting will be required for the approvaltheir addresses and would like to request “householding” of this Proposal 3.their communications should contact their brokers.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ADJOURNMENT OF THE ANNUAL MEETING IF NECESSARY OR APPROPRIATE IN THE SOLE DISCRETION OF THE BOARD OF DIRECTORS, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
OTHER BUSINESS
As of the date of this Proxy Statement, the management of the Company has no knowledge of any business that may be presented for consideration at the Annual Meeting, other than that described above. As to other business, if any, that may properly come before the Annual Meeting, or any adjournment thereof, it is intended that the Proxy hereby solicited will be voted in respect of such business in accordance with the judgment of the Proxy holders.
| BY ORDER OF THE BOARD OF DIRECTORS /s/ Frank Jaksch Executive Chairman of the Board April 23, 2019 |
CHROMADEX CORPORATION
REVOCABLE PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of ChromaDex Corporation (the “Company”) hereby revokes all previously granted proxies and appoints each of Stephen Allen and Thomas C. Varvaro as their attorneys, agents and proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote as the undersigned has designated, all the shares of Common Stock of the undersigned at the annual meeting of stockholders of the Company (the “Annual Meeting”) to be held at the offices of ChromaDex Corporation, 10005 Muirlands Boulevard, Suite G, Irvine, CA 92618, at 9:00 a.m., local time on June 2, 2016, and at any and all postponements or adjournments thereof.
¨ FOR ALL
| | ¨ FOR ALL EXCEPT* [ ]
| | ¨ WITHHOLD AUTHORITY FOR ALL
|
| 01 | Frank L. Jaksch, Jr. | 02 | Stephen Block | 03 | Reid Dabney | 04 | Hugh Dunkerley |
| 05 | Stephen Allen | 06 | Jeff Baxter | 07 | Robert Fried | | |
NOTE: To withhold authority to vote for any individual, mark the FOR ALL EXCEPT box and enter the number next to the name(s) of the exceptions in the space provided. Unless authority to vote for all the foregoing individuals is withheld, this proxy will be deemed to confer authority to vote for every individual whose number is not so listed.
| 2. | Ratification of Marcum LLP As Independent Registered Public Accounting Firm For the Year Ending December 31, 2016
|
¨ FOR
| | ¨ AGAINST
| | ¨ ABSTAIN
|
| 3. | Approval of the Adjournment of the Annual Meeting If Necessary or Appropriate, Including to Solicit Additional Proxies in the Event that there are not Sufficient Votes at the Time of the Annual Meeting or Adjournment or Postponement Thereof to Approve Any of the Foregoing Proposals. |
| 4. | In accordance with the discretion of the proxy as to all other business as may come before the meeting. If any other matter is presented, your proxies will vote in accordance with the recommendation of the Board of Directors, or, if no recommendation is given, in their own discretion. The Board of Directors at present knows of no other business to be presented at the Annual Meeting. |
This Proxy revokes any proxy to vote such shares at the Annual Meeting heretofore given by the undersigned. Please sign and date below.
The undersigned hereby ratifies and confirms all that said attorneys and proxies, or any of them, or their substitutes, shall lawfully do or cause to be done because of this proxy, and hereby revokes any and all proxies the undersigned has given before to vote at the meeting. The undersigned acknowledges receipt of the Notice of Annual Meeting and the Proxy Statement which accompanies the notice.
| | | | |
DATED: __________, 2016 | | | | (Name) |
| | | | |
| | | | (Signature) |
| | | | |
| | | | (Signature, if held jointly) |
Sign exactly as name(s) appear(s) on stock certificate(s). If stock is held jointly, each holder must sign. If signing is by attorney, executor, administrator, trustee or guardian, give full title as such. A corporation or partnership must sign by an authorized officer or general partner, respectively.
PLEASE SIGN, DATE AND RETURN THIS PROXY IN THE ENVELOPE PROVIDED TO EQUITY STOCK TRANSFER C/O MOHIT BHANSALI AT 237 W 37TH ST. SUITE 601, NEW YORK, NY 10018.
You may also submit your proxy facsimile to (646) 201-9006 or electronically on the Internet by going to http://www.equitystock.com.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 2, 2016. The proxy statement and annual report to security holders are available at http://investors.chromadex.com
-38-
