The Annual Meeting of Stockholders of Corcept Therapeutics Incorporated, or the Company, will be held on Wednesday, May 24, 201727, 2020 at 8:007:30 a.m. local timetime. In light of the coronavirus/COVID-19 outbreak and governmental decrees that in-person gatherings be postponed or cancelled, and in the best interests of public health and the health and safety of our Board of Directors, employees and stockholders, we are holding a virtual-only meeting. Stockholders can attend the meeting via the Internet at www.cstproxy.com/corcept/2020 by using the Company’s headquarters located at 149 Commonwealth Drive, Menlo Park, CA 9402512-digit control number which appears on your proxy card (printed in the box and marked by the arrow) and the instructions that accompany your proxy materials.
The holders of a majority of the outstanding shares of common stock entitled to vote at the meeting, whether present in person or by proxy, or by remote communication, if
applicable, shall constitute a quorum for the 2020 Annual Meeting. If a quorum is not present at the meeting, the chairman of the meeting may adjourn the meeting to another place, date or time. If a quorum exists at the
2020 Annual
Meeting:Meeting, the stockholders will be entitled to vote on the following proposals:
•election of directors (Proposal No. 1), the ;
•ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31,
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| | 2017 (Proposal No. 2) and the advisory vote to approve the compensation of our named executive officers (Proposal No. 3) will be approved if such proposals receive the affirmative vote of the majority of the votes cast affirmatively or negatively; and
|
the option of one year, two years or three years that receives a majority of the votes cast by stockholders will be the frequency of future advisory votes by the stockholders to approve the compensation of our named executive officers 2020 (Proposal No. 4)2); however, in the event that no option receives a majority of the votes case, we will consider the option that receives the most votes to be the option selected by the stockholders.
andThe holders of a majority of all outstanding shares of our common stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for the Annual Meeting.
Abstentions and broker non-votes will have no impact on the election of directors (Proposal No. 1), the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017 (Proposal No. 2),
•the advisory vote to approve the compensation of our named executive officers (Proposal No. 3).
Directors will be elected by a plurality of the votes cast, which means that the seven director nominees who receive the highest number of shares voted “FOR” their election will be elected.
Adoption of all other proposals requires the affirmative vote of a majority of the votes case affirmatively or negatively, meaning that the advisory vote onnumber of shares voted “FOR” a proposal must exceed the frequencynumber of future advisoryshares voted “against” such proposal.
Withhold votes,
by the stockholders to approve the compensation of our named executive officers (Proposal No. 4). Abstentionsabstentions and broker non-votes will
have no impact on the outcome of the proposals and will only be counted for purpose of determining whether a quorum exists.
A stockholder of record may revoke a proxy at any time before it is voted at the
2020 Annual Meeting by (a) delivering a proxy revocation or another duly executed proxy bearing a later date to the Secretary of our company at 149 Commonwealth Drive, Menlo Park, California 94025 or (b) attending the
virtual 2020 Annual Meeting and voting
in person.at the meeting by following the instructions above. Attendance at the
2020 Annual Meeting will not revoke a proxy unless the stockholder
actually votes in person at the
virtual meeting.
Attendance at the Virtual 2020 Annual Meeting
The live audio webcast of the 2020 Annual Meeting will begin promptly at 7:30 a.m. local time. Online access to the audio webcast will open approximately 15 minutes prior to the start of the 2020 Annual Meeting to allow time for our stockholders to log in and test their devices’ audio system. We encourage our stockholders to access the meeting in advance of the designated start time.
To attend the 2020 Annual Meeting, stockholders will need to log-in to www.cstproxy.com/corcept/2020 using the 12-digit control number on the proxy card or voting instruction form.
Submission of Questions at the Virtual 2020 Annual Meeting
An online portal will be available to our stockholders at www.cstproxy.com/corcept/2020 at the 2020 Annual Meeting. By accessing this portal, stockholders will be able to submit questions and vote at the 2020 Annual Meeting. Stockholders may also submit questions and vote on the day of, or during, the 2020 Annual Meeting on www.cstproxy.com/corcept/2020. To demonstrate proof of stock ownership, you will need to enter the 12-digit control number received with your proxy card or voting instruction form to submit questions and vote at our 2020 Annual Meeting. We intend to answer questions submitted during the meeting that are pertinent to the Company and the items being brought before stockholder vote at the 2020 Annual Meeting, as time permits, and in accordance with the Rules of Conduct for the 2020 Annual Meeting. Questions and answers will be grouped by topic and substantially similar questions will be answered only once.
Technical Assistance Provided Before and During the Virtual 2020 Annual Meeting
Beginning 15 minutes prior to the start of and during the virtual 2020 Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting.
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, you should call our support team at:
1-917-262-2373 (U.S. Domestic Toll Free)
1-917-262-2373 (International)
The proxy card accompanying this
Proxy Statementproxy statement is solicited by our Board. We will pay
all of the costs of soliciting proxies. In addition to solicitation by mail, our officers, directors and employees may solicit proxies personally or by telephone without receiving additional compensation. If requested, we will pay brokers, banks and other fiduciaries that hold shares of common stock for beneficial owners the reasonable out-of-pocket cost of forwarding
these materialsthe proxy statement and proxy card to stockholders.
Householding of Proxy Materials
“Householding” is a procedure approved by the Securities and Exchange Commission (the “SEC”) under which stockholders who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of our
Proxy Statementproxy statement from us or a bank, broker or other intermediary, unless one or more of these stockholders notifies us, the bank, broker or other intermediary that they wish to continue to receive individual copies.
At the present time, weWe do not “household” for any of our stockholders of record. However, as explained below, your bank, broker or other intermediary may be householding your account if you hold your shares in street name.
If you hold shares in street name, your bank, broker or other intermediary may deliver only one copy of our
Proxy Statementproxy statement to multiple stockholders of the same household who share the same address, and may continue to do so, unless your bank, broker or other intermediary has received contrary instructions from one or more of the affected stockholders in the household. If you are such a beneficial holder, contact your bank, broker or other intermediary to receive a separate set of our proxy materials.
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NOMINEES TO
BOARDBOARD OF DIRECTORSAt the
2020 Annual Meeting, the stockholders will vote on the election of seven directors, each to serve until the annual meeting of stockholders in
20182021 and until their successors are duly elected and qualified.
The name, age at
April 21, 2017March 31, 2020 and principal occupation of each person nominated for election to the Board, all of whom currently serve as our directors, are set forth below:
Name
| | Age
| | Occupation
| | | | | | | | | | |
Name | | Age | | Occupation |
James N. Wilson(1) | | 73
76 | | Chairman of the Board |
Gregg Alton (1) | | 54 | | Former Chief Patent Officer of Gilead Sciences, Inc. |
G. Leonard Baker, Jr. (1) (2) | | 77 | | Venture Capitalist |
| Joseph K. Belanoff, M.D. | | 59
62 | | Chief Executive Officer and President |
G. Leonard Baker, Jr.
(2)
| | 74
| | Venture Capitalist
|
Daniel M. Bradbury (2)(3)
| | 56
| | Founder of BioBrit, LLC
|
Reneé D. Galá (1)
| | 45
| | Senior Vice President and Chief Financial Officer of Theravance Biopharma, Inc.
|
David L. Mahoney (1)(2) (3) | | 62
65 | | Private Investor |
Kimberly Park (1)(3) | | 56 | | Former Global Vice President of Merck & Co. |
Daniel N. Swisher, Jr. (1) (2) (3) | | 54
57 | | President and Chief ExecutiveOperating Officer and President of SunesisJazz Pharmaceuticals Inc. |
| | | | plc |
(1)
| Member of Audit Committee
|
(2)
| Member of Compensation Committee
|
(1)Member of Corporate Governance and Nominating Committee(3)
| Member of Corporate Governance and Nominating Committee
|
(2)Member of Compensation CommitteeIn addition to the information presented below regarding the qualities that led our Board to conclude that they should serve as directors, our
(3)Member of Audit Committee
Our director nominees have
a reputation foracted throughout their careers with integrity, honesty and adherence to high ethical standards and have demonstrated business acumen
and sound judgment
we believe will benefit Corcept and
a commitment to serve our company and the Board. Our Board believes that the backgrounds and qualifications of these nominees, considered as a group, exhibit a combination of experience, knowledge and talent that will allow
these nomineesthem to fulfill their responsibilities as Board members.
James N. Wilsonhas served as a director and as Chairman of our Board since 1999. SinceFrom 2005 to 2018, he haswas also been the Chairmana member of the Boardboard of directors of NuGEN Technologies, Inc. (“NuGEN”), a provider of systems for genomic analysis. From 2002 to 2009, Mr. Wilson served as the lead independent director of Amylin Pharmaceuticals, Inc. (“Amylin”), a publicly-traded biopharmaceutical company, and from 1996 to 2001, he was Chairman of the Boardboard of directors of Amira Medical, Inc., which was acquired by Hoffmann-La Roche A.G. From 1991 to 1994, Mr. Wilson was Chief Operating Officer of Syntex Corporation (“Syntex”), which was acquired by Roche Holding, Ltd. From 1989 to 1990, Mr. Wilson was Chairman and Chief Executive Officer of Neurex Corporation (“Neurex”), which was acquired by Elan Corporation plc. From 1982 to 1988, he was Chief Executive Officer of LifeScan, Inc., which was acquired by Johnson & Johnson Company. Mr. Wilson received his B.A. and M.B.A. from the University of Arizona. Mr. Wilson brings to our Board extensive experience in the biotechnology industry, as both a directorsenior executive and officer.director.Joseph K. Belanoff, M.D.
is a co-founder of our company and has served as
Gregg Alton became a member of our Board in March 2020. Mr. Alton served as Chief Patent Officer of Gilead Sciences, Inc. (“Gilea”) until January 2020. Since joining Gilead in 1999, Mr. Alton has held a number of positions at the company with experience in legal, medical affairs, policy and commercial. He previously served as ourInterim Chief Executive Officer since 1999, and as our President since 2014. Dr. BelanoffGeneral Counsel. Prior to joining Gilead, he was an attorney at the law firm of Cooley Godward, LLP, where he specialized in mergers and acquisitions, corporate partnerships and corporate finance transactions for healthcare and information technology companies. Mr. Alton is a clinical faculty member of the board of directors of Enochian Biosciences Inc., a public biotechnology company. He also serves as a member of the board of directors of several private companies, including Collidion, Inc., the AIDS Institute, the Boys and has, since 1992, held various positionsGirls Clubs of Oakland, and the Partners in Health Board of Trustees. He serves on the DepartmentU.S. government’s Presidents Advisory Council on HIV and AIDS and the advisory boards for UCSF Global Health Group and the UC Berkeley College of PsychiatryLetters and Behavioral SciencesScience. Mr. Alton received a B.A. in legal studies from the University of California at Berkeley and a J.D. from Stanford University. Dr. Belanoff received his B.A. from Amherst College and his M.D. from Columbia University’s College of Physicians & Surgeons. Dr. BelanoffMr. Alton brings to our Board extensive experience in the pharmaceutical industry as a deep knowledge of our financial activities, commercialsenior executive with responsibilities for legal, regulatory and medical affairs, strategy, operations and pre-clinical and clinical development programs. He also has valuable expertise in drug discovery, clinical medicine and psychopharmacology.patient relations.
G. Leonard Baker, Jr.has served as a member of our Board since 1999. Since 1973, Mr. Baker has been a Managing Director of the General Partner of Sutter Hill Ventures, a venture capital firm in Palo Alto, California. Mr. Baker currently serves on the boardsboard of a numberdirectors of private companies.companies and non-profits. He received his B.A. from Yale University and his
M.B.A. from Stanford University. Mr. Baker brings to our Board extensive experienceexpertise in advising companies about finance, strategic transactions and business operations.
Daniel M. BradburyJoseph K. Belanoff, M.D. is a co-founder of our company and has served as a member of our Board since October 2012. Mr. Bradbury is the founder and Managing Member of BioBrit, LLC, a life sciences consulting firm and investment fund. Mr. Bradbury served as President andour Chief Executive Officer since Corcept’s inception in 1999, and as our President since 2014. Dr. Belanoff is an Adjunct Professor of Amylin from March 2007 until its acquisition by Bristol-Myers Squibb Company in August 2012. From June 2006 until August 2012Psychiatry at Stanford University (School of Medicine), where he was a member of Amylin’s board of directors and served on its Finance and Risk Management Committee. Mr. Bradbury served as Amylin’s President (2006 to 2007), Chief Operating Officer (2003 to 2006) and Executive Vice President (2000 to 2003) andhas held a variety of sales and marketing positions (1994 to 2003). Before joining Amylin, Mr. Bradbury worked in marketing and sales for ten years at SmithKline Beecham Pharmaceuticals. He currently serves on the boards of directors and is a member of board committees of the following publicly-traded companies: Illumina, Inc. (Audit and Nominating & Governance Committees), Geron Corporation (Audit and Nominating & Governance Committees), Biocon Limited (Audit, Risk Review and Stakeholder Relation Committees) and Intercept Pharmaceuticals, Inc. (Audit and Nominating & Governance Committees). Mr. Bradbury also serves on the board of trustees of the Keck Graduate Institute, the Patricia Industries (a part of Investor AB) Advisory Board, Chairman of the Board of ADCY5.org, the Pharming Group N.V. Commercial Advisory Board, the ProLynx, LLC Advisory Board, the Arctic Aurora Life Science Advisory Board, the BioMed Ventures Advisory Committee and the University of California San Diego’s Rady School of Management’s Advisory Council. He received a Bachelor of Pharmacy from Nottingham University and a Diploma in Management Studies from Harrow and Ealing Colleges of Higher Education in the United Kingdom. Mr. BradburyDepartment of Psychiatry and Behavioral Sciences since 1992. Dr. Belanoff received his B.A. from Amherst College and his M.D. from Columbia University’s College of Physicians & Surgeons. Dr. Belanoff brings to our Board extensive experiencea deep knowledge of our research and development programs and commercial operations. He also has expertise in pharmaceutical industry strategy, operationsdrug discovery and management.Reneé D. Galá joined our Board in June 2016. She has been the Senior Vice Presidentdevelopment and Chief Financial Officer of Theravance Biopharma, Inc., a publicly-traded biopharmaceutical company, since July 2014. From 2006 to June 2014, Ms. Galá held various roles in the finance organization before leading the separation of the biopharmaceutical business (now Theravance Biopharma) from the royalty company, Innoviva, Inc. Prior to joining Theravance, Ms. Galá held positions in global treasury, pharmaceutical sales and corporate strategy/business development at Eli Lilly and Company, a publicly-traded drug manufacturing company, from 2001 to 2006. Before that, Ms. Galá worked for seven years in the energy industry, both in the U.S. and internationally, in positions focused on corporate finance, project finance, and mergers and acquisitions. Ms. Galá received a B.S. in Mathematics from Vanderbilt University and an M.B.A. from Columbia Business School. Ms. Galá brings to our Board extensive experience in pharmaceutical industry sales, finance, corporate strategy and business development.clinical medicine.
David L. Mahoneyis a private investor who has served as a member of our Board since July 2004. From 1999 to 2001, Mr. Mahoney served as co-Chief Executive Officer of McKesson HBOC, Inc., a healthcare supply management and information technology company, and as Chief Executive Officer of iMcKesson LLC, a healthcare management and connectivity company. He joined McKesson Corporation in 1990 as Vice President for Strategic Planning. Prior to joining McKesson, Mr. Mahoney was a principal with McKinsey & Company, a management consulting firm, where he worked from 1981 to 1990. Mr. Mahoney serves on the board of Symantec Corporation (“Symantec”), a publicly-traded software technology company, including as a memberdirectors of its Compensation Committee and Chairman of its Nominating and Governance Committees; and Adamas Pharmaceuticals Inc. (“Adamas”)(Adamas), a publicly traded bio-pharmaceuticalpharmaceutical company, where he isincluding as Chairman, and chair of the Lead Independent Director and serves on the AuditCompensation Committee and Compensationa member of the Nominating and Governance Committee. Mr. Mahoney also served as a member of the Audit Committee of Symantec from 2003 to 2011. 2011 and as a member of the board of directors from 2003 to 2019.He also serves on the boardsboard of directors of theseveral privately-held organizations including San Francisco Museum of Modern Art, and Mercy Corps and Mount Holyoke College and is a Trustee of the Schwab/LaudisLaudus Family of Funds and Mount Holyoke College. Mr. Mahoney previously served on the board of directors of KQED, Inc., a public non-profit television and radio operator.Funds. Mr. Mahoney received his B.A. from Princeton University and his M.B.A. from Harvard University. Mr. Mahoney brings to our Board extensive experience in pharmaceutical distribution, fiscal management operating strategy and logistics.in healthcare and technology company operations.
Kimberly Park became a member of our Board in September 2019. She was Global Vice President of Customer Strategy and Innovation at Merck & Co. from 2014 to 2018 and also held global and U.S. leadership roles at Merck from 1997 to 2005, including U.S. Vice President of Managed Care Marketing. From 2005 to 2014, Ms. Park served in senior leadership roles at Johnson and Johnson, including Founding Partner and Global Vice President of Janssen Healthcare Innovation from 2010 to 2014 and U.S. Vice President of Primary Care Sales and Marketing of Janssen Pharmaceuticals from 2005 to 2010. Prior to joining Merck, Ms. Park held U.S. and global commercial leadership positions at GlaxoSmithKline plc. Ms. Park currently serves on the board of directors of Besser Company, a manufacturer of equipment for the building materials industry, and as a trustee for two private foundations. She is a Mentor for Philadelphia Alliance of Capital and Technology. Ms. Park received her BA in International Business from the University of Michigan. She brings to our Board experience in pharmaceutical marketing, sales, and healthcare innovation.
Daniel N. Swisher, Jr.became a member of our Board in June 2015. He has been the President and Chief Operating Officer of Jazz Pharmaceuticals since January 2018. From 2003 to December 2017, he was Chief Executive Officer and a member of the Boardboard of directors of Sunesis Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company, since 2003, andcompany. From 2005 to 2017, he was also its President since 2005.President. He joined Sunesis in 2001 and had previously served as the company’s chief business officer and chief financial officer. Prior to that, Mr. Swisher had held a broad range of senior management roles, including Senior Vice president of Sales and Marketing at ALZA Corporation, a pharmaceutical and medical systems company, from 1992 to 2001. Mr. Swisher is alsohas served as Chairman of the Boardboard of directors of Cerus Corporation, a publicly traded biopharmaceutical company, and has held this position since 2013. Mr. Swisher holds areceived his B.A. from4
Yale University and an M.B.A. from the Stanford Graduate School of Business. Mr. Swisher brings to our Board experience in life sciencepharmaceutical industry development, sales, marketing, operations and finance.
Patrick G. Enright
, who has served as a member of our Board since 2008, is not included on the slate of director nominees, and his term as a director will end as of the 2017 Annual Meeting of Stockholders.
There are no family relationships among any of our directors or named executive officers.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee is responsible for, among other things, identifying individuals qualified to serve as members of the Board, recommending to the independent members of the Board nominees for election as directors and providing oversight with respect to corporate governance and ethical conduct.conduct by Corcept’s directors, officers and employees. The Corporate Governance and Nominating Committee’s charter is available at www.corcept.com. The Committee currently consists of David L. MahoneyGregg Alton (Chairman), Daniel M. Bradbury, Patrick G. EnrightLeonard Baker, Jr., Kimberly Park and James N. Wilson. Following the 20172020 Annual Meeting of Stockholders, assuming the election of each director nominee, herein,membership of the Corporate Governance and Nominating Committee will consistnot change. The Board has determined that all members of David L. Mahoney (Chairman)the Corporate Governance and Daniel M. Bradbury.Nominating Committee are independent under the rules of the Nasdaq Stock Market. The Corporate Governance and Nominating Committee met four times during 2016. In accordance with2019. The Corporate Governance and Nominating Committee recommends director candidates to the requirements of the NASDAQ Stock Market, director nominees are selected by the independent members of our Board by means of votes in which only independent directors participate.for review and approval, and its charter is available atwww.corcept.com.
The information below describes the criteria
and process that the Corporate Governance and Nominating Committee
applies and the process it uses to evaluate candidates for director.
Board Membership Criteria. The Corporate Governance and Nominating Committee assesses whetherCommittee’s goal is to identify director candidates possesswith a broad diversity of background and experience who have the experience, skills and judgment to serve successfully on theour Board. Although there is no policy regarding diversity in director nominees, both the Corporate Governance and Nominating Committee and the Board seek the talents and backgrounds that would be most helpful to the Company. In particular, the Corporate Governance and Nominating Committee, when recommending director candidates, considers whether a candidate could help the Board represent a diversity of background and experience. The Corporate Governance and Nominating Committee also seeks to ensure that a majority of the directors are independent under the rules of the NASDAQNasdaq Stock Market, that the Audit Committee and Compensation Committee are each composed of independent directors, and that members of the Audit Committee possess the accounting and financial expertise the NASDAQNasdaq Stock Market and SEC rules require.
Process for Identifying and Evaluating Nominees. With the assistance as it deems appropriate of other members of the Board, Corcept’s management and in some cases a third-party search firm, the Corporate Governance and Nominating Committee identifies candidates who have the qualities and skills being sought. The Corporate Governance and Nominating Committee will also consider recommendations for nominees by stockholders.
With respect to candidates for initial election to the Board, the Corporate Governance and Nominating Committee reviews biographical information and qualifications and checks the candidate’s references. Qualified candidates are interviewed by at least one member of the Corporate Governance and Nominating Committee. Serious candidates meet, either in person or by telephone, with all members of the Corporate Governance and Nominating Committee and as many other members of the Board as practicable.
Candidates recommended by the Corporate Governance and Nominating Committee are presented to the Board for selection as nominees to be presented for the approval of the stockholders or for election to fill a vacancy. A similar process would be used to evaluate nominees recommended by stockholders.
Stockholders Proposals for Nominees. The Corporate Governance and Nominating Committee will consider written proposals from stockholders for nominees for director. Such nominations should be submitted to the Secretary of our Company and should include the following information: (a) all information required by Regulation 14A of the Securities Exchange Act of 1934, as amended (“Exchange Act”), including such person’s written consent to being named in the proxy statement as a nominee and willingness to serve as a director; (b) the name(s) and address(es) of the stockholder(s) making the nomination and the number of shares of our common stock which are owned beneficially and of record by such stockholder(s); and (c) biographical information and a statement as to the qualifications of the nominee. All of this should be submitted in the time required by ourOur Amended and Restated Bylaws.Process for Identifying and Evaluating Nominees. The Corporate Governance and Nominating Committee initiatesBylaws provide that advance notice of a stockholder’s proposal to be brought before the process for identifying and evaluating nominees2021 Annual Meeting of Stockholders, including director nominations, must be delivered to the Board by identifying a slateSecretary of candidates who meetour company at our principal executive offices not earlier than 120 days (December 30, 2020) and not later than 90 days (January 29, 2021) prior to the criteria for selection as nominees and have the specific qualities or skills being sought based on input from membersanniversary of the Board, management and, if the Corporate Governance and Nominating Committee deems appropriate, a third party search firm. In addition, pursuant to the Securities Purchase Agreement, dated as of March 14, 2008, the Corporate Governance and Nominating Committee takes the necessary steps to have one designee of Longitude Venture Partners, L.P., one of our significant stockholders, nominated for election to our Board, subject to compliance with relevant NASDAQ Stock Market rules and regulations and approvalmailing date of the nomineeproxy materials for the previous year’s annual meeting. Our Amended and Restated Bylaws also provide that in the event that the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the Corporate Governance and Nominating Committee for so long as Longitude Venture Partners, L.P. beneficially owns at least 5% of our issued and outstanding common stock. As of March 31, 2017, Longitude Venture Partners, L.P. beneficially owned approximately 5.4% of our issued and outstanding common stock.
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With respect to candidates for initial election to the Board, the Corporate Governance and Nominating Committee also reviews biographical information and qualifications and checks the candidate’s references. Qualified candidates are interviewed by at least one memberanniversary date of the Corporate Governance and Nominating Committee. Serious candidates meet, either in personpreceding year’s annual meeting, this advance notice must be received not later than the close of business on the later of (i) the 120th day prior to such annual meeting or by telephone, with all members(ii) the 10th day following the day on which public announcement of the Corporate Governance and Nominating Committee and as many other membersdate of the Board as practicable.
Based on interviews and other information, the Corporate Governance and Nominating Committee evaluates which of the prospective candidatessuch meeting is qualified to serve as a director and whether the Committee should recommend to the independent members of the Board that the Board nominate, or elect to fill a vacancy with, a prospective candidate. Candidates recommended by the Corporate Governance and Nominating Committee are presented to the independent members of the Board for selection as nominees to be presented for the approval of the stockholders or for election to fill a vacancy. The Corporate Governance and Nominating Committee expects that a similar process will be used to evaluate nominees recommended by stockholders.
first made.
Nominees to the Board of Directors for the 2020 Annual Meeting. The nominees for theelection at this 2020 Annual Meeting were recommended for selection by the Corporate Governance and Nominating Committee and were selected by the independent members of the Board.
BOARD MEETINGS
AND COMMITTEESThe Board met four times in 2016.
In addition to the Corporate Governance and Nominating Committee, which is described above, the Board has Audit and Compensation Committees. The Audit Committee met five times and the Compensation Committee met two times during 2016. The Corporate Governance and Nominating Committee met four times during 2016.one time in 2019. Each member of the Board attended 75%75 percent or more of the total number of Board meetings and meetings of Board committees on which such Board member served. The Board met four times in 2019. The independent directors of the Board met in executive sessions four times in 2016.2019.
We encourage our directors to attend the annual stockholder
meetings. Onemeeting. Two of our directors attended the
20162019 annual stockholder meeting.
Audit Committee. In 2016,The purpose of the Audit Committee consistedis to oversee our accounting and financial reporting processes and financial statement audits. Its responsibilities include appointing and compensating the independent registered public accounting firm for its audit of our accounts, reviewing the scope and results of these independent audits, reviewing and evaluating our accounting policies, and approving the professional services our independent registered public accounting firm provides to us. The Audit Committee consists of Daniel N. Swisher, Jr. (Chairman of the Committee)(Chairman), Patrick G. Enright, Reneé D. Galá and David L. Mahoney.Mahoney and Kimberly Park. Following the 20172020 Annual Meeting of Stockholders, assuming the election of each director nominee, herein, the Audit Committee membership will consist of Daniel N. Swisher, Jr. (Chairman of the Committee), Reneé D. Galá and David L. Mahoney.not change. The Board has determined that all members of the Audit Committee are independent under the rules of the NASDAQNasdaq Stock Market and that each of them can read and understand financial statements. In addition, theThe Board has also determined that each member of the Audit Committee satisfies the independence requirements of Rule 10A-3(b)(1) of the Exchange Act. After due consideration of all relevant factors, including Mr. Enright’s history of serviceAct and the percentage of our common stock held by others, the Board determined that Mr. Enright is independent as defined in NASDAQ Listing Rule 5605 and Rule 10A-3 of the Exchange Act. Further, the Board determined that Mr. Enright is not an “affiliated person” of our company who would be ineligible to serve on the Audit Committee. The Board has determined that each of Messrs. Swisher and Mahoney, and Ms. GaláPark qualifies as an “Audit Committee financial expert” as defined by Item 407(d)(5) of Regulation S-K of the Securities Act and the Exchange Act. The purpose of the Audit Committee is to oversee the accounting and financial reporting processes and financial statements audits. The responsibilities of the Audit Committee include appointing and providing for the compensation of the independent registered public accounting firm to conduct the annual audit of our accounts, reviewing the scope and results of the independent audits, reviewing and evaluating internal accounting policies, and approving all professional services to be provided to us by our independent registered public accounting firm. The Audit Committee charter is available at www.corcept.com.
Compensation Committee. In 2016, theThe Compensation Committee consistedconsists of David L. Mahoney (Chairman), G. Leonard Baker, Jr. (Chairman), Daniel M. BradburyJr and Daniel N. Swisher, Jr. Following the 20172020 Annual Meeting of Stockholders, assuming the election of each director nominee, herein, the Compensation Committee will remain the same.not change. The Board has determined that all members of the Compensation Committee are independent under the rules of the NASDAQNasdaq Stock Market. The Compensation Committee administers the Company’s benefit plans, reviews and administersapproves, subject to stockholder or Board approval as required, (i) our incentive, equity-based compensatory plans and (ii) any benefit, compensation or severance arrangements with our named executive officers or in which they participate. In addition, the Committee reviews and establishesapproves corporate goals relevant to our chief executive officer’s compensation and recommends the structure and amount of such compensation to the Board for its review and approval. The Committee also reviews our policies relating to the compensation and benefits of our officersoffered to nonemployee directors and employees.recommends changes to the Board, as appropriate. The Compensation Committee’s charter permits it to delegate its authority and responsibilities as it deems appropriate to individual members of the Compensation Committee or to a subcommittee of theCommittee members.The Compensation Committee. The charter is available atwww.corcept.comwww.corcept.com.
BOARD LEADERSHIP
STRUCTURE AND ROLE IN RISK OVERSIGHTBoard Leadership Structure.Leadership. We are committed to sound corporate governance practices and valuesvalue independent board oversight as an essential component of strongto good corporate performance. Six of our eight currentseven directors qualify as independent under the rules of the NASDAQNasdaq Stock Market, and, followingMarket. Following the 20172020 Annual Meeting of Stockholders, assuming the election of each director nominee, herein, fivethe number of our seven directors who are independent will qualify as independent under the rules of the NASDAQ Stock Market.not change. In February 2017,2020, our Board reviewed the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying outjudgment. The Board also reviewed the independence of Gregg Alton upon his or her responsibilities. As a result of this review, ourappointment on March 12, 2020. The Board has determined that the following directors are “independent”��independent” under the rules of the NASDAQNasdaq Stock Market:
James N. Wilson
Gregg Alton
G. Leonard Baker, Jr.
Daniel M. Bradbury
Patrick G. Enright
Reneé D. Galá
Kimberly Park
Our Board also determined that Daniel M. Bradbury and Renée D. Galá, who served as board members for part of 2019, were independent under the rules of the Nasdaq Stock Market.
In accordance with our Amended and Restated Bylaws, our Board appoints our
officers, including our Chief Executive Officer. Ourofficers. The Board does not have a policy
onas to whether the role of the Chairman of the Board and Chief Executive Officer should be separate and
if it is to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee and if it is to be combined, whether a lead independent director should be selected. Currently, we separate the roles of Chief Executive Officer and Chairman of the Board. The Chief Executive Officer is responsible for setting Corcept’s strategic direction and its day-to-day leadership and performance. The Chairman of the Board provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board.
Dr. Belanoff, ourOur Chief Executive Officer is an employee
of our company and is therefore not
“independent” under the rules of NASDAQ Stock Market. Until June 2016, Mr. Wilson, our Chairman of the Board, was also an employee and is therefore not “independent” under the rules of NASDAQ Stock Market. Mr. Wilson has not been an employee of the Company since June 2016.deemed “independent.” Our Board believes that its
current leadership
structure is appropriate for
our CompanyCorcept and
its stockholders.
Risk Oversight.Oversight. The Board oversees our exposure to risk exposures and risk management and the steps management haswe have undertaken to control business and financialmitigate those risks. The Board assesses the risks we face and reviews our strategic plan at least annually and assesses the risks facing our company. Whileannually. Although the Board hasbears ultimate responsibility for the Company’s risk management, process, various committees of the Board also have responsibility for risk management. Our Audit Committee oversees management of risks relating toarising from our accounting matters,policies and practices, financial reporting, SEC compliance and SEC compliance. Ourpotential director or named executive officer conflicts of interest. The Compensation Committee oversees the management of risks relating todirector and executive compensation. In addition, in settingofficer compensation the Compensation Committeeand strives to create compensation incentives that discourage risk-taking that is inconsistent with our business strategy. OurThe Corporate Governance and Nominating Committee oversees management of risks associated with maintaining independence of our Boardcorporate governance and preventing conflicts of interest.regulatory compliance. Each committee meets regularly with Corcept management and reports to the full Board. Our Executive Committee, which consists of our Chief Executive Officer, Chief Financial Officer, Chief Medical Officer, Senior Vice President, Research and Senior Vice President, Commercial, meets regularly to monitor the impact of the COVID-19 pandemic and to review and approve measures to mitigate pandemic-related risks.Management has provided members of the Board with regular updates regarding the pandemic’s effects and our response to them.
COMMUNICATIONS
WITH DIRECTORSStockholders or other interested parties may communicate with any director or committee of our Board by writing to them c/o Secretary, Corcept Therapeutics Incorporated, 149 Commonwealth Drive, Menlo Park, California 94025. Comments or questions regarding our accounting, internal controls or auditing matters will be referred to the Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to the Corporate Governance and Nominating Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our
None of the members of our Compensation Committee
consists of G. Leonard Baker, Jr. (Chairman), Daniel M. Bradbury and Daniel N. Swisher, Jr., none whom is,
currently, or has been, an officer or employee of our company. None of our named executive officers
currently serves or in the past year has served as a member of the board of directors of any entity that has one or more named executive officers serving on our Board or Compensation Committee.
INFORMATION
CONCERNINGABOUT OUR EXECUTIVE OFFICERS
The names of our executive officers, their ages as of
April 21, 2017March 31, 2020 and
certain other information about them are set forth below:
Name
| | Age
| | Position
| | | | | | | | | | |
Name | | Age | | Position |
| Joseph K. Belanoff, M.D. | | 59
62 | | Chief Executive Officer, President and Director |
Robert S. Fishman
Andreas Grauer, M.D. | | 55
59 | | Chief Medical Officer |
G. Charles Robb
| | 54
57 | | Chief Financial Officer and Secretary |
| Sean Maduck | | 43 | | Senior Vice President, Commercial |
Joseph K. Belanoff, M.D.Biographical information regarding Dr. Belanoff is set forth under “Nominees to Board of Directors.”Robert S. Fishman,
Andreas Grauer, M.D.has served as our Chief Medical Officer since September 2015. From May 2012 to March 2015, Dr. Fishman served as the Senior Vice President of Clinical Development at InterMune, Inc., a biopharmaceutical company.2019. Prior to his tenurejoining Corcept, Dr. Grauer spent more than ten years at InterMune, Dr. Fishman servedAmgen in a variety of leadership roles, most recently as Vice President of ClinicalGlobal Development, at Alexza Pharmaceuticals, a biopharmaceutical company, from September 2007 to May 2012.where he led or oversaw programs in therapeutic areas including bone, nephrology, and inflammation throughout all phases of development. Dr. Grauer also brings significant experience in regulatory filings across the world that culminated in multiple new drug application and biologic license application approvals. Before that,Amgen, he held senior executive positions of increasing responsibility at Heatport, Aerogen and AntheraProcter & Gamble Pharmaceuticals. Dr. Fishman trained in internal medicine at Deaconess Hospital, Boston, completed a fellowship in pulmonary and critical care medicine at Massachusetts General Hospital and began his career as a member of the Stanford pulmonary medicine faculty. He earned an A.B. in Biology from Harvard andGrauer holds an M.D. from Stanfordthe University of Heidelberg Medical School, of Medicine.where he graduated magna cum laude. He is Board Certified in both internal medicine and endocrinology in Germany.G.
Charles Robbhas served as our Chief Financial Officer since September 2011 and as our Secretary since January 2014. From April 2005 through Augustto 2011, Mr. Robb served as the Senior Vice President of Operations, Administration and Finance of Fitness Anywhere, Inc., a private fitness equipment and training company with operations in the United States, Europe and Asia. From 2003 to 2005, Mr. Robb was engaged in the private practice of law. From 2000 to 2002, he was Senior Vice President of Citadon, Inc. He also held positions in business development for Nomura Asset Capital Corporation from 1998 to 1999 and in sales and marketing for Legal Research Network, Inc. from 1996 to 1998. From 1992 to 1996, Mr. Robb practiced law at Howard, Rice, Nemerovski, Canady, Falk & Rabkin. Mr. Robb earned a B.A. in English and Political Philosophy from Yale and a J.D. from Harvard Law School.
Sean Maduck has served as our Senior Vice President, Commercial since April 2016. Prior to that, he served as our Vice President, Sales & Marketing. Mr. Maduck joined Corcept in 2012, bringing to the company 12 years of pharmaceutical, biotechnology and management experience. From 2002 to 2012, he held positions in the Finance, Portfolio Planning, and Commercial functions at Genentech. Prior to Genentech, he was an investment banking analyst at W.R Hambrecht + Company. He currently serves on the Board of Directors of the Cancer Support Community – San Francisco Bay Area. Mr. Maduck earned an A.B. from Dartmouth College, a B.E. in Biomedical Engineering from the Thayer School of Engineering at Dartmouth College, and a Masters in Management from the Stanford Graduate School of Business.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIALBENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth information regarding ownership of our common stock as of March 31,
20172020 (or earlier
date with respect to information regarding former employees or that is based on filings with the SEC) by (a) each person known to us to own more than
5%5 percent of the outstanding shares of our common stock, (b) our directors, (c) our Chief Executive Officer and each other named executive officer named in the compensation tables appearing later in this
Proxy Statementproxy statement and (d) all directors and named executive officers as a group. The information in this table is based solely on statements in filings with the SEC or other information we believe to be reliable. Percentage of ownership is based on
113,112,210114,595,076 shares of common stock outstanding as of March 31,
2017.2020. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to the shares. Shares of common stock subject to outstanding options and warrants exercisable within 60 days of March 31,
20172020 are deemed outstanding for computing the percentage of ownership of the person holding such options or warrants but are not deemed outstanding for computing the percentage of any other person.
Name of Beneficial Owner (1) | | Number of Shares Beneficially Owned (2) | | | Percentage of Shares Beneficially Owned | |
5% Stockholders | | | | | | | | |
Federated Investors, Inc. and affiliated entities (3) | | | 13,878,000 | | | | 12.3% | |
Ingalls & Snyder, LLC and affiliated entities (4) | | | 8,083,697 | | | | 7.1% | |
Longitude Venture Partners, L.P. and affiliated entities and individuals (5) | | | 6,143,547 | | | | 5.4% | |
Directors and Named Executive Officers | | | | | | | | |
Patrick G. Enright (5) | | | 6,143,547 | | | | 5.4% | |
Joseph K. Belanoff (6) | | | 5,523,570 | | | | 4.8% | |
G. Leonard Baker, Jr. (7) | | | 4,643,027 | | | | 4.1% | |
James N. Wilson (8) | | | 3,451,195 | | | | 3.0% | |
David L. Mahoney (9) | | | 1,531,820 | | | | 1.4% | |
G. Charles Robb (10) | | | 1,032,508 | | | * | |
Daniel M. Bradbury (11) | | | 343,075 | | | * | |
Robert S. Fishman (12) | | | 214,583 | | | * | |
Daniel N. Swisher, Jr. (13) | | | 79,374 | | | * | |
Reneé D. Galá | | | — | | | * | |
All directors and named executive officers as a group (10 persons) (14) | | | 22,962,699 | | | | 19.2% | |
| | | | | | | | | | | | | | |
Name of Beneficial Owner (1) | | Number of Shares Beneficially Owned (2) | | Percentage of
Shares
Beneficially
Owned |
| 5 percent Stockholders | | | | |
BlackRock, Inc. (3) | | 15,920,086 | | | 13.9% |
Vanguard Group Inc. (4) | | 10,948,746 | | | 9.6% |
Federated Investors, Inc. and affiliated entities (5) | | 8,874,400 | | | 7.7% |
Ingalls & Snyder, LLC and affiliated entities (6) | | 8,285,930 | | | 7.2% |
Renaissance Technologies (7) | | 7,768,214 | | | 6.8% |
| Directors and Named Executive Officers | | | | |
Joseph K. Belanoff, M.D. (8) | | 5,992,963 | | | 5.1% |
G. Leonard Baker, Jr. (9) | | 5,354,602 | | | 4.7% |
James N. Wilson (10) | | 3,562,637 | | | 3.1% |
Charles Robb (11) | | 1,532,980 | | | 1.3% |
David L. Mahoney (12) | | 1,477,804 | | | 1.3% |
Sean Maduck (13) | | 1,265,649 | | | 1.1% |
Daniel N. Swisher, Jr. (14) | | 197,916 | | | * |
Andreas Grauer, M.D. (15) | | 133,333 | | | * |
| Kimberly Park | | — | | | * |
| Gregg Alton | | — | | | * |
All directors and named executive officers as a group (10 persons) (16) | | 19,517,884 | | | 16.4% |
* Less than 1%
| | | | | |
| * | Less than 1 percent of our outstanding common stock. |
(1)Unless otherwise indicated, the address of each of the named individuals is c/o Corcept Therapeutics, 149 Commonwealth Drive, Menlo Park, California 94025.
(2)Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has the right to acquire ownership within 60 days after March 31, 2020. Except as otherwise noted, each person or entity has sole voting and investment power with respect to the shares shown.
(3)Information regarding the holdings of Blackrock, Inc., or Blackrock, is based on information obtained from Amendment No. 4 to Schedule 13G filed by Blackrock with respect to its holdings as of December 31, 2019. The address for BlackRock is 55 East 52nd Street, New York, NY 10055.
(4)Information regarding the holdings of Vanguard Group Inc., or Vanguard, is based on information obtained from Amendment No. 2 to Schedule 13G filed by Vanguard with respect to its holdings as of December 31, 2019. The address for Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
.
(5)Consists of shares beneficially held by registered investment companies and separate accounts advised by subsidiaries of Federated Investors, Inc., or Federated, that have been delegated the power to direct investments and power to vote the securities by the registered investment companies’ board of trustees or directors and by the separate accounts’ principals. The foregoing beneficial ownership information is based on information obtained from Amendment No. 11 to Schedule 13G filed by Federated Investors, Inc. with respect to its holdings as of December 31, 2019. Federated is the parent
holding company of Federated Equity Management Company of Pennsylvania and Federated Global Investment Management Corp., collectively referred to herein as the Investment Advisers, which act as investment advisers to registered investment companies and separate accounts that own shares of our
outstanding common stock.
(1)
| Unless otherwise indicated, the address of each of the named individuals is c/o Corcept Therapeutics, 149 Commonwealth Drive, Menlo Park, California 94025.
|
The Investment Advisers are wholly owned subsidiaries of FII Holdings, Inc., which is wholly owned subsidiary of Federated. All of Federated’s outstanding voting stock is held in the Voting Shares Irrevocable Trust, or the Trust, for which John F. Donahue, Rhodora J. Donahue and J. Christopher Donahue act as trustees, collectively referred to herein as the Trustees. The Trustees exercise collective voting control over Federated. Each of Federated, the Trust and the Trustees disclaims beneficial ownership of all holdings reflected herein, except to the extent of his individual pecuniary interest therein. Federated’s address is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.(2)(6)Consists of shares held by Ingalls & Snyder LLC, or Ingalls, for the benefit of Ingalls & Snyder Value Partners, L.P., or ISVP, or other investment advisory clients. Information regarding the holdings of Ingalls and ISVP is based on information obtained from Amendment No. 11 to Schedule 13G filed by Ingalls with respect to its holdings as of December 31, 2019. ISVP is an investment partnership managed under an investment advisory contract by Ingalls, a registered broker dealer and a registered investment advisor. Ingalls holds investment authority but not voting authority over shares held by its investment advisory clients. Mr. Thomas O. Boucher, Jr., a Managing Director of Ingalls, and Mr. Robert L. Gipson and Adam Janovic, Senior Directors of Ingalls, are the general partners of ISVP and share investment and voting power over the shares held by ISVP. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his individual pecuniary interest therein. The address for Ingalls is 1325 Avenue of the Americas, New York, NY 10019.
| Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has the right to acquire ownership within 60 days after March 31, 2017. Except as otherwise noted, each person or entity has sole voting and investment power with respect to the shares shown.
|
(3)(7)Information regarding the holdings of Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation, or Renaissance Technologies, is based on information obtained from Schedule 13G filed by Renaissance Technologies with respect to its holdings as of December 31, 2019. The address for Renaissance Technologies is 800 Third Avenue, New York, New York 10022.
| Consists of 13,878,000 shares beneficially held by registered investment companies and separate accounts advised by subsidiaries of Federated Investors, Inc., or Federated, that have been delegated the power to direct investments and power to vote the securities by the registered investment companies’ board of trustees or directors and by the separate accounts’ principals. The foregoing beneficial ownership information is based on information obtained from Amendment No. 8 to Schedule 13G filed by Federated Investors, Inc. with respect to its holdings as of December 31, 2016. Federated is the parent holding company of Federated Equity Management Company of Pennsylvania and Federated Global Investment Management Corp., collectively referred to herein as the Investment Advisers, which act as investment advisers to registered investment companies and separate accounts that own shares of our common stock. The Investment Advisers are wholly owned subsidiaries of FII Holdings, Inc., which is wholly owned subsidiary of Federated. All of Federated’s outstanding voting stock is held in the Voting Shares Irrevocable Trust, or the Trust, for which John F. Donahue, Rhodora J. Donahue and J. Christopher Donahue act as trustees, collectively referred to herein as the Trustees. The Trustees exercise collective voting control over Federated. Each of Federated, the Trust and the Trustees disclaims beneficial ownership of all holdings reflected herein, except to the extent of his individual pecuniary interest therein. Federated’s address is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.
|
10
(8)Includes 3,493,749 shares that may be acquired by Dr. Belanoff within 60 days of March 31, 2020 pursuant to options.
(9)Includes (a) 207 shares held in Mr. Baker’s name, (b) 955,055 shares held in The Baker Revocable Trust of which Mr. Baker is a trustee, (c) 996,631 shares held by a Roth IRA for the benefit of Mr. Baker, (d) 3,144,793 shares held by Saunders Holdings, L.P. of which Mr. Baker is a trustee of a trust which is the general partner and (e) 287,916 shares that may be acquired by Mr. Baker within 60 days of March 31, 2020.
(10)Includes (a) 246,246 shares held in Mr. Wilson’s name, (b) 1,083,750 shares that may be acquired by Mr. Wilson within 60 days of March 31, 2020 pursuant to options, (c) 1,331,574 shares held by the James N. Wilson and Pamela D. Wilson Trust and (d) 901,067 shares held by James and Pamela Wilson Family Partners. Mr. Wilson has voting power over the shares held by the James N. Wilson and Pamela D. Wilson Trust and James and Pamela Wilson Family Partners pursuant to voting agreements. Mr. Wilson disclaims beneficial ownership of all of such shares, except to the extent of his pecuniary interest therein.
(11)Includes (a) 8,025 shares held in Mr. Robb’s name, (b) 1,513,750 shares that may be acquired by Mr. Robb within 60 days of March 31, 2020 pursuant to options and (c) 11,205 shares held as custodian for his children under the California Uniform Transfers to Minors Act over which Mr. Robb has voting control.
(12)Includes (a) 1,119,888 shares held by the David L. Mahoney and Winnifred C. Ellis 1998 Family Trust, (b) 50,000 shares held in Mr. Mahoney’s name and (c) 307,916 shares that may be acquired by Mr. Mahoney within 60 days of March 31, 2020 pursuant to options. Mr. Mahoney is a member of our Board.
(13)Includes (a) 50,024 shares held in Mr. Maduck’s name and (b) 1,215,625 shares that may be acquired by Mr. Maduck within 60 days of March 31, 2020 pursuant to options.
(14)Includes 197,916 shares that may be acquired by Mr. Swisher within 60 days of March 31, 2020 pursuant to options.
(15)Includes 133,333 shares that may be acquired by Dr. Grauer within 60 days of March 31, 2020 pursuant to options.
(16)Total number of shares includes common stock held by directors, named executive officers and entities affiliated with directors and named executive officers. See footnotes 8 through 15 above.
(4)
| Consists of 8,083,697 shares held by Ingalls & Snyder LLC, or Ingalls, for the benefit of Ingalls & Snyder Value Partners, L.P., or ISVP, or other investment advisory clients. Information regarding the holdings of Ingalls and ISVP is based on information obtained from Amendment No. 8 to Schedule 13G filed by Ingalls with respect to its holdings as of December 31, 2016. ISVP is an investment partnership managed under an investment advisory contract by Ingalls, a registered broker dealer and a registered investment advisor. Ingalls holds investment authority but not voting authority over shares held by its investment advisory clients. Mr. Thomas O. Boucher, Jr., a Managing Director of Ingalls, and Mr. Robert L. Gipson and Adam Janovic, Senior Directors of Ingalls, are the general partners of ISVP and share investment and voting power over the shares held by ISVP. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his individual pecuniary interest therein. The address for Ingalls is 1325 Avenue of the Americas, New York, NY 10019.
|
(5)
| Consists of (a) 5,721,372 shares held by Longitude Venture Partners, L.P., (b) 114,675 shares held by Longitude Capital Associates, L.P. and (c) 307,500 shares that may be acquired by Patrick Enright within 60 days of March 17, 2017 pursuant to options. The foregoing beneficial ownership information is based on information obtained from Amendment No. 7 to Schedule 13D filed by Longitude Capital Partners, LLC with respect to its holdings as of March 17, 2017. Juliet Tammenoms Bakker and Mr. Enright may be deemed to have shared voting and investment power over the shares held by Longitude Venture Partners, L.P. and Longitude Capital Associates, L.P. Each of these individuals disclaims beneficial ownership of all such shares, except to the extent of his or her pecuniary interest therein. The address for Longitude Capital Partners, LLC is 800 El Camino Real, Suite 220, Menlo Park, California 94025. Mr. Enright is a member of our Board and a managing member of Longitude Capital Partners, LLC, the general partner of each of Longitude Venture Partners, L.P. and Longitude Capital Associates, L.P.
|
(6)
| Includes (a) 3,059,375 shares that may be acquired by Dr. Belanoff within 60 days of March 31, 2017 pursuant to options and (b) 300,000 shares held as custodian for Julia E. Belanoff under the California Uniform Transfers to Minors Act over which Dr. Belanoff has voting control.
|
(7)
| Includes (a) 207 shares held in Mr. Baker’s name, (b) 955,055 shares held in The Baker Revocable Trust of which Mr. Baker is a trustee, (c) 776,631 shares held by a Roth IRA for the benefit of Mr. Baker, (d) 2,613,634 shares held by Saunders Holdings, L.P. of which Mr. Baker is a trustee of a trust which is the general partner and (e) 297,500 shares that may be acquired by Mr. Baker within 60 days of March 31, 2017.
|
(8)
| Includes (a) 1,140,625 shares that may be acquired by Mr. Wilson within 60 days of March 31, 2017 pursuant to options, (b) 1,409,503 shares held by the James N. Wilson and Pamela D. Wilson Trust and (c) 901,067 shares held by James and Pamela Wilson Family Partners. Mr. Wilson has voting power over the shares held by the James N. Wilson and Pamela D. Wilson Trust and James and Pamela Wilson Family Partners pursuant to voting agreements. Mr. Wilson disclaims beneficial ownership of all of such shares, except to the extent of his pecuniary interest therein.
|
(9)
| Includes (a) 1,169,320 shares held by the David L. Mahoney and Winnifred C. Ellis 1998 Family Trust, (b) 55,000 shares held by the Black Dog Private Foundation, of which Mr. Mahoney is the president, and (c) 307,500 shares that may be acquired by Mr. Mahoney within 60 days of March 31, 2017 pursuant to options. Mr. Mahoney is a member of our Board.
|
(10)
| Includes 1,031,250 shares that may be acquired by Mr. Robb within 60 days of March 31, 2017 pursuant to options.
|
(11)
| Consists of (a) 155,575 shares held in the name of BioBrit, LLC, over which Mr. Bradbury has voting and investment power, and (b) 187,500 shares that may be acquired by Mr. Bradbury within 60 days of March 31, 2017 pursuant to options.
|
(12)
| Includes 214,583 shares that may be acquired by Mr. Fishman within 60 days of March 31, 2017 pursuant to options.
|
(13)
| Includes 79,374 shares that may be acquired by Mr. Swisher within 60 days of March 31, 2017 pursuant to options.
|
(14)
| Total number of shares includes common stock held by directors, named executive officers and entities affiliated with directors and named executive officers. See footnotes 5 through 13 above.
|
11
CERTAIN RELATIONSHIPS ANDAND RELATED TRANSACTIONS
As a matter of policy, all
All related party transactions between us and
any of our officers, directors or principal stockholders are reviewed and approved by our Audit Committee
as set forth in its charter, or a majority of the independent and disinterested members of our Board to ensure they are on terms no less favorable to us than could be obtained from unaffiliated third parties and have bona fide business purposes. In
2016,2019, there were no related party transactions.
On February 26, 2020, we purchased from Dr. Belanoff, our Chief Executive Officer, President and Director, 20,338 shares of common stock at a purchase price of $13.54 per share, which was the last quoted price per share on the Nasdaq Capital Market on the date of purchase. The aggregate purchase price was $275,377. We purchased the shares in order to provide Dr. Belanoff with liquidity to satisfy tax liability arising from his net (cashless) exercise in 2019 of stock options that were about to expire. This transaction was approved in advance by the Audit Committee and the Board.
Severance and Change in Control Agreements. We have entered into severance and change in control agreements with our executive officers. The agreements provide that, if employment is terminated without cause or for good reason regardless of whether it is in connection with a change in control, the executive will be eligiblecontinue to receive, for 12 months, of his or her then current base salary and continued health insurance coverage for this same period. In addition, thecoverage. The agreements also provide for the full vesting of allthe terminated executive’s outstanding equity awards in the event the executive’s employment is terminatedtermination occurs, with or without cause, or for good reason within 18 months following a change in control.
Director Indemnification Agreements. We have entered into indemnification agreements with our directors and executive officers. Such agreements require us, among other things, to indemnify our officers and directors for any event related to the fact that the officer and/or director is or was a director, officer, employee, consultant, agent or fiduciary of or to the Company or is or was serving at the request of the Board as a director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by such indemnified person in any such capacity, other than for liabilities arising from willful misconduct, of a culpable nature, and to advance theirany expenses incurred as a result of any proceedings against them asproceeding subject to which they could be indemnified.indemnification.
See “Director Compensation” for a discussion of our director compensation policy.
We have adopted a Code of Ethics that applies to all of our directors, officers and employees, including our principal executive officer, our principal financial officer and our principal accounting officer, which is available at
our website, www.corcept.com. We intend to disclose at www.corcept.com any amendment to, or waiver of, any provision of our Code of Ethics applicable to our directors and executive officers required to be disclosed under the rules of the SEC and the
NASDAQNasdaq Stock Market.
PROHIBITION OF EMPLOYEE, OFFICER AND DIRECTOR HEDGING
Our Insider Trading Compliance Policy prohibits our directors, officers and employees, as well as any of our contractors with access to our sales, financial and clinical data, from engaging in any hedging transactions. Under the policy, hedging transactions include any transactions that are intended to hedge or offset any decrease in the market value of our securities held by the individual as well as certain forms of monetization transactions (including forward contracts and zero-cost collars).
DELINQUENT SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS
Under Section 16(a) of the Exchange Act and SEC rules, our directors, executive officers and beneficial owners of more than
10%ten percent of any class of our equity securities are required to file periodic reports of their ownership, and changes in that ownership, with the SEC. Based solely on our review of
copies of these reports and representations of such reporting persons, we believe that
during the year ended December 31, 2016,in 2019 such reporting persons met
all applicable Section 16(a)
filing requirements, with the exception of
(i) James N. Wilson, whoone late report on Form 3 filed
late reports on July 19, 2016 and November 14, 2016 reporting seven transactions not reported onby Dr. Grauer to report his appointment as a
timely basis, and (ii) Messrs. Fishman, Belanoff and Robb, who filed late reports on February 14, 2017, July 19, 2016 and July 19, 2016, respectively, each reporting one transaction not reported on a timely basis, in each case in clauses (i) and (ii) above with respect to grants and/or exercises of stock options to purchase shares of the Company’s common stock.Section 16 officer.
EXECUTIVE
COMPENSATIONCOMPENSATION
Compensation Discussion and Analysis
Our goal is to offer competitive compensation that rewards good performance in the short- and long-term. We pay direct compensation consisting of base salary, cash bonuses for the achievement of significant corporate goals and long-term equity incentive awards. The Compensation Committee has primary responsibility for the design and administration of our executive compensation program.
The Compensation Committee’s goal is to ensure that we offer compensation that is competitive, rewards good corporate performance and is appropriate for our stage of development as a company. Compensation is designed to encourage a focus on both short- and long-term goals. Direct compensation consists of salary, periodic cash bonuses for the achievement of significant corporate goals and long-term equity incentive awards.
This section discusses the principles underlying our policies with respect to the compensation of the named executive officers
namedincluded in the
“2016 Summary“Summary Compensation Table” and the factors that determined
thetheir compensation
decisions we made in
2016.2019. Our named executive officers for
20162019 were Joseph K. Belanoff, M.D., Chief Executive Officer and President;
G. Charles Robb, Chief Financial Officer and Secretary;
Sean Maduck, Senior Vice President, Commercial; and
Robert S. Fishman,Andreas Grauer, M.D., Chief Medical
Officer.Officer, who commenced employment on March 18, 2019.
Executive Summary
During 2016,
In 2019, we hadachieved significant clinical, commercial and financial goals:
•Advanced the clinical development operational and commercial accomplishments: | •
| Increased revenue from the sale of Korlym® for the treatment of patients with Cushing’s syndrome from $50.3 million in 2015 to $81.3 million in 2016, an increase of 62 percent.of our proprietary selective cortisol modulator, relacorilant, as a potential treatment for patients with Cushing’s syndrome.
|
Generated GAAP net income of $8.1 million•Demonstrated in 2016, compared to a loss of $6.4 millionPhase 1b trial that our proprietary selective cortisol modulator, miricorilant, is active in 2015.
| •
| Generated encouraging efficacy results in our Phase 1/2 trial of Korlym in combination with eribulin (Eisa Inc.’s drug, Halaven®) to treat patients with triple-negative breast cancer.
|
Beganhealthy volunteers experiencing weight gain caused by the antipsychotic medication olanzapine. Started a Phase 2 trial of our next-generation selective cortisol modulator, CORT125134, to treatmiricorilant in patients with Cushing’s syndrome.
| •
| Began the Phase 1/2 trial of CORT125134 in combination with nab-paclitaxel (Celgene Corporation’s drug, Abraxane®) to treat patients with a variety of solid-tumor cancers.
|
Advanced•Significantly advanced the pre-clinicalclinical development of other compoundsrelacorilant as a potential treatment for solid tumors, including enrolling patients with advanced ovarian cancer in a controlled, Phase 2 trial and formulating the development plan for relacorilant as a potential treatment for patients with metastatic pancreatic cancer.
•Increased revenue from $251.2 million in 2018 to $306.5 million in 2019.
•Increased our proprietary series of selective cortisol modulators.cash and investments by 52.5 percent, to $315.3 million.
Executive Compensation
20162019 Program Overview
Based on our compensation principles and in light of
bothstrong performance by the company and
individual performance,its named executive officers and employees, the Compensation Committee
and the Board took the following actions with respect to the compensation
forof our named executive officers for
2016:2019:
Base Salary.Effective MarchFebruary 1, 2016,2019, the Compensation Committee recommended, and the Board approved, limited 3.0% increasesa 4 percent increase to the annual base salaries of Dr. Belanoff, Mr. Robb and Mr. Fishman.Maduck. Dr. Grauer’s base salary was set at the start of his employment.
Bonuses. In accordance with our practice of awarding cash bonuses to named executive officers only for the achievement of significant corporate goals, in April 2016,February 2020, we paid bonuses to all employees of the company, including Drs. Belanoff and Fishman and Mr. Robb, uponour named executive officers, in recognition of the achievement of a key clinical milestone. accomplishments described above.
Equity Awards. In February 2016,2019, the Compensation Committee recommended, and the Board approved, grantsthe grant of options to each of our named executive officers. officers other than Dr. Grauer. In April 2019, Dr. Grauer was granted a new-hire option award in connection with the start of his employment.These option awards vest monthly over a four-year period, subject to the named executive officer’s continued employment through each applicable vesting date. These awards were given to our named executive officersemployment. The Board made these grants as an incentive toward theirfor the recipients’ continued service and to align their interests with the company.interests of the company’s stockholders.
Strong Stockholder Support for our Compensation Decisions
At our annual stockholder meeting in 2014, 99
Stockholder’s controlling ninety-five percent of the shares voted at our stockholders approved2017 annual meeting voted to approve the 20132016 compensation of our named executive officers andofficers. Fifty-eight percent of the shares voted approved our practice of submitting the compensation of our named executive officers to a non-binding stockholder vote once every three years. In light of this support, the Compensation Committee did not change the design of our compensation programs during 2014, 2015in 2018 or 2016. We are seeking an2019. The Compensation Committee’s objective continues to be aligning management’s interests in long-term value creation with those of our stockholders’. In accordance with our practice on the frequency of advisory votevotes on the compensation of our named executive officers, andwe are seeking the approval of our stockholders, on an advisory vote on the frequencybasis, of stockholder votes onour named executive officers’ compensation at the Annual Meeting. Unless our Board changes its policy with respect to the frequency of stockholder votes on executive compensation, we expect that our next advisory vote to approve our named executive officers’ compensation will be held at our 2020 annual stockholder meeting.See Proposal 2 in this Proxy Statement.
Compensation Principles and Objectives
Our compensation program is meant to attract, motivate and retain
highly qualifiedhighly-qualified executive officers by paying them competitively
consistent withand in a manner that reflects our
successperformance and their contributions to it.
We setEach year the Board sets goals designed to link each named executive officer’s compensation to
our corporate performance, such assignificant increases in Corcept’s long-term value. These goals reference the attainment of
significant research, development, commercial
operational and financial
targets.objectives, which the Board evaluates at end of each year. Because
pharmaceutical productdrug development can take many years,
athe largest portion of our
named executives’ compensation
is determined byconsists of option grants that are subject to extended vesting periods and reward achievements that increase stockholder value in the long term.
Except for their salaries, compensation for our named executive officers is performance-based. The Compensation Committee determines the structure and amount of performance-based compensation based on
the its members’
knowledgeexperience with and understanding of the most effective practices in the biotechnology and specialty pharmaceutical
industries.industry.
These are the Compensation Committee’s objectives:
•Align executive and stockholder interests in both the short and long term by providing equity awards and bonuses that are tied to company and individual performance.
Make sure compensation is competitive by relying on•Use the Compensation Committee members’ deep expertise and many years’years of experience with companies both ininside and outside of the pharmaceutical industry to design competitive compensation programs and awards recognizing that because of ourCorcept’s business model, and stage of development, there may be few directly comparable companies; and
Recognize•Take advantage of the fact that optimum compensation practices for a company withcompanies such as Corcept, which has relatively few employees may be substantially different than those for a larger, more mature company.
To realizecompared to its objectives, the Compensation Committee has offered our executives stock option grants that reward significant, sustained increases in our stock market value and discretionary bonuses based on the achievement of key milestones. The Compensation Committee reviews our performance-based compensation offerings at least annually.
The Chairman of the Boardrevenue and the scope of its development programs, can implement compensation programs and practices that larger companies may have difficulty matching.
The members of the Compensation Committee are seasoned executives of, consultants to, or
venture capitalists with investmentsinvestors in the biotechnology and specialty pharmaceutical industry. Collectively
theythe Chairman of the Board and members of the Compensation Committee have served as board and compensation committee members of many public and privately held companies including
NuGen, Jazz Pharmaceuticals, AimuneAimmune Therapeutics, Symantec,
Illumina, Sunesis
Pharmaceuticals, Adamas Pharmaceuticals and Cerus Corporation. As a result,
of this extensive involvement in the compensation of executives in these and other companies, we believe that the Chairman of the Board and the members of the Compensation Committee
(as well as our other Board members) clearly understand the compensation structures and amounts that are necessary to attract, motivate and retain management
talent.14
talent in our industry.
Determination of Compensation
The Compensation Committee reviews the performance of our named executive officers annually. To aid the Compensation Committee in its deliberations, our Chief Executive Officer
reviewsevaluates the performance of all executives other than himself and makes compensation recommendations regarding them. The Compensation Committee bases its
reviewdecisions on executive compensation on the Chief Executive Officer’s input,
the input of other Board members and
on its own evaluation of
the achievements of Corcept and
the individual executives’ achievements during the period.of each executive. The Compensation Committee then sets
or recommends salaries, performance bonuses and grants of stock options, taking into account its members’ understanding of compensation practices in the biotechnology and pharmaceutical industry and the members’ experiences as executives, consultants, board and compensation committee members, and
investors in such companies.investors.
Tax Considerations
In making its compensation determinations, our
The Compensation Committee considers the impact of Section 162(m) of the Internal Revenue Code of 1986, as amended, which limits the tax deductibility
by us of annual compensation in excess of $1,000,000 paid to
our Chief Executive Officer and any of our three other most highly compensatedindividuals who have ever served as named executive officers,
other than our Chief Financial Officer.While the tax impact of any compensation arrangement is one factor to be considered, such impact is evaluated in light of the Compensation Committee’sour overall compensation philosophy and objectives. The Compensation Committee considers ways to maximize the deductibility of executive compensation, while retaining the flexibility to compensate officers in a manner commensurate with their performance and the competitive market for executive talent. The Compensation Committee may award compensation to our named executive officers that may not be fully deductible by Corcept if it determines that such compensation is in our stockholders’ best interests and is consistent with our compensation principles.
interests.
Elements of Executive Compensation
The Compensation Committee determines our executives’or recommends executive salaries based on its members’ many years of assessing competitive market rates and the salaries required to attract, motivate and retain talented executives. Each year the Compensation Committee reviews the Chief Executive Officer’s base salary to determine if a change is appropriate based on its assessment of market trends and our company’s commercial and clinical performance. The Compensation Committee applies similar scrutiny to the salaries of our other officers, with input from the Chief Executive Officer. No formulaicOfficer and other Board members. Base salary increases are provided to our named executive officers. Thenot determined formulaically. Based on the Compensation Committee’s assessment of market trends, the Compensation Committee increasedrecommended and the Board approved four percent increases to the annual base salary forsalaries of Dr. Belanoff, Mr. Robb and Mr. Fishman each by 3.0%,Maduck, effective February 1, 2019, resulting in 2019 annual base salaries of $709,800, $457,600 and $457,600, respectively.Dr. Grauer’s annual base salary of $457,600 was set at the start of his employment as our Chief Medical Officer in March 1, 2016, to reflect its assessment2019 as a result of market trends for cost of living increases.arms’ length negotiations.
Performance-Based Compensation
Cash Bonus. Although we do not have an annual bonus program, weWe pay discretionary bonuses from time to time forannually based on the Compensation Committee’s assessment of our achievement of significant corporate goals. The Compensation Committee believes that the best way to ensure that our executives’ compensation is aligned with our business objectivesgoals and the interestscontribution to such achievements of our stockholders iseach named executive officer. We also maintain the discretion to pay bonuses when significant milestones are met,goals – such as the successful completion of a clinical trial, approval of a new product, a significant increase in revenue advancing our pre-clinical and clinical development programs, and successfully buildingor profitability, or substantial improvements in our management andor operational capabilities to support growth. The achievement of these types of milestones does not necessarily correspond with annual performance periods. Performance-based cash compensation has been awarded in recent years primarily to recognize the accomplishment of certain value-enhancing milestones such as the growth of– are met.
Annual bonuses for our
Cushing’s syndrome franchise and the achievement of pre-clinical and clinical milestones. In accordance with our practice of awarding bonuses to named executive officers onlyare targeted at a percentage of their base salaries, with actual payouts determined in the discretion of the Compensation Committee based on its evaluation of company and individual performance. Target bonuses are set based on the Compensation Committee’s assessment of market trends and performance. For 2019, our named executive officers’ target annual bonuses were as follows: Dr. Belanoff: 70% of base salary; Mr. Robb: 45% of base salary; Mr. Maduck: 45% of base salary; and Dr. Grauer: 45% of base salary. For Dr. Belanoff, Mr. Robb and Mr. Maduck, such target bonuses remained unchanged from their levels in 2018. Dr. Grauer’s target bonus was set at the start of his employment with us based on arms’ length negotiations, and for 2019, was subject to proration based on his partial year of employment.
In February 2020, the Compensation Committee evaluated the performance of our company and each of our named executive officers with respect to our short- and long-term goals and identified the accomplishments set forth in the Executive Summary above. These include: (i) opening clinical sites and enrolling patients in the United States, Europe and Israel in the Phase 3 trial of relacorilant as a potential treatment for patients with Cushing’s syndrome; (ii) preparing to start a Phase 3 trial of relacorilant in patients whose Cushing’s syndrome is caused by adrenal adenomas; (iii) demonstrating in a Phase 1b trial that miricorilant is active in mitigating antipsychotic-induced weight gain; (iv) enrolling patients in a Phase 2 trial of miricorilant for the
achievementreversal of
recent antipsychotic-induced weight gain; (v) significantly advancing the clinical development of relacorilant, in combination with the chemotherapeutic agent nab-paclitaxel, as a potential treatment for patients with advanced ovarian cancer and metastatic pancreatic cancer; and (vi) significant
corporate goals,growth in
March 2016, our
revenue, cash and investments. In light of these achievements, the Compensation Committee recommended, and the Board approved,
acorporate performance at 150 percent of target and bonus
opportunity for all employees of the company, including Drs. Belanoff and Fishman and Mr. Robb, payable upon the achievement of a key clinical15
milestone relating to the advancement of our oncology development program. In April 2016, this milestone was achieved and bonuses were paidpayments in the following amounts: Dr. Belanoff: $400,000;$745,290; Mr. Robb: $146,000;$308,881; Mr. Maduck: $308,881; and Dr. Fishman: $40,000. Grauer: $243,720.
The size of these bonuses was based primarily on each such named executive officer’s contributions to the achievement of the milestones and, in the case of Dr. Fishman, his tenure with our company.Long-Term Equity Incentive Program.Our named executive officers along with all of our employees, are eligible to receive grants of stock options under our 2012 Incentive Award Plan. We believe that equity ownership in our company isincentives are necessary to link executive compensation to the performance of our stock and our sustained growth. So far, weWe have used stock options as our only long-term performance-based equity incentive vehicle because the Compensation Committee believes that stock optionswe believe they maximize an executive officer’sthe incentive to increase our stock price and maximize stockholder value, since there is no financial gain to an executive officer unless our stock price appreciates.
The Compensation Committee
or the Board typically
grantsgrant stock options
uponwhen a named executive officer
joining our companyjoins Corcept and
once per yearthen annually in connection with its
determinationevaluation of the named executive officer’s potential future performance. The Compensation Committee
or the Board also typically
grantsgrant stock options following a significant change in job responsibility or in recognition of a significant achievement. The Compensation Committee determines the number of shares underlying each stock option grant based on a number of factors, including the
scope of the named executive officer’s
salary, such executive officer’sresponsibilities and anticipated contributions to
the achievement of our
financial and strategic objectives,goals, the value of the stock option at the time of grant
the possible value of the option if we achieve our objectives, and the Compensation Committee’s
or the Board’s understanding of industry practices and
norms.norms and other competitive factors. The relative weight given to each of these
factorsconsiderations is at the Compensation Committee’s discretion. There is no set formula.
To
maximize the incentive forincentivize continued employment, stock options granted to our named executive officers generally
have a four-year vesting schedule, measured from around the date of grant.vest over four years. We have occasionally granted stock options that vest based on the attainment of performance goals. Stock option awards generally expire ten years from the date of the grant, which allows the executive to focus on the creation and sustainment of long-term stockholder value and to have a reasonable opportunity to benefit from price appreciation in our shares. The exercise price
of such stock options is
100% of theset at our common stock’s fair market value
of the underlying stock on the date of grant.
In February
2016,2019, the Compensation Committee recommended, and the Board approved,
grants of options to our named executive officers in the following
amounts: 550,000 shares to Dr. Belanoff; 150,000 shares to Mr. Robb; and 100,000 shares to Mr. Fishman. These option
awards vest in substantially equal monthly installments over a four-year period from the grant date, subject to the named executive officer’s continued employment through each applicable vesting date. These awards were givengrants to our named executive officers as an incentive toward their continued service
and to
further align their interests with the
company.interests of our stockholders: Dr. Belanoff: 475,000 shares; Mr. Robb, 250,000 shares; and Mr. Maduck, 200,000 shares. The size of each award was based on the Compensation Committee’s
and Board’s determination of the recipient’s ability to contribute to our future success.
The awards vest in 48 equal monthly installments from the grant date, subject to the recipient’s continued employment at each monthly vesting date.
In April 2019, in connection with Dr. Grauer’s commencement of employment as the Company’s Chief Medical Officer, the Board granted to Dr. Grauer an option to purchase 425,000 shares of the Company’s common stock. The option vests with respect to 25 percent of the shares subject to the grant on March 19, 2020, and then in 36 equal installments on each monthly anniversary thereafter, subject to Dr. Grauer’s continued employment at each monthly vesting date.
Severance and Change in Control Arrangements
We have entered into Severance and Change in Control Agreements with each of our named executive officers to encourage continued attention and dedication to duties without distraction should there arise the possibility of ana change in the control of our company and to help ensure a smooth transition should such a change in control occur. The terms of thethese agreements are identical.the same for all of the named executive officers. For a detailed description, of the Severance and Change in Control Agreements, see “Potential Payments Upon Termination or Change in Control –- Severance and Change in Control Agreements”Agreements,” below.
Other Elements of Compensation
Our executives are eligible to receive the following retirement and insurance benefits on the same terms as our other employees.employees, as set forth below. Eligibility for all employees begins on the first day of the month coinciding with or immediately following the first business day of employment. These benefits help us attract and retain talented employees in a competitive employment market, where such benefits are common. Each year, we review the benefitbenefits package we offer.16
401(k) Plan.We have a Section 401(k) Savings/Retirement Plan, or 401(k) Plan, to cover eligible employees of the company and any designated affiliate. The 401(k) Plan permits eligible employees to defer up to 100%100 percent of their annual compensation, subject to limitations imposed by the Internal Revenue Code. All contributions are immediately vested and non-forfeitable. We make no matching contributions
Medical Insurance. At our sole cost, we provide each eligible employee, including each named executive officer, and his or her spouse and children with comprehensive health, dental and vision insurance.
Life and Disability Insurance.At our sole cost, we provide each eligible employee, including each named executive officer, disability and life insurance.
Other. From time to time, we provide new employees with relocation benefits in connection with their commencement of employment with us, which we believe is reasonable and necessary for recruitment. Pursuant to Dr. Grauer’s offer letter, Dr. Grauer was entitled to receive, in connection with his commencement of employment with us in March 2019: (i) reimbursement for the packing and shipping of household goods, (ii) up to six months of temporary housing; and (ii) reimbursement of up to $10,000 for approved miscellaneous relocation expenses. We also provided to Dr. Grauer a tax-gross up for the reimbursement of his temporary housing in 2019. In 2020, our Board also approved providing a housing supplement to Dr. Grauer equal to 100 percent of his housing costs for 2020, 50 percent of his housing costs for 2021 and 25 percent of his housing costs for 2022.
Policies with Respect to Equity Compensation Awards
We
Our policy is to grant all stock option awards based on the fair market value as of the date of grant. We do not have a policy of granting stock option awards at other than the fair market value of our common stock. The with anexercise price for each stock option grant is based onequal to the last quoted price per share on the NASDAQNasdaq Capital Market on the date of grant. We do not have a policy and do not intend to have a policy or practice to select option grant dates for named executive officers in coordination with the release of material non-public information.
We also have an insider trading policy that prohibits our named executive officers and Board members from engaging in
short-term or speculativecertain transactions in our stock, including short
sales.sales, and in derivative securities related to our stock. For a detailed description, see “Prohibition of Employee, Officer and Director Hedging,” above.
2019 Summary Compensation Table
The following table provides compensation information for the years ended December 31,
2016, 20152019, 2018 and
20142017 for each of our named executive officers.
| Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | | Option Awards(1) ($) | | | All Other Compensation ($) | | | Total ($) | Name and Principal Position | | Year | | Base Salary
($) | | Bonus
($) | | Option Awards (1) ($) | | All Other
Compensation (3)
($) | | Total
($) |
Joseph K. Belanoff, M.D., | | 2016 | | 615,000 | | 400,000 | | | 1,382,390 | | | | — | | | 2,397,390 | Joseph K. Belanoff, M.D., | | 2019 | | 707,525 | | | 745,290 | | | 3,506,155 | | | — | | | 4,958,970 | |
Chief Executive Officer and | | 2015 | | 597,670 | | | — | | | 1,255,685 | | | | — | | | 1,853,355 | Chief Executive Officer and | | 2018 | | 679,792 | | | 477,750 | | | 5,157,075 | | | — | | | 6,314,617 | |
President | | 2014 | | 571,250 | | | — | | | | — | | | | — | | | 571,250 | President | | 2017 | | 647,333 | | | 702,000 | | | 2,922,119 | | | — | | | 4,271,452 | |
G. Charles Robb, | | 2016 | | 374,685 | | 146,000 | | | 377,015 | | | | — | | | 897,700 | |
| Charles Robb, | | Charles Robb, | | 2019 | | 456,133 | | | 308,881 | | | 1,845,345 | | | — | | | 2,610,359 | |
Chief Financial Officer and | | 2015 | | 363,472 | | | — | | | 418,562 | | | | — | | | 782,034 | Chief Financial Officer and | | 2018 | | 436,667 | | | 237,600 | | | 2,171,400 | | | — | | | 2,845,667 | |
Secretary | | 2014 | | 350,908 | | | — | | | | — | | | | — | | | 350,908 | Secretary | | 2017 | | 397,929 | | | 320,000 | | | 1,062,589 | | | — | | | 1,780,518 | |
Robert S. Fishman, M.D. | | 2016 | | 411,363 | | 40,000 | | | 234,067 | | | | — | | | 685,430 | |
Chief Medical Officer | | 2015 | | 104,956 | | | — | | | 1,258,963 | | | | — | | | 1,363,919 | |
| Sean Maduck, | | Sean Maduck, | | 2019 | | 456,133 | | | 308,881 | | | 1,476,276 | | | — | | | 2,241,290 | |
| Senior Vice President, | | Senior Vice President, | | 2018 | | 436,667 | | | 198,000 | | | 2,171,400 | | | — | | | 2,806,067 | |
| Commercial | | Commercial | | 2017 | | 397,917 | | | 320,000 | | | 2,036,818 | | | — | | | 2,754,735 | |
| Andreas Grauer, M.D. | | Andreas Grauer, M.D. | | 2019 | | 362,267 | | | 243,720 | | | 3,115,335 | | | 78,245 | | | 3,799,567 | |
| Chief Medical Officer (2) | | Chief Medical Officer (2) | | | | | | | | | | | | | | | | | |
(1)
| Amounts shown do not reflect compensation actually received by the named executive officers or the actual value that may be recognized by the named executive officers with respect to these awards in the future. Amounts reported constitute the grant date fair value of option awards as calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” in our Annual Report on Form 10-K for the year ended December 31, 2016.
|
(1)Amounts shown do not reflect compensation actually received by the named executive officers or the actual value that may be recognized by the named executive officers with respect to these awards in the future. Amounts reported constitute the grant date fair value of option awards as calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employee and Director Options” in our Annual Report on Form 10-K for the year ended December 31, 2019.
(2)Dr. Grauer was hired as our Chief Medical Officer on March 18, 2019.
(3)Represents (i) reimbursements of $17,287 for the movement of household goods and other relocation expenses; (ii) $39,879 reimbursed for temporary housing; and (iii) $21,079 in the amount of a tax gross-up relating to the temporary housing benefit, in each case, provided to Dr. Grauer in connection with his commencement of employment with us.
Grants of Plan-Based Awards During
20162019
The following table summarizes the grants of
optionsoption awards we made to the named executive officers in
2016.Name | | Grant Date | | All Other Option Awards: Number of Securities Underlying Options (2) (#) | | | Exercise Price or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards(1) ($) | |
Joseph K. Belanoff, M.D. | | 2/26/2016 | | | 550,000 | | | 3.88 | | | 1,382,390 | |
G. Charles Robb | | 2/26/2016 | | | 150,000 | | | 3.88 | | | 377,015 | |
Robert S. Fishman, M.D. | | 2/26/2016 | | | 100,000 | | | 3.88 | | | 234,067 | |
(1)
| The amount reported constitutes the grant date fair value of the option award, calculated in accordance with FASB ASC Topic 718. Refer to Note 8 “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” included in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2016 for the relevant assumptions used to determine the valuation of our option awards.
|
2019.(2)
| The stock options vest over a four year period at the rate of 2.08334% on each monthly anniversary of the grant date until fully vested, subject to the terms and conditions of the option award agreement.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Grant Date | | All Other
Option Awards:
Number of Securities
Underlying Options
(no. of shares) | | Exercise Price of
Option Awards
($/share) | | Grant Date Fair Value of Option Awards (3) ($) |
| Joseph K. Belanoff, M.D. | | 2/8/2019 | | 475,000 (1) | | 11.35 | | 3,506,155 | |
| Charles Robb | | 2/8/2019 | | 250,000 (1) | | 11.35 | | 1,845,345 | |
| Sean Maduck | | 2/8/2019 | | 200,000 (1) | | 11.35 | | 1,476,276 | |
| Andreas Grauer, M.D. | | 4/1/2019 | | 425,000 (2) | | 11.29 | | 3,115,335 | |
(1)These stock options vest in 48 equal installments on each monthly anniversary of the grant date until fully vested, subject to the terms and conditions of the option award agreement.
(2)Twenty-five percent of this stock option vests on the one-year anniversary of grant and the remainder of the stock option vests in 36 equal installments on each monthly anniversary of the grant date thereafter until fully vested, subject to the terms and conditions of the option award agreement.
(3)The amount reported constitutes the grant date fair value of the option award, calculated in accordance with FASB ASC Topic 718. Refer to Note 8 “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employee and Director Options” included in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2019 for the relevant assumptions used to determine the valuation of our option awards.
Outstanding Equity Awards
Atat Fiscal Year-End
The following table summarizes
unexercisedoutstanding options
that have not vested and related information for each of our named executive officers as of December 31,
2016.2019. To date, no stock awards have been granted to any of our named executive officers.
| | | | Number of Securities Underlying Unexercised Options Exercisable | | | Number of Securities Underlying Unexercised Options Unexercisable | | | Option Exercise Price | | Option Expiration |
Name | | Vesting Commencement Date (1) | | (#) | | | (#) | | | ($) | | Date |
Joseph K. Belanoff, M.D. | | 3/26/2009 | | | 1,000,000 | | | | — | | | 1.19 | | 3/26/2019 |
| | 5/19/2011 | | | 800,000 | | | | — | | | 4.42 | | 5/19/2021 |
| | 1/30/2013 | | | 783,333 | | | | 16,667 | | | 2.08 | | 1/30/2023 |
| | 2/18/2015 | | | 206,250 | | | | 243,750 | | | 3.29 | | 2/18/2025 |
| | 2/26/2016 | | | 114,583 | | | | 435,417 | | | 3.88 | | 2/26/2026 |
G. Charles Robb | | 9/1/2011 | | | 600,000 | | | | — | | | 2.70 | | 9/1/2021 |
| | 1/30/2013 | | | 195,833 | | | | 4,167 | | | 2.08 | | 1/30/2023 |
| | 11/19/2013 | | | 77,083 | | | | 22,917 | | | 1.92 | | 11/19/2023 |
| | 2/18/2015 | | | 68,750 | | | | 81,250 | | | 3.29 | | 2/18/2025 |
| | 2/26/2016 | | | 31,250 | | | | 118,750 | | | 3.88 | | 2/26/2026 |
Robert S. Fishman, M.D. | | 9/28/2015 | | | 132,812 | | | | 292,188 | | | 3.51 | | 9/29/2025 |
| | 2/26/2016 | | | 20,833 | | | | 79,167 | | | 3.88 | | 2/26/2026 |
(1)
| Eeach unvested option vests and becomes exercisable in substantially equal monthly installments through the fourth anniversary of the vesting commencement date, subject to the named executive officer’s continued services through the applicable vesting date.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Vesting
Commencement | | Number of
Shares
Underlying
Unexercised
Options
Exercisable | | Number of
Shares
Underlying
Unexercised
Options
Unexercisable | | Option
Exercise
Price | | Option
Expiration |
| Name | | Date (1) | | (no. of shares) | | (no. of shares) | | ($/share) | | Date |
| Joseph K. Belanoff, M.D. | | 5/19/2011 | | 800,000 | | | — | | | $ | 4.42 | | | 5/19/2021 |
| | 1/30/2013 | | 800,000 | | | — | | | $ | 2.08 | | | 1/30/2023 |
| | 2/18/2015 | | 450,000 | | | — | | | $ | 3.29 | | | 2/18/2025 |
| | 2/26/2016 | | 527,083 | | | 22,917 | | | $ | 3.88 | | | 2/26/2026 |
| | 2/10/2017 | | 389,583 | | | 160,417 | | | $ | 8.27 | | | 2/10/2027 |
| | 2/7/2018 | | 217,708 | | | 257,292 | | | $ | 16.52 | | | 2/7/2028 |
| | 2/8/2019 | | 98,958 | | | 376,042 | | | $ | 11.35 | | | 2/8/2029 |
| Charles Robb | | 9/1/2011 | | 600,000 | | | — | | | $ | 2.70 | | | 9/1/2021 |
| | 1/30/2013 | | 200,000 | | | — | | | $ | 2.08 | | | 1/30/2023 |
| | 11/19/2013 | | 45,000 | | | — | | | $ | 1.92 | | | 11/19/2023 |
| | 2/18/2015 | | 150,000 | | | — | | | $ | 3.29 | | | 2/18/2025 |
| | 2/26/2016 | | 143,750 | | | 6,250 | | | $ | 3.88 | | | 2/26/2026 |
| | 2/10/2017 | | 141,666 | | | 58,334 | | | $ | 8.27 | | | 2/10/2027 |
| | 2/7/2018 | | 91,666 | | | 108,334 | | | $ | 16.52 | | | 2/7/2028 |
| | 2/8/2019 | | 52,083 | | | 197,917 | | | $ | 11.35 | | | 2/8/2029 |
| Sean Maduck | | 11/1/2012 | | 25,000 | | | — | | | $ | 2.24 | | | 11/1/2022 |
| | 1/30/2013 | | 20,000 | | | — | | | $ | 2.08 | | | 1/30/2023 |
| | 10/16/2013 | | 25,000 | | | — | | | $ | 1.92 | | | 11/19/2023 |
| | 2/6/2014 | | 40,000 | | | — | | | $ | 3.02 | | | 2/6/2024 |
| | 8/1/2014 | | 55,009 | | | — | | | $ | 2.61 | | | 8/1/2024 |
| | 2/18/2015 | | 234,991 | | | — | | | $ | 3.29 | | | 2/18/2025 |
| | 2/26/2016 | | 143,750 | | | 6,250 | | | $ | 3.88 | | | 2/26/2026 |
| | 4/27/2016 | | 137,500 | | | 12,500 | | | $ | 5.05 | | | 5/2/2026 |
| | 2/10/2017 | | 283,333 | | | 116,667 | | | $ | 8.27 | | | 2/10/2027 |
| | 2/7/2018 | | 91,666 | | | 108,334 | | | $ | 16.52 | | | 2/7/2028 |
| | 2/8/2019 | | 41,666 | | | 158,334 | | | $ | 11.35 | | | 2/8/2029 |
| Andreas Grauer, M.D. | | 3/18/2019 | | — | | | 425,000 | | | $ | 11.29 | | | 3/18/2029 |
(1)Except the grant to Dr. Grauer, which vested with respect to 25 percent of the shares on March 19, 2020 and vests in 36 equal monthly installments after that, subject to his continued employment through the monthly vesting date, each unvested option vests and becomes exercisable in equal monthly installments through the fourth anniversary of the vesting commencement date, subject to the named executive officer’s continued employment through the monthly vesting date.
Option Exercises in
20162019
The following table includes certain information with regard to options exercised by our named executive officers during
2016.2019. | | Option Exercise | | | | | | | | | | | | | | | | | | | |
| Option Awards | | Option Awards | |
Name | | Number of Shares Acquired On Exercise (#) | | | Value Realized on Exercise ($)(1) | | Name | | Number of Shares Acquired
On Exercise
(no. of shares) | | Value Realized on Exercise ($)(1) |
Joseph K. Belanoff, M.D. | | | 1,000,000 | | | | 7,143,297 | | |
| Joseph K. Belanoff, M.D. (2) | | Joseph K. Belanoff, M.D. (2) | | 782,885 | | 8,408,185 |
| Charles Robb | | Charles Robb | | 30,000 | | 354,428 |
(1)
| The value realized on the exercise represents the excess of the sales price or market price at close on the day of the exercise less the exercise price of the shares.
|
(1)The value realized on exercise represents, for each share exercised, the excess of the closing trading price of our common stock on the date of exercise over the exercise price of the option.
(2)The shares acquired on exercise by Dr. Belanoff were issued as part of a net exercise whereby 427,528 shares were retained by us to satisfy the exercise price and statutory withholding requirements.
None of our named executive officers participate in or have account balances in qualified or non-qualified defined benefit plans sponsored by us.
Nonqualified Deferred Compensation
None of our named executives participate in or have account balances in non-qualified defined contribution plans or other deferred compensation plans maintained by us.
Potential Payments Upon Termination or Change in Control
Severance and Change in Control Agreements
We have entered into Severance and Change in Control Agreements with each of our named executive officers. The terms of the agreements are identical.
The agreementsThey provide that if the executive’s employment is terminated by us without “cause” or by the executive for “good reason” (as each term is defined in the agreements) prior to or more than 18 months following a change in control, the executive will be eligible to receive 12 months of his or her
then currentthen-current base salary, payable in substantially equal installments in accordance with the company’s customary payroll procedures and continued health insurance coverage for up to 12 months following the date of termination. In addition, the agreements provide that in the event the executive’s employment is terminated by us without “cause” or by the executive for “good reason” within 18 months following a change in control, the executive will be eligible to receive an amount equal to 12 months of his or her
then currentthen-current base salary payable in a lump sum, continued health insurance coverage for up to 12 months following the date of termination, and full vesting of all outstanding equity awards. The receipt of any severance will be subject to the executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to us within 60 days following executive’s termination of employment. No severance will be paid or provided until the separation agreement and release of claims becomes effective.
19
The following table reflects compensation payable to each of
Dr.Drs. Belanoff
Mr.and Grauer and Messrs. Robb and
Dr. Fishman underMaduck upon a change in control or various employment termination events. The amounts shown below assume that (i)
a change in control of our company occurred and each named executive officer experienced a qualifying termination on December 31, 2016 or (ii) suchthe named executive officer experienced a qualifying termination effective as of December 31,
2016.Name | | Benefit | | Termination Without Cause or For Good Reason Outside of a Change in Control | | | Termination Without Cause or For Good Reason Within 18 Months Following a Change in Control | |
Joseph K. Belanoff, M.D. | | Base Salary | | $615,000 | | | $615,000 | |
| | Accelerated Vesting of Stock Options | | | — | | | $2,525,815 | (1) |
| | Health Benefit | | $33,253 | | | $33,253 | |
| | Total | | $648,253 | | | $3,174,068 | |
G. Charles Robb | | Base Salary | | $374,685 | | | $374,685 | |
| | Accelerated Vesting of Stock Options | | | — | | | $867,920 | (1) |
| | Health Benefit | | $12,112 | | | $12,112 | |
| | Total | | $386,797 | | | $1,254,717 | |
Robert S. Fishman, M.D. | | Base Salary | | $411,363 | | | $411,363 | |
| | Accelerated Vesting of Stock Options | | | — | | | $1,363,289 | (1) |
| | Health Benefit | | $33,253 | | | $33,253 | |
| | Total | | $444,616 | | | $1,807,905 | |
(1)
| For unvested options held by named executive officers as of December 31, 2016, the value ascribed to the change in control acceleration features under the Severance and Change in Control Agreements is calculated as follows:
|
2019 or (ii) a change in control of our company occurred and the named executive officer experienced a qualifying termination on December 31, 2019. | a.
| For option grants to these individuals where the closing trading price for our company’s common stock on the NASDAQ Capital Market as of December 30, 2016, $7.26, exceeded the exercise price of the option grant, the value of the acceleration benefit on change in control has been calculated as the difference between these prices multiplied by the number of unvested shares in each of these option awards as of that date.
|
| b.
| There is no value ascribed to any unvested shares for any option grants to these individuals where the exercise price of the option grant equaled or exceeded $7.26, which was the closing trading price for our company’s common stock on the NASDAQ Capital Market as of December 30, 2016.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Benefit | | Termination
For Any Reason
Outside of a Change
in Control | | Termination
For Any Reason
Within 18 Months
Following a
Change in Control | | |
| Joseph K. Belanoff, M.D. | | Base Salary | | 707,525 | | | $ | 707,525 | | | |
| | | Accelerated Vesting of Stock Options | | — | | | $ | 1,084,806 | | | (1) | |
| | | Health Insurance Benefit | | $ | 31,152 | | | $ | 31,152 | | | |
| | | Total | | $ | 738,677 | | | $ | 1,823,483 | | | |
| Charles Robb | | Base Salary | | 456,133 | | | $ | 456,133 | | | |
| | | Accelerated Vesting of Stock Options | | — | | | $ | 423,232 | | | (1) | |
| | | Health Benefit | | $ | 22,397 | | | $ | 22,397 | | | |
| | | Total | | $ | 478,530 | | | $ | 901,762 | | | |
| Sean Maduck | | Base Salary | | $ | 456,133 | | | $ | 456,133 | | | |
| | | Accelerated Vesting of Stock Options | | — | | | $ | 705,085 | | | (1) | |
| | | Health Insurance Benefit | | $ | 31,152 | | | $ | 31,152 | | | |
| | | Total | | $ | 487,285 | | | $ | 1,192,370 | | | |
| Andreas Grauer, M.D. | | Base Salary | | $ | 362,267 | | | $ | 362,267 | | | |
| | | Accelerated Vesting of Stock Options | | — | | | $ | 344,250 | | | (1) | |
| | | Health Insurance Benefit | | $ | 21,169 | | | $ | 21,169 | | | |
| | | Total | | $ | 383,436 | | | $ | 727,686 | | | |
(1)For unvested options held by named executive officers as of December 31, 2019, the value ascribed to the accelerated vesting benefit under the Severance and Change in Control Agreements is calculated by multiplying any excess in the closing price for our company’s common stock on the Nasdaq Stock Market as of December 31, 2019, $12.10, over the exercise price of the option grant, times the number of unvested shares subject to the option as of that date.
Risk Assessment of Compensation Programs
Our Compensation Committee and Board have determined that our compensation policies, plans and practices are appropriately balanced and do not create risks that will have a material adverse effect on our company. To make this determination, they reviewed the company’s compensation policies, plans and practices with a focus on compensation program design, payment methodology, relationship to performance and length of performance period, and oversight and controls as compared to the compensation practices that they have seen in similar companies. During the review, the Compensation Committee noted risk mitigating factors inherent in our compensation practices, including the Compensation Committee’s and management’s discretion in approving executive and employee compensation and establishing performance goals for
short-short and long-term compensation plans, the balance between fixed and variable pay and the mix of
short-short and long-term incentives that encourage consistent performance over a sustained period, and these factors aligned the interests of our named executive officers and employees with those of our stockholders.
20
EQUITY
COMPENSATIONCOMPENSATION PLAN INFORMATIONThe following table provides information as of December 31,
20162019 with respect to the shares of our common stock that may be issued under all of our existing equity compensation plans, which consist of the 2012 Incentive Award Plan and the 2004 Equity Incentive Plan.
| | (a) | | | (b) | | | (c) | | |
Plan Category | | Number of Securities to Be Issued upon Exercise of Outstanding Options | | | Weighted Average Exercise Price of Outstanding Options | | | Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column(a))(2) | | |
Equity compensation plans approved by stockholders | | | 17,663,682 | | | $ | 3.63 | | | | 7,919,076 | | (1)(2) |
Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | | |
Total | | | 17,663,682 | | | $ | 3.63 | | | | 7,919,076 | | |
| (1)
| Represents shares of common stock remaining available for future issuance under our 2012 Incentive Award Plan as of December 31, 2016.
|
| (2)
| The 2012 Incentive Award Plan contains an “evergreen” provision that allows for increases on the first day of each year beginning in 2013 and ending in 2022, the lesser of an additional (i) 8,000,000 shares of our common stock, (ii) 4% of the outstanding shares of common stock on the immediately preceding December 31 or (iii) such smaller number of shares determined by the Board. None of our other plans has an “evergreen” provision. On February 10, 2017, the Board authorized an “evergreen” increase in the shares available for grant under the 2012 Plan to be equivalent to 4% of the shares of our common stock outstanding on December 31, 2016, which represented an increase of 4,508,404 shares to the plan.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (a) | | (b) | | (c) | | |
| Plan Category | | Number of
Securities to be
Issued upon
Exercise of
Outstanding
Options | | Weighted Average
Exercise Price of
Outstanding Options | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))(2) | | |
| Equity compensation plans approved by stockholders | | 23,600,627 | | | $ | 8.77 | | | 8,623,981 | | | (1)(2) |
| Equity compensation plans not approved by stockholders | | — | | | — | | | — | | | |
| Total | | 23,600,627 | | | $ | 8.77 | | | 8,623,981 | | | |
(1)Represents shares of common stock remaining available for future issuance under our 2012 Incentive Award Plan as of December 31, 2019.
(2)The 2012 Incentive Award Plan contains an “evergreen” provision that allows for an increase on the first day of each year beginning in 2013 and ending in 2022 equal to the lesser of an additional (i) 8,000,000 shares of our common stock, (ii) 4 percent of the outstanding shares of common stock on the immediately preceding December 31 or (iii) such smaller number of shares determined by the Board. None of our other plans has an “evergreen” provision. On February 7, 2020, the Board authorized an “evergreen” increase in the shares available for grant under the 2012 Plan to be equivalent to 4 percent of the shares of our common stock outstanding on December 31, 2019, which represented an increase of 4,581,942 shares to the plan.
The following table provides compensation information, for the one-year period ended December 31,
2016,2019, for each
non-employee member of our Board.
Name | | Fees Earned or Paid in Cash ($) | | | Option Awards(1)(2) ($) | | | All Other Compensation ($) | | | Total ($) | |
James N. Wilson (3) | | 65,873 | | | 251,344 | | | 275,131 | | (3) | 592,348 | |
Joseph K. Belanoff, M.D. (4) | | | — | | | | — | | | | — | | | | — | |
G. Leonard Baker, Jr. | | 53,000 | | | 110,198 | | (5) | | — | | | 163,198 | |
Daniel M. Bradbury | | 49,176 | | | 110,198 | | (5) | | — | | | 159,374 | |
Daniel N. Swisher, Jr. | | 57,879 | | | 183,663 | | (5) | | — | | | 241,542 | |
Patrick G. Enright | | 52,250 | | | 110,198 | | (5) | | — | | | 162,448 | |
David L. Mahoney | | 57,250 | | | 110,198 | | (5) | | — | | | 167,448 | |
Reneé D. Galá (6) | | 25,000 | | | 223,684 | | (6) | | — | | | 248,684 | |
| (1)
| Amounts shown do not reflect compensation actually received by the directors or the actual value that may be recognized by the directors with respect to these awards in the future. Instead, the amounts shown represent the grant date fair value of the awards as calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employees and Director Options” in our Annual Report on Form 10-K for the year ended December 31, 2016.
|
Dr. Belanoff is not provided additional compensation for his service on our Board. | (2)
| As of December 31, 2016, our non-employee directors and Mr. Wilson held options outstanding to purchase the following number of shares: Mr. Baker: 300,000; Mr. Bradbury: 190,000; Mr. Swisher: 120,000; Mr. Enright: 310,000; Mr. Mahoney: 310,000; Ms. Galá: 70,000 shares; and Mr. Wilson: 1,250,000 shares.
|
21
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid
in Cash
($) | | Option Awards(1)(2) ($) | | Total
($) |
| James N. Wilson | | 125,128 | | 505,933 | | 631,061 |
| G. Leonard Baker, Jr. | | 66,336 | | 168,644 | | 234,980 |
| Daniel M. Bradbury (3) | | 29,095 | | — | | 29,095 |
| Daniel N. Swisher, Jr. | | 80,172 | | 168,644 | | 248,816 |
| David L. Mahoney | | 73,017 | | 168,644 | | 241,661 |
| Renée D. Galá (4) | | 30,259 | | — | | 30,259 |
| Kimberly Park (5) | | 18,778 | | 517,397 | | 536,175 |
(1)Amounts shown do not reflect compensation actually received by the directors or the actual value that may be recognized by the directors with respect to these awards in the future. Instead, the amounts shown represent the grant date fair value of the awards as calculated under FASB ASC Topic 718. The relevant assumptions used to calculate the value of the option awards are set forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements, Note 8 – “Preferred Stock and Stockholders’ Equity – Stock-Based Compensation Related to Employee and Director Options” in our Annual Report on Form 10-K for the year ended December 31, 2019.
(2)As of December 31, 2019, our non-employee directors held options outstanding to purchase the following number of shares: Mr. Baker: 290,000; Mr. Bradbury: 245,000; Mr. Swisher: 200,000; Mr. Mahoney: 310,000; and Mr. Wilson: 1,090,000 shares. During 2019, Mr. Wilson, as chairman of the board, was granted an option to purchase 75,000 shares with a grant date fair value of $505,933, Messrs. Baker, Swisher and Mahoney were each granted an option to purchase 25,000 shares with a grant date fair value of $168,645. All of these awards vest pro-rata over a one-year period at the rate of 8.3334 percent on the monthly anniversary of the date of grant, subject to continued service.
(3)Mr. Bradbury did not stand for reelection at our 2019 annual meeting.
(4)Ms. Galá did not stand for reelection at our 2019 annual meeting.
(5)Ms. Park was appointed to our board of directors in September 2019. On September 17, 2019, Ms. Park was granted an option to purchase 60,000 shares of the Company’s common stock, at an exercise price of $13.49 per share, the closing price of the Company’s common stock on the Nasdaq
| (3)
| From January 1, 2016 through March 1, 2016, Mr. Wilson was an employee director serving as the Chairman of our board of directors. He received compensation in his role as an employee providing advice and business insight. The amount in “All Other Compensation” column for Mr. Wilson represents the $91,000 in base salary paid to Mr. Wilson for his services as an employee through March 1, 2016, and bonus compensation awarded to him by the Compensation Committee of $184,000, constituting a bonus for the achievement of corporate performance goals.
|
| (4)
| Dr. Belanoff is a full time employee and a named executive officer and is compensated in that capacity. His compensation as an employee is shown in the “Summary Compensation Table” above. He receives no additional compensation in his capacity as a director. See “Outstanding Equity Awards At Fiscal Year-End” table above for the aggregate number of shares represented by option awards outstanding that have been granted to Dr. Belanoff.
|
Stock Market on the date of grant. The grant date fair value of this option was $517,397. This option will vest over a 4-year period, with 25 percent vesting on the first annual anniversary of the date of grant and the remainder vesting ratably on each monthly anniversary thereafter until fully vested, subject to Ms. Park’s continued service. | (5)
| During 2016, Mr. Wilson, as chairman of the board, was granted an option to purchase 100,000 shares with a grant date fair value of $251,344, Mr. Swisher, as chairman of the Audit Committee, was granted an option to purchase 50,000 shares with a grant date fair value of $183,663, and Messrs. Baker, Bradbury, Enright and Mahoney were each granted an option to purchase 30,000 shares with a grant date fair value of $110,198. All of these awards vest pro-rata over a one-year period at the rate of 8.3334% on the monthly anniversary of the date of grant, subject to continued service.
|
| (6)
| Ms. Galá was appointed to our board of directors in June 2016. On June 27, 2016, Ms. Galá was granted an option to purchase 70,000 shares of the Company’s common stock, at an exercise price of $5.11 per share, the closing price of the Company’s common stock on the Nasdaq Stock Market on the date of grant. The grant date fair value of this option was $223,684. This option will vest over a 4-year period, with 25 percent vesting on the first annual anniversary of the date of grant and the remainder vesting ratably on each monthly anniversary thereafter until fully vested, subject to Ms. Galá’s continued service.
|
For 2016,2019, non-employee directors received a director fee from us for their services as members of the Board in the amount of $50,000, increased from $40,000 per year.effective January 1, 2019. In addition, the Chair and members of the Audit Committee receivereceived fees of $15,000$20,000 and $10,000, respectively, per year;respectively; the Chair and members of the Compensation Committee receivereceived fees of $13,000$15,000 and $6,500, respectively, per year;$7,500, respectively; and the Chair and members of the Corporate Governance & Nominating Committee receivereceived fees of $8,000$10,000 and $4,500, respectively, per year. Commencing March 1, 2016, the$5,000, respectively. The chairman of our board of directors receives an annualBoard received a cash retainer of $120,000 in lieu of any other fees. New directors are granted an option to purchase 70,00060,000 shares of common stock in connection with their initial election to the Board. In February 2017, the Board approved a reduction in the initial option grant to 60,000 shares.stock. The initial director options vest with respect to 25%25 percent of the shares on the first anniversary of the date of the grant and, in 36 equal monthly installments thereafter, at the rate of 2.08334% per month, until fully vested, subject to the director’s continued service.service on each monthly vesting date. Non-employee directors who are reelected at the 2020 Annual Meeting are each receive agranted an option to purchase 25,000 shares of common stock option grant of 30,000 shares that vests over one year at the rate of 8.3334% per monthin 12 equal monthly installments from the date of the 2020 Annual Meeting, until fully vested, subject to the director’s continued service.service on each monthly vesting date. Non-employee directors that are appointed to the Board mid-year receive a pro-rated annual option grant. The Board has also historically approved larger option awards for directors serving certain leadership roles. In 2016,2019, the Board approvedgranted Mr. Wilson an option covering 100,000to purchase 75,000 shares to Mr. Wilsonof common stock, vesting in 12 monthly installments for his service as Chairman of the Board, subject to his continued service on each monthly vesting date. For 2020, the Board approved increasing the annual option for each director other than Mr. Wilson to 30,000 shares and granting to Mr. Wilson an option covering 50,000to purchase 80,000 shares to Mr. Swisherof common stock for his service as ChairChairman of the Audit Committee.
Board.
We have also entered into a Severance and Change in Control Agreement with James N. Wilson, Chairman of the Board.Mr. Wilson. The agreement with Mr. Wilson provides that if his employment or service on the Board is terminated involuntarily by us without “cause” or by him for “good reason” (as each is defined in the agreement) within 18 months following a change in control all of his outstanding equity awards shall become fully vested. Mr. Wilson will only receive vesting acceleration under this agreement if he signs and does not revoke a separation agreement and release of claims in a form reasonably acceptable to our Company within 60 days following termination of employment. No vesting acceleration will
Pay Ratio Disclosure
The Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulation S-K require us to report the ratio of the median annual compensation of our full- and part-time employees in 2019 (that is, the compensation of the employee whose compensation is in the middle of the group, with as many employees earning more as earned less, not including our CEO) to the annual total compensation of our CEO.
We identified the employee with median compensation by comparing the W-2 gross income (Box 1) of all full- and part-time employees (except our CEO) who were employed on December 31, 2019. To permit meaningful comparisons between employees who worked for us less than the entire year and those who worked for us during the entire year, we annualized each permanent employee’s compensation based on the percentage of the year they worked for us. The annual total compensation of our median employee was $253,070 for 2019, including base salary earned for 2019, the grant date fair value options awarded in 2019 and the bonus paid in February 2020 with respect to 2019 performance.
As disclosed above in the Summary Compensation Table, our CEO’s annual total compensation for 2019 was $4,958,970.
As calculated above, the annual total compensation of our median employee excluding the CEO to that of our CEO is as follows:
| | | | | |
| Median employee | $253,070 | |
| CEO | $4,958,970 | |
| Ratio | 20:1 |
Because public companies use different methods to calculate their pay ratios, the ratio we report should not be
providedused as a basis for comparing Corcept to
Mr. Wilson until the separation agreement and release of claims becomes effective.22
its peers.
COMPENSATION
COMMITTEECOMMITTEE REPORT*The Compensation Committee of the Board, or Compensation Committee, has furnished this report on executive compensation. None of the members of the Compensation Committee is currently our officer or employee and all are “non-employee directors” for purposes of Rule 16b-3 under the Exchange
Act and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.Act. The Compensation Committee is responsible for designing, recommending to the Board for approval and evaluating our compensation plans, policies and programs and reviewing and approving the compensation of the Chief Executive Officer and other officers and directors.
This report, filed in accordance with Item 407(e)(5) of Regulation S-K, should be read in conjunction with the other information relating to executive compensation, which is contained elsewhere in this
Proxy Statementproxy statement and is not repeated here.
In this context, the Compensation Committee hereby reports as follows:
1.
| The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K contained herein with management; and
|
•The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K contained herein with management; and
•Based on the review and discussions referred to in paragraph (1) above, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2019.
2.
| Based on the review and discussions referred to in paragraph (1) above, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference to our Annual Report on Form 10-K for the year ended December 31, 2016.
| |
|
Compensation Committee |
|
David L. Mahoney, Chairman |
G. Leonard Baker, Jr., Chairman |
Daniel M. Bradbury
|
Daniel N. Swisher, Jr. |
* The material in this report is not soliciting material, and is not deemed filed with the SEC.
23
| | | | | |
| * | The material in this report is not soliciting material, and is not deemed filed with the SEC. |
REPORT OF THE
AUDITAUDIT COMMITTEE*Under the guidance of a written charter adopted by the Board, the purpose of the Audit Committee is to oversee the accounting and financial reporting processes of the Company and audits of its financial statements. The responsibilities of the Audit Committee include appointing and providing for the compensation of the Company’s independent registered public accounting firm. Each of the members of the Audit Committee meets the independence requirements of
the rules of the NASDAQ Stock MarketNasdaq and the SEC.
Management has primary responsibility for the system of internal controls and the financial reporting process. The independent registered public accounting firm has the responsibility to express an opinion on the financial statements and internal control over financial reporting based on an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board
(“PCAOB”)(PCAOB).
In this context and in connection with the audited financial statements contained in the Company’s Annual Report on Form 10-K, the Audit Committee:
•reviewed and discussed the audited financial statements as of and for the fiscal year ended December 31, 20162019 with the Company’s management and Ernst & Young LLP, the Company’s independent registered public accounting firm;
•discussed with Ernst & Young LLP the matters required to be discussed by Auditing Standards No. 1301, “Communications with Audit Committees,” as adopted by the PCAOB;
•received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB regarding Ernst and Young LLP’s communications with the Audit Committee concerning independence and discussed with Ernst & Young LLP their independence;
•considered and discussed whether the non-audit services, if any, performed by Ernst & Young LLP are compatible with maintaining their independence;
•reviewed and discussed the reports of management and Ernst & Young LLP on their assessments of the effectiveness of the Company’s internal control over financial reporting as of the end of the most recent fiscal year;
•reviewed the disclosures regarding the Company’s system of internal controls required to be contained in the Company’s Form 10-K;
•based on the foregoing reviews and discussions, recommended to the Board that the audited financial statements and management’s report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 20162019 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20162019 filed with the Securities and Exchange Commission; and
•instructed Ernst & Young LLP that the Audit Committee expects to be advised if there are any subjects that require special attention.
The Audit Committee has also recommended, subject to stockholder ratification in Proposal 2 in this Proxy Statement, the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2017.AUDIT COMMITTEE
Daniel N. Swisher, Jr., Chairman
Patrick G. Enright
Reneé D. Galá
David L. Mahoney
24
2020.
| | |
|
| Audit Committee |
|
| Daniel N Swisher, Jr., Chairman |
| David L. Mahoney |
| Kimberly Park |
| | | | | |
| * | The material in this report is not soliciting material, and is not deemed filed with the SEC. |
*The material in this report is not soliciting material, and is not deemed filed with the SEC.
FEES OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees for audit services totaled approximately
$1,154,000$1,807,000 in
20162019 and
$1,052,000$1,871,000 in
2015,2018, including fees for professional services provided by Ernst & Young LLP, our independent registered public accounting firm, in connection with the integrated annual audit of our financial statements and internal control over financial reporting in
20162019 and
2015,2018, respectively, review of our quarterly financial statements included in Quarterly Reports on Forms 10-Q, consultations on matters addressed during the audit and services provided in connection with other statutory or regulatory filings, including consents.
Audit-Related Fees, Tax Fees, and All Other Fees
We did not incur fees
Fees for tax advisory services from our independent registered public accounting firm
totaled approximately $47,000 and $38,000 in
2016 or 2015.2019 and 2018, respectively.
We did not incur audit-related fees for assurance and related services, or for any other products or services, from our independent registered public accounting firm in
20162019 or
2015.2018.
Pre-approval of audit-related and non-audit services
Our Audit Committee has adopted a policy and procedures for the pre-approval of audit and permissible non-audit services rendered by our independent registered public accounting firm, Ernst & Young LLP. Under this policy, our Audit Committee must pre-approve all audit and non-audit services performed by the Company’s independent auditor in order to ensure that the provision of such services does not impair the auditor’s independence. The policy permits the engagement of the independent registered public accounting firm for services that are approved by our Audit Committee in defined categories such as audit services, audit-related services and tax services. Pre-approval may be given as part of our Audit Committee’s annual review and approval of the scope and estimated cost of non-audit services that may be provided by the independent registered public accounting firm or on an individual explicit case-by-case basis before the independent registered public accounting firm is engaged to provide each service. The Audit Committee has also delegated to the Chair of the Audit Committee the authority to pre-approve audit and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees, provided that the Chair shall report any decision to pre-approve such audit or non-audit services and fees to the full Audit Committee at its next regular meeting. Our Audit Committee receives periodic reports on the scope of services provided and expected to be provided in the future by the independent registered public accounting firm.
Consistent with this policy, in
20162019 and
20152018 all audit and non-audit services (including audit-related fees, tax fees and all other fees) performed by our independent registered public accounting firm, Ernst & Young LLP, were pre-approved by the Audit Committee.
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PROPOSALS TO BE ACTED
UPONUPON AT THE 2020 ANNUAL MEETINGAt the
2020 Annual Meeting, the stockholders will vote on the election of seven directors, each to serve until the annual meeting of stockholders in
20182021 and until their successors are duly elected and qualified. The
independent members of the Board have selected,Corporate Governance and Nominating Committee has recommended, and the Board has unanimously nominated,
James N. Wilson, Gregg Alton, G. Leonard Baker, Jr., Joseph K. Belanoff, M.D.,
Daniel M. Bradbury, Reneé D. Galá,Kimberly Park, David L. Mahoney
and Daniel N. Swisher, Jr.
and James N. Wilson for election to the Board. The nominees have indicated that they are willing and able to serve as directors. If any of the nominees becomes unable or unwilling to serve, the accompanying proxy may be voted for the election of such other person as shall be designated by the Board. The proxies being solicited will be voted for the nominees at the
2020 Annual Meeting. Directors will be elected by a plurality of the votes cast, in person or by proxy,
or by remote communication, if applicable, at the
2020 Annual Meeting, assuming a quorum is present. Stockholders do not have cumulative voting rights in the election of directors.
Recommendation of the Board
The Board of Directors unanimously recommends a vote “FOR” the election of the nominees as listed above.
Unless otherwise instructed, it is the intention of the persons named in the accompanying proxy card to vote shares represented by properly executed proxy cards for the election of the nominees as listed above.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
At the
2020 Annual Meeting, the stockholders will be asked to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2017.2020. Representatives of Ernst & Young LLP are expected to
be present atattend the
2020 Annual Meeting and
will have the opportunity to make statements
if they desire to do so. Such representatives are also expected to be available toand respond to appropriate questions.
Recommendation of the Board
The Board of Directors unanimously recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2017.2020.
ADVISORY VOTE
ONTO APPROVE THE
COMPENSATION OF NAMED EXECUTIVE OFFICERS
We intend for our executive compensation program to attract and retain a talented, entrepreneurial and creative team of executives who will provide leadership forsuccessfully manage our company’s success in promoting Korlym for the treatment of patients with Cushing’s syndromecommercial and successfully managing the pre-clinical and clinical development of our cortisol modulation platform. We accomplish this goal in a manner consistent with our strategy, competitive practice, sound corporate governance principles, and stockholder interests and concerns. We believe the compensation program for the named executive officers is closely aligned with the long-term interests of our stockholders and was instrumental in helping us perform well in 2016.Stockholders are urged to read the Executive Compensation section of this Proxy Statement, including the Compensation Discussion and Analysis, or CD&A, section which discusses our compensation policies and
26
procedures, and the 2016 compensation for our named executive officers. programs.
The Compensation Committee and the Board believe that our compensation policies and procedures are effective in advancing our goals and furthering the interests of our stockholders.
Stockholders should read the Executive Compensation section of this Proxy Statement, including the Compensation Discussion and Analysis, which discusses our compensation policies and procedures, and the 2019 compensation for our named executive officers.
In accordance with Section 14A of the Securities Exchange Act,
we are including in this Proxy Statement
includes a
separate, non-binding
advisory stockholder vote
onto approve the compensation of our named executive
compensation.officers. We
are askingask you to approve, on
ana non-binding advisory basis, the compensation of our named executive officers listed in the
20162019 Summary Compensation Table
included in this Proxy Statement, as described in the Executive Compensation section,
of this Proxy Statement, including
the CD&ACompensation Discussion and
Analysis, the
related compensation tables and
otherthe accompanying narrative
executive compensation disclosure contained therein.discussion.
Stockholders
have the opportunity tomay vote
“for” or“for,” “against” or
to “abstain”
from voting on the following non-binding
resolution relating to executive compensation:advisory resolution:
“RESOLVED, that the stockholders of the Company approve, on
ana non-binding advisory basis, the compensation of the Company’s named executive officers, as disclosed
inpursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis,
the compensation tables and
the accompanying narrative discussion
ofin this Proxy Statement.”
Although the advisory vote is non-binding, the Compensation Committee and the Board will reviewcarefully consider the results of the vote. The Compensation Committee will consider our stockholders’ concerns to the extent there is any significant vote against the named executive officer compensation as disclosed in this Proxy Statement and take them into account in future determinations concerningwhen determining our executive compensation program.programs. The Board therefore recommends that you
indicate your support for our compensation
policies and procedures for our named executive officers, as outlined above.policies. Unless our Board changes its policy with respect to the frequency of stockholder votes on executive compensation, we expect to hold our next such vote at the
20202023 Annual Meeting of Stockholders.
Recommendation of the Board
The Board unanimously recommends that stockholders vote, on an advisory basis, FOR the approval of the compensation of the named executive officers as described in the CD&A,Compensation Discussion and Analysis, the compensation tables and the accompanying narrative discussion ofin this Proxy Statement.PROPOSAL 4
ADVISORY VOTE ON THE FREQUENCY OF THE VOTE
ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
In accordance with Section 14A of the Securities Exchange Act, we are including in this Proxy Statement a separate stockholder vote on how frequently the advisory vote described under Proposal No. 3 — the “Advisory Vote on Compensation of Named Executive Officers”, or the “say on pay” advisory vote, should occur, which is referred to herein as the “frequency advisory vote”. We are providing stockholders the option of selecting a frequency of one, two or three years, or abstaining. As with the say on pay advisory vote, the vote described in this Proposal No. 4 is non-binding.
The Board has determined that providing stockholders with the say on pay advisory vote once every three years will be the most effective means for conducting and responding to the say on pay advisory vote based on a number of considerations, including the following:
Our compensation program is designed to induce and reward performance over a multi-year period;
A three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation strategies and the related business outcome of the Company;
27
A three-year vote cycle gives the Board and the Compensation Committee sufficient time to thoughtfully respond to stockholders’ sentiments and to implement any necessary changes to our executive compensation policies and procedures; and
The Board will continue to engage with our stockholders on executive compensation during the period between stockholder votes. As discussed under “Communications with Directors,” the Company provides stockholders an opportunity to communicate with the Board, including on issues of executive compensation.
Based on the factors discussed, the Board has determined to recommend that future say on pay advisory votes occur every three years until the next frequency advisory vote. Stockholders are not being asked to approve or disapprove the Board’s recommendation, but rather to indicate their choice among the following frequency options: one year, two years or three years, or to abstain from voting.
While the Board has determined that providing stockholders with the say on pay advisory vote once every three years is advisable, and therefore recommends that you approve a triennial vote, the Compensation Committee and the Board will consider our stockholders’ concerns and take them into account in determining how frequently the say on pay advisory vote occurs.
Recommendation of the Board
The Board unanimously recommends that stockholders select every “three years” on the proposal recommending the frequency of the say on pay advisory vote.
OTHER MATTERS
As of the time of preparation of this
Proxy Statement,proxy statement, neither the Board nor management intends to bring before the meeting any business other than the matters referred to in the Notice of Annual Meeting and this
Proxy Statement.proxy statement. If any other business should properly come before the meeting, or any adjournment or postponement thereof, the persons named in the proxy will vote on such matters according to their discretion.
STOCKHOLDER PROPOSALS FOR
THE 20182021 ANNUAL MEETINGPursuant to Rule 14a-8 under the Exchange Act, stockholder proposals for inclusion in the proxy statement of the Board of Directors for the
20182021 Annual Meeting of Stockholders must be received by us at 149 Commonwealth Drive, Menlo Park, California 94025, on or before December
25, 201730, 2020 and must otherwise comply with Rule 14a-8 under the Exchange Act.
However, ifIf the date of the
20182021 Annual Meeting of Stockholders is changed by more than 30 days from the anniversary date of our
20172020 Annual Meeting of Stockholders,
suchthe deadline pursuant to Rule 14a-8 under the Exchange Act will instead be a reasonable time before we begin to print and send our proxy materials. If we are not notified by the deadline under Rule 14a-8 under the Exchange Act of a proposal to be brought before the
20182021 Annual Meeting of Stockholders,
by a stockholder, then proxies held by management may provide the discretion to vote against such proposal even though it is not discussed in the proxy
statement for such meeting.In addition, regardless of whether a proposal is included in our proxy statement, ourstatement.
Our Amended and Restated Bylaws provide that advance notice of a stockholder’s proposal to be brought before the
20182021 Annual Meeting of Stockholders, including director nominations, must be delivered to the Secretary of our company at our principal executive offices not earlier than
one hundred twenty (120)120 days (December
25, 2017)30, 2020) and not later than
ninety (90)90 days (January
24, 2018) prior to29, 2021) before the anniversary of the mailing date of the proxy materials for the previous year’s annual meeting. Our Amended and Restated Bylaws
also provide that in the event that the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after the anniversary date of the preceding year’s annual meeting, this advance notice must be received
not later thanby the close of business on the later of (i) the 120th day prior to such annual meeting or (ii) the 10th day following the day on which
the first public announcement of the date of such
meeting is first made.29
meeting.
Each stockholder’s notice must contain the following information as to each matter the stockholder proposes to bring before the annual meeting: (a) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person (as defined in the Company’s Amended and Restated Bylaws), (b) the text of the proposal or business (including the text of any resolutions proposed for consideration), (c) a reasonably detailed description of all agreements, arrangements and understandings (i) between or among any of the Proposing Persons or (ii) between or among any Proposing Person and any other record or beneficial holder(s) or persons(s) who have a right to acquire beneficial ownership at any time in the future of the shares of any class or series of the Corporation (including their names) in connection with the proposal of such business by such stockholder, and (d) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act. A copy of the full text of the provisions of our Amended and Restated Bylaws dealing with stockholder nominations and proposals is available to stockholders from our Secretary upon written request.
30
AVAILABLE
INFORMATIONINFORMATION
We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and, in accordance therewith, file reports, proxy statements and other information with the U.S. Securities and Exchange Commission. Reports, proxy statements and other information filed by us may be inspected without charge and copies obtained upon payment of prescribed fees from the Public Reference Section of the U.S. Securities and Exchange Commission at 100 F Street, NE, Washington, D.C. 20549, or by way ofare available on the U.S. Securities and Exchange Commission’s website at www.sec.gov.
We will provide without charge to each person to whom a copy of the proxy statement is delivered, upon the written or oral request of any such persons, additional copies of our Annual Report on Form 10-K for the year ended December 31, 20162019 or the 20172020 proxy materials. Requests for such copies should be made by written request to Corcept Therapeutics Incorporated, 149 Commonwealth Drive, Menlo Park, California 94025, Attention: Secretary, or by oral request by calling (650) 327-3270.G. Charles Robb
By Order of the Board of Directors,
/s/ G. Charles Robb
G. Charles Robb
Chief Financial Officer and Secretary
| | |
|
| By Order of the Board of Directors, |
|
| /s/ Charles Robb |
| Charles Robb |
| Chief Financial Officer and Secretary |
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE YOUR SHARES BY INTERNET, BY TELEPHONE OR BY COMPLETING, SIGNING, DATING AND MAILING PROMPTLY THE ACCOMPANYING PROXY CARD IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSONAT THE VIRTUAL MEETING EVEN IF YOU HAVE PREVIOUSLY SENT IN YOUR PROXY CARD. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.31
b
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. Vote by Internet or Telephone - Q UICK ... EASY IMMEDIATE - 24 Hours a Day, 7 Days a Week or by Mail CORCEPT THERAPEUTICS INCORPORATED PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE. . FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED . PROXY The Board of Directors recommends that you vote “FOR” the election of each of the following nominees, “FOR” Proposals 2 and 3 and “THREE YEARS” for Proposal 4. 1. To elect seven directors, to hold office until the 2018 Annual Meeting of Stockholders and until their successors are duly qualified and elected, the nominees listed below: 01 James N. Wilson 05 Reneé D. Galá 02 G. Leonard Baker, Jr. 06 David L. Mahoney 03 Joseph K. Belanoff, M.D. 07 Daniel N. Swisher, Jr. 04 Daniel M. Bradbury FOR All nominees WITHHOLD listed (except AUTHORITY as indicated to vote (as to all below) nominees) (INSTRUCTION: To withhold authority to vote for any individual nominee, write the nominee’s name on the line provided below.) 2. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017. FOR AGAINST ABSTAIN As a stockholder of Corcept Therapeutics Incorporated, you have the option of voting your shares electronically through the Internet or on the telephone, eliminating the need to return the proxy card. Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern Time, on May 23, 2017. INTERNET/MOBILE – www.cstproxyvote.com Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares. PHONE – 1 (866) 894-0537 Use a touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares. MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided. 3. To conduct a non-binding advisory vote to approve the compensation of the Company’s named executive officers as disclosed in the accompanying proxy statement. 4. To conduct a non-binding advisory vote on the frequency of future advisory votes by the stockholders to approve the compensation of the Company’s named executive officers. Please mark your votes like this X FOR AGAINST ABSTAIN 3 YEARS 2 YEARS 1 YEAR ABSTAIN PROPOSALS. This proxy may be revoked by the undersigned at any time, prior to the time it is voted, by any of the means described in the accompanying proxy statement. COMPANY ID: PROXY NUMBER: ACCOUNT NUMBER: Signature______________________________________ Signature__________________________________________________ Date_____________, 2017. Date and sign exactly as name(s) appear(s) on this proxy. If signing for estates, tr usts, cor porations or other entities, title or capacity should be stated. If shares are held jointly, each holder should sign.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 24, 2017 The 2017 Proxy Statement and our 2016 Annual Report are available at http://www.corcept.com/proxymaterials/2017 . FOLD HERE • DO NOT SEPARATE • INSERT IN ENVELOPE PROVIDED . PROXY CORCEPT THERAPEUTICS INCORPORATED Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders to be Held on May 24, 2017 The undersigned hereby appoints Joseph K. Belanoff, M.D., G. Charles Robb and James N. Wilson, or any one of them, with full power of substitution, as proxies to vote at the Annual Meeting of Stockholders of Corcept Therapeutics Incorporated (the “Company”) to be held on May 24, 2017 at 8:00 a.m., local time, at 149 Commonwealth Drive, Menlo Park, CA 94025, and at any adjournment or postponement thereof, hereby revoking any proxies heretofore given, to vote all shares of common stock of the Company held or owned by the undersigned as directed on the reverse side of this proxy card, and in their discretion upon such other matters as may come before the meeting. This proxy, when properly executed, will be voted in the manner directed. WHEN NO CHOICE IS INDICATED, THIS PROXY WILL BE VOTED “FOR” EACH NOMINEE FOR DIRECTOR IN PROPOSAL 1, “FOR” PROPOSALS 2 AND 3 AND FOR “THREE YEARS” FOR PROPOSAL 4. This proxy may be revoked by the undersigned at any time, prior to the time it is voted by any of the means described in the accompanying proxy statement. (Continued, and to be marked, dated and signed, on the other side)
