(Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): ☒ No fee required. ☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ☐ Fee paid previously with preliminary materials. ☐ Check box if any part | ||
LETTER TO SHAREHOLDERS
Clinical progress and setbacks characterize the cycle of new product development for biotechnology companies, and ArQule was no exception during 2012. Following the events of the past year,fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the primary clinical focus offiling for which the Company is nowoffsetting fee was paid previously. Identify the Phase 3 METIV-HCC trial in second line hepatocellular carcinoma (HCC), which is being conducted under a Special Protocol Assessment (SPA) agreement withprevious filing by registration statement number, or the FDA that includes a companion diagnostic for testing MET levels. We began enrolling patients in January, 2013,Form or Schedule and the ratedate of enrollment will depend upon the screen failure rate for patients, all of whom must test MET-high upon enrollment in this trial.
The second line setting in HCC represents an urgent medical need, as no systemic therapy has yet been shown to be effective for patients with advanced HCC following failure of first-line therapy with sorafenib. We believe this setting presents a compelling opportunity to achieve Phase 3 success based on the findings from our randomized, double blind, placebo controlled Phase 2 second line HCC trial featured at the American Society for Clinical Oncology (ASCO) Annual Meeting in June, 2012.
These exciting findings were the first randomized data reported with a c-Met inhibitor administered as a single agent in this disease. Treatment with tivantinib not only met the overall endpoint of the study in the intent-to-treat population but also produced pronounced, consistent benefits in overall survival (OS), time-to-progression (TTP) and progression-free survival (PFS) among patients with high levels of MET. The complete findings from this trial were recently published in The Lancet Oncology.
In our non-small cell lung cancer (NSCLC) program, the Phase 3 MARQUEE trial was halted last fall for futility at a pre-planned interim analysis based on the recommendation of the independent Data Monitoring Committee. At the time, the top-line analysis showed a statistically significant improvement in PFS in the non-squamous cell intent-to-treat population who received the combination of tivantinib and erlotinib, but this benefit was not expected to carry over to OS. No unexpected safety findings were identified, and the trial formally concluded in December 2012. We plan to present detailed data analyses from MARQUEE at a peer-reviewed forum in the second half of this year.
The second Phase 3 trial in non-squamous NSCLC named ATTENTION and employing the same combination regimen as MARQUEE is continuing in Japan, South Korea and Taiwan under the sponsorship of our partner, Kyowa Hakko Kirin. The trial was originally intended to enroll 450 patients, but additional recruitment was permanently suspended once approximately 300 patients had been recruited because of an observed imbalance in cases of interstitial lung disease (ILD). Of interest, a recent epidemiological study identified ILD as an adverse drug reaction of concern in Japanese patients with NSCLC receiving erlotinib therapy alone.
Kyowa has informed us that where possible, patients already enrolled in ATTENTION were re-consented following the permanent suspension of additional recruitment and continued to receive treatment if still on therapy as per protocol. Data from the trial, expected to be available in late 2013its filing.
Rounding out our NSCLC program with tivantinib are two additional trials. The first is a randomized, open-label Phase 2 trial in the U.S. in patients with KRAS mutations who are receiving tivantinib plus erlotinib versus chemotherapy, and the second is a Phase 2, open-label, single arm study of tivantinib plus erlotinib in Japan in patients with locally advanced or metastatic EGFR mutation-positive NSCLC. Data from the first trial are expected later this year, and data from the second should be available next year.
To determine if there is still a path forward in NSCLC for tivantinib and what that path might be, we will take into consideration the extensive body of data that is emerging from the MARQUEE data base, the final results of the ATTENTION trial and any additional data that will emerge from the ongoing Phase 2 trials.
Introduction
The National Cancer Institute is supporting a number of investigator-sponsored clinicalbiomarker-defined trials in areas of high unmet need and received orphan drug designation in the U.S. for two diseases, cholangiocarcinoma and Proteus syndrome.
Our proprietary pipeline has been expanded significantly as a result of two developments. The most recent occurred in April, 2013 when we regained worldwide rights for compounds covered underwere expanding our concluded AKIP™ (ArQule Kinase Inhibitor Platform) collaboration with Daiichi Sankyo, including the lead compound that emerged from this collaboration, ARQ 092, an inhibitor of the serine/threonine kinase, AKT. Regaining these rights adds significant value for ArQule, as it expands our pipeline in an exciting area of therapeutic development. Researchers presented data from an ongoing Phase 1 trial with ARQ 092 at the AACR (American Association for Cancer Research) Annual Meeting on April 9, 2013 showing that this novel oral agent has demonstrated a manageable safety profile and AKT target inhibition in data analyzed to date.
The second pipeline development took place late in 2012 when we initiated a Phase 1 trial with ARQ 087, our FGFR inhibitor, and opening the Phase 2 portion of the trial to treat patients with intrahepatic cholangiocarcinoma harboring FGFR2 fusions. During 2015, we opened sites in the United States and Italy and have recently seen recruitment pick up significantly. The activity in this patient population continues to encourage us. In addition, we have received orphan drug designation for this indication from the FDA. We plan to complete the Phase 2 portion of the trial this year and explore potential next steps, including a possible pivotal trial in this indication.
Beyond ARQ 092 and ARQ 087,we pursue value creating events for our early-stage product portfolio includes ARQ 621, an inhibitor of the Eg5 kinesin motor protein, and ARQ 736, an inhibitor of the RAF kinases, both of which have completed Phase 1 testing. Our strategy with all of these product candidates is to generate pre-clinical and early clinical data that will inform decisions to initiate Phase 2 testing with one or more of them either independently or on a partnered basis.
ArQule continues to be well capitalized.shareholders. We ended 20122015 with $130.6approximately $39 million in cash and marketable securities, which wasand in line with the top range of our guidanceearly 2016 completed an offering for the year.an additional approximately $15 million. We expect that these financial resourcesto end 2016 with $29-$31 million which we anticipate will be sufficient to finance our working capital requirementsoperations into 2018.
shareholders.
ARQULE, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 2013
24, 2016
Woburn,
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19 Presidential Way
14, 2016.
What are my voting choices for each of the proposals to be voted on at the Annual Meeting?
Proposal | | | Voting Choices and Board Recommendation | | ||||||
Proposal 1: Election of Directors | | | • vote in favor of all | | ||||||
| • withhold authority to vote for all | | ||||||||
| • withhold authority to vote for any specified nominee. | | ||||||||
| The Board recommends a vote FOR each of the nominees. | | ||||||||
Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm | | | • vote in favor of | | ||||||
| • vote against | | ||||||||
| • abstain from voting on | | ||||||||
| The Board recommends a vote FOR ratification. | | ||||||||
Proposal 3: Advisory Proposal to Approve Executive Compensation | | | • vote in favor of | | ||||||
| • vote against | | ||||||||
| • abstain from voting on | | ||||||||
| The Board recommends a vote FOR the advisory vote to approve executive compensation. | |
2
Proposal | | | Abstentions | | | Broker Non-Votes | | |||||||||
Proposal 1: Election of Directors | | | N/A | | | Not counted and no effect on | | |||||||||
Proposal 2: Ratification of Independent Registered Public Accounting Firm | | | Not counted and no effect on | | | N/A | | |||||||||
Proposal 3: Advisory Proposal to Approve Executive Compensation | | | Not counted and no effect on | | | Not counted and no effect on | |
3
What happens if additional matters are presented at the Annual Meeting?
Internet?
PROPOSAL 1—ELECTION OF DIRECTORS
The
5
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE
NOMINEES LISTED ABOVE.
Mr. Pucci was Senior Vice President of Bayer Pharmaceuticals Global Specialty Business Unit, President of U.S. Pharmaceutical Operations and a member of the Bayer Pharmaceuticals Global Management
carefully considers issues of diversity among its members in identifying and considering potential nominees and attempts, where appropriate, to achieve a diversity of professional experiences, business cultures, perspectives, genders, ages and ethnicities, among other characteristics, in the membership of the Board and its committees. The Company does not require members of the Board (or our executive officers) to purchase or hold a minimum number of shares of our Common Stock.
Committees.
| | | Timothy C. Barabe (1) | | | Ronald M. Lindsay (3) | | | Michael Loberg (2)(3) | | | William Messenger (1)(2) | | | Paolo Pucci | | | Patrick Zenner (1)(2) | | | Susan L. Kelley (3) | | |||||||||||||||||||||||||||||||||||||||||||||
High level of financial literacy | | | | | X | | | | | | | | | | | | X | | | | | | X | | | | | | X | | | | | | X | | | | | | | | | ||||||||||||||||||||||||
Relevant biotechnology business experience | | | | | X | | | | | | X | | | | | | X | | | | | | X | | | | | | X | | | | | | X | | | | | | X | | | ||||||||||||||||||||||||
Extensive knowledge of drug research and development | | | | | | | | | | | X | | | | | | X | | | | | | | | | | | | X | | | | | | X | | | | | | X | | | ||||||||||||||||||||||||
Extensive knowledge of drug commercialization and marketing | | | | | X | | | | | | X | | | | | | X | | | | | | | | | | | | X | | | | | | X | | | | |||||||||||||||||||||||||||||
Expertise in corporate governance and business ethics | | | | | X | | | | | | | | | | | | | | | | | | X | | | | | | X | | | | | | X | | | | | | | | | ||||||||||||||||||||||||
Diversity of background, professional experience or culture | | | | | | | | | | | | | | | | | X | | | | | | X | | | | | | X | | | | | | | | | | | | X | | |
Company at our principal executive office. If a stockholder is nominating a director candidate for election at the annual meeting of stockholders, notice must be received at least 75 days before the anniversary date of the prior year’s meeting, assuming there was an annual meeting in the prior year and the date of the current year’s annual meeting is within 30 days of the anniversary date of the prior year’s meeting. Otherwise, notice must be received at least 45 days before the date of the current year’s annual meeting or a special meeting, if at least 60 days’ notice or prior public disclosure of the date of the current year’s annual meeting or the special meeting is provided. If neither of the previous two sentences applies, notice must be received no later than 15 days after the date on which notice of the date of the current year’s annual meeting or the special meeting was mailed or public disclosure was made of such meeting date. The notice must include the stockholder’s name and address, the class and number of shares of securities beneficially owned by such stockholder, and each nominee’s:
9
Director Independence
10
Compensation Committee Interlocks and Insider Participation
11
The report of the Audit Committee is on page 31.
2015.
The report of the Compensation Committee is on page 22.
12
Science Committee
in 2015.
Name | Fees Earned or Paid in Cash ($) | Option Awards(1) ($) | Total ($) | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Timothy C. Barabe(2) | $ | 63,250 | $ | 53,787 | $ | 117,037 | |||||||||||
Ronald M. Lindsay, Ph.D. | 73,500 | 53,787 | 127,287 | ||||||||||||||
Michael D. Loberg, Ph.D.(3) | 64,750 | 53,787 | 118,537 | ||||||||||||||
William G. Messenger, D. Min. | 67,500 | 53,787 | 121,287 | ||||||||||||||
Susan L. Kelley, M.D. | 58,000 | 53,787 | 111,787 | ||||||||||||||
Patrick J. Zenner | 72,500 | 89,645 | 162,145 |
Name | | | Fees Earned or Paid in Cash ($) | | | Option Awards(1) ($) | | | Total ($) | | |||||||||
Timothy C. Barabe(2) | | | | $ | 62,250 | | | | | $ | 17,160 | | | | | $ | 79,410 | | |
Susan L. Kelley, M.D | | | | | 56,000 | | | | | | 17,160 | | | | | | 73,160 | | |
Ronald M. Lindsay, Ph.D | | | | | 74,000 | | | | | | 17,160 | | | | | | 91,160 | | |
Michael D. Loberg, Ph.D.(3) | | | | | 62,250 | | | | | | 17,160 | | | | | | 79,410 | | |
William G. Messenger, D. Min. | | | | | 68,500 | | | | | | 17,160 | | | | | | 85,660 | | |
Patrick J. Zenner | | | | | 73,500 | | | | | | 28,600 | | | | | | 102,100 | | |
Committee and the Compensation Committee, and $2,500 for meetings of the Science Committee. In addition to the base compensation for directors, chairs of committees receive additional compensation. The director serving as Chairman of the Board (currently, Mr. Zenner) receives an additional $20,000 annual retainer; the director serving as Chairman of the Audit Committee (currently, Mr. Barabe) receives an additional $15,000 annual retainer, the director serving as Chairman of the Compensation Committee (currently, Dr. Messenger) receives an additional $15,000 annual retainer; and the director serving as Chairman of the Science Committee (currently, Dr. Lindsay) receives an additional $20,000 annual retainer.
14
COMPENSATION DISCUSSION AND ANALYSIS
15
As part of our Board’s risk oversight responsibilities, our Compensation Committee reviews the Company’s compensation policies and practices as generally applicable to our employees and discussdiscusses with management any risks created by such policies and practices. Based on that review and discussions with management, and taking into consideration ArQule’s risk assessment and risk management policies and procedures, we believe that our compensation policies and procedures do not encourage excessive andor unnecessary risk-taking and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on ArQule.
The
For 2012, Radford provided the following services to the Compensation Committee:
While the Company pays for the costs of Radford’s services, our Compensation Committee has the authority to engage and terminate Radford’s engagement. Radford makes recommendations to the Compensation Committee, but has no authority to make compensation decisions on behalf of the Compensation Committee or the Company. Radford attends Compensation Committee meetings either in person or via conference call as deemed appropriate by the Compensation Committee. Our management provides historical data, reviews reports for accuracy and interacts directly with Radford, at the direction of the Compensation Committee. The Compensation Committee, at its discretion, also communicates and meets with Radford without participation of the Company’s management.
Radford did not provide any additional services to the Company in 2012, other than providing survey data for our broader employee base to our management. The costs of the survey data provided by Radford to management in 2012 were $6,100. The Compensation Committee permitted these other non-executive
compensation services as it determined that these services did not constitute a conflict of interest or prevent Radford from objectively performing its work for the Compensation Committee. Total fees paid in 2015 to Radford for survey data and advisory fees were $52,150$40,000 in the aggregate.
| | | | ||
| | | Immunomedics, Inc. | | |
| Aradigm Corporation | | | Oncothyreon Inc. | |
| Athersys, Inc. | | | Peregrine Pharmaceuticals, Inc. | |
| Caladrius Biosciences | | | Repros Therapeutics, Inc. | |
| |||||
| |||||
| |||||
| | ||||
| Rigel Pharmaceuticals, Inc. | | |||
| | | Sunesis Pharmaceuticals, Inc. | | |
| Cytori Therapeutics, Inc. | | | Synta Pharmaceuticals, Inc. | |
| CytRx Corporation | | | ||
|
17
Elements of Compensation
Name and Principal Position | 2011 Annualized Base Salary ($) | 2012 Annualized Base Salary ($) | % Increase | Comment | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Paolo Pucci, CEO | 485,000 | 489,000 | 1.0 | Base salary negotiated in and adjusted per amended employment agreement and annual review. | ||||||||||
Peter S. Lawrence, COO | 402,000 | 414,000 | 3.0 | Base salary negotiated in and adjusted per amended employment agreement and annual review. | ||||||||||
Dr. Brian Schwartz, CMO | 348,000 | 370,000 | 6.2 | Base salary negotiated in and adjusted per employment agreement and annual review. | ||||||||||
Dr. Thomas C.K. Chan, CSO(1) | 341,000 | 345,000 | 1.0 | Base salary negotiated in and adjusted per employment agreement and annual review. |
Name and Principal Position | | | 2014 Annualized Base Salary ($) | | | 2015 Annualized Base Salary ($) | | | % Increase | | | Comment | | |||||||||
Paolo Pucci, CEO | | | | | 489,000 | | | | | | 489,000 | | | | | | — | | | | Base salary negotiated in and adjusted per amended employment agreement and annual review. | |
Peter S. Lawrence, COO | | | | | 414,000 | | | | | | 422,000 | | | | | | 2.0 | | | | Base salary negotiated in and adjusted per amended employment agreement and annual review. | |
Dr. Brian Schwartz, CMO | | | | | 396,000 | | | | | | 412,000 | | | | | | 4.0 | | | | Base salary negotiated in and adjusted per employment agreement and annual review. | |
Robert J. Weiskopf, CFO | | | | | 258,750 | | | | | | 305,000 | | | | | | 17.9 | | | | Merit increase with additional responsibility, and increase to $305,000 related to promotion to Chief Financial Officer and Treasurer in June 2015. | |
Performance-Based Bonuses
18
The following is a summary description of the primary corporate goals for 20122015 used to determine performance-based bonuses:
c-Met Program—Tivantinib (ARQ 197)
Discovery Program
Business Development
Finance
Publications & Presentations
Name and Principal Position | 2012 Bonus Target (% of Base Salary) | 2012 Bonus Actual (% of Base Salary) | Comment | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Paolo Pucci, CEO | 60.0% | 57.0% | Target bonus set by terms of amended employment agreement. Actual bonus 95% of target. | ||||||||
Peter S. Lawrence, COO | 40.0% | 38.0% | Target bonus set by terms of amended employment agreement. Actual bonus 95% of target. | ||||||||
Dr. Brian Schwartz, CMO | 35.0% | 33.3% | Target bonus set by terms of employment agreement. Actual bonus 95% of target. | ||||||||
Dr. Thomas C. K. Chan, CSO | 35.0% | 33.3% | Target bonus set by terms of employment agreement. Actual bonus 95% of target. |
Name and Principal Position | | | 2015 Bonus Target (% of Base Salary) | | | 2015 Bonus Actual (% of Base Salary) | | | Comment | |
Paolo Pucci, CEO | | | 60.0% | | | 60.0% | | | Target bonus set by terms of amended employment agreement. Actual bonus 100% of target. | |
Peter S. Lawrence, COO | | | 45.0% | | | 45.0% | | | Target bonus set by terms of amended employment agreement. Actual bonus 100% of target. | |
Dr. Brian Schwartz, CMO | | | 40.0% | | | 40.0% | | | Target bonus set by terms of employment agreement. Actual bonus 100% of target. | |
Robert J. Weiskopf, CFO | | | 35.0% | | | 35.0% | | | Bonus target set by Compensation Committee in accordance with annual standard process. | |
19
The amounts of cash bonus awards made to our named executive officers are also reported in the Summary Compensation Table on page 23.
Table.
these awards as it deems necessary or advisable, e.g., to take into account unforeseen adverse events or clinical developments.
20
Compensation Committee take the issue of deductibility into consideration as our Amended and Restated 1994 Equity Incentive Plan and other benefit plans are updated. The Compensation Committee believes that none of the Company’s named executive officers received compensation in 20122015 that was nondeductible under Section 162(m) of the Tax Code.
22
EXECUTIVE COMPENSATION
Name and Principal Position | Year | Salary ($) (1) | Bonus ($) | Stock Awards ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Paolo Pucci Chief Executive Officer | 2012 | 488,786 | — | — | 1,549,485 | 278,927 | 7,950 | 2,325,148 | ||||||||||||||||||||||||||||||||||
2011 | 483,769 | — | — | 1,214,070 | 261,630 | 7,950 | 1,967,419 | |||||||||||||||||||||||||||||||||||
2010 | 461,250 | — | — | 714,688 | 313,500 | 7,926 | 1,497,364 | |||||||||||||||||||||||||||||||||||
Peter S. Lawrence President, Chief Operating Officer, General Counsel and Secretary | 2012 | 412,530 | — | — | 726,782 | 157,290 | 7,950 | 1,304,552 | ||||||||||||||||||||||||||||||||||
2011 | 401,111 | — | — | 627,270 | 144,671 | 7,950 | 1,181,002 | |||||||||||||||||||||||||||||||||||
2010 | 391,472 | — | — | 270,075 | 172,508 | 7,926 | 841,981 | |||||||||||||||||||||||||||||||||||
Dr. Brian Schwartz Chief Medical Officer and Senior Vice President | 2012 | 367,520 | — | — | 538,631 | 123,029 | 7,950 | 1,037,130 | ||||||||||||||||||||||||||||||||||
2011 | 347,630 | — | — | 566,566 | 109,749 | 7,950 | 1,031,895 | |||||||||||||||||||||||||||||||||||
2010 | 337,753 | — | — | 186,975 | 130,231 | 7,926 | 662,885 | |||||||||||||||||||||||||||||||||||
Dr. Thomas C. K. Chan(5) Chief Scientific Officer and Senior Vice President | 2012 | 347,284 | — | — | 398,439 | 105,110 | 600 | 851,433 | ||||||||||||||||||||||||||||||||||
2011 | 340,680 | — | — | 566,566 | 107,555 | 600 | 1,015,401 | |||||||||||||||||||||||||||||||||||
2010 | 331,000 | — | — | 186,975 | 127,628 | 576 | 646,179 |
Name and Principal Position | | | Year | | | Salary ($) (1) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) (2) | | | Non-Equity Incentive Plan Compensation ($) (3) | | | All Other Compensation ($) (4) | | | Total ($) | |||||||||||||||||||||||
Paolo Pucci Chief Executive Officer | | | | | 2015 | | | | | | 489,345 | | | | | | — | | | | | | — | | | | | | 285,948 | | | | | | 293,607 | | | | | | 8,550 | | | | | | 1,077,450 |
| | | 2014 | | | | | | 489,345 | | | | | | — | | | | | | — | | | | | | 532,134 | | | | | | 249,566 | | | | | | 8,400 | | | | | | 1,279,445 | ||
| | | 2013 | | | | | | 489,345 | | | | | | — | | | | | | — | | | | | | 486,609 | | | | | | 249,566 | | | | | | 8,100 | | | | | | 1,233,620 | ||
Peter S. Lawrence President, Chief Operating Officer, General Counsel and Secretary | | | | | 2015 | | | | | | 421,562 | | | | | | — | | | | | | — | | | | | | 160,571 | | | | | | 189,990 | | | | | | 8,550 | | | | | | 780,673 |
| | | 2014 | | | | | | 413,921 | | | | | | — | | | | | | — | | | | | | 245,130 | | | | | | 158,325 | | | | | | 8,400 | | | | | | 825,776 | ||
| | | 2013 | | | | | | 413,921 | | | | | | — | | | | | | — | | | | | | 210,864 | | | | | | 158,325 | | | | | | 8,100 | | | | | | 791,210 | ||
Dr. Brian Schwartz Chief Medical Officer and Senior Vice President | | | | | 2015 | | | | | | 410,991 | | | | | | — | | | | | | — | | | | | | 107,780 | | | | | | 164,884 | | | | | | 8,550 | | | | | | 692,205 |
| | | 2014 | | | | | | 394,597 | | | | | | — | | | | | | — | | | | | | 185,811 | | | | | | 134,761 | | | | | | 8,400 | | | | | | 723,569 | ||
| | | 2013 | | | | | | 380,258 | | | | | | — | | | | | | — | | | | | | 145,983 | | | | | | 129,578 | | | | | | 8,100 | | | | | | 663,919 | ||
Robert J. Weiskopf (5) Chief Financial Officer and Treasurer | | | | | 2015 | | | | | | 288,372 | | | | | | — | | | | | | — | | | | | | 91,876 | | | | | | 106,750 | | | | | | 8,550 | | | | | | 495,548 |
23
EMPLOYMENT AGREEMENTS
On July 15, 2010, The agreement also establishes the Company, acting through its Compensation Committee, amended certain terms of Mr. Pucci’s employment agreement. The amendment: (i) extended the term of the agreement from June 9, 2012 to June 30, 2015; (ii) increased Mr. Pucci’s minimum base salary by approximately five percent; (iii) increased the target amount of the discretionary annual cash bonus payablevesting conditions for performance-based stock units (PSUs) that were awarded to Mr. Pucci under the agreement from 50% to 60% of Mr. Pucci’s annual base salary; (iv) revised the definition of the occurrences following a change of control of the Company which constitute a deemed termination of Mr. Pucci’s employment; (v) awarded Mr. Pucci stock options covering 100,000 shares of the Company’s Common Stock; (vi) awarded Mr. Pucci 390,000 PSUs in tranches of 300,000 and 90,000 units that vest, respectively, upon the achievement of certain performance goals related to the development of the Company’s products by a date specified by the Compensation Committee and the average price of its Common Stock; and (vii) provided that, if a deemed termination without cause of Mr. Pucci’s employment under the agreement occurs prior to achievement of such product development, 300,000 of the PSUs will vest if the average price of Common Stock has met or exceeded a target price over a specified period established by the Compensation Committee.
On March 8, 2013, the Company further amended certain terms of Mr. Pucci’s employment agreement. The March 8, 2013 amendment: (i) extended the term of the agreement from June 30, 2015 to March 8, 2017; and (ii) revised the vesting events pertaining to the award to Mr. Pucci of 390,000 PSUs in connection with the July 15, 2010 Amendment. The March 8, 2013 amendment extended the period for achievement of the product development goal and reduced the target price for the stock performance goal. In addition, the March 8, 2013 amendment stipulatesprovides that all such PSUs will be subject to accelerated vesting if Mr. Pucci is terminated or deemed terminated without cause in connection with a change of control of the Company.
All other material terms of the employment agreement that were in effect prior to the amendment remain in effect.
On March 8, 2013, The agreement also establishes the Company further amended certain terms of Mr. Lawrence’s employment agreement. The March 8, 2013 amendment providesvesting conditions for a term of employment through March 8, 2017 and gives effect to the awardPSUs that were awarded to Mr. Lawrence of 125,000 PSUs. The PSUs will vest if, during the course of Mr. Lawrence’s employment with the Company, a certain performance goal related to the development of the Company’s products is achieved by a date specified by the Compensation Committee. In addition, the March 8, 2013 amendment stipulatesand provides that all such PSUs will be subject to accelerated vesting if Mr. Lawrence is terminated or deemed terminated without cause in connection with a change of control of the Company.
24
The March 8, 2013 amendment also adds a provision to the agreement requiring that Mr. Lawrence be terminated or deemed terminated without cause in connection with a change of control of the Company in order for him to receive accelerated vesting of stock options and restricted stock. Prior to this change, Mr. Lawrence would have been entitled to receive accelerated vesting solely as a result of a change of control.
All other material terms of the agreement that were in effect prior to the Compensation Committee’s approval of the March 8, 2013 amendment remain in effect.
Employment Agreement with Brian Schwartz
On March 8, 2013, the Company further amended certain terms of Dr. Schwartz’s employment agreement. The March 8, 2013 amendmentMr. Schwartz and provides for a term of employment through March 8, 2017 and gives effect to the award to Dr. Schwartz of 120,000 PSUs. The units will vest if, during the course of Dr. Schwartz’s employment with the Company, a performance goal related to the development of the Company’s products is achieved by a date specified by the Compensation Committee. In addition, the March 8, 2013 amendment stipulates that all such PSUs will be subject to accelerated vesting if Dr.Mr. Schwartz is terminated or deemed terminated without cause in connection with a change of control of the Company.
All other material terms of the agreement that were in effect prior to the Compensation Committee’s approval of the March 8, 2013 amendment remain in effect.
Employment Agreement with Thomas C. K. Chan
As previously reported, Dr. Chan entered into an Amendment to Employment Agreement on November 2, 2012, pursuant to which his employment with the Company was terminated effective November 22, 2012. Pursuant to the agreement, Dr. Chan waived any claim for compensation under his prior employment agreement and released the Company from all liability related to his employment with the Company and otherwise. In addition, he received payment in 2013 of a pro rata portion of his discretionary bonus for 2012 calculated by multiplying the amount of his target bonus amount times a percentage based on the scoring of achievement of the Company’s 2012 corporate goals by the Compensation Committee with the endorsement of the Board. Dr. Chan also received an extension of the period following his departure in which to exercise stock options for the purchase of 330,000 shares of Common Stock issued to him under the Company’s 1994 Amended and Restated Equity Incentive Plan and vested as of the termination date from February 22, 2013 to December 31, 2013.
25
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR 2012
2015
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | All Other Option Awards: Number of Securities Underlying Options (#) | Grant Date Fair Value of Stock and Option Awards(2) ($) | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||
Paolo Pucci | N/A | — | 293,607 | 440,411 | ||||||||||||||||||||||||||||
2/1/2012 | 315,000 | 1,549,485 | ||||||||||||||||||||||||||||||
Peter S. Lawrence | N/A | — | 165,568 | 248,353 | ||||||||||||||||||||||||||||
2/1/2012 | 147,750 | 726,782 | ||||||||||||||||||||||||||||||
Dr. Brian Schwartz | N/A | — | 133,389 | 200,084 | ||||||||||||||||||||||||||||
2/1/2012 | 109,500 | 538,631 | ||||||||||||||||||||||||||||||
2/23/2012 | 50,000 | 375,000 | ||||||||||||||||||||||||||||||
Dr. Thomas C.K. Chan | N/A | — | — | — | ||||||||||||||||||||||||||||
2/1/2012 | 81,000 | 398,439 |
| | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Grant Date Fair Value of Stock and Option Awards(2) ($) | | |||||||||||||||||||||
Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | ||||||||||||||||||||||||
Paolo Pucci | | | | | N/A | | | | | | — | | | | | | 293,607 | | | | | | 440,410 | | | | | ||||||||||
| | | | | 1/20/2015 | | | | | | | | | | | | | | | | | | | | | | | | 390,000 | | | | | | 285,948 | | |
Peter S. Lawrence | | | | | N/A | | | | | | — | | | | | | 193,789 | | | | | | 290,684 | | | | | ||||||||||
| | | | | 1/20/2015 | | | | | | | | | | | | | | | | | | | | | | | | 219,000 | | | | | | 160,571 | | |
Dr. Brian Schwartz | | | | | N/A | | | | | | — | | | | | | 171,480 | | | | | | 257,219 | | | | | ||||||||||
| | | | | 1/20/2015 | | | | | | | | | | | | | | | | | | | | | | | | 147,000 | | | | | | 107,780 | | |
Robert J. Weiskopf | | | | | N/A | | | | | | — | | | | | | 106,750 | | | | | | 160,125 | | | | | ||||||||||
| | | | | 1/20/2015 | | | | | | | | | | | | | | | | | | | | | | | | 108,500 | | | | | | 91,876 | | |
OUTSTANDING EQUITY AWARDS AT 20122015 FISCAL YEAR-END
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) (1) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested(2) | ||||||||||||||||||||||||||
Paolo Pucci(3) | 500,000 | $ | 3.95 | 6/9/2018 | ||||||||||||||||||||||||||||
112,500 | 112,500 | 3.42 | 1/21/2020 | |||||||||||||||||||||||||||||
75,000 | 25,000 | 4.14 | 7/15/2020 | |||||||||||||||||||||||||||||
75,000 | 225,000 | 6.70 | 1/24/2021 | |||||||||||||||||||||||||||||
315,000 | 7.95 | 2/1/2022 | ||||||||||||||||||||||||||||||
16,875 | $ | 59,738 | ||||||||||||||||||||||||||||||
390,000 | $ | 1,614,600 | ||||||||||||||||||||||||||||||
Peter S. Lawrence | 300,000 | 6.20 | 4/13/2016 | |||||||||||||||||||||||||||||
50,000 | 6.16 | 1/16/2017 | ||||||||||||||||||||||||||||||
100,000 | 7.56 | 10/4/2017 | ||||||||||||||||||||||||||||||
200,000 | 4.75 | 1/17/2018 | ||||||||||||||||||||||||||||||
65,000 | 65,000 | 3.42 | 1/21/2020 | |||||||||||||||||||||||||||||
32,500 | 97,500 | 6.70 | 1/24/2021 | |||||||||||||||||||||||||||||
6,250 | 18,750 | 6.70 | 1/24/2021 | |||||||||||||||||||||||||||||
147,750 | 7.95 | 2/1/2022 | ||||||||||||||||||||||||||||||
18,750 | $ | 66,375 | ||||||||||||||||||||||||||||||
Dr. Brian Schwartz | 200,000 | 3.62 | 7/14/2018 | |||||||||||||||||||||||||||||
45,000 | 45,000 | 3.42 | 1/21/2020 | |||||||||||||||||||||||||||||
22,500 | 67,500 | 6.70 | 1/24/2021 | |||||||||||||||||||||||||||||
12,500 | 37,500 | 6.70 | 1/24/2021 | |||||||||||||||||||||||||||||
109,500 | 7.95 | 2/1/2022 | ||||||||||||||||||||||||||||||
2,925 | $ | 10,355 | ||||||||||||||||||||||||||||||
50,000 | $ | 375,000 | ||||||||||||||||||||||||||||||
Dr. Thomas C. K. Chan(4) | 50,000 | 6.93 | 12/31/2013 | |||||||||||||||||||||||||||||
50,000 | 6.16 | 12/31/2013 | ||||||||||||||||||||||||||||||
50,000 | 4.75 | 12/31/2013 | ||||||||||||||||||||||||||||||
100,000 | 2.86 | 12/31/2013 | ||||||||||||||||||||||||||||||
45,000 | 3.42 | 12/31/2013 | ||||||||||||||||||||||||||||||
22,500 | 6.70 | 12/31/2013 | ||||||||||||||||||||||||||||||
12,500 | 6.70 | 12/31/2013 |
| | | Option Awards | | | | | | | | | Stock Awards | | ||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#)(1) Exercisable | | | Number of Securities Underlying Unexercised Options (#)(1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Equity Incentive Plan Awards: Number of Shares, Units or Other Rights that Have Not Vested | | | Equity Incentive Plan Awards: Market or Payout Value of Shares, Units or Other Rights that Have Not Vested(2) | | ||||||||||||||||||
Paolo Pucci | | | | | 500,000(3) | | | | | | | | | | | $ | 3.95 | | | | | | 6/9/2018 | | | | | | | | | | | | | | |
| | | 225,000 | | | | | | | | | | | | 3.42 | | | | | | 1/21/2020 | | | | | | | | | | | | | | | ||
| | | 100,000 | | | | | | | | | | | | 4.14 | | | | | | 7/15/2020 | | | | | | | | | | | | | | | ||
| | | 300,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 236,250 | | | | | | 78,750 | | | | | | 7.95 | | | | | | 2/1/2022 | | | | | | | | | | | | | | | ||
| | | 142,500 | | | | | | 142,500 | | | | | | 2.51 | | | | | | 1/14/2023 | | | | | | | | | | | | | | | ||
| | | 76,250 | | | | | | 228,750 | | | | | | 2.57 | | | | | | 1/22/2024 | | | | | | | | | | | | | | | ||
| | | | | | | | | 390,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 390,000(4) | | | | | $ | 1,614,600 | | | ||
Peter S. Lawrence | | | | | 300,000 | | | | | | | | | | | | 6.20 | | | | | | 4/13/2016 | | | | | | | | | | | | | | |
| | | 50,000 | | | | | | | | | | | | 6.16 | | | | | | 1/16/2017 | | | | | | | | | | | | | | | ||
| | | 100,000 | | | | | | | | | | | | 7.56 | | | | | | 10/4/2017 | | | | | | | | | | | | | | | ||
| | | 200,000 | | | | | | | | | | | | 4.75 | | | | | | 1/17/2018 | | | | | | | | | | | | | | | ||
| | | 130,000 | | | | | | | | | | | | 3.42 | | | | | | 1/21/2020 | | | | | | | | | | | | | | | ||
| | | 130,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 25,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 110,812 | | | | | | 36,938 | | | | | | 7.95 | | | | | | 2/1/2022 | | | | | | | | | | | | | | | ||
| | | 61,750 | | | | | | 61,750 | | | | | | 2.51 | | | | | | 1/14/2023 | | | | | | | | | | | | | | | ||
| | | 35,125 | | | | | | 105,375 | | | | | | 2.57 | | | | | | 1/22/2024 | | | | | | | | | | | | | | | ||
| | | | | | | | | 169,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | 50,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 12,500(5) | | | | | $ | 31,375 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 125,000(6) | | | | | $ | 307,500 | | | ||
Dr. Brian Schwartz | | | | | 200,000 | | | | | | | | | | | | 3.62 | | | | | | 7/14/2018 | | | | | | | | | | | | | | |
| | | 90,000 | | | | | | | | | | | | 3.42 | | | | | | 1/21/2020 | | | | | | | | | | | | | | | ||
| | | 90,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 50,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 82,125 | | | | | | 27,375 | | | | | | 7.95 | | | | | | 2/1/2022 | | | | | | | | | | | | | | | ||
| | | 42,750 | | | | | | 42,750 | | | | | | 2.51 | | | | | | 1/14/2023 | | | | | | | | | | | | | | | ||
| | | 26,625 | | | | | | 79,875 | | | | | | 2.57 | | | | | | 1/22/2024 | | | | | | | | | | | | | | | ||
| | | | | | | | | 117,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | 30,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 50,000(7) | | | | | $ | 375,000 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 15,000(8) | | | | | $ | 37,650 | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 120,000(7) | | | | | $ | 295,200 | | |
| | | Option Awards | | | | | | | | | Stock Awards | | ||||||||||||||||||||||||
Name | | | Number of Securities Underlying Unexercised Options (#)(1) Exercisable | | | Number of Securities Underlying Unexercised Options (#)(1) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Equity Incentive Plan Awards: Number of Shares, Units or Other Rights that Have Not Vested | | | Equity Incentive Plan Awards: Market or Payout Value of Shares, Units or Other Rights that Have Not Vested(2) | | ||||||||||||||||||
Robert J. Weiskopf | | | | | 30,000 | | | | | | | | | | | | 6.81 | | | | | | 2/19/2017 | | | | | | | | | | | | | | |
| | | 22,500 | | | | | | | | | | | | 4.75 | | | | | | 1/17/2018 | | | | | | | | | | | | | | | ||
| | | 45,000 | | | | | | | | | | | | 3.42 | | | | | | 1/21/2020 | | | | | | | | | | | | | | | ||
| | | 45,000 | | | | | | | | | | | | 6.70 | | | | | | 1/24/2021 | | | | | | | | | | | | | | | ||
| | | 40,500 | | | | | | | | | | | | 7.95 | | | | | | 2/01/2022 | | | | | | | | | | | | | | | ||
| | | 32,062 | | | | | | 10,688 | | | | | | 2.51 | | | | | | 1/14/2023 | | | | | | | | | | | | | | | ||
| | | 24,125 | | | | | | 24,125 | | | | | | 2.57 | | | | | | 1/22/2024 | | | | | | | | | | | | | | | ||
| | | 14,625 | | | | | | 43,875 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | 5,000 | | | | | | 15,000 | | | | | | 1.16 | | | | | | 1/20/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | 30,000 | | | | | | 1.80 | | | | | | 6/01/2025 | | | | | | | | | | | | | | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | 3,200(9) | | | | | $ | 8,032 | | |
In accordance with an amendment to Mr. Pucci’s employment agreement dated as of July 15, 2010, Mr. Pucci was granted an option to purchase 100,000 shares of the Company’s Common Stock, vesting annually over four years and 390,000
Company’s products and 90,000 units that vest only after satisfaction of the development target and a performance target based on the average price of the Company’s Common Stock; providedStock.
2015
Option Awards | Stock Awards | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Acquired on Exercise | Value Realized Upon Exercise ($) | Number of Shares Acquired on Vesting | Value Realized on Vesting ($) (1) | ||||||||||||||||||
Paolo Pucci | — | — | 16,875 | $ | 118,463 | |||||||||||||||||
Peter S. Lawrence | — | — | 18,750 | 131,625 | ||||||||||||||||||
Dr. Brian Schwartz | — | — | 2,925 | 20,534 | ||||||||||||||||||
Dr. Thomas C. K. Chan | — | — | 5,000 | 35,100 |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Securities Acquired on Exercise | | | Value Realized Upon Exercise ($) | | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting ($) (1) | | ||||||||||||
Peter S. Lawrence | | | | | — | | | | | | — | | | | | | 6,250 | | | | | | 7,500 | | |
Dr. Brian Schwartz | | | | | — | | | | | | — | | | | | | 7,500 | | | | | | 9,000 | | |
Robert J. Weiskopf | | | | | — | | | | | | — | | | | | | 3,200 | | | | | | 3,840 | | |
28
of the annual performance bonuses that he received in the preceding two years. In addition, 50% of any then unvested options that were granted at the time that the employment agreement was originally executed will become immediately exercisable on the termination date, and the Company will pay, for the twelve-month period following the date of termination, the cost of continuing the health and other employee benefits that Mr. Lawrence is entitled to receive under his employment agreement at the level in effect as of the termination date. The employment agreement further provides that, if the Company terminates (or is deemed to terminate) Mr. Lawrence’s employment with the Company without Cause within a specified period uponone year following a Change of Control of the Company, in addition to the severance benefits described above, any then unvested options held by Mr. Lawrence will become immediately exercisable.exercisable and any shares of restricted stock previously granted shall immediately be free and clear of any restrictions. Additionally, if a Change of Control occurs prior to achievement of the product development milestone, and the Company subsequently terminates (or is deemed to terminate) Mr. Lawrence’s employment without Cause within a specified period, 125,000 of his PSUs will vest without regard to the product developmentperformance milestone.
Name | Cash Payment(1) ($) | Equity Acceleration(2) ($) | Benefits and Perquisites(3) ($) | Total ($) | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Paolo Pucci | $ | 1,553,820 | — | $ | 24,363 | $ | 1,578,183 | |||||||||||||||
Peter S. Lawrence | 579,489 | — | 24,382 | 603,871 | ||||||||||||||||||
Dr. Brian Schwartz | 499,516 | — | 24,382 | 523,898 |
Name | | | Cash Payment(1) ($) | | | Equity Acceleration(2) ($) | | | Benefits and Perquisites(3) ($) | | | Total ($) | | ||||||||||||
Paolo Pucci | | | | $ | 1,477,822 | | | | | | 1,240,200 | | | | | $ | 28,060 | | | | | $ | 2,746,082 | | |
Peter S. Lawrence | | | | | 612,188 | | | | | | 519,565 | | | | | | 28,060 | | | | | | 1,159,813 | | |
Dr. Brian Schwartz | | | | | 577,095 | | | | | | 549,920 | | | | | | 28,060 | | | | | | 1,155,075 | | |
30
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
As of March 29, 2013 there were 8,259,603 shares subject to issuance upon exercise of outstanding options and there were no stock appreciation rights under all of our equity compensation plans referred to in the table below, at a weighted average exercise price of $5.27, and with a weighted average remaining life of 6.4 years. There were a total of 927,697 shares subject to outstanding restricted stock and PSUs and other full value awards that remain subject to forfeiture. As of March 29, 2012, there were 2,042,341 shares available for future issuance under those plans. The following table provides information as of December 31, 2012 regarding compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.
(a) | (b) | (c)(1) | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||
Equity compensation plans approved by security holders | 7,157,458 | $ | 5.70 | 5,184,778 | |||||||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||||||
Total | 7,157,458 | $ | 5.70 | 5,184,778 |
REPORT OF THE AUDIT COMMITTEE
31
PROPOSAL 2—RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
2012 | 2011 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Audit Fees | $ | 479,000 | $ | 474,786 | ||||||||
Audit-Related Fees | — | — | ||||||||||
Tax Fees | — | — | ||||||||||
All Other Fees | — | — | ||||||||||
Total | $ | 479,000 | $ | 474,000 |
2014.
| | | 2015 | | | 2014 | | ||||||
Audit Fees | | | | $ | 410,000 | | | | | $ | 427,000 | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | — | | | | | | — | | |
Total | | | | $ | 410,000 | | | | | $ | 427,000 | | |
|
September 2014.
2014.
If you submit a proxy without direction as to a vote on this matter, your proxy will be treated as a vote “FOR” this proposal. Abstentions will have no effect on this proposal.
32
PROPOSAL 3—ADVISORY VOTE ON APPROVAL OF THE COMPENSATION OF
THE COMPANY’S NAMED EXECUTIVE OFFICERS
33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
2015.
Stock as of March 31, 2016.
Name | Common Stock Owned | Options to Purchase Common Stock | Total Stock and Stock-based Holdings | Percent of Class | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
BlackRock, Inc.(1) | 5,305,108 | — | 5,305,108 | 8.51 | % | |||||||||||||||||
55 East 52nd Street New York, NY 10055 | ||||||||||||||||||||||
First Eagle Investment Management, LLC(2) | 4,539,651 | — | 4,539,651 | 7.28 | % | |||||||||||||||||
1345 Avenue of the Americas New York, NY 10105 | ||||||||||||||||||||||
The Vanguard Group, Inc.(3) | 3,487,378 | — | 3,487,378 | 5.59 | % | |||||||||||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||||||||||||
Pfizer Inc(4) | 3,273,679 | — | 3,273,679 | 5.23 | % | |||||||||||||||||
235 East 42nd Street New York, New York 10017 | ||||||||||||||||||||||
FMR LLC(5) | 3,269,804 | — | 3,269,804 | 5.25 | % | |||||||||||||||||
82 Devonshire Street, Boston, MA 02109 |
Name | | | Common Stock Owned | | | Options to Purchase Common Stock | | | Total Stock and Stock-based Holdings | | | Percent of Class | | ||||||||||||
First Eagle Investment Management, LLC(1) 1345 Avenue of the Americas New York, NY 10105 | | | | | 10,825,233 | | | | | | 935,673 | | | | | | 11,760,906 | | | | | | 16.6% | | |
Nantahala Capital Management, LLC(2) 19 Old Kings Highway S, Suite 200 Darien, CT 06820 | | | | | 8,615,547 | | | | | | 1,053,333 | | | | | | 9,668,880 | | | | | | 13.6% | | |
BVF Partners, LP(3) 900 North Michigan Avenue, Suite 1100 Chicago, IL 60611 | | | | | 7,862,478 | | | | | | 467,868 | | | | | | 8,330,316 | | | | | | 11.7% | | |
1Globe Capital LLC(4) 245 First Street Riverview II, 18th Floor Cambridge, MA 02142 | | | | | 4,008,664 | | | | | | — | | | | | | 4,008,664 | | | | | | 5.6% | | |
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Directors and Executive Officers(1) | Common Stock Owned | Options to Purchase Common Stock | Total Stock and Stock-based Holdings | Percent of Class | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Timothy C. Barabe(2) | 52,570 | 100,000 | 152,570 | * | ||||||||||||||||||
Susan L. Kelley | — | 50,000 | 50,000 | * | ||||||||||||||||||
Ronald M. Lindsay | 20,000 | 95,000 | 115,000 | * | ||||||||||||||||||
Michael D. Loberg | 80,364 | 95,000 | 175,364 | * | ||||||||||||||||||
William G. Messenger | 1,500 | 100,000 | 101,500 | * | ||||||||||||||||||
Patrick J. Zenner | 35,300 | 150,000 | 185,300 | * | ||||||||||||||||||
Thomas C. K. Chan | 16,994 | 330,000 | 346,994 | * | ||||||||||||||||||
Peter S. Lawrence | 63,857 | 861,937 | 925,794 | 1.5 | % | |||||||||||||||||
Paolo Pucci | 235,419 | 972,500 | 1,207,919 | 1.9 | % | |||||||||||||||||
Brian Schwartz | 38,057 | 364,875 | 402,932 | * | ||||||||||||||||||
Directors and executive officers as a group (10 persons) | 544,061 | 3,119,312 | 3,663,373 | 5.9 | % |
Directors and Executive Officers(1) | | | Common Stock Owned | | | Options to Purchase Common Stock | | | Total Stock and Stock-based Holdings | | | Percent of Class | | ||||||||||||
Timothy C. Barabe(2) | | | | | 113,331 | | | | | | 130,000 | | | | | | 243,331 | | | | | | * | | |
Susan L. Kelley | | | | | 50,000 | | | | | | 105,000 | | | | | | 155,000 | | | | | | * | | |
Ronald M. Lindsay | | | | | 20,000 | | | | | | 130,000 | | | | | | 150,000 | | | | | | * | | |
Michael D. Loberg | | | | | 136,674 | | | | | | 140,000 | | | | | | 276,674 | | | | | | * | | |
William G. Messenger | | | | | 10,000 | | | | | | 130,000 | | | | | | 140,000 | | | | | | * | | |
Patrick J. Zenner | | | | | 73,770 | | | | | | 210,000 | | | | | | 283,770 | | | | | | * | | |
Peter S. Lawrence | | | | | 74,365 | | | | | | 1,300,375 | | | | | | 1,374,740 | | | | | | 1.9% | | |
Paolo Pucci | | | | | 410,614 | | | | | | 1,806,252 | | | | | | 2,216,866 | | | | | | 3.1% | | |
Brian Schwartz | | | | | 52,016 | | | | | | 693,625 | | | | | | 745,641 | | | | | | 1.0% | | |
Robert J. Weiskopf | | | | | 28,422 | | | | | | 258,812 | | | | | | 287,234 | | | | | | * | | |
Directors and executive officers as a group (10 persons) | | | | | 969,192 | | | | | | 4,904,064 | | | | | | 5,873,256 | | | | | | 8.3% | | |
|
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
01803-4757
William B. Boni
01803-4757
36
ARQULE, INC.19 PRESIDENTIAL WAYWOBURN,INC. ONE WALL STREET BURLINGTON, MA 01801VOTE01803VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery ofinformationof information up until 5:00 P.M. Eastern Daylight SavingSavings Time, May 19, 2013. Haveyour23, 2016. Have your proxy card in hand when you access the web site and follow the instructionstoinstructions to obtain your records and to create an electronic voting instruction form.ELECTRONICform. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSIfMATERIALS If you would like to reduce the costs incurred by ArQule, Inc. in mailingproxymailing proxy materials, you can consent to receiving all future proxy statements,proxy cards and annual reports electronically via e-mail or the Internet. To signupsign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxymaterialsproxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until5:until 5:00 P.M. Eastern Daylight SavingSavings Time, May 19, 2013.23, 2016. Have your proxy card inhandin hand when you call and then follow the instructions.VOTEinstructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to ArQule, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.TO VOTE, MARK BLOCKS
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and Proxy Statement, Form 10-K and Stockholder Letter are available at www.proxyvote.com. M58475-P37136 THISwww.proxyvote.com.E01955-P75268THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSOFARQULE, INC. ANNUALDIRECTORS OF ARQULE, INC.ANNUAL MEETING OF STOCKHOLDERSMay 20, 2013 TheSTOCKHOLDERS May 24, 2016The undersigned stockholder of ArQule, Inc. hereby appoints Peter S. Lawrence, and Robert J. Connaughton, Jr., and each of them acting individually, as proxies, eachproxy, with the power to appoint his substitute, and hereby authorizes themhim to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of ArQule, Inc. that the undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at the offices of ArQule, Inc. at 19 Presidential Way, Woburn,Boston Burlington Marriott, One Mall Road, Burlington, Massachusetts 01801-514001803 at 10:00 a.m. Eastern Daylight SavingSavings Time on May 20, 201324, 2016 and any adjournment or postponement thereof.THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO SUCH DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE AND "FOR" PROPOSALS 2 AND 3.PLEASE MARK, SIGN, DATE AND RETURN THlS PROXY CARD PROMPTLY USING THE ENCLOSED