Radius Health, Inc.
Radius Health, Inc. (Form: DEF 14A, Received: 04/20/2018 16:07:25)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

Filed by the Registrant  

Filed by a Party other than the Registrant  

Check the appropriate box:

 

Preliminary Proxy Statement

 

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

 

Definitive Proxy Statement

 

 

Definitive Additional Materials

 

 

Soliciting Material Pursuant to §240.14a-12

RADIUS HEALTH, INC.

 

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction: 

 

 

 

 

(5)

Total fee paid:

 

 

 

 

 

Fee paid previously with preliminary materials:

 

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

 

 

(1)

Amount previously paid:

 

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:

 

 

 

 

 

 


 

 


 

 

April 20, 2018

 

To Our Stockholders:

You are cordially invited to attend the 2018 Annual Meeting of Stockholders of Radius Health, Inc. at 10:00 a.m. EDT, on June 6, 2018, at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th Floor, Boston, MA 02210.

The Notice of Meeting and Proxy Statement on the following pages describe the matters to be presented at the Annual Meeting.

We hope that you will be able to join us at our Annual Meeting. Whether or not you expect to attend the Annual Meeting, it is important that your shares be represented and voted at the Annual Meeting. Therefore, I urge you to promptly vote and submit your proxy by phone, via the Internet, or, if you received paper copies of these materials, by signing, dating, and returning the enclosed proxy card in the enclosed envelope, which requires no postage if mailed in the United States. If you have previously received our Notice of Internet Availability of Proxy Materials, then instructions regarding how you can vote are contained in that notice. If you have received a proxy card, then instructions regarding how you can vote are contained on the proxy card. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy.

Thank you for your support.

Sincerely,

 

 

Jesper Høiland

President and Chief Executive Officer

 

 

 


 

TABLE OF CONTENTS

 

 

Page

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

1

 

 

PROXY STATEMENT

2

Directions to the Annual Meeting

2

Proposals

3

Recommendations of the Board

3

Information about this Proxy Statement

3

 

 

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

4

 

 

PROPOSAL 1: ELECTION OF DIRECTORS

8

 

 

PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

12

 

 

AUDIT COMMITTEE REPORT

14

 

 

PROPOSAL 3: ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

15

 

 

PROPOSAL 4: APPROVAL OF 2018 STOCK OPTION AND INCENTIVE PLAN

16

 

 

EXECUTIVE OFFICERS

24

 

 

CORPORATE GOVERNANCE

25

General

25

Board Composition

25

Majority Voting in Director Elections

25

Director Independence

25

Director Candidates

25

Communications from Stockholders

26

Board Leadership Structure and Role in Risk Oversight

26

Code of Ethics

26

Director Attendance at Board and Committee Meetings

26

Executive Sessions

27

 

 

BOARD COMMITTEES

28

Audit Committee

28

Compensation Committee

28

Nominating and Corporate Governance Committee

29

Strategy Committee

29

 

 

EXECUTIVE COMPENSATION

30

Compensation Discussion and Analysis

30

Summary Compensation Table

36

Grants of Plan-Based Awards

38

Outstanding Equity Awards at Fiscal Year End

39

Option Exercises and Stock Vested

40

Pension Benefits

40

Nonqualified Deferred Compensation

40

Potential Payments upon Termination or Change In Control

41

Compensation Risk Assessment

45

 

 

CEO PAY RATIO

46

 

 

DIRECTOR COMPENSATION

47

Director Compensation Table

48

 

 

COMPENSATION COMMITTEE REPORT

49

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

50

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

52

 

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

53

 


 

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

53

 

 

FUTURE STOCKHOLDER PROPOSALS

53

 

 

OTHER MATTERS

53

 

 

SOLICITATION OF PROXIES

54

 

 

ANNUAL REPORT ON FORM 10-K

54

 

 

APPENDIX A: 2018 STOCK OPTION AND INCENTIVE PLAN

A-1

 

 

 

 

 

 

 


 

 

RADIUS HEALTH, INC.

950 Winter Street

Waltham, Massachusetts 02451

NOTICE OF 2018 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 6, 2018

To Our Stockholders:

The 2018 Annual Meeting of Stockholders (the “Annual Meeting”) of Radius Health, Inc., a Delaware corporation (the “Company”), will be held at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th Floor, Boston, Massachusetts 02210, on June 6, 2018, at 10:00 a.m. EDT, for the following purposes:

 

1.

To elect Jesper Høiland, Owen Hughes, and Debasish Roychowdhury, M.D. as Class I Directors to serve until the 2021 Annual Meeting of Stockholders, and until their respective successors shall have been duly elected and qualified;

 

2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

 

3.

To approve, on an advisory basis, the compensation of our named executive officers;

 

4.

To approve our 2018 Stock Option and Incentive Plan; and

 

5.

To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment thereof.

Holders of record of our common stock at the close of business on April 11, 2018 are entitled to notice of and to vote at the Annual Meeting, or any continuation, postponement or adjournment thereof. A complete list of the stockholders of record will be open to the examination of any stockholder at our principal executive offices at 950 Winter Street, Waltham, Massachusetts 02451 for a period of ten days prior to the Annual Meeting. The Annual Meeting may be continued or adjourned from time to time without notice other than by announcement at the Annual Meeting.

It is important that your shares be represented regardless of the number of shares you may hold. All stockholders are cordially invited to attend the Annual Meeting. Whether or not you plan to attend the Annual Meeting in person, we urge you to vote your shares via the toll-free telephone number or over the Internet, as described in the enclosed materials. If you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the enclosed return envelope. Promptly voting your shares will ensure the presence of a quorum at the Annual Meeting and will save us the expense of further solicitation. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option.

By Order of the Board of Directors,

 

 

Brent Hatzis-Schoch, Esq.

Secretary

 

Waltham, Massachusetts

April 20, 2018

 


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RADIUS HEALTH, INC.

950 Winter Street

Waltham, Massachusetts 02451

 

PROXY STATEMENT FOR 2018 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 6, 2018

This proxy statement is furnished in connection with the solicitation by the Board of Directors of Radius Health, Inc. of proxies to be voted at our Annual Meeting of Stockholders to be held on June 6, 2018 (the “Annual Meeting”), at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th Floor, Boston, Massachusetts 02210, at 10:00 a.m. EDT, and at any continuation, postponement, or adjournment thereof. Holders of record of shares of our common stock, $0.0001 par value (“Common Stock”), at the close of business on April 11, 2018 (the “Record Date”), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement, or adjournment thereof. As of the Record Date, there were 45,253,669 shares of our Common Stock issued and outstanding and entitled to vote at the Annual Meeting. Each share of our Common Stock is entitled to one vote on any matter presented to stockholders at the Annual Meeting.

This proxy statement and our annual report to stockholders for the fiscal year ended December 31, 2017 (the “2017 Annual Report”), including a shareholder letter from our Chief Executive Officer (the “Shareholder Letter”), will be released on or about April 20, 2018 to our Record Date stockholders.

In this proxy statement, “we,” “our,” “us,” the “Company,” and “Radius” refer to Radius Health, Inc.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 6, 2018

This Proxy Statement and our 2017 Annual Report, including the Shareholder Letter, are available at www.proxyvote.com . To view these materials please have your 16-digit control number(s) available that appears on your notice or proxy card. On this website, you can also elect to receive distributions of our proxy statements and annual reports to stockholders for future annual meetings by electronic delivery. For specific instructions on making such an election, please refer to the instructions on your proxy card or voting instruction form.  

 

Directions to the Annual Meeting

Directions to the Annual Meeting are available at www.goodwinlaw.com/locations/boston or by calling 617-551-4000.


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Proposals

At the Annual Meeting, our stockholders will be asked:

 

1.

To elect Jesper Høiland, Owen Hughes, and Debasish Roychowdhury, M.D. as Class I Directors to serve until the 2021 Annual Meeting of Stockholders, and until their respective successors shall have been duly elected and qualified;

 

2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

 

3.

To approve, on an advisory basis, the compensation of our named executive officers;

 

4.

To approve our 2018 Stock Option and Incentive Plan; and

 

5.

To transact such other business as may properly come before the Annual Meeting or any continuation, postponement, or adjournment thereof.

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.

Recommendations of the Board

The Board of Directors of Radius Health, Inc. (the “Board of Directors,” “Board,” or “our Board”) recommends that you vote your shares as indicated below. If you return a properly completed proxy card, or vote your shares by telephone or Internet, your shares of Common Stock will be voted on your behalf as you direct. You may also vote your shares in person at the Annual Meeting. If not otherwise specified, the shares of Common Stock represented by the proxies will be voted, and our Board recommends that you vote:

 

1.

“FOR” the election of Jesper Høiland, Owen Hughes, and Debasish Roychowdhury, M.D. as Class I Directors;

 

2.

“FOR” the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;

 

3.

“FOR” the approval, on an advisory basis, of the compensation of our named executive officers; and

 

4.

“FOR” the approval of our 2018 Stock Option and Incentive Plan.

Information about this Proxy Statement

Why you received this proxy statement.

You are viewing or have received these proxy materials because our Board is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement includes information that we are required to provide to you under the rules of the U.S. Securities and Exchange Commission (the “SEC”) and that is designed to assist you in voting your shares.

Notice of Internet Availability of Proxy Materials.

As permitted by SEC rules, we are making this proxy statement and our 2017 Annual Report available to stockholders electronically via the Internet. On or about April 20, 2018, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) containing instructions on how to access this proxy statement and our 2017 Annual Report, including the Shareholder Letter (the “Proxy Materials”) and vote online. If you received an Internet Notice by mail, you will not receive a printed copy of the Proxy Materials in the mail unless you specifically request them. Instead, the Internet Notice instructs you on how to access and review all of the important information contained in the Proxy Materials. The Internet Notice also instructs you on how you may submit your proxy over the Internet. If you received an Internet Notice by mail and would like to receive a printed copy of our Proxy Materials, you should follow the instructions for requesting such materials contained on the Internet Notice.

Printed copies of our Proxy Materials.

If you received printed copies of our Proxy Materials, then instructions regarding how you can vote are contained on the proxy card included in the materials.

Householding.

The SEC’s rules permit us to deliver a single Internet Notice or set of Proxy Materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of

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this opportunity, we have delivered only one Internet Notice or one set of Proxy Materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the Internet Notice or Proxy Materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the Internet Notice or Proxy Materials, contact Broadridge Financial Solutions, Inc. at 1-866-540-7095 or in writing at Broadridge, Householding Department, 51 Merced es Way, Edgewood, New York 11717.

If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future Internet Notices or proxy materials for your household, please contact Broadridge at the above phone number or address.  

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Who is entitled to vote at the Annual Meeting?

The Record Date for the Annual Meeting is April 11, 2018. You are entitled to vote at the Annual Meeting only if you were a stockholder of record at the close of business on that date, or if you hold a valid proxy for the Annual Meeting. Each outstanding share of Common Stock is entitled to one vote for all matters before the Annual Meeting. At the close of business on the Record Date, there were 45,253,669 shares of Common Stock issued and outstanding and entitled to vote at the Annual Meeting.

What is the difference between being a “record holder” and holding shares in “street name”?

A record holder holds shares in his or her name. Shares held in “street name” means shares that are held in the name of a bank or broker on a person’s behalf.

Am I entitled to vote if my shares are held in “street name” ?  

Yes. If your shares are held by a bank or a brokerage firm, you are considered the “beneficial owner” of those shares held in “street name.” If your shares are held in street name, these Proxy Materials are being provided to you by your bank or brokerage firm, along with a voting instruction card if you received printed copies of our Proxy Materials. As the beneficial owner, you have the right to direct your bank or brokerage firm how to vote your shares, and the bank or brokerage firm is required to vote your shares in accordance with your instructions. If your shares are held in street name, you may not vote your shares in person at the Annual Meeting unless you obtain a legal proxy from your bank or brokerage firm.

How many shares must be present to hold the Annual Meeting?

A quorum must be present at the Annual Meeting for any business to be conducted. The presence at the Annual Meeting, in person or by proxy, of the holders of a majority in voting power of the Common Stock issued and outstanding and entitled to vote on the Record Date will constitute a quorum.

Who can attend the Annual Meeting?

You may attend the Annual Meeting only if you are a Radius stockholder who is entitled to vote at the Annual Meeting, or if you hold a valid proxy for the Annual Meeting. Stockholders planning to attend the Annual Meeting in person are requested to call 617-551-4000 to be placed on the attendance list. In order to be admitted into the Annual Meeting, you must present a government-issued photo identification (such as a driver’s license). If your bank or broker holds your shares in street name, you will also be required to present proof of beneficial ownership of our Common Stock on the Record Date, such as the Internet Notice you received from your bank or broker, or a bank or brokerage statement or a letter from your bank or broker showing that you owned shares of our Common Stock at the close of business on the Record Date.

What if a quorum is not present at the Annual Meeting?

If a quorum is not present at the scheduled time of the Annual Meeting, (i) the chair of the Annual Meeting or (ii) a majority in voting power of the stockholders entitled to vote at the Annual Meeting, present in person or represented by proxy, may adjourn the Annual Meeting until a quorum is present or represented.

What does it mean if I receive more than one Internet Notice or more than one set of Proxy Materials ?  

It means that your shares are held in more than one account at the transfer agent and/or with banks or brokers. Please vote all of your shares. To ensure that all of your shares are voted, for each Internet Notice or set of Proxy Materials, please submit your proxy by phone, via the Internet, or, if you received printed copies of the Proxy Materials, by signing, dating and returning the enclosed proxy card in the enclosed envelope.

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How do I vote?  

We recommend that stockholders vote by proxy even if they plan to attend the Annual Meeting and vote in person. If you are a stockholder of record, there are three ways to vote by proxy:

 

by Telephone—You can vote by telephone by calling 1-800-690-6903 and following the instructions on the Internet Notice or proxy card;

 

by Internet—You can vote over the Internet at www.proxyvote.com by following the instructions on the Internet Notice or proxy card; or

 

by Mail—You can vote by mail by signing, dating and mailing the proxy card, which you may have received by mail.

Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day and will close at 11:59 p.m., EDT, on June 5, 2018.

If your shares are held in street name through a bank or broker, you will receive instructions on how to vote from the bank or broker. You must follow their instructions in order for your shares to be voted. Telephone and Internet voting also may be offered to stockholders owning shares through certain banks and brokers. If your shares are not registered in your own name and you would like to vote your shares in person at the Annual Meeting, you should contact your bank or broker to obtain a legal proxy and bring it to the Annual Meeting in order to vote.

Can I change my vote after I submit my proxy?  

Yes, if you are a registered stockholder, you may revoke your proxy and change your vote by:

 

submitting a duly executed proxy bearing a later date;

 

granting a subsequent proxy through the Internet or telephone;

 

giving written notice of revocation to the Secretary of Radius prior to or at the Annual Meeting; or

 

voting in person at the Annual Meeting.

Your most recent proxy card or telephone or Internet proxy is the one that is counted. Your attendance at the Annual Meeting by itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote in person at the Annual Meeting.

If your shares are held in street name, you may change or revoke your voting instructions by following the specific directions provided to you by your bank or broker, or you may vote in person at the Annual Meeting by obtaining a legal proxy from your bank or broker and submitting the legal proxy along with your ballot.

Who will count the votes?

A representative of Broadridge Financial Solutions, Inc., our inspector of election, will tabulate and certify the votes.

What if I do not specify how my shares are to be voted?  

If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote in accordance with the recommendations of our Board. The recommendations of our Board are indicated above under the heading “Recommendations of the Board,” as well as with the description of each proposal in this proxy statement.

Will any other business be conducted at the Annual Meeting?  

We know of no other business that will be presented at the Annual Meeting. If any other matter properly comes before the stockholders for a vote at the Annual Meeting, however, the proxy holders named on the Company’s proxy card will vote your shares in accordance with their best judgment.


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How many votes are required for the approval of the proposals to be voted upon and how will abstentions and broker non-votes be treated?

Proposal

 

Votes required

 

Effect of Votes Withheld, Abstentions,

and Broker Non-Votes

Proposal 1 : Election of Directors

 

The majority of the votes cast.

This means that the number of votes “FOR” a nominee for director exceeds the number of votes “AGAINST” such nominee.

 

Abstentions and broker non-votes

will have no effect.

Proposal 2 : Ratification of Appointment of

Independent Registered Public Accounting Firm

 

The affirmative vote of the holders of

a majority in voting power of the votes

cast affirmatively or negatively

(excluding abstentions) by the holders

entitled to vote on the proposal.

 

Abstentions will have no effect.

We do not expect any broker

non-votes on this proposal.

Proposal 3 : Advisory Vote on the Compensation

of Named Executive Officers

 

The affirmative vote of the holders of

a majority in voting power of the votes

cast affirmatively or negatively

(excluding abstentions) by the holders

entitled to vote on the proposal.

 

Abstentions and broker non-votes

will have no effect.

Proposal 4 : Approval of 2018 Stock Option and Incentive Plan

 

The affirmative vote of the holders of

a majority in voting power of the votes

cast affirmatively or negatively

(excluding abstentions) by the

holders entitled to vote on the proposal.

 

Abstentions and broker non-votes

will have no effect.

What is an abstention and how will votes withheld and abstentions be treated?  

An “abstention,” in the case of the proposals to be voted on at the Annual Meeting, represents a stockholder’s affirmative choice to decline to vote on a proposal. Abstentions are counted as present and entitled to vote for purposes of determining a quorum. Abstentions have no effect on the proposals to be voted upon at the Annual Meeting.

What are broker non-votes and do they count for determining a quorum?  

Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because the broker (1) has not received voting instructions from the beneficial owner and (2) lacks discretionary voting power to vote those shares. A broker is typically entitled to vote shares held for a beneficial owner on routine matters, such as the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm, without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on non-routine matters, such as the election of directors, the advisory vote on the compensation of our named executive officers, and the proposal to approve our 2018 Stock Option and Incentive Plan. Broker non-votes count for purposes of determining whether a quorum is present.

Where can I find the voting results of the Annual Meeting?  

We plan to announce preliminary voting results at the Annual Meeting and we will report the final results in a Current Report on Form 8-K, which we intend to file with the SEC shortly after the Annual Meeting.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. We have engaged Innisfree M&A Incorporated (“Innisfree”) to act as our proxy solicitor in connection with the proposals to be acted upon at the Annual Meeting. Pursuant to our agreement with Innisfree, they will, among other things, provide advice regarding proxy solicitation issues and solicit proxies from our stockholders on our behalf in connection with the Annual Meeting. For these services, we will pay a fee of approximately $25,000 plus expenses.

FORWARD-LOOKING STATEMENTS

This proxy statement contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, relating to future events. Such statements are only predictions and involve risks and uncertainties, resulting in the possibility that the actual events or performance will differ materially from such predictions. For a nonexclusive list of major factors

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which could cause the actual results to differ materially from the predicted results in these forward looking statements, please refer to the “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017 and in our periodic reports on Form 10-Q and Form 8-K. Those factors are not ranked in any particular order.

 

 


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PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting, three (3) Class I Directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2021 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

We currently have eight (8) Directors on our Board. The proposal regarding the election of directors requires the approval of a majority of the votes cast. This means that a nominee will be elected as a Class I Director if the number of votes “FOR” such nominee exceeds the number of votes “AGAINST” such nominee. Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal.

Our Board is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successor to each director whose term then expires will be elected to serve from the time of election and qualification until the third annual meeting of stockholders following election or such director’s death, resignation or removal, whichever is earliest to occur. The current class structure is as follows: Class I, whose current term expires at the Annual Meeting and whose new term will expire at the 2021 Annual Meeting of Stockholders; Class II, whose previous term expired at the 2016 Annual Meeting of Stockholders and whose current term will expire at the 2019 Annual Meeting of Stockholders; and Class III, whose previous term expired at the 2017 Annual Meeting of Stockholders and whose current term will expire at the 2020 Annual Meeting of Stockholders. The current Class I Directors are Jesper Høiland, Owen Hughes, and Debasish Roychowdhury, M.D.; the current Class II Directors are Catherine J. Friedman and Jean-Pierre Garnier, Ph.D.; and the current Class III Directors are Willard H. Dere, M.D., Kurt C. Graves and Anthony Rosenberg.

As indicated in our Restated Certificate of Incorporation and our Amended and Restated Bylaws, the authorized number of directors may be changed only by resolution of our Board. In November 2017, our Board approved a decrease in the authorized number of directors from ten to nine directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of the outstanding shares of our Common Stock.

If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of Common Stock represented by the proxy “FOR” the election as Class I Directors the persons whose names and biographies appear below. All of the persons whose names and biographies appear below are currently serving as our directors. In the event any of the nominees should become unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by our Board or our Board may elect to reduce its size. Our Board has no reason to believe that the nominees named below will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected.

Vote Required

The proposal regarding the election of directors requires the approval of a majority of the votes cast. This means that a nominee will be elected as a Class I Director if the number of votes “FOR” such nominee exceeds the number of votes “AGAINST” such nominee. Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal.

 


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Nominees for Class I Directors (Terms to Expire at the 2021 Annual Meeting)

The following table sets forth certain information regarding the members of our Board who are nominees for election to the Board as Class I Directors, including their positions with the Company and ages as of the Annual Meeting.

Name

 

Age

 

 

Director Since

 

 

Position

Jesper Høiland

 

 

57

 

 

 

2017

 

 

President, Chief Executive Officer and Director

Owen Hughes

 

 

43

 

 

 

2013

 

 

Director

Debasish Roychowdhury, M.D.

 

 

57

 

 

 

2015

 

 

Director

The principal occupations and business experience, for at least the past five years, of each Class I nominee for election at the Annual Meeting are as follows:

Jesper Høiland has served as our President and Chief Executive Officer and as a member of our Board since July 2017. Prior to joining Radius, Mr. Høiland served as President of Novo Nordisk Inc. USA, the US affiliate of Novo Nordisk A/S, a global healthcare company focused on diabetes and other serious chronic conditions. Since joining Novo Nordisk in 1987, Mr. Høiland held multiple global roles of increasing responsibility, including leading its International Operations, which spanned 150 countries. Mr. Høiland has 30 years of experience in the biopharmaceutical industry across numerous senior leadership roles, geographies and therapeutic areas. He possesses extensive knowledge about the areas of endocrinology, biopharmaceuticals and women’s health, as well as unique insights about U.S. market access. Mr. Høiland is a member of the board of directors of LEO Pharma A/S. Mr. Høiland received his M.Sc. in Management from Copenhagen Business School in Denmark. We believe Mr. Høiland is qualified to serve as a member of our Board because of his role with us and his extensive operational knowledge of, and executive level management experience in, the global biopharmaceutical industry.

Owen Hughes has served on our Board since April 2013. He has served as the Chief Executive Officer of Cullinan Oncology, LLC, a company focused on oncology therapeutics, and a Managing Director at MPM Capital, a venture capital firm, since October 2017. Previously, Mr. Hughes served as Chief Business Officer and Head of Corporate Development at Intarcia Therapeutics, Inc., a biotechnology company, from February 2013 to September 2017. Prior to Intarcia, Mr. Hughes served as a Director at Bain Capital Public Equity, a multi-billion dollar hedge fund that falls under the Bain Capital umbrella, from March 2008 to January 2013. While there, he co-managed public and private healthcare investments, including those in the biotechnology, med-tech, and services segments. Mr. Hughes has over 16 years of financial experience on both the buy and sell-side. Mr. Hughes is a director of Malin PLC and Translate Bio. He received his B.A. from Dartmouth College. We believe Mr. Hughes is qualified to serve as a member of our Board because of his extensive business and professional experience, including his experience in the venture capital industry and years of analyzing development opportunities in the life sciences sector.

Debasish Roychowdhury, M.D. has served on our Board since July 2015. Dr. Roychowdhury has served as the Chief Medical Officer of Partner Therapeutics, Inc., a biotechnology company focused on cancer treatments, since February 2018. Dr. Roychowdhury has served as President of Nirvan Consultants, LLC since December 2013, where he advises biotechnology companies and institutions. He was one of the founding members of the Clinical and Scientific Advisory Board of Seragon Pharmaceuticals, Inc. (“Seragon”), a biotechnology company, and was Seragon’s Chief Medical Officer, prior to its acquisition by Roche Pharma, from March 2014 to August 2014. Prior to Seragon, Dr. Roychowdhury was the Senior Vice President and Head of the Global Oncology Division at Sanofi, a pharmaceutical company, from August 2009 to November 2013. Prior to that, he served as the Vice President for Clinical Development at GlaxoSmithKline, a pharmaceutical company, from 2005 to 2009, and directed the Oncology Global Regulatory group at Eli Lilly and Company, a pharmaceutical company, from 1999 to 2005. Prior to his role in industry, Dr. Roychowdhury served as faculty member at the University of Cincinnati. He received his M.D. from the All India Institute of Medical Sciences. He serves as a director of Celyad S.A., Lytix Biopharma AS and Fund + , a life sciences investment fund. We believe Dr. Roychowdhury is qualified to serve as a member of our Board because of his strong medical background, specifically related to oncology, and extensive experience in the pharmaceutical industry.

Recommendation

Our Board recommends that stockholders vote “ FOR ” the election of the Class I Director nominees, and proxies solicited by our Board will be voted in favor thereof, unless a stockholder has indicated otherwise on the proxy.


9


 

Class II Directors (Terms to Expire at the 2019 Annual Meeting)

The following table sets forth certain information regarding the members of our Board who are Class II Directors, including their positions with the Company and ages as of the Annual Meeting.

Name

 

Age

 

Director Since

 

Position

Catherine J. Friedman

 

57

 

2015

 

Director

Jean-Pierre Garnier, Ph.D.

 

70

 

2015

 

Director

The principal occupations and business experience, for at least the past five years, of each Class II Director are as follows:

Catherine J. Friedman has served on our Board since August 2015. Previously, Ms. Friedman held the position of Managing Director at Morgan Stanley, a global financial services firm, from 1997 to 2006 and head of West Coast Healthcare and co-head of the Biotechnology Practice at Morgan Stanley from 1993 to 2006. In 2017, she joined the Board of Grail, Inc., a life sciences company focused on early cancer detection, where she chairs the Audit Committee and serves on the Nominating and Governance Committee. In 2016, Ms. Friedman joined the Board of Altaba Inc., an independent, publicly traded, non-diversified, closed-end management investment company (formerly Yahoo! Inc.), where she chairs the Compensation Committee and serves on the Nominating and Corporate Governance Committee. In 2014, she joined the Board of Innoviva, Inc., a royalty management company specializing in respiratory assets (formerly Theravance, Inc.), where she chairs the Compensation Committee and serves on the Nominating and Corporate Governance Committee. Ms. Friedman is a member of the Board of Trustees for Sacred Heart Schools in Atherton. Ms. Friedman was previously a director of XenoPort, Inc. and EnteroMedics, Inc. from 2007 to 2016 and GSV Capital Corp. from 2013 to 2017. She is a graduate of Harvard University and received an MBA from the University of Virginia Darden School of Business, where she is currently a Darden School Foundation Board of Trustees member. We believe Ms. Friedman is qualified to serve as a member of our Board due to her extensive experience as a member on various boards of directors, her educational background and her previous leadership and management roles.

Jean-Pierre Garnier, Ph.D. has served on our Board since December 2015. Dr. Garnier has served as the Chairman of the Board of Idorsia Ltd., a biopharmaceutical company, since 2017, and Chairman of the Board of Alzheon, Inc., a biotechnology company, since 2016 .  Previously, Dr. Garnier served as Chairman of the Board of Actelion Ltd., a biopharmaceutical company, from 2010 to 2017, and was Chief Executive Officer of GlaxoSmithKline plc, a pharmaceutical company, from 2000 to 2008. In addition, Dr. Garnier is a member of the Board of Directors of United Technologies Corporation, a global manufacturing and high-technology conglomerate, and an Operating Partner at Advent International, a global private equity firm. Dr. Garnier previously served as Chief Executive Officer of Pierre Fabre S.A., a pharmaceutical company, from 2008 to 2010, as Chief Executive Officer and Executive Member of the Board of Directors of GlaxoSmithKline plc from 2000 to 2008, as Chief Executive Officer of SmithKline Beecham plc, a pharmaceutical company, in 2000 and as Chief Operating Officer and Executive Member of the Board of Directors of SmithKline Beecham plc from 1996 to 2000. Dr. Garnier was previously Chairman of Cerenis and a board member of Renault S.A., the Stanford Advisory Council on Interdisciplinary Biosciences, Weill Cornell Medical College and the Dubai International Capital Advisory Board. He is also a member of the Advisory Board of the Newman’s Own Foundation. Dr. Garnier received his M.Sc in pharmaceutical science and Ph.D. in pharmacology from Louis Pasteur University in France and MBA from Stanford University. We believe Dr. Garnier is qualified to serve as a member of our Board because of his significant business and professional experience, including his extensive experience in the life sciences industry, membership on various boards of directors and his previous leadership and management roles.  

 


10


 

Class III Directors (Terms to Expire at the 2020 Annual Meeting)

The following table sets forth certain information regarding the members of our Board who are Class III Directors, including their positions with the Company and ages as of the Annual Meeting.

Name

 

Age

 

 

Director Since

 

 

Position

Willard H. Dere, M.D.

 

 

64

 

 

 

2014

 

 

Director

Kurt C. Graves

 

 

50

 

 

 

2011

 

 

Chairman of the Board

Anthony Rosenberg

 

 

65

 

 

 

2015

 

 

Director

The principal occupations and business experience, for at least the past five years, of each Class III Director are as follows:

Willard H. Dere, M.D. has served on our Board since November 2014. Dr. Dere has served as the B. Lue and Hope S. Bettilyon Presidential Endowed Chair in Internal Medicine for Diabetes Research; Co-Director of the Center for Clinical and Translational Science; Executive Director of Personalized Health, and a Professor of Internal Medicine at the University of Utah Health Sciences Center since November 2014. Prior to that, he served at Amgen Inc., a biopharmaceutical company, as the Senior Vice President, Global Development from December 2004 to June 2007, and from April 2014 to October 2014, and as International Chief Medical Officer from January 2007 to April 2014. Before he joined Amgen in 2003, Dr. Dere served as Vice President of Endocrine, Bone and General Medicine Research and Development at Eli Lilly and Company, a pharmaceutical company, where he also held various other roles in clinical pharmacology, regulatory affairs, and both early-stage translational, and late-stage clinical research. Dr. Dere received B.A. degrees in history and zoology and a M.D. degree from the University of California, Davis. He currently serves as a director of BioMarin Pharmaceutical Inc., Mersana Therapeutics, Inc., and Seres Therapeutics, Inc. Dr. Dere previously served as a director of Ocera Therapeutics from 2016 until 2017. We believe Dr. Dere is qualified to serve as a member of our Board because of his strong medical background and extensive experience in the pharmaceutical industry.

Kurt C. Graves has served on our Board since May 2011 and as Chairman of the Board since November 2011. Mr. Graves has been the Chairman, President and Chief Executive Officer of Intarcia Therapeutics, Inc., a biotechnology company, since April 2012, having previously served as Executive Chairman of Intarcia Therapeutics, Inc. from August 2010 to April 2012, and as Acting Chief Executive Officer from October 2011 to April 2012. Mr. Graves served as Executive Chairman of Biolex Therapeutics, a biotechnology company, from November 2010 to March 2012. Previously, Mr. Graves was Executive Vice President, Chief Commercial Officer and Head of Corporate and Strategic Development at Vertex Pharmaceuticals Inc., a biotechnology company, from July 2007 to October 2009. Before his tenure at Vertex, Mr. Graves held various leadership positions at Novartis Pharmaceuticals, a pharmaceutical company, from 1999 to June 2007, most recently on the Executive Committee as Global Head of the General Medicines Business Unit & Chief Marketing Officer for the Pharmaceuticals division. Prior to Novartis, Mr. Graves held several commercial and general management positions at Merck, a pharmaceutical company, and Astra Merck/Astra Pharmaceuticals, each pharmaceutical companies, where he spent most of his time leading the GI Business Unit responsible for Prilosec ® and Nexium ® . He currently serves as a director of Intarcia Therapeutics, Inc., Achillion Pharmaceuticals, Inc. and Seres Therapeutics, Inc. Mr. Graves was previously a director of Pulmatrix, Inc. from 2010 to 2016 and Biolex Therapeutics and Springleaf Therapeutics from 2010 to 2012. Mr. Graves received a B.S. in Biology from Hillsdale College. We believe Mr. Graves is qualified to serve as a member of our Board because of his extensive experience in the life sciences industry, membership on various boards of directors and his leadership and management experience.

Anthony Rosenberg has served on our Board since March 2015. Mr. Rosenberg has been a Managing Director of MPM Capital, a venture capital firm, since April 2015. From January 2013 to February 2015, Mr. Rosenberg served as Corporate Head of M&A and Licensing at Novartis International, a pharmaceutical company. From March 2005 to December 2012, he served as Global Head of Business Development and Licensing at Novartis Pharmaceuticals. Prior to that, Mr. Rosenberg was Global Head of the Transplant and Immunology Business Unit at Novartis Pharmaceuticals from 2000 to 2005. Mr. Rosenberg initially joined Sandoz, a predecessor to Novartis, in 1980. He currently serves as a director of Oculis SA, Clinical Ink, Inc., TriNetX, Inc., Cullinan Oncology, Inc., Argenx SE, and iOmx Therapeutics AG. Mr. Rosenberg served as a director of Idenix Pharmaceuticals, Inc. from June 2009 to March 2012 and from December 2012 to March 2013. Mr. Rosenberg holds a B.Sc from the University of Leicester and an M.Sc in physiology from the University of London. We believe Mr. Rosenberg is qualified to serve as a member of our Board due to his extensive experience in mergers and acquisitions and licensing in the pharmaceutical sector.

We believe that all of our current Board members possess the professional and personal qualifications necessary for Board service, and have highlighted particularly noteworthy attributes for each Board member in the individual biographies above.

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PROPO SAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Audit Committee has appointed Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the fiscal year ending December 31, 2018. Our Board has directed that this appointment be submitted to our stockholders for ratification. Although ratification of our appointment of EY is not required, we value the opinions of our stockholders and believe that stockholder ratification of our appointment is a good corporate governance practice.

EY also served as our independent registered public accounting firm for the fiscal year ended December 31, 2017. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as our auditors, providing audit and non-audit related services. A representative of EY is expected to attend the Annual Meeting, and will have the opportunity to make a statement and be available to respond to appropriate questions from stockholders.

In the event that the appointment of EY is not ratified by our stockholders, our Audit Committee will consider this fact when it appoints the independent auditors for the fiscal year ending December 31, 2019. Even if the appointment of EY is ratified, our Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change would be in the best interests of Radius and our stockholders.

Vote Required

This proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) by the holders entitled to vote on the proposal. Abstentions will have no effect on the outcome of this proposal. Because brokers have discretionary authority to vote on the ratification of the appointment of EY, we do not expect any broker non-votes in connection with this proposal.

Independent Registered Public Accounting Firm Fees and Other Matters

The following table summarizes the fees of EY, our independent registered public accounting firm, for the fiscal years ended December 31, 2017 and 2016, in each of the following categories:

Fee Category

 

2017

 

2016

Audit Fees (1)

 

$1,118,939

 

$802,000

Audit-Related Fees (2)

 

482,500

 

174,000

Tax Fees (3)

 

171,328

 

212,000

Total Fees

 

$1,772,767

 

$1,188,000

1

“Audit Fees” consist of fees for the audit of our consolidated financial statements and review of our unaudited interim financial statements included in our quarterly reports on Form 10-Q during the years ended December 31, 2017 and 2016.

2

“Audit-Related Fees” consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under “Audit Fees.” Audit-Related Fees reported for the years ended December 31, 2017 and 2016 consisted primarily of the issuance of comfort letters, the review of our registration statements on Form S-3 and Form S-8, current reports on Form 8-K and proxy statements, and for fiscal year 2017, included technical accounting services related to our adoption of ASC 606 and our convertible debt offering.

3

“T ax Fees” comprise fees for tax compliance, tax advice and tax planning services. Tax compliance services, which relate to the review of our U.S. tax returns, accounted for $ 35,000 of the total tax fees in each of fiscal year 2017 and 2016.


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Audit Committee Pre-Approval Policy and Procedures

Our Audit Committee has adopted a policy (the “Pre-Approval Policy”) which sets forth the procedures and conditions pursuant to which audit and non-audit services proposed to be performed by our independent auditor may be pre-approved. The Pre-Approval Policy generally provides that we will not engage EY to render any audit, audit-related, tax or permissible non-audit service unless the service is either (i) explicitly approved by our Audit Committee (“specific pre-approval”) or (ii) entered into pursuant to the pre-approval policies and procedures described in the Pre-Approval Policy (“general pre-approval”). Unless a type of service to be provided by EY has received general pre-approval under the Pre-Approval Policy, it requires specific pre-approval by our Audit Committee. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval. On an annual basis, our Audit Committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that may be provided by EY without first obtaining specific pre-approval from our Audit Committee. Our Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations.

Recommendation

Our Board recommends that stockholders vote “ FOR ” the Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm, and proxies solicited by our Board will be voted in favor thereof, unless a stockholder has indicated otherwise on the proxy.

13


 

AUDIT COMMITTEE REPORT

The information contained in this report is not “soliciting material,” is not deemed “filed” with the Commission and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that the Company specifically incorporates it by reference into that filing.

The Audit Committee has reviewed the Company’s audited financial statements for the fiscal year ended December 31, 2017 and has discussed these financial statements with management of the Company and the Company’s independent registered public accounting firm. The Audit Committee has also received from, and discussed with, the Company’s independent registered public accounting firm various communications that the independent registered public accounting firm is required to provide to the Audit Committee, including the matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees , as adopted by the Public Company Accounting Oversight Board (“PCAOB”).

The Company’s independent registered public accounting firm has also provided the Audit Committee with a formal written statement required by PCAOB Rule 3526, Communications with Audit Committees Concerning Independence, describing all relationships between the independent registered public accounting firm and Company, including the disclosures required by the applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence. In addition, the Audit Committee discussed with the Company’s independent registered public accounting firm the accounting firm’s independence from the Company. Based on its discussions with management of the Company and the Company’s independent registered public accounting firm, and its review of the representations and information provided by management of the Company and the Company’s independent registered public accounting firm, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Catherine J. Friedman (Chair)

Owen Hughes

Willard H. Dere, M.D.

14


 

PROPOSAL 3

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

This proposal gives our stockholders the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers. Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), at our 2015 Annual Meeting of Stockholders, our stockholders cast an advisory vote with respect to the frequency of future stockholder advisory votes on executive compensation. Based on the results of that vote, we determined to hold the stockholder advisory vote on executive compensation annually.

As described in detail under the heading “Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, motivate, and retain our named executive officers, who are critical to our success. Please read the “Compensation Discussion and Analysis” section of this proxy statement for additional details about our executive compensation programs. We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, is required by Section 14A of the Exchange Act and gives our stockholders the opportunity to express their views on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our compensation philosophy, policies and practices for named executive officers described in this proxy statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Company’s stockholders approve, by a non-binding advisory vote, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2018 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion.”

The say-on-pay vote is advisory, and therefore not binding on the Company, our Board or Compensation Committee. However, our Board and Compensation Committee value the opinions of our stockholders and will take into consideration the advisory vote results when making decisions regarding executive compensation.

Vote Required

This proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) by the holders entitled to vote on the proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

Recommendation

Our Board recommends that stockholders vote “ FOR ” the Advisory Vote on the Compensation of our Named Executive Officers, and proxies solicited by our Board will be voted in favor thereof, unless a stockholder has indicated otherwise on the proxy.


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PROPOSAL 4

APPROVAL OF 2018 STOCK OPTION AND INCENTIVE PLAN

Overview of Proposal

In this Proposal 4, we are requesting our stockholders to approve the adoption of the Radius Health, Inc. 2018 Stock Option and Incentive Plan (the “2018 Plan”). On April 12, 2018, based upon the recommendation of our Compensation Committee, our Board adopted the 2018 Plan, subject to and effective upon approval by our stockholders. The 2018 Plan is intended to replace the Radius Health, Inc. 2011 Equity Incentive Plan, as amended and restated (the “2011 Plan”) and if the 2018 Plan is approved by our stockholders, we will no longer grant awards under the 2011 Plan. If the 2018 Plan is not approved by our stockholders, the 2018 Plan will not become effective, and the 2011 Plan will remain in effect. The 2018 Plan is described in more detail below and a copy of the 2018 Plan is attached as Appendix A to this proxy statement and incorporated herein by reference.

The 2018 Plan is designed to enhance our ability to grant equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant equity awards to eligible recipients at levels determined to be appropriate by our Board and/or Compensation Committee. In order to achieve our strategic objectives, we need to continue to attract and retain talented leaders and employees in a highly competitive market. Our goal is to become a leading provider of innovative endocrine therapeutics in the areas of osteoporosis and oncology. In osteoporosis, we are focused on growing our market share for our first commercial product, TYMLOS ® (abaloparatide) injection, conducting clinical research for potential additional indications, and expanding the market potential for abaloparatide through the development of an innovative abaloparatide-patch. In our breast cancer programs, we continue to advance development of elacestrant (RAD1901) and RAD140. During 2017, we added 328 new employees, as we (i) completed hiring our U.S. sales force in the first quarter of 2017, obtained U.S. marketing approval for TYMLOS in April, commenced U.S. commercial sales in May, and achieved full year product revenues of $12.1 million; (ii) obtained U.S. Food and Drug Administration (“FDA”) Fast Track designation for elacestrant; and (iii) initiated a Phase 1 study for RAD140. We expect 2018 to be another significant year for Radius as we continue to progress our clinical programs and execute on our commercial objectives.

Our Board believes that equity-based incentive awards are an essential component of our compensation program and are linked to our success by encouraging and enabling our and our subsidiaries’ employees, officers, non-employee directors and consultants, whose judgment, initiative and efforts are critical for the successful conduct of our business, to acquire a proprietary interest in our Company. Our Board believes that providing these individuals with a direct stake in our Company will assure a closer alignment of the interests of these individuals with those of Radius and our stockholders, thereby stimulating their efforts on our behalf for long-term value creation and strengthening their desire to remain with the Company.

As of April 2, 2018, there were 1,885,249 shares of our Common Stock available for future grants under the 2011 Plan. Under the 2018 Plan, we have authorized 3,500,000 shares for issuance thereunder, plus the number of shares remaining available for issuance under the 2011 Plan as of the date of our Annual Meeting. As of April 2, 2018, there were stock options to acquire an aggregate of 5,849,338 shares of our Common Stock outstanding under our equity compensation plans, as well as equity awards granted outside of our equity compensation plans to new hires as inducement grants made in accordance with Nasdaq Listing Rule 5635(c)(4), with a weighted average exercise price of $38.57 and a weighted average remaining contractual term of 7.96 years. In addition, as of April 2, 2018, there were 332,340 unvested full value awards with time-based vesting outstanding under our equity compensation plans. Other than the foregoing, no awards under our equity compensation plans were outstanding as of April 2, 2018.

In the opinion of our Board, our future success depends in large part on our ability to maintain a competitive position in attracting, retaining and motivating key employees. Our Board believes that approval of the 2018 Plan and the authorization of the additional shares for issuance thereunder is appropriate and in the best interests of our stockholders given our current expectations on hiring, the highly competitive environment in which we recruit and retain employees, and our historical burn rate. Our management will carefully consider all proposed grants under the 2018 Plan.

Summary of Material Features of the Plan

The material features of the 2018 Plan are:

 

The maximum number of shares of Common Stock to be issued under the 2018 Plan is the sum of (i) 3,500,000 shares and (ii) the shares remaining available for issuance under our 2011 Plan;

 

The 2018 Plan does not contain an annual “evergreen” provision; stockholder approval is required to issue any additional shares, allowing our stockholders to have direct input on our equity compensation programs;

 

Shares of Common Stock tendered or withheld for taxes or payment of an award’s exercise price, or shares we reacquire on the open market, will not be added back to the shares available for issuance under the 2018 Plan;

16


 

 

The value of all awards granted under the 2018 Plan and all other cash compensation paid by us to any non-employee director in any calendar year will not exceed $950,000, excluding the valu e of any awards granted in connection with a non-employee director’s initial election or appointment to serve on our Board;

 

The award of stock options (both incentive and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, and dividend equivalent rights is permitted;

 

Stock options and stock appreciation rights will not be repriced in any manner without stockholder approval, other than to appropriately reflect changes in our capital structure or in connection with a change of control of the Company;

 

Minimum one year vesting periods are required for awards granted under the 2018 Plan, subject to certain exceptions described below;

 

Any material amendment to the 2018 Plan is subject to approval by our stockholders;

 

The definition of change in control in our 2018 Plan requires the consummation of an actual transaction so that no vesting acceleration benefits may occur without an actual change in control transaction occurring;

 

The 2018 Plan will be administered by our Compensation Committee, which is composed entirely of independent directors; and

 

The term of the 2018 Plan will expire on June 6, 2028.

Based solely on the closing price of our Common Stock as reported by the Nasdaq Global Market on April 2, 2018 and the maximum number of shares that would have been available for awards as of such date under the 2018 Plan, taking into account the proposed increase described herein, the maximum aggregate market value of the Common Stock that could potentially be issued under the 2018 Plan is $197,961,753. The shares of Common Stock underlying any awards that are forfeited, canceled or otherwise terminated, other than by exercise, under each of the 2018 Plan and the 2011 Plan will be added back to the shares of Common Stock available for issuance under the 2018 Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2018 Plan to cover the exercise price or tax withholding will not be added back to the shares of Common Stock available for issuance under the 2018 Plan. In addition, shares of Common Stock repurchased on the open market will not be added back to the shares of Common Stock available for issuance under the 2018 Plan.

Rationale for Share Increase

The 2018 Plan is a key component to our ongoing effort to build stockholder value. Equity incentive awards are a critical aspect of our executive and non-executive employees’ compensation. Our Compensation Committee and Board believe that we must continue to offer a competitive equity compensation program in order to attract, retain, and motivate the talented and qualified employees necessary for our continued growth and success. Adopting the 2018 Plan is designed to enhance our ability to grant stock options and other equity awards to our officers, employees, non-employee directors and consultants and to ensure that we can continue to grant stock options and other equity awards to eligible recipients at levels determined to be appropriate by our Compensation Committee and/or Board.

As noted above, we are focused on the advancement of our strategy for the development and commercialization of innovative endocrine therapeutics in the areas of osteoporo sis and oncology. During 2017, we added 328 new employees . We expect 2018 to be another significant year for Radius as we continue to progress our clinical development assets and execute on our commercial objectives. Our Board believes that approval of the 2018 Plan and authorization of the additional shares for issuance thereunder is appropriate and in the best interests of our stockholders given our current expectations on hiring, the highly competitive environment in which we recruit and retain employees, and our historical burn rate. Our management will carefully consider all proposed grants under the 2018 Plan.

We manage our long-term stockholder dilution by limiting the number of equity incentive awards granted annually. Our Compensation Committee carefully reviews both our annual net burn rate, total dilution and equity expense, and our projected burn rate and dilution over the next several years based on our expected growth and equity strategy in order to maximize stockholder value by granting only the number of equity incentive awards that it believes are necessary and appropriate to attract, reward and retain our employees. Our compensation philosophy reflects broad-based eligibility for equity incentive awards for high performing employees. By doing so, we link the interests of those employees with those of our stockholders and motivate our employees to act as owners of the business.


17


 

Burn Rate

The following table sets forth information regarding historical awards granted for the 2015 through 2017 period, and the corresponding burn rate, which is defined as the number of shares subject to equity-based awards granted in a year divided by the weighted-average number of shares of Common Stock outstanding for that year, for each of the last three fiscal years. No performance-based equity awards were earned during this time period.

Share Element

 

2015

 

2016

 

2017

Stock Options Granted

 

1,487,000

 

2,259,000

 

2,094,000

Full-Value Awards Granted

 

 

59,000

 

137,000

Total Awards Granted (1)

 

1,487,000

 

2,318,000

 

2,231,000

Weighted-Average Common Shares Outstanding During the Fiscal Year

 

39,643,099

 

43,067,952

 

43,804,660

Annual Burn Rate

 

3.75%

 

5.38%

 

5.09%

Three-Year Average Burn Rate (2)

 

 

 

 

 

4.74%

(1)

Total Awards Granted represents the sum of Stock Options Granted and Full-Value Awards Granted.

(2)

As illustrated in the table above, our three-year average burn rate for the 2015-2017 period was 4.74%, which is below the ISS industry category burn rate threshold of 7.08%.

Our Board, upon the recommendation of our Compensation Committee, determined the number of shares available for issuance under the 2018 Plan based on projected equity awards to anticipated new hires, projected annual equity awards to existing employees, non-employee directors and scientific advisory board members, and an assessment of the magnitude of increase that our institutional investors and the firms that advise them would likely find acceptable. We anticipate that if our request to increase the share reserve is approved by our stockholders, it will be sufficient to provide equity incentives to attract, retain, and motivate our employees for approximately the next two years.

Summary of the 2018 Plan

A copy of the 2018 plan is attached as Appendix A to this proxy statement, and we urge stockholders to read it in its entirety. The following description of certain features of the 2018 Plan is intended to be a summary only, and is qualified in its entirety by reference to the full text of the 2018 Plan.

Administration.     The 2018 Plan will be administered by our Compensation Committee. Our Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2018 Plan. Our Compensation Committee may delegate to one or more officers of the Company the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Exchange Act, subject to certain limitations and guidelines.

Eligibility.     All full-time and part-time officers, employees, non-employee directors and consultants are eligible to participate in the 2018 Plan, subject to the discretion of the administrator. As of April 2, 2018, approximately 390 individuals would have been eligible to participate in the 2018 Plan had it been effective on such date, which includes 6 executive officers, 368 employees who are not executive officers, 7 non-employee directors and 9 non-employee members of our scientific/oncology advisory boards.

Director Compensation Limit.     The 2018 Plan provides that the value of all awards granted under the 2018 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year shall not exceed $950,000, excluding the value of any awards granted in connection with a non-employee director’s initial election or appointment to serve on our Board.

Minimum Vesting .     The 2018 Plan provides that all awards (except for cash-settled awards or awards elected by a director in lieu of a cash retainer) may not vest earlier than one year following the grant date. However, awards that result in the issuance of an aggregate of up to 5% of the maximum number of shares available for issuance under the 2018 Plan may be granted without respect to this minimum vesting provision.

 

Stock Options.     The 2018 Plan permits the granting of (i) stock options to purchase Common Stock intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and (ii) stock options that do not so qualify. Stock options granted under the 2018 Plan will be non-qualified stock options if they fail to qualify as incentive stock options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries. Non-qualified stock options may be granted to any persons eligible to receive incentive stock options and to non-employee directors and consultants. The option exercise price of each stock option will be determined by our Compensation Committee but may not be less than 100% of the fair market value of the Common Stock on the date

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of grant. Fair market value for this purpose will be determined by reference to market quotations for shares of our Common Stock on the Nasdaq Global Market as of the grant date. The exercise price of a stock option may not be reduced after the date of the stock option grant, other than to appropriately reflect changes in our capital structure or in connection with a change of control of the Company.

The term of each stock option will be fixed by our Compensation Committee and may not exceed ten years from the date of grant. Our Compensation Committee will determine at what time or times each stock option may be exercised. Stock options may be made exercisable in installments and the exercisability of stock options may be accelerated by our Compensation Committee. In general, unless otherwise permitted by our Compensation Committee, no stock option granted under the 2018 Plan is transferable by the optionee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order, and stock options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.

Upon exercise of stock options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to our Compensation Committee or by delivery (or attestation to the ownership) of shares of Common Stock that are beneficially owned by the optionee and that are not subject to risk of forfeiture. Subject to applicable law, the exercise price may also be delivered to the Company by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, our Compensation Committee may permit non-qualified stock options to be exercised using a net exercise feature which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.

To qualify as incentive stock options, stock options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive stock options that first become exercisable by a participant in any one calendar year.

Stock Appreciation Rights.     Our Compensation Committee may award stock appreciation rights subject to such conditions and restrictions as our Compensation Committee may determine. Stock appreciation rights entitle the recipient to shares of Common Stock (or cash, to the extent provided for in the applicable award agreement) equal to the value of the appreciation in the stock price over the exercise price. The exercise price is the fair market value of the Common Stock on the date of grant. The term of a stock appreciation right may not exceed ten years.

Restricted Stock.     Our Compensation Committee may award shares of Common Stock to participants subject to such conditions and restrictions as our Compensation Committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or a continued service relationship with us through a specified restricted period. During the vesting period, the grantee will have the rights of a stockholder with respect to the voting of the restricted stock and receipt of dividends; provided, however, that if the vesting of the restricted stock award is tied to the attainment of performance criteria, dividends will accrue during the performance period but will not be paid unless and until such performance conditions are attained.

Restricted Stock Units.     Our Compensation Committee may award restricted stock units to participants. Restricted stock units are ultimately payable in the form of shares of Common Stock subject to such conditions and restrictions as our Compensation Committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or a continued service relationship with the Company through a specified vesting period. A grantee will only have the rights of a stockholder with respect to the shares of Common Stock acquired by the grantee upon settlement of the restricted stock units. During the vesting period, restricted stock units may be credited with dividend equivalent rights.

Unrestricted Stock Awards.     Our Compensation Committee may also grant shares of Common Stock which are free from any restrictions under the 2018 Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.

Dividend Equivalent Rights.     Our Compensation Committee may grant dividend equivalent rights to participants, which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of Common Stock. Dividend equivalent rights granted as a component of another award (other than a stock option or stock appreciation right) may be paid only if the related award becomes vested. Dividend equivalent rights may be settled in cash, shares of Common Stock or a combination thereof, in a single installment or installments, as specified in the award.

Change of Control Provisions.     The 2018 Plan provides that upon the effectiveness of a “change of control,” as defined in the 2018 Plan, except as otherwise provided by our Compensation Committee in the award agreement, all awards with time-based conditions will become vested and exercisable upon the change of control, unless the parties to the change of control agree that such awards will be assumed or continued by the successor entity. Awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in connection with a change of control in our Compensation Committee’s discretion or to the extent specified in the relevant award agreement. In addition, the Company may make or provide for payment, in cash or in

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kind, to participants holding stock options and stock appreciation rights equal to the differenc e between the per share cash consideration and the exercise price of the stock options or stock appreciation rights. Our Compensation Committee shall also have the option to make or provide for a payment, in cash or in kind, to grantees holding other award s in an amount equal to the per share cash consideration multiplied by the number of vested shares under such awards. All awards will terminate in connection with a change of control unless they are assumed by the successor entity.

Adjustments for Stock Dividends, Stock Splits, Etc.     The 2018 Plan requires our Compensation Committee to make appropriate adjustments to the number of shares of Common Stock that are subject to the 2018 Plan, subject to certain limits in the 2018 Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.

Tax Withholding.     Participants in the 2018 Plan are responsible for the payment of any federal, state or local taxes that we are required by law to withhold upon the exercise of stock options or stock appreciation rights or vesting of other awards. Subject to approval by our Compensation Committee, participants may elect to have their tax withholding obligations satisfied by authorizing us to withhold shares of Common Stock to be issued pursuant to exercise or vesting. Our Compensation Committee may also require awards to be subject to mandatory share withholding up to the required withholding amount.  

Amendments and Termination.     Our Board may at any time amend or discontinue the 2018 Plan and our Compensation Committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under Nasdaq rules, any amendments that materially change the terms of the 2018 Plan will be subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by our Compensation Committee to be required by the Code to preserve the qualified status of incentive stock options.

Effective Date of Plan.     Our Board approved and adopted the 2018 Plan on April 12, 2018, subject to and effective upon approval by our stockholders. Awards of incentive stock options may be granted under the 2018 Plan until the tenth anniversary of our Board’s approval of the 2018 Plan, or April 11, 2028. No other awards may be granted under the 2018 Plan after the date that is ten years from the date of stockholder approval.

 

New Plan Benefits

Because the grant of awards under the 2018 Plan is within the discretion of our Compensation Committee, we cannot determine the dollar value or number of shares of Common Stock that will in the future be received by or allocated to any participant in the 2018 Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the 2018 Plan, the following table provides information concerning the benefits that were received by the following persons and groups during 2017: (i) each of our NEOs; (ii) all of our current executive officers, as a group; (iii) all of our current directors who are not executive officers, as a group; and (iv) all of our current employees who are not executive officers, as a group.

 

 

Stock Options

 

Stock Awards

Name and Position

 

Average Exercise Price

($)

 

Number of Awards

(#)

 

Dollar Value (1)

($)

 

Number of Awards

(#)

Jesper Høiland, President and CEO

 

42.97

 

305,000

 

 

 

 

Jose Carmona, Chief Financial Officer

 

34.96

 

125,000

 

 

 

 

Gregory Williams, Ph.D., Chief Development Officer

 

45.65

 

75,000

 

 

 

 

Gary Hattersley, Ph.D., Chief Scientific Officer

 

45.65

 

75,000

 

 

 

 

Brent Hatzis-Schoch, J.D., General Counsel

 

45.65

 

60,000

 

 

 

 

Robert E. Ward, former President and CEO

 

45.65

 

187,800

 

 

 

 

B. Nicholas Harvey, former Chief Financial Officer

 

45.65

 

55,000

 

 

 

 

David Snow, former Chief Commercial Officer

 

45.65

 

75,000

 

 

 

 

All current executive officers, as a group

 

40.45

(2)

700,000

 

 

 

 

All current directors who are not executive officers, as a group

 

45.65

(2)

192,500

 

 

 

 

All current employees who are not executive officers, as a group

 

39.57

(2)

703,160

 

38.62

(3)

137,550

(1)

The valuation of stock awards is based on the grant date fair value computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions used in calculating these values, see Note 11 to our financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

(2)

Represents the weighted-average exercise price for the group.

(3)

Represents the aggregate grant date fair value for the group.


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Tax Aspects Under the Code

The following is a summary of the principal U.S. federal income tax consequences of certain transactions under the 2018 Plan. It does not describe all federal tax consequences under the 2018 Plan, nor does it describe state or local tax consequences.

Incentive Stock Options.     No taxable income is generally realized by the optionee upon the grant or exercise of an incentive stock option. If shares of Common Stock issued to an optionee pursuant to the exercise of an incentive stock option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the stock option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) we will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive stock option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.

If shares of Common Stock acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of Common Stock at exercise (or, if less, the amount realized on a sale of such shares of Common Stock) over the stock option price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive stock option is paid by tendering shares of Common Stock.

If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described above, the stock option is treated as a non-qualified stock option. Generally, an incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply. In the event that the optionee’s employment with us terminates, but the optionee otherwise continues to have an ongoing service relationship with us as a consultant, adviser or director, then the stock option will continue to vest, but it will thereafter be treated as a non-qualified stock option and taxed as described below.  

Non-Qualified Stock Options.     No income is realized by the optionee at the time a non-qualified stock option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the stock option price and the fair market value of the shares of Common Stock on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of Common Stock have been held. Special rules will apply where all or a portion of the exercise price of the non-qualified stock option is paid by tendering shares of Common Stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the stock option.

Other Awards.     We will generally be entitled to a tax deduction in connection with other awards under the 2018 Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.

Parachute Payments.     The vesting of any portion of an award that is accelerated due to the occurrence of a change of control may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to us, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).

Limitation on Deductions .     Under Section 162(m) of the Code, our deduction for certain awards under the 2018 Plan may be limited to the extent that any “covered employee” (generally, our chief executive officer, chief financial officer or other executive officer whose compensation is required to be reported in the summary compensation table for any year following 2016) receives compensation in excess of $1.0 million a year.


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Equity Compensation Plan Information

The following table provides information as of December 31, 2017 regarding shares of Common Stock that may be issued under our equity compensation plans, consisting of our 2003 Long-Term Incentive Plan, as amended (the “2003 Plan”), our 2011 Plan, and our 2016 Employee Stock Purchase Plan (the “ESPP”).

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 (1)

($)

 

Number of

Securities Remaining Available for Future

Issuance Under

Equity Compensation

Plans (excluding

securities reflected in

the first column)

 

Equity compensation plans approved by security holders:

 

 

 

 

 

 

 

2003 Plan

 

189,322

 

2.94

 

 

2011 Plan

 

4,831,538

(2)

39.29

 

2,726,928

(3)

ESPP (4)

 

 

 

1,231,138

(5)

Equity compensation plans not approved by security holders (6)

 

773,386

 

36.31

 

 

Total

 

5,794,246

 

37.70

 

3,958,066

 

1

Does not take into account outstanding restricted stock units as these awards have no exercise price.

2

Includes 146,451 shares issuable under our 2011 Plan upon vesting of outstanding restricted stock units.

3

Includes 38,887 shares cancelled under the 2003 Plan which are available for issuance under the 2011 Plan.

4

The purchase rights accruing under the ESPP (and therefore the exercise price and number of shares to be purchased thereunder) are not determined until the end of the applicable purchase period.

5

The number of shares authorized for issuance under the ESPP will be annually increased on January 1 of each year during the term of the ESPP, beginning on January 1, 2017 and ending on and including January 1, 2026, by an amount equal to the lesser of (a) 1% of the shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our Board. The maximum aggregate number of shares issuable under the ESPP is 4,298,424.

6

Consists of shares authorized for issuance pursuant to individual stock option awards granted on each of March 7, 2016, March 28, 2016, May 8, 2016, May 15, 2017, July 17, 2017, and November 27, 2017 to certain individuals to induce such individuals to accept employment with the Company.

The following table provides the information presented in the table above as of April 2, 2018.

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 (1)

($)

 

Number of

Securities Remaining Available for Future

Issuance Under

Equity Compensation

Plans (excluding

securities reflected in

the first column)

 

Equity compensation plans approved by security holders:

 

 

 

 

 

 

 

2003 Plan

 

1

 

2.05

 

 

2011 Plan

 

5,431,398

(2)

38.80

 

1,885,249

(3)

ESPP (4)

 

 

 

1,176,448

(5)

Equity compensation plans not approved by security holders (6)

 

750,279

 

36.44

 

 

Total

 

6,181,678

 

38.51

 

3,061,697

 

1

Does not take into account outstanding restricted stock units as these awards have no exercise price.

2

Includes 332,340 shares issuable under our 2011 Plan upon vesting of outstanding restricted stock units.

3

Includes 38,887 shares cancelled under the 2003 Plan which are available for issuance under the 2011 Plan.

4

The purchase rights accruing under the ESPP (and therefore the exercise price and number of shares to be purchased thereunder) are not determined until the end of the applicable purchase period.

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5

The number of shares authorized for issuance under the ESPP will be annually increased on January 1 of each year during the term of the ESPP, beginning on January 1, 2017 and ending on and including January 1, 2026, by an amount equal to the lesser of (a) 1% of the shares of Common Stock outstanding on the final day of the immediately preceding calendar year and (b) such smaller number of shares as is determined by our Board. The maximum aggregate number of shares issuable under the ESPP is 4,298,424.

6

Consists of shares authorized for issuance pursuant to individual stock option awards granted on each of March 7, 2016, March 28, 2016, May 8, 2016, May 15, 2017, July 17, 2017, and November 27, 2017 to certain individuals to induce such individuals to accept employment with the Company.

Vote Required

This proposal requires the affirmative vote of the holders of a majority in voting power of the votes cast affirmatively or negatively (excluding abstentions) by the holders entitled to vote on the proposal. Abstentions and broker non-votes will have no effect on the outcome of this proposal.

Recommendation

Our Board recommends that stockholders vote “ FOR ” the approval of the Radius Health, Inc. 2018 Stock Option and Incentive Plan, and proxies solicited by our Board will be voted in favor thereof, unless a stockholder has indicated otherwise on the proxy.

 


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EXECUTIVE OFFICERS

The following table sets forth certain information regarding our executive officers, including their ages as of the Annual Meeting.

Name

 

Age

 

Position

Jesper Høiland

 

57

 

President, Chief Executive Officer and Director

Jose Carmona

 

46

 

Senior Vice President, Chief Financial Officer and Treasurer

Gary Hattersley, Ph.D.

 

51

 

Senior Vice President, Chief Scientific Officer

Brent Hatzis-Schoch

 

53

 

Senior Vice President, General Counsel and Secretary

Joseph Kelly

 

49

 

Senior Vice President, Sales and Marketing

Gregory Williams, Ph.D.

 

59

 

Chief Development Officer

For biographical information pertaining to Mr. Høiland , who is a director and executive officer of the Company, see the section of the proxy statement entitled “Proposal 1: Election of Directors.”

Jose Carmona has served as our Senior Vice President, Chief Financial Officer and Treasurer since May 2017. Prior to joining Radius, Mr. Carmona served as the Chief Financial Officer of Innocoll Holdings plc (“Innocoll”), a pharmaceutical and medical device company, and its predecessor entity, Innocoll AG, from 2015 to 2017. Prior to Innocoll, he served as Chief Financial Officer of Alcon Europe, Middle East & Africa, a division of Novartis AG (“Novartis”), a pharmaceutical company, from 2013 to 2015 and prior to that he held numerous financial management positions with increasing responsibility at Novartis, as Divisional Chief Financial Officer in North America, Latin America and other senior global financial roles, from 2003 to 2013. Mr. Carmona received his B.S. in Industrial Civil Engineering from Universidad Tecnica Federico Santa Maria in Valparaiso, Chile, and his M.B.A. from Columbia Business School in New York City.

Gary Hattersley, Ph.D. has served as our Chief Scientific Officer since January 2014. Prior to his current role with Radius, Dr. Hattersley served as our Senior Vice President of Preclinical Development from December 2011 to December 2013, and President of Biology from May 2011 to December 2011. From 2003 until May 2011, Dr. Hattersley served in various roles in our predecessor company, including as Vice President of Biology, Senior Director of Research and Director of Disease Biology & Pharmacology. Dr. Hattersley received a Ph.D. in Experimental Pathology from St. George’s Hospital Medical School.

Brent Hatzis-Schoch has served as our Senior Vice President and General Counsel since April 2015 and Secretary since March 2017. Mr. Hatzis-Schoch served part-time as our General Counsel From February 2015 to April 2015. Prior to joining Radius, Mr. Hatzis-Schoch was Senior Vice President and Chief Legal Counsel of Merz Pharma, a pharmaceutical company, in Frankfurt, Germany from July 2013 to April 2015. Prior to Merz, Mr. Hatzis-Schoch served for five years as General Counsel to Agennix AG, a publicly-traded development stage biopharmaceutical company. He has held senior legal positions in the U.S. and internationally, including as European legal counsel for Baxter International, Associate General Counsel of Pharmacia Corporation, and General Counsel of GPC Biotech AG. Mr. Hatzis-Schoch holds a J.D. from George Washington University and a B.A. from the University of Delaware.

Joseph Kelly has served as our Senior Vice President, Sales and Marketing since November 2017. Prior to joining Radius, Mr. Kelly was Vice President of Sales, South and East United States, at Novo Nordisk, Inc. a global healthcare company. From 2002 until 2017, Mr. Kelly served in various positions of increasing responsibility at Novo Nordisk, including commercial leadership roles. Mr. Kelly attended the University of Georgia and received his B.S. in Public Relations from Utica College of Syracuse University.

Gregory Williams, Ph.D. has served as our Chief Development Officer since January 2014. Prior to joining Radius, Dr. Williams was Vice President of Regulatory Affairs, Global Product and Clinical Development, and Program Management with The Medicines Company, a biopharmaceutical company, from 2006 to 2013. He was Vice President of Regulatory Affairs, Regulatory Compliance and Program Management for NPS Pharmaceuticals, a biopharmaceutical company, from 2004 to 2006. Dr. Williams has a Ph.D. in Biopharmaceutics from Rutgers University and an M.B.A. from Cornell University.

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CORPORATE GOVERNANCE

General

Our Board has adopted Corporate Governance Guidelines, a Code of Conduct and Business Ethics and charters for our Nominating and Corporate Governance Committee, Audit Committee, Compensation Committee and Strategy Committee to assist our Board in the exercise of its responsibilities and to serve as a framework for the effective governance of the Company. You can access our current committee charters and our Code of Conduct and Business Ethics in the “Corporate Governance” section of the “Investors” page of our website located at www.radiuspharm.com, or by writing to our Secretary at our offices at 950 Winter Street, Waltham, Massachusetts, 02451.

Board Composition

Our Board currently consists of eight (8) members: Willard H. Dere, M.D., Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., Kurt C. Graves, Jesper Høiland, Owen Hughes, Anthony Rosenberg, and Debasish Roychowdhury, M.D. As indicated in our Restated Certificate of Incorporation and our Amended and Restated Bylaws, the authorized number of directors may be changed only by resolution of our Board. In November 2017, our Board approved a decrease in the authorized number of directors from ten to nine directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of the outstanding shares of our Common Stock.

Our Board is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successor to each director whose term then expires will be elected to serve from the time of election and qualification until the third annual meeting following election or such director’s death, resignation or removal, whichever is earliest to occur.

Majority Voting in Director Elections

In February 2018, we amended our Amended and Restated Bylaws to provide that our directors must be elected by a majority of votes cast in uncontested elections and by a plurality of votes cast in contested elections, which occurs where the number of director nominees exceeds the number of directors to be elected.  Any incumbent director who is not re-elected must tender his or her resignation to our Board. Our Nominating and Corporate Governance Committee will make a recommendation to our Board as to whether to accept or reject the resignation, or whether other action should be taken. Our Board will act on the recommendation and publicly disclose its decision within 90 days following certification of the voting results. An incumbent director who tenders his or her resignation may not participate in such decisions of our Nominating and Corporate Governance Committee or our Board.

Director Independence

Our Board has affirmatively determined that each of Willard H. Dere, M.D., Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., Kurt C. Graves, Owen Hughes, Anthony Rosenberg, and Debasish Roychowdhury, M.D., is an “independent director,” as defined under Nasdaq rules. In evaluating and determining the independence of the directors, our Board considered the relationships that each such director has with our Company and all other facts and circumstances that our Board deemed relevant in determining their independence, including the beneficial ownership of our Common Stock by each such director.

Dire ctor Candidates

Our Nominating and Corporate Governance Committee is responsible for searching for qualified director candidates for election to our Board and filling vacancies on our Board. To facilitate the search process, our Nominating and Corporate Governance Committee may solicit our current directors and executives for the names of potentially qualified candidates or ask directors and executives to pursue their own business contacts for the names of potentially qualified candidates. Our Nominating and Corporate Governance Committee may also consult with outside advisors or retain search firms to assist in the search for qualified candidates, or consider director candidates recommended by our stockholders. Once potential candidates are identified, our Nominating and Corporate Governance Committee reviews the backgrounds of those candidates, evaluates candidates’ independence from the Company and potential conflicts of interest and determines if candidates meet the qualifications desired by the committee of candidates for election as a director. To the extent feasible, candidates are interviewed by our Nominating and Corporate Governance Committee, other members of our Board, and members of our executive management.

In considering whether to recommend any particular candidate for inclusion in our Board’s slate of recommended Director nominees, our Nominating and Corporate Governance Committee will apply the criteria set forth in our Corporate Governance Guidelines. These criteria include the candidate’s integrity, ethics and values; practical business judgment; experience in corporate management and finance; relevant social policy concerns; professional and academic experience relevant to our industry and operations; and experience as a board member or executive officer of another publicly held company. Our Nominating and Corporate Governance Committee

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also considers the candidate’s diversity of expertise and experience in substantive matters pertaining to our business relative to other Board members, as wel l as diversity of background and perspective, including, but not limited to, with respect to age, gender, race, place of residence and specialized experience. Our Board evaluates each individual in the context of our Board as a whole, with the objective of assembling a group that can best perpetuate our success and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas. In determining whether to recommend a director for re-election, ou r Nominating and Corporate Governance Committee may also consider the director’s past attendance at meetings and participation in and contributions to the activities of our Board.

Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential Director candidates by submitting the names of the recommended individuals, together with appropriate biographical information and background materials, to the Nominating and Corporate Governance Committee, c/o Secretary, Radius Health, Inc., 950 Winter Street, Waltham, Massachusetts, 02451. In the event there is a vacancy, and assuming that appropriate biographical and background material has been provided on a timely basis, the Committee will evaluate candidates recommended by stockholders by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

Communications from Stockholders

Our Board will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. Our Secretary is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the Directors as he considers appropriate.

Communications are forwarded to all Directors if they relate to important substantive matters and include suggestions or comments that our Secretary and Chairman of our Board consider to be important for the Directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications. Stockholders who wish to send communications on any topic to our Board should address such communications to our Board of Directors by writing: c/o Secretary, Radius Health, Inc., 950 Winter Street, Waltham, Massachusetts, 02451.

For a stockholder communication directed to an individual Director in his or her capacity as a member of our Board, stockholders may send such communication to the attention of the individual Director by writing: c/o Chairman of the Board, Radius Health, Inc., 950 Winter Street, Waltham, Massachusetts, 02451. We will forward any such stockholder communication to each Director, and the Chairman in his capacity as a representative of our Board, to whom such stockholder communication is addressed, unless there are safety or security concerns that mitigate against further transmission.

Board Leadership Structure and Role in Risk Oversight

Our Board is currently chaired by Mr. Graves. Our Board believes that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of our Board from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of our Board as a whole. As such, Mr. Høiland serves as our President and Chief Executive Officer while Mr. Graves serves as the Chairman of the Board but is not an officer of the Company.

Our Board and Board committees have an active role in overseeing management of our risks. Our Board regularly reviews information regarding our credit, liquidity and operations, as well as the risks associated with each. Our Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. Our Audit Committee oversees management of financial risks. Our Nominating and Corporate Governance Committee manages risks associated with the independence of our Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire Board stays regularly informed through committee reports about such risks. Our Board does not believe that its role in the oversight of our risks affects our Board’s leadership structure.

Code of Ethics

We have adopted a Code of Conduct and Business Ethics (the “Code of Conduct”) that applies to all of our directors, officers and employees. A copy of our Code of Conduct is available on our website at www.radiuspharm.com in the “Corporate Governance” section of the “Investors” page. In addition, we intend to post on our website all disclosures that are required by SEC rules and/or Nasdaq rules concerning any amendments to, or waivers from, any provision of our Code of Conduct.

Director Attendance at Board and Committee Meetings

There were six meetings of our Board during the fiscal year ended December 31, 2017. During the fiscal year ended December 31, 2017, each of our incumbent Directors attended at least 75% of the aggregate of all meetings of our Board and committees on which the Director served during the period in which he or she was on the Board or committee.

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Currently, we do not maintain a formal policy regarding director attendance at the Annual Meeting; however, it is expected that absent compelling circumstances dir ectors will attend. Eight directors attended our 2017 Annual Meeting of Stockholders in person.

Executive Sessions

As provided in our Corporate Governance Guidelines, our non-management directors meet in executive session without management directors or management present on a regularly scheduled basis, but no less than twice per year. In addition, our Corporate Governance Guidelines provide that our independent directors must also meet separately at least once per year in an executive session.

 


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BOARD COMMITTEES

Our Board has established four standing committees—Audit, Compensation, Nominating and Corporate Governance and Strategy—each of which operates under a written charter that has been approved by our Board.

The members of each of our Board committees are set forth in the following chart.

Name

 

Audit

 

Compensation

 

Nominating

and Corporate

Governance

 

Strategy

Willard H. Dere, M.D.

 

X

 

 

 

X

 

 

Catherine J. Friedman

 

Chair

 

X

 

 

 

X

Jean-Pierre Garnier, Ph.D.

 

 

 

Chair

 

 

 

X

Kurt C. Graves

 

 

 

X

 

Chair

 

 

Owen Hughes

 

X

 

 

 

 

 

 

Anthony Rosenberg

 

 

 

 

 

 

 

Chair

Debasish Roychowdhury, M.D.

 

 

 

 

 

X

 

 

Jesper Høiland

 

 

 

 

 

 

 

 

Audit Committee

Our Audit Committee oversees our corporate accounting and financial reporting process. Among other matters, our Audit Committee:

 

appoints, approves the compensation of, and assesses the independence of our registered public accounting firm;

 

oversees the work of our independent registered public accounting firm, including through the receipt and consideration of reports from such firm;

 

reviews and discusses with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

 

monitors our internal control over financial reporting, disclosure controls and procedures and Code of Conduct and Business Ethics;

 

discusses our risk management policies;

 

reviews and approves or ratifies any related person transactions; and

 

prepares the Audit Committee Report required by SEC rules.

The members of our Audit Committee are Catherine J. Friedman, Owen Hughes, and Willard H. Dere, M.D. Ms. Friedman serves as chair of the committee. Our Audit Committee met four times during the fiscal year ended December 31, 2017.

Each member of our Audit Committee meets the independence requirements of Rule 10A-3 under the Exchange Act, and is able to read and understand fundamental financial statements, as required by the Nasdaq rules. In addition, our Board has determined that Ms. Friedman is an “audit committee financial expert” as defined under the rules of the SEC and has the requisite financial sophistication as defined under the Nasdaq rules.

Compensation Committee

Our Compensation Committee reviews and recommends policies relating to compensation and benefits of our officers and employees, including our executive officers. The Compensation Committee, among other matters:

 

reviews and approves, or makes recommendations to our Board with respect to, the compensation of our Chief Executive Officer and our other executive officers;

 

oversees an evaluation of our senior executives;

 

oversees and administers our cash and equity incentive plans;

 

reviews and makes recommendations to our Board with respect to director compensation;

 

reviews and discusses annually with management our “Compensation Discussion and Analysis”; and

 

prepares the annual Compensation Committee Report required by Item 407(e)(5) of Regulation S-K.

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Our Compensation Committee has the sole authority to retain, oversee or terminate the advice of compensation consultants, legal counsel and other advisors to assist in carrying out its responsibilities.

Our Compensation Committee may delegate its authority under its charter to one or more subcommittees as it deems appropriate from time to time as further described in its charter, which is available on our website at www.radiuspharm.com. Our Compensation Committee may also delegate to one or more executive officers the authority to grant equity awards to certain employees, as further described in its charter and subject to the terms of our equity plans.

The members of our Compensation Committee are Catherine J. Friedman, Jean-Pierre Garnier, Ph.D. and Kurt C. Graves. Dr. Garnier serves as the chair of the committee. Our Compensation Committee met six times during the fiscal year ended December 31, 2017.

Our Board has determined that each member of our Compensation Committee is independent under the Nasdaq rules, including the Nasdaq rules specific to compensation committee independence.

For information regarding the role of compensation consultants and executive officers in determining our executive compensation refer to “Executive Compensation—Compensation Discussion and Analysis—Role of Compensation Consultant in Determining Executive Compensation” and “Executive Compensation—Compensation Discussion and Analysis—Role of Executive Officers in Determining Executive Compensation” below.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee, among other things:

 

identifies individuals qualified to become Board members;

 

recommends to our Board the persons to be nominated for election as directors and to be appointed to each of the Board’s committees;

 

reviews and makes recommendations to our Board with respect to management succession planning; and

 

develops and recommends to our Board corporate governance guidelines.

Our Nominating and Corporate Governance Committee consists of Kurt C. Graves, Willard H. Dere, M.D. and Debasish Roychowdhury, M.D. Mr. Graves serves as the chair of the committee. Our Nominating and Corporate Governance Committee met four times during the fiscal year ended December 31, 2017.

Strategy Committee

Our Strategy Committee, among other things:

 

reviews and provides guidance to management and our Board with respect to our long-term business strategy;

 

advises management and our Board on our business development strategy, including on optimal transaction structures and partner companies for existing programs and on potential partnering or acquisition opportunities;

 

periodically reviews with management potential strategic transactions and business development opportunities; and

 

provides advice to management on the engagement of strategic, financial and business development advisors to support the execution of our business development and corporate strategy.

Our Strategy Committee consists of Jean-Pierre Garnier, Ph.D., Catherine J. Friedman and Anthony Rosenberg. Mr. Rosenberg serves as the chair of the committee. Our Strategy Committee did not meet during the fiscal year ended December 31, 2017.    


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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides an overview and analysis of the compensation awarded to, or earned by, our named executive officers (“NEOs”) for 2017, including the elements of our executive compensation program, material compensation decisions made under that program for 2017 and the material factors considered in making those decisions. We collectively refer to our NEOs, other than our Chief Executive Officer, as our “Other NEOs.”

Our NEOs for 2017 were:

Name

 

Position

Jesper Høiland (1)

 

President, Chief Executive Officer (“CEO”) and Director

Jose Carmona (1)

 

Senior Vice President, Chief Financial Officer and Treasurer

Gregory Williams, Ph.D.

 

Chief Development Officer

Gary Hattersley, Ph.D.

 

Chief Scientific Officer

Brent Hatzis-Schoch, J.D.

 

Senior Vice President, General Counsel and Secretary

Robert E. Ward (2)

 

Former President, CEO and Director

B. Nicholas Harvey (2)

 

Former Senior Vice President, Chief Financial Officer and Treasurer

David Snow (2)

 

Former Chief Commercial Officer

1

Messrs. Høiland and Carmona joined the Company in July and May 2017, respectively.

2

Messrs. Ward, Harvey, and Snow resigned from the Company in July, May, and November 2017, respectively.

Compensation Philosophy and Objectives

We intend that total compensation for our NEOs reflect a “pay for performance” compensation philosophy. Total compensation is allocated between several compensation elements, taking into consideration the balance between providing short- and long-term incentives related to our financial and operational performance, in a manner intended to align the interests of our NEOs with the interests of our stockholders, reward value creation and provide competitive pay and benefits to our NEOs. Variable incentive compensation is a key component of our compensation strategy and helps to ensure that total compensation reflects the overall success or failure of our Company.

To achieve our compensation objectives, we provide executives with a total compensation package consisting primarily of the following fixed and variable compensation elements:

Compensation Element

 

Purpose

Base Salary

 

Recognize performance of job responsibilities and attract and

retain individuals with superior talent

Annual Cash Incentive Program

 

Provide short-term incentives to attain key business objectives

Equity Incentive Awards

 

Promote the maximization of stockholder value by aligning the

interests of our executive officers and stockholders

We believe that direct ownership in our Company provides our NEOs with a strong incentive to increase the value of our Company. We have historically encouraged equity ownership by NEOs through awards of stock options. We believe these awards align the interests of our NEOs with those of our stockholders.

Stockholder Say-On-Pay Vote Results

At our 2017 Annual Meeting of Stockholders held on June 7, 2017, we provided our stockholders with the opportunity to cast an advisory vote on the compensation of our NEOs. Approximately 93% of the votes cast on our “say-on-pay” vote were voted in favor of the proposal. We have considered the results of this vote and believe the support of our stockholders for the proposal indicates that our stockholders are generally supportive of our approach to executive compensation. Accordingly, we did not make changes to our executive compensation arrangements in response to the vote or to our compensation policies. In the future, we will continue to consider the outcome of our “say-on-pay” votes when making compensation decisions regarding our NEOs and determining compensation policies.

Determination of Compensation Awards

Our Compensation Committee has principal authority for determining and approving, or recommending to our Board for approval, the compensation awards available to our NEOs and is charged with reviewing our executive compensation policies and practices to

30


 

ensure adherence to our compensation philosophies and objectives. In determining 2017 executive compensation, the Compensation Comm ittee consulted with our President and Chief Executive Officer and considered advice and data provided by the Company’s independent compensation consultant, Radford, an Aon Hewitt company (“Radford”). Additional information regarding their roles is provide d below under the headings “Role of Compensation Consultant in Determining Executive Compensation” and “Role of Executive Officers in Determining Executive Compensation.” Radford assisted with benchmarking the compensation of our senior executives by provi ding peer group and market information to support the Company and Compensation Committee in determining fully competitive and appropriate pay levels.

Role of Compensation Consultant in Determining Executive Compensation

Our Compensation Committee has the sole authority under its charter to engage the services of a consulting firm or other outside advisor to assist it in designing our compensation programs and in making executive compensation decisions. Our Compensation Committee engaged Radford as its compensation consultant and, when making executive compensation decisions in 2017, our Compensation Committee considered advice and data provided by Radford. Radford provided our Compensation Committee with peer group and market information that our Compensation Committee used when determining whether our executive compensation is competitive, commensurate with the executive officers’ responsibilities and consistent with market trends in executive compensation practices for comparable companies. Radford also provides services to us that are unrelated to executive compensation. Our Compensation Committee has considered the adviser independence factors required under SEC rules and the Nasdaq listing standards as they relate to Radford and does not believe Radford’s work raised a conflict of interest.

In August 2016, in connection with our Compensation Committee’s review of our executive compensation programs, Radford conducted and presented to the Compensation Committee an assessment of our peer group, taking into account the Company’s progress in advancing its development programs and its growth. In particular, our Compensation Committee considered selection criteria for our peer group to include companies with products under regulatory review or early commercial stage companies, with an emphasis on those in the early stage of commercialization. In performing this competitive assessment, Radford recommended a peer group, selected by our Compensation Committee in consultation with Radford, based on stage of development, revenue, industry, market capitalization, employee size and executive role considerations. As a result of that assessment, our peer group was updated for use in determining 2017 NEO compensation, to be comprised of the 22 publicly traded companies shown in the table below, which operate in the broader biopharmaceutical industries that represent competitors for executive talent and capital.

 

2017 Peer Group

 

ACADIA Pharmaceuticals

INSYS Therapeutics

Portola Pharmaceuticals

Alnylam Pharmaceuticals

Intercept Pharmaceuticals

Puma Biotechnology

Anacor Pharmaceuticals

Ironwood Pharmaceuticals

Spark Therapeutics

bluebird bio

Lexicon Pharmaceuticals

Tesaro

Celldex Therapeutics

Neurocrine Biosciences

The Medicines Company

Chimerix

NewLink Genetics

Ultragenyx Pharmaceutical

Clovis Oncology

Ophthotech

 

Exelixis

Pacira Pharmaceuticals

 

Our Compensation Committee recognizes the very competitive market for executive talent in our industry, and the importance of attracting and retaining strong talent as our business continues to evolve. Our positioning on compensation is intended to keep our Company competitive while strongly incentivizing performance and appropriately controlling executive compensation cost.

In February 2018, in connection with our Compensation Committee’s review of our executive compensation programs, Radford conducted and presented to the Compensation Committee a competitive assessment of the compensation program for our executive officers. In conducting this competitive assessment, Radford recommended a peer group selected by our Compensation Committee in consultation with Radford based on stage of development, revenue, industry, market capitalization, employee size and executive role considerations.


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The peer group that was used when determining 2018 compensation for our NEOs was comprised of the 20 publicly traded com panies shown in the table below, which operate in the broader biopharmaceutical industries that represent competitors for executive talent and capital.

 

2018 Peer Group

 

ACADIA Pharmaceuticals

Ironwood Pharmaceuticals

Puma Biotechnology

Clovis Oncology

Keryx Biopharmaceuticals

Retrophin

Exelixis

Lexicon Pharmaceuticals

Spark Therapeutics

Halozyme Therapeutics

Momenta Pharmaceuticals

Spectrum Pharmaceuticals

Heron Therapeutics

Neurocrine Biosciences

Tesaro

INSYS Therapeutics

Pacira Pharmaceuticals

The Medicines Company

Intercept Pharmaceuticals

Portola Pharmaceuticals

 

Role of Executive Officers in Determining Executive Compensation

Our President and Chief Executive Officer made recommendations to our Compensation Committee to assist it in determining 2017 compensation levels for our other executive officers. In addition, our President and Chief Executive Officer provided our Compensation Committee with a review of the performance of our other executive officers. While our Compensation Committee utilized this information and valued management’s observations with regard to compensation, the ultimate decisions regarding 2017 executive compensation were made by our Compensation Committee or our Board upon the recommendation of the Compensation Committee.

 

Components of Compensation

Our executive compensation program consists of three primary components: base salary, annual performance-based cash incentives, and periodic equity-based incentives, typically in the form of stock options.

Base Salary

The annual base salary for each of our NEOs was initially established through arm’s length negotiations at the time the executive was hired, based on an assessment of market data and the experience of the candidate, in order to develop a compensation package, including base salary, that was necessary to attract and retain each individual.

Our Compensation Committee periodically reviews and evaluates, with input from our President and Chief Executive Officer, other than with respect to his own salary, the need for adjustment of the base salaries of our NEOs based on changes and expected changes in the scope of an executive’s responsibilities, including promotions, individual contributions made by and performance of the executive during the prior fiscal year, the executive’s performance over a period of years, overall labor market conditions, the relative ease or difficulty of replacing the executive with a well-qualified person, our overall growth and development as a company and general salary trends in our industry. No specific weight is assigned to any of these criteria.

The following table sets forth the annualized base salaries of our NEOs for 2017 and 2018.

Name

 

2017

Base

Salary

($)

 

2018

Base

Salary

($)

 

Percent

Change 1

Jesper Høiland

 

600,000

 

624,000

 

4%

Jose Carmona

 

410,000

 

426,400

 

4%

Gregory Williams, Ph.D.

 

398,000

 

409,940

 

3%

Gary Hattersley, Ph.D.

 

395,000

 

434,500

 

10%

Brent Hatzis-Schoch, J.D.

 

405,000

 

421,600

 

4%

Robert E. Ward (2)

 

600,000

 

 

B. Nicholas Harvey (2)

 

332,700

 

 

David Snow (2)

 

425,000

 

 

1

Represents the percentage change in base salary from the prior year. Base salaries are effective January 1 of the given year, except in 2017 with respect to Messrs. Høiland and Carmona, who joined the Company during 2017 .

2

Messrs. Ward, Harvey, and Snow resigned from the Company during 2017.

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Annual Performance-Based Cash Incentives

We believe that the payment of annual, performance-based cash compensation provides incentives necessary to retain executive officers and reward them for short-term Company performance. Each NEO is eligible to receive an annual performance-based cash bonus based on achievement of performance goals developed by our Compensation Committee or Board with input from our President and Chief Executive Officer. Each NEO has a target annual bonus award amount, expressed as a percentage of the NEO’s base salary. After the fiscal year is completed, the Compensation Committee reviews actual performance against the stated goals and determines subjectively what it believes to be the appropriate level of cash bonus, if any, for our NEOs. For 2017, the actual bonus amounts for our NEOs were approved by our Compensation Committee.

Our corporate, financial and operational goals for 2017 were:

 

1.

Obtain U.S. approval for TYMLOS (abaloparatide) injection and achieve TYMLOS U.S. commercial launch objectives;

 

2.

Obtain EU approval for abaloparatide subcutaneous injection and achieve business development objectives;

 

3.

Achieve pipeline development objectives; and

 

4.

Achieve year-end financial objectives.

In February 2018, our Compensation Committee met to review performance against the Company’s 2017 goals and determined that we had met substantially all of our goals set for 2017. In particular, our Compensation Committee concluded that we had exceeded our goals related to (i) TYMLOS by obtaining U.S. approval in April 2017 and achieving full year product revenues of $12.1 million and (ii) our year-end financial objectives by ending 2017 with $430.3 million in cash, cash equivalents and marketable securities . Our Compensation Committee also concluded that we had substantially met our goal regarding pipeline development objectives by obtaining FDA Fast Track designation for elacestrant (RAD1901), our breast cancer product candidate; initiating a Phase 1 study for RAD140, our breast cancer product candidate; and establishing a full development plan to enable a pivotal study for our abaloparatide patch product candidate. Overall, our Compensation Committee determined that our actual corporate performance was one hundred percent (100%) of target.

Our Compensation Committee also reviewed each individual NEO’s performance within the NEO’s area of responsibility and, based on the individual’s performance against, and contribution to the achievement of, our corporate goals and the scope of the executive officer’s area of responsibility, as well as the collective business judgment and industry experience of the individual Compensation Committee members, the Compensation Committee approved the bonuses for our NEOs set forth in the table below.

 

 

2017 Target Bonus

 

2017 Actual Bonus

Name

 

% of Base

Salary

 

$

 

% of Base

Salary

 

$

Jesper Høiland (1)

 

60%

 

165,000

 

75%

 

206,250

Jose Carmona (1)

 

40%

 

104,734

 

40%

 

104,734

Gregory Williams, Ph.D.

 

40%

 

159,200

 

40%

 

159,200

Gary Hattersley, Ph.D.

 

40%

 

158,000

 

40%

 

158,000

Brent Hatzis-Schoch, J.D.

 

40%

 

162,000

 

40%

 

162,000

Robert E. Ward (2)

 

60%

 

360,000

 

 

B. Nicholas Harvey (2)

 

40%

 

133,080

 

 

David Snow (2)

 

40%

 

170,000

 

 

1

Messrs. Høiland and Carmona joined the Company during 2017 and therefore received prorated bonuses.

2

Mr. Ward received a prorated portion of his target annual bonus for 2017 in the amount of $194,400 pursuant to the terms of his separation agreement with the Company in connection with his resignation as our President and Chief Executive Officer in July 2017. Messrs. Harvey and Snow resigned from the Company in May and November 2017, respectively, and therefore did not receive an annual bonus.

Equity-Based Awards

Our Compensation Committee believes that our employees in a position to make a substantial contribution to our long-term success should have a significant and ongoing stake in our Company. Equity awards not only compensate but also motivate and encourage retention of our key employees by providing an opportunity for the recipients to participate in the ownership of our Company. In addition, we believe equity awards align the interests of our key employees with the interests of our stockholders.

We have historically made initial awards of stock options to our NEOs upon commencement of employment with us and from time to time thereafter as our Board or Compensation Committee determined appropriate to motivate, retain and reward our NEOs for their

33


 

p erformance and our success. Equity awards have been tied to both time and performance based vesting conditions. Generally, our time-based stock options vest as to 25% of the underlying shares on the first anniversary of the date of grant (or employment com mencement date for initial awards) and in 36 monthly installments during the three years thereafter, subject to the holder’s continued service to the Company through each applicable vesting date.

Our Compensation Committee evaluates various factors when determining the precise number of equity-based awards to grant to our NEOs, including the base salary and target annual cash incentive opportunity of the NEO, the value of the total compensation package our Compensation Committee deems appropriate to attract and retain highly qualified NEOs in light of the competitive environment, the NEO’s ability to influence and create long-term stockholder value and, with respect to awards granted to our NEOs from time to time after they have commenced employment, the equity-based holdings of the NEO and the individual’s personal experience and performance in recent periods.

The following table sets forth the amount and terms of the stock options awarded to our NEOs in 2017. The options awarded to Messrs. Høiland and Carmona were granted in connection with their commencement of employment with us. Because Messrs. Ward, Harvey, and Snow each resigned from the Company during 2017, their 2017 option awards were forfeited and the shares subject to these awards returned to, and became available for new grants under, our 2011 Plan.

Name

 

Grant

Date

 

Number of

Options

Granted 1

Jesper Høiland

 

7/17/17

 

305,000

Jose Carmona

 

5/15/17

 

125,000

Gregory Williams, Ph.D.

 

2/17/17

 

75,000

Gary Hattersley, Ph.D.

 

2/17/17

 

75,000

Brent Hatzis-Schoch, J.D.

 

2/17/17

 

60,000

Robert E. Ward

 

2/17/17

 

187,800

B. Nicholas Harvey

 

2/17/17

 

55,000

David Snow

 

2/17/17

 

75,000

1

Except for the awards to Messrs. Ward, Harvey, and Snow, which were forfeited as discussed above, these stock options vest as to 25% of the underlying shares on the one-year anniversary of the grant date, and the remainder of the stock options vest as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date.

All of the awards detailed above were granted with an exercise price equal to the closing price of our Common Stock on the option grant date. For a discussion of the impact that certain terminations of employment would have on the vesting of these awards, refer below to the heading “Potential Payments upon Termination or Change in Control.”

Retirement Programs

We maintain a tax-qualified 401(k) defined contribution plan in which substantially all of our full-time employees, including our NEOs, are eligible to participate. We provide an employer matching contribution equal to 100% of a participant’s eligible contributions of up to 3% of eligible compensation and 50% of the next 2% of eligible compensation, subject to limits established by the Code. All matching contributions are fully vested when made. Our 401(k) plan is intended to provide our employees, including our NEOs, with an opportunity for tax-efficient retirement savings and long-term financial security. We do not maintain any defined benefit pension plans, non-qualified deferred compensation plans or other special or supplemental executive retirement programs.

 

Employee Benefits and Perquisites

Our NEOs are eligible to participate in our employee benefit plans and programs, including our employee stock purchase plan and our medical and dental benefits, flexible spending accounts and short- and long-term disability and life insurance, to the same extent as our other full-time employees, with the exception of maximum coverage limits under our life insurance plan, subject to the terms and eligibility requirements of those plans. We believe that the availability of our broad-based employee benefit programs enhances employee morale and loyalty. We do not generally provide perquisites or other personal benefits or tax “gross-ups” or reimbursements to our NEOs, although we have from time to time reimbursed relocation expenses for executive officers whom we require to relocate when performing their duties for us.

Employment and Severance Arrangements

We consider maintenance of a strong management team essential to our success. To that end, we recognize that the uncertainty which may exist among management with respect to their “at-will” employment with us could result in the departure or distraction of

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management personnel to our detriment. Accordingly, our Board and Compensation Committee have determined that severance arrangements are appropriate to encourage the continued a ttention and dedication of our executive management team and to allow them to focus on the value to stockholders of strategic alternatives without concern for the impact on their continued employment.

Each of our NEOs has entered into an agreement that entitles the NEO to severance payments and benefits in the event of certain terminations of employment or upon a change in control of our Company. The severance protections for Messrs. Høiland and Ward are set forth in their respective employment agreements. The terms of these severance arrangements are described below under the heading “Potential Payments upon Termination or Change in Control.” In addition, all of our NEOs have executed confidentiality and non-competition agreements, or, for Mr. Høiland, agreed to similar provisions in his employment agreement, pursuant to which they have agreed not to disclose our confidential information during or after their employment with us or compete with us or solicit our customers or employees for a period of one year following termination or, for Mr. Ward, the longer of one year or the period during which Mr. Ward receives severance payments under his separation agreement.

Anti-Hedging Policy

Our insider trading compliance policy prohibits all of our employees, including our executive officers, and our directors from engaging in speculative transactions in our stock, including hedging transactions, short sales and pledges.

Deductibility of Compensation

In 2017, we considered the provisions of Section 162(m) of the Code as then in effect and related treasury regulations that restricted deductibility of compensation paid to our NEOs (other than our principal financial officer) to the extent such compensation exceeded $1,000,000 and did not qualify for an exception as commission-based compensation or qualified performance-based compensation. In 2017, our Compensation Committee endeavored to structure compensation to maintain deductibility under Section 162(m) to the extent practicable, while maintaining the ability to provide a competitive compensation program for our NEOs.

Beginning in 2018, recently-enacted tax legislation (i) expands the scope of Section 162(m), such that all NEOs are “covered employees” (including our principal financial officer) and any individual who is a covered employee in any year after 2016 will remain a covered employee for as long as the NEO (or the NEO’s beneficiaries) receive compensation from the Company, and (ii) eliminates the exception to the $1,000,000 deduction limit for commission-based compensation and performance-based compensation, except with respect to certain grandfathered arrangements in effect as of November 2, 2017. Accordingly, any compensation paid to a covered employee in excess of $1,000,000 will be non-deductible going forward. Our Compensation Committee believes that stockholder interests are best served if our Compensation Committee retains maximum flexibility to design executive compensation programs that meet stated business objectives. For these reasons, our Compensation Committee, while considering tax deductibility as a factor in determining executive compensation, will not limit such compensation to those levels that will be deductible, particularly in light of the expansion of the covered employee group and the elimination of the exception to the deduction limit for performance-based compensation.

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Summary Compensation Table

The following table provides information regarding the compensation provided to our NEOs during the last three completed fiscal years.

Name and Principal Position

 

Year

 

Salary

($)

 

Bonus (1)

($)

 

Option

Awards (2)

($)

 

Stock

Awards (3)

($)

 

Non-Equity

Incentive Plan

Compensation (4)

($)

 

All Other

Compensation (5)

($)

 

Total

($)

Jesper Høiland (6)

 

2017

 

275,000

 

 

7,179,166

 

 

206,250

 

638

 

7,661,053

President, CEO and Director

 

2016

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

Jose Carmona (7)

 

2017

 

261,835

 

40,000

 

2,406,008

 

 

104,734

 

10,860

 

2,823,437

Chief Financial Officer

 

2016

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

Gregory Williams, Ph.D. (8)

 

2017

 

398,000

 

 

1,874,510

 

 

159,200

 

12,330

 

2,444,040

Chief Development Officer

 

2016

 

372,100

 

 

1,202,530

 

 

178,608

 

13,193

 

1,766,431

 

 

2015

 

 

 

 

 

 

 

Gary Hattersley, Ph.D. (9)

 

2017

 

395,000

 

 

1,874,510

 

 

158,000

 

12,330

 

2,439,840

Chief Scientific Officer

 

2016

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

Brent Hatzis-Schoch, J.D. (10)

 

2017

 

405,000

 

 

1,499,608

 

 

162,000

 

4,905

 

2,071,513

General Counsel

 

2016

 

378,300

 

 

1,002,108

 

 

181,584

 

1,530

 

1,563,522

 

 

2015

 

279,718

 

100,000

 

3,411,660

 

 

160,938

 

123,758

 

4,076,074

Robert E. Ward (11)

 

2017

 

325,000

 

 

4,693,773

 

 

 

540,818

 

5,559,591

Former President, CEO and

 

2016

 

525,471

 

 

2,505,270

 

 

315,283

 

13,202

 

3,359,226

Director

 

2015

 

477,700

 

 

 

 

300,805

 

9,111

 

787,616

B. Nicholas Harvey (12)

 

2017

 

127,073

 

 

991,026

 

 

 

453,098

 

1,571,197

Former Chief Financial

 

2016

 

332,700

 

 

1,002,108

 

 

133,080

 

13,057

 

1,480,945

Officer

 

2015

 

313,900

 

 

 

 

141,067

 

10,391

 

465,358

David Snow (13)

 

2017

 

407,292

 

 

1,874,510

 

 

 

47,238

 

2,329,039

Former Chief Commercial

 

2016

 

396,600

 

 

1,202,530

 

 

190,368

 

13,202

 

1,802,700

Officer

 

2015

 

119,583

 

 

3,436,000

 

1,239,765

 

44,637

 

3,576

 

4,843,561

1

Represents a cash signing bonus paid in connection with Messrs. Carmona and Hatzis-Schoch joining the Company in 2017 and 2015, respectively.

2

Represents the aggregate grant date fair value of stock option awards made during the year computed in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures. For additional information, including the assumptions used when valuing the awards granted in 2017, refer to Note 11 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018.

3

Represents the aggregate grant date fair value of performance units (“PUs”) granted to Mr. Snow in 2015 in connection with his joining the Company, computed in accordance with FASB ASC Topic 718. Fair value was determined using a Monte Carlo simulation analysis. For additional information, including the assumptions used when valuing this award, refer to Note 11 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 25, 2016. The maximum potential value of the PUs, based on the closing price per share of our Common Stock on the date they were granted, was $1,630,750.

4

Represents bonus amounts earned under our annual performance-based cash bonus program.

5

For 2017, the amounts shown for each NEO include life insurance premiums paid by us, and, for Mr. Carmona, $9,968 for reimbursement of relocation expenses; for Dr. Williams, $10,800 in employer matching contributions made pursuant to our 401(k) plan; for Dr. Hattersley, $10,800 in employer matching contributions made pursuant to our 401(k) plan; for Mr. Hatzis-Schoch, employer matching contributions made pursuant to our 401(k) plan; for Mr. Ward, $10,800 in employer matching contributions made pursuant to our 401(k) plan, an aggregate of $469,400 in cash severance payments pursuant to his separation agreement with the Company in connection with his resignation from the Company in July 2017, comprised of $275,000 in salary continuation payments and $194,400 for the prorated portion of his target annual bonus for 2017, $11,636 in continued payments of medical care premiums pursuant to his separation agreement, and $48,089 for accrued vacation time payments in connection with his resignation from the Company; for Mr. Harvey, employer matching contributions made pursuant to our 401(k) plan, $166,350 in salary continuation cash severance payments pursuant to his separation agreement

36


 

with the Company in connection with his resignation from the Company in May 2017, $11,895 in continued payments of medical care premiums pursuant to his separation agreement, reimbursement of outplacement services pursuant to his separation agreem ent, $16,178 for accrued vacation time payments in connection with his resignation from the Company, $108,127 in post-employment consulting fees, and $133,080 for a bonus paid in connection with his consulting services; and, for Mr. Snow, $10,800 in employ er matching contributions made pursuant to our 401(k) plan, $17,708 in salary continuation cash severance payments pursuant to his separation agreement with the Company in connection with his resignation from the Company in November 2017, continued payment s of medical care premiums pursuant to his separation agreement, and $15,000 for accrued vacation time payments in connection with his resignation from the Company.

6

Mr. Høiland joined the Company in July 2017.

7

Mr. Carmona joined the Company in May 2017.

8

Dr. Williams was not an NEO in 2015.

9

Dr. Hattersley was not an NEO in 2015 or 2016.

10

Mr. Hatzis-Schoch joined the Company on a part-time basis in February 2015 and became a full-time employee in April 2015. During the period of his part-time employment, he received base salary at the rate of 25% of his full-time base salary. Mr. Hatzis-Schoch was not an NEO in 2016.

11

Mr. Ward resigned from the Company in July 2017.

12

Mr. Harvey resigned from the Company in May 2017.

13

Mr. Snow joined the Company in September 2015 and resigned from the Company in November 2017.


37


 

Grants of Plan-Based Awards

The following table sets forth information regarding grants of plan-based awards to our NEOs in 2017. All equity awards were granted under our 2011 Plan, except the awards to Messrs. Høiland and Carmona, which were granted pursuant to stand-alone employment inducement stock option agreements outside of our 2011 Plan as a material inducement to their acceptance of employment with us.

 

 

 

 

Estimated Future Payouts

Under Non-Equity

Incentive Plan Awards (1)

 

Estimated Future Payouts

Under Equity

Incentive Plan Awards

 

All Other

Option Awards:

Number of

Securities Underlying Options

(#)

 

Exercise or

Base Price

of Option Awards

($/Sh)

 

Grant Date

Fair Value of

Stock and Option

Awards (2)

($)

Name

 

Grant

Date

 

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

 

 

 

 

 

 

Jesper Høiland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

165,000

 

 

 

 

 

 

 

Options

 

7/17/2017

 

 

 

 

 

 

 

305,000

 

42.97

 

7,179,166

Jose Carmona

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

104,734

 

 

 

 

 

 

 

Options

 

5/15/2017

 

 

 

 

 

 

 

 

 

 

 

 

 

125,000

 

34.96

 

2,406,008

Gregory Williams, Ph.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

159,200

 

 

 

 

 

 

 

Options

 

2/17/2017

 

 

 

 

 

 

 

75,000

 

45.65

 

1,874,510

Gary Hattersley, Ph.D.