rdus-def14a_20190606.htm

 

 

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 18, 2019

 

To Our Stockholders:

You are cordially invited to attend the 2019 Annual Meeting of Stockholders of Radius Health, Inc. at 11:00 a.m. EDT, on June 6, 2019, at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17th 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

7

 

 

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

 

 

EXECUTIVE OFFICERS

16

 

 

CORPORATE GOVERNANCE

17

General

17

Board Composition

17

Majority Voting in Director Elections

17

Director Independence

17

Director Candidates

17

Communications from Stockholders

18

Board Leadership Structure and Role in Risk Oversight

18

Code of Ethics

18

Director Attendance at Board and Committee Meetings

18

Executive Sessions

19

 

 

BOARD COMMITTEES

20

Audit Committee

20

Compensation Committee

20

Nominating and Corporate Governance Committee

21

Strategy Committee

21

 

 

EXECUTIVE COMPENSATION

22

Compensation Discussion and Analysis

22

Summary Compensation Table

31

Grants of Plan-Based Awards

32

Outstanding Equity Awards at Fiscal Year End

33

Option Exercises and Stock Vested

34

Pension Benefits

34

Nonqualified Deferred Compensation

34

Potential Payments upon Termination or Change In Control

34

Compensation Risk Assessment

38

 

 

CEO PAY RATIO

39

 

 

DIRECTOR COMPENSATION

41

Director Compensation Table

42

 

 

COMPENSATION COMMITTEE REPORT

43

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

44

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

46

 

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

46

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

46

 


 

 

 

FUTURE STOCKHOLDER PROPOSALS

46

 

 

OTHER MATTERS

47

 

 

SOLICITATION OF PROXIES

47

 

 

ANNUAL REPORT ON FORM 10-K

47

 

 

 

 

 

 

 


 

RADIUS HEALTH, INC.

950 Winter Street

Waltham, Massachusetts 02451

NOTICE OF 2019 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 6, 2019

To Our Stockholders:

The 2019 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, 17th Floor, Boston, Massachusetts 02210, on June 6, 2019, at 11:00 a.m. EDT, for the following purposes:

 

1.

To elect Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., and Jessica Hopfield, Ph.D. as Class II Directors to serve until the 2022 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, 2019;

 

3.

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

 

4.

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 10, 2019 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 18, 2019

 


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RADIUS HEALTH, INC.

950 Winter Street

Waltham, Massachusetts 02451

 

PROXY STATEMENT FOR 2019 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 6, 2019

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, 2019 (the “Annual Meeting”), at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17th Floor, Boston, Massachusetts 02210, at 11:00 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 10, 2019 (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 46,108,197 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, 2018 (the “2018 Annual Report”), including a shareholder letter from our Chief Executive Officer (the “Shareholder Letter”), will be released on or about April 18, 2019 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, 2019

This Proxy Statement and our 2018 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 Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., and Jessica Hopfield, Ph.D. as Class II Directors to serve until the 2022 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, 2019;

 

3.

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

 

4.

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 Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., and Jessica Hopfield, Ph.D. as Class II 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, 2019; and

 

3.

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

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 2018 Annual Report available to stockholders electronically via the Internet. On or about April 18, 2019, 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 2018 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 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

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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 Mercedes 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 10, 2019. 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 46,108,197 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, 2019.

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.

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 and the advisory vote on the compensation of our named executive officers. 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.

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 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, 2018 and in our periodic reports on Form 10-Q and our current reports on 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 II Directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2022 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

We currently have nine (9) 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 II 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 (3) 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 will expire at the 2021 Annual Meeting of Stockholders; Class II, whose current term expires at the Annual Meeting and, if re-elected, whose new term will expire at the 2022 Annual Meeting of Stockholders; and Class III, 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, Jean-Pierre Garnier, Ph.D., and Jessica Hopfield, 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. Any additional directorships resulting from an increase in the number of directors would 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 to our Board, as Class II 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 II 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 II Directors (Terms to Expire at the 2022 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 II Directors, including their ages as of the Annual Meeting.

Name

 

Age

 

Director Since

 

Position

Catherine J. Friedman

 

58

 

2015

 

Director

Jean-Pierre Garnier, Ph.D.

 

71

 

2015

 

Director

Jessica Hopfield, Ph.D.

 

54

 

2019

 

Director

The principal occupations and business experience, for at least the past five years, of each Class II nominee for election at the Annual Meeting 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 2018, she joined the Board of Lyell Immunopharma, Inc., a biopharmaceutical company focused on cell-based immunotherapies for cancer. In 2017, she joined the Board of Grail, Inc., a life sciences company focused on early cancer detection, and in 2018 was appointed as Chair of the Board. 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. Ms. Friedman is a member of the Board of Trustees for Sacred Heart Schools in Atherton, California. Ms. Friedman was previously a director of XenoPort, Inc., a biopharmaceutical company focused on neurological disorders, and EnteroMedics, Inc., a medical device company focused on technology to treat obesity and metabolic diseases, from 2007 to 2016, GSV Capital Corp., a publicly traded investment fund, from 2013 to 2017, and Innoviva, Inc. (formerly Theravance, Inc.), a royalty management company, from 2014 to 2018. 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. 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, Chairman of the Board of CARMAT, a medical device company focused on the development of a total artificial heart, 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 Alzheon, Inc., a biotechnology company, from 2016 to 2019, and a board member of Renault S.A., a global automobile manufacturer, from 2007 to 2017, 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, a non-profit charitable 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.

Jessica Hopfield, Ph.D. has served on our Board since January 2019. Dr. Hopfield has served on the Board of Trustees of the Joslin Diabetes Center since 2013, initially as the Vice Chair, and since 2015, as the Chair. She has served on the Board of Directors of Insulet Corporation, a medical device company, since July 2015 and as its Lead Independent Director from August 2016 to December 2018. Since February 2018, Dr. Hopfield has served on the Board of Editas Medicine, a genome editing company. She has been the President of J Hopfield Consulting providing strategic guidance to and investing in start-up technology firms since 2010. From 1995 to 2009, Dr. Hopfield was a Partner of McKinsey & Company, a global management consulting firm, in its global pharmaceuticals and medical devices practice, where she served clients across pharmaceutical, biotechnology, medical device, and consumer industries. She also previously held management positions at Merck Sharp & Dohme Corp., a global health care company, in clinical development, outcomes research, and marketing. Dr. Hopfield earned a B.S. from Yale College, an M.B.A. from Harvard Graduate School of Business Administration as a Baker Scholar, and a Ph.D. in Neuroscience/Biochemistry from The Rockefeller University. We believe Dr. Hopfield is qualified to serve as a member of our Board because of her experience as a member on various boards of directors, her educational background, and experience in the life sciences industry.  

8


 

Recommendation

Our Board recommends that stockholders vote “FOR” the election of the Class II Director nominees, 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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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 Class I Directors, including their positions with the Company and ages as of the Annual Meeting.

Name

 

Age

 

Director Since

 

Position

Jesper Høiland

 

58

 

2017

 

President, Chief Executive Officer and Director

Owen Hughes

 

44

 

2013

 

Director

Debasish Roychowdhury, M.D.

 

58

 

2015

 

Director

The principal occupations and business experience, for at least the past five years, of each Class I Director 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/Executive Vice 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. After 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, a pharmaceutical company focused on dermatology. 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 an Executive Partner 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 currently a director of Translate Bio, a messenger RNA therapeutics company focused on diseases caused by protein or gene dysfunction, and Wren Therapeutics, a biopharmaceutical company focused on drug discovery and development for protein misfolding diseases, and was a director of Malin PLC, a life sciences company, from 2012 to 2017. 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 Partner Therapeutics, ImCheck Therapeutics, Celyad S.A., and Lytix Biopharma AS, each biotechnology companies, and Fund+ NV, 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.


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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.

 

65

 

2014

 

Director

Kurt C. Graves

 

51

 

2011

 

Chairman of the Board

Anthony Rosenberg

 

66

 

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; Associate Vice President of Research (interim) for Health Sciences; Vice Dean of Research (interim) for the School of Medicine; Co-Director of the Center for Clinical and Translational Science; 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., each biotechnology companies. Dr. Dere previously served as a director of Ocera Therapeutics, a biotechnology company, 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., each biotechnology companies. Mr. Graves was previously a director of Pulmatrix, Inc., a biopharmaceutical company, from 2010 to 2016. 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, Cullinan Oncology, Inc., Argenx SE, and iOmx Therapeutics AG, each biotechnology companies, and TriNetX, Inc., a global health research network. Mr. Rosenberg previously served as a director of Idenix Pharmaceuticals, Inc., a biopharmaceutical company, 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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PROPOSAL 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, 2019. 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, 2018. 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, 2020. 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, 2018 and 2017, in each of the following categories:

Fee Category

 

2018

 

2017

Audit Fees(1)

 

$1,300,000

 

$1,118,939

Audit-Related Fees(2)

 

20,000

 

482,500

Tax Fees(3)

 

40,127

 

171,328

All Other Fees

 

 

Total Fees

 

$1,360,127

 

$1,772,767

1

“Audit Fees” consist of fees for the integrated audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting and review of our unaudited interim financial statements included in our quarterly reports on Form 10-Q during the years ended December 31, 2018 and 2017.

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, 2018 and 2017 consisted primarily of the review of our registration statements on Form S-8 and proxy statements, and for fiscal year 2017, also included the review of our registration statement on Form S-3, the issuance of comfort letters, and technical accounting services related to our adoption of ASC 606 and our convertible debt offering.

3

“Tax Fees” consist of 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 $31,314 and $35,000 of the total tax fees in each of fiscal year 2018 and 2017, respectively.


12


 

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 planned services (and related fee levels or budgeted amounts) that may be provided by EY without further Audit Committee approval. Specific Audit Committee pre-approval is required for EY services which are not pre-approved planned services. Our Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations. During 2018 and 2017, all services provided by EY were pre-approved by the Audit Committee in accordance with this policy.

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, 2018 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, 2018.

Catherine J. Friedman (Chair)

Owen Hughes

Willard H. Dere, M.D.

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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 2019 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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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

 

58

 

President, Chief Executive Officer and Director

Jose Carmona

 

47

 

Senior Vice President, Chief Financial Officer and Treasurer

Brent Hatzis-Schoch

 

54

 

Senior Vice President, General Counsel and Secretary

Joseph Kelly

 

50

 

Senior Vice President, Sales and Marketing

Charles Morris, MBChB, MRCP

 

54

 

Chief Medical 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.

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, a global healthcare company, Associate General Counsel of Pharmacia Corporation, a global pharmaceutical company, and General Counsel of GPC Biotech AG, a German biopharmaceutical company. 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.

Charles Morris, MBChB, MRCP has served as our Chief Medical Officer since September 2018. Prior to joining Radius, Dr. Morris served as Chief Development Officer at PsiOxus Therapeutics, Ltd., a cancer gene therapy company, from September 2016. Prior to PsiOxus, he was Chief Development Officer at ImmunoGen, Inc., a biotechnology company focused on antibody-drug conjugate therapeutics, from November 2012 to August 2016. Prior to that, Dr. Morris was Chief Medical Officer at Allos Therapeutics, Inc., a biopharmaceutical company focused on anti-cancer therapeutics, and served in various leadership positions at Cephalon, a biopharmaceutical company, and AstraZeneca Pharmaceuticals (formerly Zeneca Pharmaceuticals), a pharmaceutical company. Dr. Morris is a graduate of Sheffield University Medical School and is a Member of the Royal College of Physicians of London.

 

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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 nine (9) members: Willard H. Dere, M.D., Catherine J. Friedman, Jean-Pierre Garnier, Ph.D., Kurt C. Graves, Jesper Høiland, Jessica Hopfield, Ph.D., 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. Any additional directorships resulting from an increase in the number of directors would 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

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, Jessica Hopfield, Ph.D., 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.

Director 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

17


 

also considers the candidate’s diversity of expertise and experience in substantive matters pertaining to our business relative to other Board members, as well 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, our 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, 2018. During the fiscal year ended December 31, 2018, 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 directors will attend. All of our directors attended our 2018 Annual Meeting of Stockholders.

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.

 


19


 

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. Mr. Høiland and Dr. Hopfield do not currently serve on any of our Board committees.

Name

 

Audit

Committee

 

Compensation

Committee

 

Nominating

and Corporate

Governance

Committee

 

Strategy

Committee

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

 

 

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, 2018.

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

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

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, 2018.

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, 2018.

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 met four times during the fiscal year ended December 31, 2018.    


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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 2018, including the elements of our executive compensation program, material compensation decisions made under that program for 2018 and the material factors considered in making those decisions. We collectively refer to our NEOs, other than our Chief Executive Officer (“CEO”), as our “Other NEOs.”

Our NEOs for 2018 were:

Name

 

Position

Jesper Høiland

 

President, Chief Executive Officer and Director

Jose Carmona

 

Senior Vice President, Chief Financial Officer and Treasurer

Charles Morris, MBChB, MRCP(1)

 

Chief Medical Officer

Brent Hatzis-Schoch, J.D.

 

Senior Vice President, General Counsel and Secretary

Joseph Kelly

 

Senior Vice President, Sales and Marketing

Gary Hattersley, Ph.D.(2)

 

Former Senior Vice President, Chief Scientific Officer

Gregory Williams, Ph.D.(2)

 

Former Chief Development Officer

1

Dr. Morris joined the Company in September 2018.

2

Drs. Hattersley and Williams resigned from the Company in November and May 2018, respectively.

Executive Summary

In 2018 we made great strides toward our goal of becoming a leading provider of innovative endocrine therapeutics in the areas of osteoporosis and oncology, including:

 

Achieving full-year 2018 TYMLOS U.S. net sales of $99.2 million, a greater than sevenfold increase from full-year 2017, and exceeding our guidance of $95 million to $98 million.

 

Ending 2018 with $237 million in cash, cash equivalents and investments, in line with our guidance of in excess of $220 million.

 

Initiating a pivotal Phase 3 clinical trial for elacestrant (RAD1901), our breast cancer product candidate, in late November 2018.

 

Completing critical manufacturing and regulatory activities to support a planned Phase 3 clinical study of our abaloparatide transdermal patch product candidate and finalizing our abaloparatide patch commercial supply agreement with 3M Company.

 

Initiating the Phase 3 clinical trial of abaloparatide injection for the treatment of osteoporosis in men, commencing our bone histomorphometry study to evaluate the early effects of TYMLOS on tissue-based bone remodeling and structural indices, and updating the label for TYMLOS with the U.S. Food and Drug Administration (“FDA”) to reflect results from our ACTIVExtend clinical study of abaloparatide injection.

 

Advancing our Phase 1 clinical trial for RAD140, our second breast cancer product candidate.

In 2019, we are focused on expanding our market share for TYMLOS in the U.S. anabolic market and progressing our late-stage clinical pipeline, including by (i) advancing our ongoing elacestrant Phase 3 study, (ii) entering into a global co-development and co-commercialization partnership to broaden development of elacestrant to potentially address earlier lines of treatment in combination with other anti-cancer agents, and (iii) launching our abaloparatide-patch Phase 3 study that we plan to initiate in the middle of the year.

While we have achieved many operational and strategic goals in the past year, these achievements have not been reflected in our stock price, which has disappointingly fallen nearly 48% in the year. As our stock price has declined, our Compensation Committee has adjusted our compensation program to properly reflect our new lower market capitalization. Actions taken in 2018 include:

 

Short-Term Incentives – Our Compensation Committee set challenging operational, pipeline and organizational goals aligned with our strategic objectives.

 

Long Term Incentives – Our executives were granted stock options to emphasize our strategic focus on stock price performance. In 2019, however, in addition to stock options, our Compensation Committee determined to also grant performance-based restricted stock units (“PRSUs”) to our CEO, with a milestone goal of the Company’s execution of a

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Board approved partnership agreement for elacestrant, a key business objective of the Company, within 12 months of the February 22, 2019 grant date. In addition to stock options, our Other NEOs also received restricted stock units (“RSUs”) in 2019 subject to time-based vesting as a long-term, retentive vehicle.

 

Peer group – Our Compensation Committee revised our peer group for 2018, and again for 2019, to properly reflect our size.

As described throughout this CD&A, our stock price performance has had a significant impact on compensation results as well. While overall target pay levels have been lowered through lower valued equity awards, the actual value received, or “realizable value,” by our executives is significantly lower, an indication that our pay-for-performance philosophy is working and management and stockholders have aligned interests. We believe our Compensation Committee has refined our executive compensation program to reflect our current size, strategy, and operational priorities, and has motivated and incentivized our management team to build long-term, sustainable stockholder value.

Compensation Philosophy and Objectives

We intend that total compensation for our NEOs reflect our pay-for-performance compensation philosophy in order to attract, retain and motivate our officers who have relevant, critical skills and experience, and can make important contributions to the achievement of our business objectives. 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 Incentives

 

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

Executive Target Pay Mix

Consistent with our desire to align pay and performance, we take the above-mentioned elements and more heavily weight their distribution towards variable or at-risk incentive pay. Although our Compensation Committee does not target a specific allocation for each pay element, the Compensation Committee is nevertheless cognizant of delivering an appropriate balance between fixed and variable elements, as well as short- and long-term incentives, as evidenced in the following 2018 target pay mix allocation charts:

1

Excludes Drs. Williams and Hattersley who resigned from the Company in 2018. For Dr. Morris, who joined the Company in September 2018, reflects pro-rated target pay for his period of service.

Realizable Value

We believe strong pay-for-performance programs align the short- and long-term interests of management and stockholders. One way to demonstrate this alignment is to take a snapshot of compensation and note the variance between the ‘realizable value’ of such

23


 

compensation and the amounts reported as the grant date fair value in our Summary Compensation Table (an accounting value, as required by the SEC).

In light of our disappointing stock price performance over the past year, the dramatic difference between the grant date target values of our annual cash and equity incentives for 2018 (the bar labeled “Target Incentives” in the chart below) and the realizable pay (the bar labeled “Realizable as of FYE” in the chart below) is a palpable reminder of our alignment of pay and performance. While we believe our stock price will increase in the future as the Company continues to execute on its strategy and although the stock options granted to our executives in 2018 still have several years to vest and become of value, all these executive options were significantly underwater as of the end of the year. In addition, all stock options granted to our currently employed NEOs in prior years were also underwater as of the end of 2018. In 2018, each NEO (other than Dr. Morris) received a grant of options on February 13 with a strike price of $37.83/share. Dr. Morris received an option grant on September 4 with a strike price of $19.93/share in connection with his joining the Company. On December 31, 2018, the last trading day of 2018, our stock price was only $16.49/share.

1

Excludes Drs. Williams and Hattersley who resigned from the Company in 2018 and did not receive any annual cash incentive for 2018.

“Target Incentives” is the grant date fair value of stock options and the target annual cash incentives.

“Realizable as of FYE” is defined as the actual annual cash incentive received for 2018 performance, as well as the options spread value as of December 31, 2018, the last trading day of the year, when the stock price closed at $16.49/share.

Strong Governance of our Compensation Program

Our pay-for-performance philosophy and compensation governance practices are designed to provide an appropriate framework for our executives to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. Some of our core practices include:

Practices We Employ

Deliver executive compensation primarily through performance-based pay

Heavily weight executive compensation towards variable or at-risk incentive pay

Maintain an independent compensation committee with entirely independent directors

Retain and consult with an independent compensation consultant (Radford) on pay levels and practices

Utilize industry-specific peer group tailored to current market capitalization and stage of development and verifiable market data to benchmark competitive pay

Develop challenging short- and long-term incentive program goals

Responsible use of shares under our long-term incentive program

Grant equity awards with meaningful vesting periods

Award bonuses consistent with performance

Provide competitive benefits for executives which are consistent with the rest of our employees

Conduct annual say-on-pay vote

 

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Practices We Dont Employ

No single-trigger change of control payments or equity acceleration

No excessive perquisites

No tax gross-ups to executives

No hedging or pledging of our securities

No guaranteed annual bonuses, salary increases or equity awards

No stock option repricings without shareholder approval

No supplemental executive retirement plans

Stockholder Say-On-Pay Vote Results

At our 2018 Annual Meeting of Stockholders held on June 6, 2018, we provided our stockholders with the opportunity to cast an advisory vote on the compensation of our NEOs. Approximately 99% 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 strong support of our stockholders for the proposal indicates that our stockholders are 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 ensure adherence to our compensation philosophies and objectives. In determining 2018 executive compensation, the Compensation Committee consulted with our President and CEO 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 provided 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 providing 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 2018, 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 February 2018, 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.


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As a result of that assessment, our peer group was updated for use in determining 2018 NEO compensation, to be comprised of the 20 publicly traded companies 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

 

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 November 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 changes to the peer group selected by our Compensation Committee based on the change in market capitalization of the Company since the selection of the peer group in February 2018. The peer group that was used when determining 2019 compensation for our NEOs was comprised of the 18 publicly traded companies shown in the table below, which operate in the broader biopharmaceutical industries that represent competitors for executive talent and capital.

 

2019 Peer Group

 

ACADIA Pharmaceuticals

Keryx Biopharmaceuticals

Retrophin

Clovis Oncology

Lexicon Pharmaceuticals

Sorrento Therapeutics

Dynavax Technologies

Momenta Pharmaceuticals

Spectrum Pharmaceuticals

Flexion Therapeutics

Pacira Pharmaceuticals

Tesaro

Halozyme Therapeutics

Portola Pharmaceuticals

Vanda Pharmaceuticals

INSYS Therapeutics

Puma Biotechnology

Vericel

Role of Executive Officers in Determining Executive Compensation

Our President and CEO made recommendations to our Compensation Committee to assist it in determining 2018 compensation levels for our other executive officers. In addition, our President and CEO 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 2018 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, historically in the form of stock options, and, starting in 2019, also including PRSUs for our CEO and RSUs for our Other NEOs.

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 CEO, 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.

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The following table sets forth the annualized base salaries of our NEOs for 2018 and 2019.

Name

 

2018

Base

Salary

($)

 

2019

Base

Salary

($)

 

Percent

Change(1)

Jesper Høiland

 

624,000

 

642,720

 

3%

Jose Carmona

 

426,400

 

439,192

 

3%

Charles Morris, MBChB

 

495,000

 

509,850

 

3%

Brent Hatzis-Schoch, J.D.

 

421,600

 

451,112

 

7%

Joseph Kelly

 

386,300

 

397,889

 

3%

Gary Hattersley, Ph.D.(2)

 

434,500

 

 

Gregory Williams, Ph.D.(2)

 

409,940

 

 

1

Represents the percentage change in base salary from the prior year. Base salaries are effective January 1 of the given year, except in 2018 with respect to Dr. Morris, who joined the Company during 2018.

2

Drs. Hattersley and Williams resigned from the Company during 2018.

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 CEO. 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 2018, the actual bonus amounts for our NEOs were approved by our Compensation Committee.

Our corporate, financial and operational goals for 2018 were:

Goal

 

Target

Percentage

 

Achievement

Against Goal

 

Level of Achievement

1. Corporate and Business Development:

(a) Full-year TYMLOS U.S. net sales of $95 million to $98 million

(b) Year-end cash and investments balance in excess of $220 million

(c) Enter into ex-U.S. partnership for abaloparatide

(d) Enter into commercial partnership for elacestrant

 

60%

 

Overachieved

 

70%

2. Pipeline Development:

(a) Initiate Phase 3 trial for elacestrant by third quarter of 2018

(b) Complete critical Phase 3 trial-enabling activities for abaloparatide patch

(c) Initiate male osteoporosis & histomorphometry trials for abaloparatide-SC

(d) Update TYMLOS label with ACTIVExtend results

(e) Complete enrollment in Phase 1 trial for RAD140

 

30%

 

Underachieved

 

20%

3. Organizational:

(a) Develop strategic workforce plans

(b) Achieve employee engagement and retention metrics

 

10%

 

Underachieved

 

5%

Total Achievement

 

 

 

 

 

95%

In February 2019, our Compensation Committee met to review performance against the Company’s 2018 goals and determined that we had met substantially all of our goals set for 2018 and that, overall, our actual corporate performance was ninety-five percent (95%) of target. In particular, our Compensation Committee concluded that we had exceeded key corporate and business development objectives by (i) achieving full-year TYMLOS U.S. net sales of $99.2 million and (ii) ending 2018 with $237 million in cash, cash equivalents and investments. Our Compensation Committee also concluded that we had substantially met our goals regarding pipeline development and organizational objectives by (i) initiating our pivotal Phase 3 clinical trial for elacestrant in late November 2018; (ii) completing critical manufacturing and regulatory activities to support our planned Phase 3 clinical study of abaloparatide patch and finalizing our abaloparatide patch commercial supply agreement with 3M Company; (iii) initiating our Phase 3 clinical trial of abaloparatide injection for the treatment of osteoporosis in men, commencing our bone histomorphometry study to evaluate the early effects of TYMLOS on tissue-based bone remodeling and structural indices, and updating the label for TYMLOS with the FDA to reflect results from our ACTIVExtend clinical study of abaloparatide injection; and (iv) advancing our Phase 1 study of RAD140.

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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.

 

 

2018 Target Bonus

 

2018 Actual Bonus

Name

 

% of Base

Salary

 

$

 

% of Base

Salary

 

$

Jesper Høiland

 

65%

 

405,600

 

61.8%

 

385,320

Jose Carmona

 

45%

 

191,880

 

42.8%

 

182,286

Charles Morris, MBChB(1)

 

45%

 

72,822

 

45.0%

 

72,822

Brent Hatzis-Schoch, J.D.

 

45%

 

189,720

 

47.0%

 

198,257

Joseph Kelly

 

40%

 

154,520

 

39.9%

 

154,134

Gary Hattersley, Ph.D.(2)

 

45%

 

195,525

 

 

Gregory Williams, Ph.D.(2)

 

40%

 

163,976

 

 

1

Dr. Morris joined the Company in September 2018 and therefore received a prorated bonus.

2

Drs. Hattersley and Williams resigned from the Company in November and May 2018, respectively, and therefore did not receive annual bonuses.

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 performance 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 commencement 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.

In 2018, each of our NEOs received an award of stock options with time-based vesting conditions. In 2019, in addition to an award of stock options with time-based vesting conditions and consistent with the Company’s pay-for-performance compensation philosophy, our CEO also received a PRSU award tied to the Company’s execution of a Board approved partnership agreement for elacestrant, a key business objective of the Company, within 12 months of the grant date of February 22, 2019. Also in 2019, all of our Other NEOs received a mix of stock options and RSUs tied to time-based vesting conditions. Our NEOs equity awards for 2018 and 2019 are each described in greater detail below.

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.

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The following table sets forth the amount and terms of the stock options awarded to our NEOs in 2018. 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.”

Name

 

Grant

Date

 

Number of

Shares Underlying

Options Granted(1)

Jesper Høiland

 

2/13/18

 

210,000

Jose Carmona

 

2/13/18

 

60,000

Charles Morris, MBChB(2)

 

9/4/18

 

130,000

Brent Hatzis-Schoch, J.D.

 

2/13/18

 

60,000

Joseph Kelly

 

2/13/18

 

30,000

Gary Hattersley, Ph.D.

 

2/13/18

 

60,000

Gregory Williams, Ph.D.

 

2/13/18

 

60,000

1

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 1/48th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to the executive’s continued service to the Company through each applicable vesting date. All of the awards were granted with an exercise price equal to the closing price of our Common Stock on the award grant date.

2

The option awarded to Dr. Morris was granted in connection with his commencement of employment with us.

The following table sets forth the amount and terms of the equity awards granted to our NEOs in 2019.

Name

 

Grant

Date

 

Number of

Shares Underlying Options Granted(1)

Number of

PRSUs or RSUs

Granted(2)

Jesper Høiland

 

2/22/19

 

128,000

71,000

Jose Carmona

 

2/22/19

 

55,000

15,000

Charles Morris, MBChB

 

2/22/19

 

55,000

15,000

Brent Hatzis-Schoch, J.D.

 

2/22/19

 

55,000

15,000

Joseph Kelly

 

2/22/19

 

30,000

10,000

1

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 1/48th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to the executive’s continued service to the Company through each applicable vesting date. All of the awards were granted with an exercise price equal to the closing price of our Common Stock on the award grant date.

2

For Mr. Høiland, 50% of the PRSUs vest upon the execution of a Board approved partnership agreement for elacestrant within 12 months of the grant date, and, assuming such performance condition is achieved, the remaining 50% of the PRSUs vest on the third anniversary of the grant date, subject to Mr. Høiland’s continued service to the Company through such vesting dates. For each of our Other NEOs, the RSUs vest in four substantially equal annual installments on each of the first four anniversaries of the grant date, subject to the executive’s continued service to the Company through such vesting dates.

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 Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (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 and housing related expenses for executive officers whom we require to relocate when performing their duties for us.

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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 management personnel to our detriment. Accordingly, our Board and Compensation Committee have determined that severance arrangements are appropriate to encourage the continued attention 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 our CEO are set forth in his employment agreement. 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 our CEO, 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.

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

Beginning in 2018, the Tax Cuts and Jobs Act of Act of 2017 (i) expanded 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) receives compensation from the Company, and (ii) eliminated 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 that are not subsequently materially modified. Accordingly, any compensation paid to a covered employee in excess of $1,000,000 is 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.

30


 

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

($)

 

Non-Equity

Incentive Plan

Compensation(3)

($)

 

All Other

Compensation(4)

($)

 

Total

($)

Jesper Høiland(5)

 

2018

 

624,000

 

 

4,384,292

 

 

385,320

 

35,900

 

5,429,512

President, CEO and Director

 

2017

 

275,000

 

 

7,179,166

 

 

206,250

 

638

 

7,661,053

 

 

2016

 

 

 

 

 

 

 

Jose Carmona(6)

 

2018

 

426,400

 

 

 

1,252,655

 

 

182,286

 

64,775

 

1,926,116

Chief Financial Officer

 

2017

 

261,835

 

40,000

 

2,406,008

 

 

104,734

 

10,860

 

2,823,437

 

 

2016

 

 

 

 

 

 

 

Charles Morris, MBChB(7)

 

2018

 

161,827

 

168,138

 

1,435,562

 

 

72,822

 

11,300

 

1,849,649

Chief Medical Officer

 

2017

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

Brent Hatzis-Schoch, J.D.(8)

 

2018

 

421,600

 

 

1,252,655

 

 

198,257

 

11,900

 

1,884,412

General Counsel

 

2017

 

405,000

 

 

1,499,608

 

 

162,000

 

4,905

 

2,071,513

 

 

2016

 

378,300

 

 

1,002,108

 

 

181,584

 

1,530

 

1,563,522

Joseph Kelly(9)

 

2018

 

386,300

 

60,000

 

626,327

 

 

154,134

 

53,900

 

1,280,661

SVP, Sales and Marketing

 

2017

 

 

 

 

 

 

 

 

 

2016

 

 

 

 

 

 

 

Gary Hattersley, Ph.D.(10)

 

2018

 

365,695

 

 

1,252,655

 

 

 

319,110

 

1,937,460

Former Chief Scientific Officer

 

2017

 

395,000

 

 

1,874,510

 

 

158,000

 

12,330

 

2,439,840

 

 

2016

 

 

 

 

 

 

 

Gregory Williams, Ph.D.(11)

 

2018

 

181,321

 

 

1,252,655

 

 

 

533,729

 

1,967,705

Former Chief Development

 

2017

 

398,000

 

 

1,874,510

 

 

159,200

 

12,330

 

2,444,040

Officer

 

2016

 

372,100

 

 

1,202,530

 

 

178,608

 

13,193

 

1,766,431

1

Represents a cash signing bonus paid in connection with Dr. Morris and Messrs. Carmona and Kelly joining the Company.

2

Represents the aggregate grant date fair value of stock option awards made during the year computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification (the “FASB ASC”) Topic 718, excluding the impact of estimated forfeitures related to service-based vesting conditions. For additional information, including the assumptions used when valuing the awards granted in 2018, refer to Note 10 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019.

3

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

4

For 2018, the amounts shown for each NEO include life insurance premiums paid by us, and, for Messrs. Høiland, Carmona, and Kelly $35,000, $52,875, and $42,000, respectively for reimbursement of relocation and housing related expenses; for each Other NEO, $11,000 in employer matching contributions made pursuant to our 401(k) plan; for Dr. Hattersley, $217,250 in a lump sum salary cash severance payment pursuant to his separation agreement with the Company in connection with his resignation from the Company in November 2018, $7,958 in a lump sum payment of medical care premiums pursuant to his separation agreement, $36,072 for accrued vacation time payments in connection with his resignation from the Company, and $46,080 in post-employment consulting fees; and for Dr. Williams, $307,455 in a lump sum salary cash severance payment pursuant to his separation agreement with the Company in connection with his resignation from the Company in May 2018, $35,899 for accrued vacation time payments in connection with his resignation from the Company, $79,000 in post-employment consulting fees and $100,000 for a bonus paid in connection with his consulting services.

5

Mr. Høiland joined the Company in July 2017. His annualized base salary was $600,000 in 2017.

6

Mr. Carmona joined the Company in May 2017. His annualized base salary was $410,000 in 2017.

7

Dr. Morris joined the Company in September 2018. His annualized base salary was $495,000 in 2018.

8

Mr. Hatzis-Schoch was not an NEO in 2016, but his compensation for 2016 was required to be reported in the Company’s proxy statement for the year ended December 31, 2017.

9

Mr. Kelly joined the Company in November 2017.

10

Dr. Hattersley was not an NEO in 2016 and he resigned from the Company in November 2018.

31


 

11

Dr. Williams resigned from the Company in May 2018.

 

Grants of Plan-Based Awards

The following table sets forth information regarding grants of plan-based awards to our NEOs in 2018. All equity awards were granted under our Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), except the award to Dr. Morris, which was granted pursuant to a stand-alone employment inducement stock option agreement outside of our 2011 Plan as a material inducement to his 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(2)

($/Sh)

 

Grant Date

Fair Value of

Stock and Option

Awards(3)

($)

Name

 

Grant

Date

 

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

 

 

 

 

 

 

Jesper Høiland

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

405,600

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

210,000

 

37.83

 

4,384,292

Jose Carmona

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

191,880

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

60,000

 

37.83

 

1,252,655

Charles Morris, MBChB

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

72,822

 

 

 

 

 

 

 

Options

 

9/4/2018

 

 

 

 

 

 

 

130,000

 

19.93

 

1,435,562

Brent Hatzis-Schoch, J.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

189,720

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

60,000

 

37.83

 

1,252,655

Joseph Kelly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

154,520

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

30,000

 

37.83

 

626,327

Gary Hattersley, Ph.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

195,525

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

60,000

 

37.83

 

1,252,655

Gregory Williams, Ph.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

163,976

 

 

 

 

 

 

 

Options

 

2/13/2018

 

 

 

 

 

 

 

60,000

 

37.83

 

1,252,655

1

Consists of the target cash bonus payment each of our NEOs was eligible to receive under our annual performance-based bonus program. For 2018, the bonus target for Mr. Høiland was 65% of his base salary, the bonus target for Messrs. Carmona and Hatzis-Schoch and Drs. Morris and Hattersley was 45% of their base salary, and the bonus target for Mr. Kelly and Dr. Williams was 40% of their base salary. The amount shown for Dr. Morris represents a pro-rated amount based on his start date in September 2018. The amounts actually paid to our NEOs for 2018 bonuses are disclosed in the “Non-Equity Incentive Plan Compensation” in our Summary Compensation Table. Additional information about our annual bonus program is disclosed under the heading “Compensation Discussion and Analysis—Components of Compensation—Annual Performance-Based Cash Incentives.”

2

This column shows the per share exercise price for the stock options granted, which is equal to the closing price of our Common Stock on the date of grant.

3

Represents the aggregate grant date fair value of option awards made during the year computed in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures related to service-based vesting conditions. For additional information, including the assumptions used when valuing the awards, refer to Note 10 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 28, 2019.


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Outstanding Equity Awards at Fiscal Year End

The following table provides information regarding the outstanding equity awards held by our NEOs as of December 31, 2018. These awards were granted under our 2011 Plan, except for the new hire awards to Messrs. Høiland, Carmona and Kelly and Dr. Morris, which were granted pursuant to stand-alone employment inducement stock option agreements outside of our 2011 Plan and 2018 Stock Option and Incentive Plan (the “2018 Plan”) as a material inducement to their acceptance of employment with the Company.

 

 

Option Awards

 

Stock Awards

Name

 

Number of

Securities

Underlying

Unexercised

Options

Exercisable

(#)

 

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

(#)

 

Option

Exercise

Price

($)

 

Option

Expiration

Date

 

Equity

Incentive

Plan

Awards:

Number of

Unearned

Units

That Have

Not Vested

(#)

 

Equity

Incentive

Plan

Awards:

Market or

Payout

Value of

Unearned

Units

That

Have

Not

Vested

($)

Jesper Høiland

 

108,020

 

196,980

(1)

42.97

 

7/17/2027

 

 

 

 

 

210,000

(2)

37.83

 

2/13/2028

 

 

Jose Carmona

 

49,479

 

75,521

(3)

34.96

 

5/15/2027

 

 

 

 

 

60,000

(2)

37.83

 

2/13/2028

 

 

Charles Morris, MBChB

 

 

130,000

(4)

19.93

 

9/4/2028

 

 

Brent Hatzis-Schoch, J.D.

 

128,332

 

11,668

(5)

45.32

 

2/25/2025

 

 

 

 

44,270

 

18,230

(6)

29.89

 

2/9/2026

 

 

 

 

27,500

 

32,500

(7)

45.65

 

2/17/2027

 

 

 

 

 

60,000

(2)

37.83

 

2/13/2028

 

 

Joe Kelly

 

16,250

 

43,750

(8)

27.80

 

11/27/2027

 

 

 

 

 

30,000

(2)

37.83

 

2/13/2028

 

 

Gary Hattersley, Ph.D.

 

18,285

 

(9)

7.34

 

11/6/2021

 

 

 

 

120,614

 

(10)

8.00

 

6/4/2024

 

 

 

 

100,000

 

(11)

30.97

 

12/16/2024

 

 

 

 

53,125

 

21,875

(6)

29.89

 

2/9/2026

 

 

 

 

34,375

 

40,625

(7)

45.65

 

2/17/2027

 

 

 

 

 

60,000

(2)

37.83

 

2/13/2028

 

 

Gregory Williams, Ph.D.

 

175,438

 

(12)

7.80

 

2/15/2024

 

 

 

 

80,000

 

(11)

30.97

 

12/16/2024