Radius Health, Inc.
Radius Health, Inc. (Form: DEF 14A, Received: 04/21/2017 16:17:27)

 

 

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.

 

 

 

 

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(2)

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(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)

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(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)

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(4)

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April 21, 2017

 

To Our Stockholders:

You are cordially invited to attend the 2017 Annual Meeting of Stockholders of Radius Health, Inc. at 10:00 a.m. EDT, on June 7, 2017, at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th Floor, Boston, MA 02210.

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

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

Thank you for your support.

Sincerely,

 

 

Robert E. Ward

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

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

18

 

 

BOARD COMMITTEES

19

Audit Committee

19

Compensation Committee

20

Nominating and Corporate Governance Committee

20

Strategy Committee

21

 

 

EXECUTIVE COMPENSATION

22

Compensation Discussion and Analysis

22

Summary Compensation Table

27

2016 Grants of Plan-Based Awards

28

Outstanding Equity Awards at 2016 Fiscal Year End

29

Options Exercised and Stock Vested in 2016

30

Pension Benefits

30

Nonqualified Deferred Compensation

30

Potential Payments upon Termination or Change In Control

31

Compensation Risk Assessment

34

 

 

EQUITY COMPENSATION PLAN INFORMATION

35

 

 

DIRECTOR COMPENSATION

36

2016 Director Compensation Table

37

 

 

COMPENSATION COMMITTEE REPORT

38

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

39

 

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

41

 

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

41

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

42

 


 

 

 

FUTURE STOCKHOLDER PROPOSALS

42

 

 

OTHER MATTERS

42

 

 

SOLICITATION OF PROXIES

42

 

 

ANNUAL REPORT ON FORM 10-K

42

 

 

 

 

 

 

 


 

NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 7, 2017

 

RADIUS HEALTH, INC.

950 WINTER STREET

WALTHAM, MASSACHUSETTS 02451

 

 

To Our Stockholders:

The 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Radius Health, Inc., a Delaware corporation (the “Company”), will be held at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th Floor, Boston, Massachusetts 02210, on June 7, 2017, at 10:00 a.m. EDT, for the following purposes:

 

1.

To elect Willard H. Dere, M.D., Kurt C. Graves, and Anthony Rosenberg as Class III Directors to serve until the 2020 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, 2017;

 

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 of the Annual Meeting.

Holders of record of our common stock at the close of business on April 12, 2017 are entitled to notice of and to vote at the Annual Meeting, or any continuation, postponement or adjournment of the Annual Meeting. 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 21, 2017

 

 

 


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PROXY STATEMENT

FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 7, 2017

 

RADIUS HEALTH, INC.

950 WINTER STREET

WALTHAM, MASSACHUSETTS 02451

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 7, 2017 (the “Annual Meeting”), at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, 17 th   Floor, Boston, Massachusetts 02210, at 10:00 a.m. EDT, and at any continuation, postponement, or adjournment of the Annual Meeting. Holders of record of shares of our common stock, $0.0001 par value (“Common Stock”), at the close of business on April 12, 2017 (the “Record Date”), will be entitled to notice of and to vote at the Annual Meeting and any continuation, postponement, or adjournment of the Annual Meeting. As of the Record Date, there were approximately 43,262,460 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, 2016 (the “2016 Annual Report”), including a shareholder letter from our Chief Executive Officer (the “Shareholder Letter”), will be released on or about April 21, 2017 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 7, 2017

This Proxy Statement and our 2016 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 Willard H. Dere, M.D., Kurt C. Graves, and Anthony Rosenberg as Class III Directors to serve until the 2020 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, 2017;

 

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 of 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.

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 the Board recommends that you vote:

 

1.

FOR the election of Willard H. Dere, M.D., Kurt C. Graves, and Anthony Rosenberg as Class III 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, 2017; 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 2016 Annual Report available to stockholders electronically via the Internet. On or about April 21, 2017, 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 2016 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 t o 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 12, 2017. 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 43,262,460 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 6, 2017.

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 plurality of the votes cast.

This means that the three nominees

receiving the highest number of

affirmative “FOR” votes will be

elected as Class III Directors.

 

Votes withheld 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?  

A “vote withheld,” in the case of the proposal regarding the election of directors, or an “abstention,” in the case of the two other proposals to be voted on at the Annual Meeting, represents a stockholder’s affirmative choice to decline to vote on a proposal. Votes withheld and abstentions are counted as present and entitled to vote for purposes of determining a quorum. Votes withheld have no effect on the election of directors. Abstentions have no effect on the ratification of the appointment of Ernst & Young LLP and the advisory vote on the compensation of our named executive officers.

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 the 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, 2016 and in our periodic reports on Form 10-Q and Form 8-K. Those factors are not ranked in any particular order.

 

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PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting, three (3) Class III Directors are to be elected to hold office until the Annual Meeting of Stockholders to be held in 2020 and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.

We currently have ten (10) Directors on our Board. The proposal regarding the election of directors requires the approval of a plurality of the votes cast. This means that the three (3) nominees receiving the highest number of affirmative “FOR” votes will be elected as Class III Directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal.

Our Board of Directors is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the successor to each director whose term then expires will be elected to serve from the time of election and qualification until the third annual meeting of stockholders following election or such director’s death, resignation or removal, whichever is earliest to occur. The current class structure is as follows: Class I, whose current term will expire at the 2018 Annual Meeting of Stockholders and whose subsequent term will expire at the 2021 Annual Meeting of Stockholders; Class II, whose previous term expired at the 2016 Annual Meeting of Stockholders and whose current term will expire at the 2019 Annual Meeting of Stockholders; and Class III, whose current term expires at the Annual Meeting and whose new term will expire at the 2020 Annual Meeting of Stockholders. The current Class I Directors are Owen Hughes, Debasish Roychowdhury, M.D. and Robert E. Ward; the current Class II Directors are Alan H. Auerbach, Catherine J. Friedman, Ansbert Gadicke, M.D., and Jean-Pierre Garnier, Ph.D.; and the current Class III Directors are Willard H. Dere, M.D., Kurt C. Graves and Anthony Rosenberg.

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

If you submit a proxy but do not indicate any voting instructions, the persons named as proxies will vote the shares of Common Stock represented by the proxy for the election as Class III 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 the Board or the Board may elect to reduce its size. The 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 plurality of the votes cast. This means that the three (3) nominees receiving the highest number of affirmative “FOR” votes will be elected as Class III Directors. Votes withheld and broker non-votes will have no effect on the outcome of the vote on this proposal.

 


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Nominees for 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 nominees for election to the Board as 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.

 

63

 

2014

 

Director

Kurt C. Graves

 

49

 

2011

 

Chairman of the Board

Anthony Rosenberg

 

64

 

2015

 

Director

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

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

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

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

Recommendation

Our Board recommends that stockholders vote “ FOR ” the election of the Class III Director nominees, and proxies solicited by the 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 2018 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

Owen Hughes

 

42

 

2013

 

Director

Debasish Roychowdhury, M.D.

 

56

 

2015

 

Director

Robert E. Ward

 

59

 

2013

 

President, Chief Executive Officer and Director

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

Owen Hughes has served on our Board since April 2013. He has served as the Chief Business Officer and Head of Corporate Development at Intarcia Therapeutics, Inc., a biotechnology company, since February 2013. Prior to Intarcia, Mr. Hughes served as a Director at Bain Capital Public Equity, a multi-billion dollar hedge fund that falls under the Bain Capital umbrella, from March 2008 to January 2013. While there, he co-managed public and private healthcare investments, including those in the biotechnology, med-tech, and services segments. Mr. Hughes has over 16 years of financial experience on both the buy and sell-side. Mr. Hughes is a director of Malin PLC and RaNA Therapeutics, Inc. 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 been President of Nirvan Consultants, LLC since December 2013, where he advises biotechnology companies and institutions. He was one of the founding members of the Clinical and Scientific Advisory Board of Seragon Pharmaceuticals, Inc. (“Seragon”), a biotechnology company, and was Seragon’s Chief Medical Officer, prior to its acquisition by Roche Pharma, from March 2014 to August 2014. Prior to Seragon, Dr. Roychowdhury was the Senior Vice President and Head of the Global Oncology Division at Sanofi, a pharmaceutical company, from August 2009 to November 2013. Prior to that, he served as the Vice President for Clinical Development at GlaxoSmithKline, a pharmaceutical company, from 2005 to 2009, and directed the Oncology Global Regulatory group at Eli Lilly and Company, a pharmaceutical company, from 1999 to 2005. Prior to his role in industry, Dr. Roychowdhury served as faculty member at the University of Cincinnati. He received his M.D. from the All India Institute of Medical Sciences. He serves as a director of Celyad S.A., Lytix Biopharma AS and Fund + , a life sciences investment fund. We believe Dr. Roychowdhury is qualified to serve as a member of our Board because of his strong medical background, specifically related to oncology, and extensive experience in the pharmaceutical industry.

Robert E. Ward has served as our President and Chief Executive Officer and as a member of our Board since December 2013. Prior to joining Radius, Mr. Ward was Vice President for Strategy and External Alliances for the New Opportunities iMed of AstraZeneca, a biopharmaceutical company, from 2011 to 2013. In addition, he served as Co-Chair of the Joint Development Committees in AstraZeneca’s drug development partnerships with Alcon and Galderma. Prior to AstraZeneca, from 2010 to 2011, Mr. Ward was the Managing Director of Harriman Biopartners, LLC, a biopharmaceutical company, and from 2006 to 2010 he was the Vice President of Corporate Development for NPS Pharmaceuticals, a pharmaceutical company. Mr. Ward serves as a director of Akari Therapeutics, PLC and the Massachusetts High Technology Council. Mr. Ward received a B.A. in Biology and a B.S. in Physiological Psychology, both from the University of California, Santa Barbara; an M.S. in Management from the New Jersey Institute of Technology; and an M.A. in Immunology from The Johns Hopkins University School of Medicine. We believe Mr. Ward 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.


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

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

Name

 

Age

 

Director Since

 

Position

Alan H. Auerbach

 

47

 

2011

 

Director

Catherine J. Friedman

 

56

 

2015

 

Director

Ansbert Gadicke, M.D.

 

59

 

2011

 

Director

Jean-Pierre Garnier, Ph.D.

 

69

 

2015

 

Director

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

Alan H. Auerbach has served on our Board since May 2011 and served as a member of the Board of Directors of our predecessor company from October 2010 until May 2011. Mr. Auerbach is currently the Founder, Chief Executive Officer, President and Chairman of the Board of Directors of Puma Biotechnology, Inc., a company dedicated to in-licensing and developing drugs for the treatment of cancer. Previously, Mr. Auerbach founded Cougar Biotechnology (“Cougar”), a biotechnology company, in May 2003 and served as the company’s Chief Executive Officer, President and as a member of its Board of Directors until July 2009. From July 2009 until January 2010, Mr. Auerbach served as the Co-Chairman of the Integration Steering Committee at Cougar after its acquisition by Johnson & Johnson. Mr. Auerbach received a B.S. in Biomedical Engineering from Boston University and an M.S. in Biomedical Engineering from the University of Southern California. We believe Mr. Auerbach is qualified to serve as a member of our Board because of his business and professional experience, including his leadership of Cougar in drug development, private and public financings and a successful sale of the business.

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 March 2016, she joined the Board of Yahoo! Inc., a global internet media company, where she chairs the Nominating and Corporate Governance Committee and serves on the Compensation Committee. In June 2014, she joined the Board of Innoviva, Inc., a royalty management company specializing in respiratory assets (formerly known as Theravance, Inc.), where she serves on the Audit and Compensation Committees. Ms. Friedman is a member of the Board of Trustees for Sacred Heart Schools in Atherton. Ms. Friedman was previously a director of XenoPort, Inc. and EnteroMedics, Inc. from 2007 to 2016 and GSV Capital Corp. from 2013 to 2017. She is a graduate of Harvard University and received an MBA from the University of Virginia Darden School of Business, where she is currently a Darden School Foundation Board of Trustees member. We believe Ms. Friedman is qualified to serve as a member of our Board due to her extensive experience as a member on various boards of directors, her educational background and her previous leadership and management roles.

Ansbert Gadicke, M.D. has served on our Board since May 2011 and served as a member of the Board of Directors of our predecessor company from November 2003 until May 2011. Dr. Gadicke is the Managing Director of MPM Capital, a venture capital firm he co-founded in 1997, and Managing Director of the Oncology Impact Fund. At MPM, he led the company-building effort of several of MPM’s most successful investments, including Biomarin, Idenix (acquired by Merck), Pharmasset (acquired by Gilead) and Radius. Prior to founding MPM, Dr. Gadicke was at the Boston Consulting Group. He received an M.D. from J.W. Goethe University in Frankfurt and held research positions at the Whitehead Institute at MIT and the Biochemistry Department at Harvard University. While at the German Cancer Research Center, he focused on HPV16 and 18 in Professor Harald zur Hausen's group (Nobel Laureate in Physiology or Medicine, 2008). Dr. Gadicke currently serves as a director of Mitobridge, Inc. and TCR 2 Therapeutics Inc. He is also a member of the Board of Fellows of Harvard Medical School and the Research Advisory Council of the Massachusetts General Hospital. Dr. Gadicke previously served as a director of a number of companies, including Chiasma, Inc., Clinical Ink, Inc., Dragonfly Sciences, Inc., Florida Healthcare Analytics, Inc., OSS Healthcare, Inc., Raze Therapeutics, Inc., Sideris Pharmaceuticals, Inc., Solasia Pharma K.K., and TriNetX, Inc. We believe Dr. Gadicke is qualified to serve as a member of our Board because of his business and professional experience, including his experience in the venture capital industry and his years of analyzing development opportunities in the life sciences sector.

Jean-Pierre Garnier, Ph.D. has served on our Board since December 2015. Dr. Garnier is currently Chairman of the Board of Actelion Ltd., a biopharmaceutical company, and Alzheon, Inc., a biotechnology company, and was previously Chief Executive Officer of GlaxoSmithKline plc, a pharmaceutical company, from 2000 to 2008. In addition, Dr. Garnier is also a member of the Board of Directors of United Technologies Corporation, a global manufacturing and high-technology conglomerate, and an Operating Partner at Advent International, a global private equity firm. Dr. Garnier previously served as Chief Executive Officer of Pierre Fabre S.A., a pharmaceutical company, from 2008 to 2010, as Chief Executive Officer and Executive Member of the Board of Directors of GlaxoSmithKline plc from 2000 to 2008, as Chief Executive Officer of SmithKline Beecham plc, a pharmaceutical company, in 2000 and as Chief Operating Officer and Executive Member of the Board of Directors of SmithKline Beecham plc from 1996 to 2000. Dr. Garnier was previously Chairman of Cerenis and a board member of Renault S.A., the Stanford Advisory Council

10


 

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 F oundation. 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 sign ificant 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.  

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.

 


11


 

PROPO SAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our Audit Committee has appointed Ernst & Young LLP (“EY”) as our independent registered public accounting firm for the fiscal year ending December 31, 2017. 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, 2016. 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 the stockholders, the Audit Committee will consider this fact when it appoints the independent auditors for the fiscal year ending December 31, 2018. Even if the appointment of EY is ratified, the Audit Committee retains the discretion to appoint a different independent auditor at any time if it determines that such a change is in the interests of Radius.

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, 2016 and 2015, in each of the following categories:

Fee Category

 

2016

 

2015

Audit Fees (1)

 

$    802,000

 

$ 521,000

Audit-Related Fees (2)

 

174,000

 

70,000

Tax Fees (3)

 

212,000

 

49,000

Total Fees

 

$ 1,188,000

 

$ 640,000

1

“Audit Fees” consist of fees for the audit of our consolidated financial statements and review of the unaudited interim financial statements included in our quarterly reports on Form 10-Q during the years ended December 31, 2016 and 2015.

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, 2016 and 2015 consisted primarily of the issuance of comfort letters and review of our registration statements on Form S-3 and Form S-8, current reports on Form 8-K and proxy statements.

3

“T ax Fees” comprise fees for tax compliance, tax advice and tax planning services. Tax compliance services, which relate to the review of our U.S. tax returns, accounted for $35,000 and $12,500 of the total tax fees for fiscal year 2016 and 2015, respectively.


12


 

Audit Committee Pre -Approval Policy and Procedures

The 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 the 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 the Audit Committee. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require specific pre-approval. On an annual basis, the Audit Committee reviews and generally pre-approves the services (and related fee levels or budgeted amounts) that may be provided by EY without first obtaining specific pre-approval from the Audit Committee. The Audit Committee may revise the list of general pre-approved services from time to time, based on subsequent determinations.

Recommendation

Our Board recommends that stockholders vote “ FOR ” the Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm, and proxies solicited by the 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 Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that Radius 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, 2016 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, 2016.

Catherine J. Friedman (Chair)

Owen Hughes

Willard H. Dere, M.D.

14


 

PROPOSAL 3

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

This proposal gives our stockholders the opportunity to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers. Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the Exchange Act”), at our 2015 Annual Meeting of Stockholders, our stockholders cast an advisory vote with respect to the frequency of future stockholder advisory votes on executive compensation. Based on the results of that vote, Radius 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 2017 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, the Board or the Compensation Committee. However, the Board and the 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 the Board will be voted in favor thereof, unless a stockholder has indicated otherwise on the proxy.

 


15


 

EXECUTIVE OFFICERS

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

Name

 

Age

 

Position

Robert E. Ward

 

59

 

President, Chief Executive Officer and Director

B. Nicholas Harvey

 

56

 

Senior Vice President, Chief Financial Officer, and Treasurer

Lorraine Fitzpatrick, M.D.

 

63

 

Chief Medical Officer

Gary Hattersley, Ph.D.

 

50

 

Senior Vice President, Chief Scientific Officer

Brent Hatzis-Schoch

 

52

 

Senior Vice President, General Counsel, and Secretary

David Snow

 

55

 

Chief Commercial Officer

Gregory Williams, Ph.D.

 

58

 

Chief Development Officer

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

B. Nicholas Harvey has served as our Senior Vice President, Chief Financial Officer and Treasurer since November 2010, and served as a member of the Board of Directors of our predecessor company from November 2010 until May 2011. Mr. Harvey served as the Chief Financial Officer and Senior Vice President of our predecessor company from December 2006 to May 2011. Mr. Harvey received a Bachelor of Economics degree and a Bachelor of Laws degree with first-class honors from the Australian National University and an M.B.A. from the Harvard Business School.

Lorraine Fitzpatrick, M.D. has served as our Chief Medical Officer since July 2015. Prior to joining Radius, Dr. Fitzpatrick was a Medicine Development Leader and Group Director at GlaxoSmithKline, a pharmaceutical company, from August 2006 to July 2015. Prior to GlaxoSmithKline, she was an Executive Director at Amgen Inc., a biopharmaceutical company, focusing on osteoporosis and oncology from 2004 to 2006. She has served as Chair of the General Clinical Research Center study section of the National Center for Research Resources, National Institute of Health (“NIH”); on the Advocacy Committee of the American Society of Bone and Mineral Research (“ASBMR”); and as Chair of the Public Communications Committee and the Media Relations Steering Committee of The Endocrine Society (“TES”). She has also been a member of the Publications Committee of the ASBMR and TES and on the Advisory Committee for the Office of Research on Women’s Health at the NIH. Dr. Fitzpatrick has served on the National Committee for Quality Assurance Technical Subgroup on Osteoporosis, the Clinical Guidelines Committee of TES, the Scientific Program Committees of North American Menopause Society and the ASBMR, and as Associate Editor for The Mayo Clinic Proceedings and the American Medical Association Scientific Advisory Board: Osteoporosis Guidelines. Dr. Fitzpatrick received a B.S. in Molecular Biology from Wellesley College and received her medical degree from the Pritzker School of Medicine at the University of Chicago.

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

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

David Snow has served as our Chief Commercial Officer since September 2015. Prior to joining Radius, Mr. Snow was President of the China/Hong Kong business unit of AstraZeneca, a biopharmaceutical company, from January 2012 to December 2014. He was also the first global commercialization Vice President for AstraZeneca’s prescription medication Brilinta ® and head of one of two U.S. business units from March 2010 to December 2011. Mr. Snow held numerous global and U.S. commercial leadership roles within the following pharmaceutical companies: AstraZeneca, Bristol-Myers Squibb, Searle, and Hoechst-Roussel. He served on the Research and Development based Pharmaceutical Association Committee industry association board in China. Mr. Snow received his B.S. in Business Administration from Auburn University, and an M.B.A. from New York University—Leonard N. Stern School of Business.

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

16


 

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 the 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 of Directors currently consists of ten (10) members: Alan H. Auerbach, Willard H. Dere, M.D., Catherine J. Friedman, Ansbert Gadicke, M.D., Jean-Pierre Garnier, Ph.D., Kurt C. Graves, Owen Hughes, Anthony Rosenberg, Debasish Roychowdhury, M.D., and Robert E. Ward. As indicated in our Restated Certificate of Incorporation, the authorized number of directors may be changed only by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Our directors may be removed only for cause by the affirmative vote of the holders of at least two-thirds of the outstanding shares of our Common Stock.

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

Director Independence

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

Director Candidates

The Nominating and Corporate Governance Committee is responsible for searching for qualified director candidates for election to the Board and filling vacancies on the Board. To facilitate the search process, the 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. The 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, the 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 director. To the extent feasible, candidates are interviewed by the Nominating and Corporate Governance Committee, other members of the Board, and members of our executive management.

In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended Director nominees, the 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. The Nominating and Corporate Governance Committee 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. The Board evaluates each individual in the context of the 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, the Nominating and Corporate Governance Committee may also consider the director’s past attendance at meetings and participation in and contributions to the activities of the 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

17


 

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 backg round 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 othe rs.

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 the 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 the Board should address such communications to the 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 the 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 the 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 the Board from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of the Board as a whole. As such, Mr. Ward 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. The 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. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board stays regularly informed through committee reports about such risks. The Board does not believe that its role in the oversight of our risks affects the Board’s leadership structure.

Code of Ethics

We have adopted a Code of Conduct and Business Ethics (the “Code”) that applies to all of our directors, officers and employees. A copy of the Code 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 the Code.

Director Attendance at Board and Committee Meetings

There were eight meetings of the Board during the fiscal year ended December 31, 2016. During the fiscal year ended December 31, 2016, each Director attended at least 75% of the aggregate of all meetings of the Board and committees on which the Director served during the period in which he or she was on the Board or Committee, except for Alan Auerbach.

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. Nine directors attended our 2016 Annual Meeting of Stockholders in person.

Executive Sessions

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

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BOARD COMMITTEES

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

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

Name

 

Audit

 

Compensation

 

Nominating

and Corporate

Governance

 

Strategy

Alan H. Auerbach

 

 

 

X

 

 

 

X

Willard H. Dere, M.D.

 

X

 

 

 

X

 

 

Catherine J. Friedman

 

Chair

 

X

 

 

 

 

Ansbert Gadicke, M.D.

 

 

 

 

 

 

 

X

Jean-Pierre Garnier, Ph.D.

 

 

 

Chair

 

 

 

 

Kurt C. Graves

 

 

 

X

 

Chair

 

X

Owen Hughes

 

X

 

 

 

 

 

 

Anthony Rosenberg

 

 

 

 

 

 

 

Chair

Debasish Roychowdhury, M.D.

 

 

 

 

 

X

 

 

Robert E. Ward

 

 

 

 

 

 

 

 

Audit Committee

Our Audit Committee oversees our corporate accounting and financial reporting process. Among other matters, the 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. Each member of the Audit Committee meets the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (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.

Our Audit Committee met five (5) times during the fiscal year ended December 31, 2016.


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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 cash compensation;

 

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

 

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

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. The 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 Alan H. Auerbach, Catherine J. Friedman, Jean-Pierre Garnier, Ph.D. and Kurt C. Graves. Dr. Garnier serves as the chair of the committee. Our Board has determined that each member of the Compensation Committee is independent under the NASDAQ rules, including the NASDAQ rules specific to compensation committee independence.

Our Compensation Committee met seven (7) times during the fiscal year ended December 31, 2016.

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 the Board with respect to management succession planning; and

 

develops and recommends to the 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 two (2) times during the fiscal year ended December 31, 2016.


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Strategy Committee

Our Strategy Committee, among other things:

 

reviews and provides guidance to management and the Board with respect to our basic strategy and business model;

 

assists management and the Board in discussions on material changes in strategy, as they may evolve;

 

periodically reviews with management prospective candidates for corporate strategic transactions, when and as appropriate; and

 

advises management on the most effective and appropriate communication of its strategic initiatives with external constituencies, including but not limited to investors, financial institutions and potential collaborators.

Our Strategy Committee consists of Alan H. Auerbach, Ansbert Gadicke, M.D., Kurt C. Graves and Anthony Rosenberg. Mr. Rosenberg serves as the chair of the committee.

Our Strategy Committee met two (2) times during the fiscal year ended December 31, 2016.  


21


 

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”) during 2016, including the elements of our executive compensation program, material compensation decisions made under that program during 2016 and the material factors considered in making those decisions.

Our NEOs for 2016 were:

Name

 

Position

Robert E. Ward

 

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

B. Nicholas Harvey

 

Senior Vice President, Chief Financial Officer and Treasurer

Lorraine Fitzpatrick, M.D.

 

Chief Medical Officer

David Snow

 

Chief Commercial Officer

Gregory Williams, Ph.D.

 

Chief Development Officer

Compensation Philosophy and Objectives

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

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

Compensation Element

 

Purpose

Base Salary

 

Recognize performance of job responsibilities and attract and

retain individuals with superior talent

Annual Cash Incentive Program

 

Provide short-term incentives to attain key business objectives

Equity Incentive Awards

 

Promote the maximization of stockholder value by aligning the

interests of our executive officers and stockholders

Stockholder Say-On-Pay Votes

At our 2016 Annual Meeting of Stockholders held on May 24, 2016, we provided our stockholders with the opportunity to cast an advisory vote on the compensation of our NEOs. Approximately 97% of the votes cast on our “say on pay” vote were voted in favor of the proposal. We have considered the results of this vote and believe the support of our stockholders for the proposal indicates that our stockholders are generally supportive of our approach to executive compensation. Accordingly, we did not make changes to our executive compensation arrangements in response to the vote or to our compensation policies. In the future, we will continue to consider the outcome of our “say on pay” votes when making compensation decisions regarding our NEOs and determining compensation policies.

Determination of Compensation Awards

Our Compensation Committee has principal authority for determining and approving, or recommending to our Board for approval, the compensation awards available to our NEOs and is charged with reviewing our executive compensation policies and practices to ensure adherence to our compensation philosophies and objectives. In determining 2016 executive compensation, the Compensation Committee consulted with our President and Chief Executive Officer and considered advice and data provided by the Company’s independent compensation consultant, Radford, an Aon Hewitt company (“Radford”). Refer to “Role of Compensation Consultant in Determining Executive Compensation” and “Role of Executive Officers in Determining Executive Compensation” below for additional information. 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.


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We believe that direct ownership in our Company provides our NEOs with a strong incentive to increase the value of our Company. We do not currently have an y formal stock ownership guidelines, but we have historically encouraged equity ownership by NEOs through awards of stock options. We believe these awards align the interests of our NEOs with those of our stockholders.

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 2016, our Compensation Committee considered advice and data provided by Radford. Radford provided the Compensation Committee with peer group and market information that the 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. The 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 connection with the Compensation Committee’s review of our executive compensation programs in November 2015, Radford conducted and presented to the Compensation Committee an assessment of our 2015 peer group, taking into account the progress of the Company in advancing its development programs and its growth. In particular, the Compensation Committee considered new selection criteria for the peer group to include companies with products under regulatory review or in the early stage of commercialization. In performing this competitive assessment, Radford used a peer group selected by the Compensation Committee in consultation with Radford based on revenue, industry and executive role considerations. As a result of that assessment, the peer group was updated for 2016 to be comprised of the following 19 publicly traded companies in the pharmaceutical, biotechnology and life sciences industries that represent competitors for executive talent and capital:

ACADIA Pharmaceuticals

Dyax

NewLink Genetics

Alnylam Pharmaceuticals

Exelixis

Ophthotech

Anacor Pharmaceuticals

INSYS Therapeutics

Portola Pharmaceuticals

bluebird bio

Intercept Pharmaceuticals

Tesaro

Celldex Therapeutics

Ironwood Pharmaceuticals

Ultragenyx Pharmaceutical

Chimerix

Lexicon Pharmaceuticals

 

Clovis Oncology

Neurocrine Biosciences

 

The 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 the Company competitive while strongly incentivizing performance and appropriately controlling executive compensation cost.

In connection with the Compensation Committee’s review of our executive compensation programs in August 2016, Radford conducted and presented to the Compensation Committee a competitive assessment of our compensation program for executive officers with respect to pay philosophies, pay mix, cash and equity-linked compensation. In performing this competitive assessment, Radford used a peer group selected by the Compensation Committee in consultation with Radford based on revenue, industry and executive role considerations.

The peer group that was used when determining 2017 compensation for our NEOs was comprised of the following 22 publicly traded companies in the pharmaceutical, biotechnology and life sciences industries that represent competitors for executive talent and capital:

ACADIA Pharmaceuticals

INSYS Therapeutics

Portola Pharmaceuticals

Alnylam Pharmaceuticals

Intercept Pharmaceuticals

Puma Biotechnology

Anacor Pharmaceuticals

Ironwood Pharmaceuticals

Spark Therapeutics

bluebird bio

Lexicon Pharmaceuticals

Tesaro

Celldex Therapeutics

Neurocrine Biosciences

The Medicines Company

Chimerix

NewLink Genetics

Ultragenyx Pharmaceutical

Clovis Oncology

Ophthotech

 

Exelixis

Pacira Pharmaceuticals

 

 


23


 

Role of Executive Officers in Determining Executive Compensation

Our President and Chief Executive Officer made recommendations to the Compensation Committee to assist it in determining 2016 compensation levels for our other executive officers. In addition, our President and Chief Executive Officer provided the Compensation Committee with a review of the performance of our other executive officers. While the Compensation Committee utilized this information and valued management’s observations with regard to compensation, the ultimate decisions regarding 2016 executive compensation were made by the Compensation Committee or the 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 incentive awards and periodic equity-based incentives, typically in the form of stock options.

Base Salary

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

The Compensation Committee periodically reviews and evaluates, with input from our President and Chief Executive Officer, other than with respect to his own salary, the need for adjustment of the base salaries of our NEOs based on changes and expected changes in the scope of an executive’s responsibilities, including promotions, individual contributions made by and performance of the executive during the prior fiscal year, the executive’s performance over a period of years, overall labor market conditions, the relative ease or difficulty of replacing the executive with a well-qualified person, our overall growth and development as a company and general salary trends in our industry. No specific weight is assigned to any of these criteria. In reviewing Mr. Ward’s base salary for 2017, the Compensation Committee also sought to align Mr. Ward’s base salary approximately at the median of the market, based on our peer group and broader market data in order to emphasize pay for performance.

The following table sets forth the base salaries of our NEOs for 2016 and 2017.

Name

 

2016

Base

Salary

($)

 

2017

Base

Salary

($)

 

Percent

Change 1

Robert E. Ward

 

525,471

 

600,000

 

14%

B. Nicholas Harvey

 

332,700

 

332,700

 

0%

Lorraine Fitzpatrick, M.D.

 

378,000

 

389,300

 

3%

David Snow

 

396,600

 

425,000

 

7%

Gregory Williams, Ph.D.

 

372,100

 

398,000

 

7%

1

Represents the percentage change in base salary from the prior year. Base salaries are effective January 1 of the given year.

Annual Performance-Based Cash Incentives

We believe that the payment of annual, performance-based cash compensation provides incentives necessary to retain executive officers and reward them for short-term company performance. Each NEO is eligible to receive an annual performance-based cash bonus based on achievement of performance goals developed by our Compensation Committee or Board with input from our President and Chief Executive Officer. Each NEO has a target annual bonus award amount, expressed as a percentage of the NEO’s base salary. After the 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 2016, the actual bonus amounts for our NEOs were approved by our Compensation Committee.

Our corporate, financial and operational goals for 2016 were:

 

1.

Achieve regulatory objectives for our abaloparatide subcutaneous injection product candidate (“abaloparatide-SC”);

 

2.

Achieve U.S. launch readiness for abaloparatide-SC;

 

3.

Achieve business development objectives;

 

4.

Achieve pipeline development objectives; and

 

5.

Achieve year-end financial status consistent with the Board approved budget.

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In February 2017, the Compensation Committee met to review performanc e against the Company’s 2016 goals. The Compensation Committee determined that the Company had met substantially all of the goals set for 2016, including that the Company had met the goal to achieve year-end financial status consistent with the approved bu dget by ending 2016 with $332.4 million in cash, cash equivalents and marketable securities . In addition, t he Compensation Committee concluded that the Company had exceeded the goal regarding achieving pipeline development objectives by reporting positive Phase 1 clinical trial results for elacestrant (RAD1901), our breast cancer product candidate; presenting proof of concept data for our abaloparatide transdermal patch product candidate; and finishing enrollment of our Phase 2b clinical trial of elacestran t in vasomotor symptoms. Overall, the Compensation Committee determined that actual corporate performance was one hundred percent (100%) of target.

The Compensation Committee also reviewed each individual NEO’s performance within his or her area of responsibility and, based on the individual’s performance against, and contribution to 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.

 

 

2016 Target Bonus

 

2016 Actual Bonus

Name

 

% of Base

Salary

 

$

 

% of Base

Salary

 

$

Robert E. Ward

 

60%

 

315,283

 

60%

 

315,283

B. Nicholas Harvey

 

40%

 

133,080

 

40%

 

133,080

Lorraine Fitzpatrick, M.D.

 

40%

 

151,200

 

40%

 

151,200

David Snow

 

40%

 

158,640

 

48%

 

190,368

Gregory Williams, Ph.D.

 

40%

 

148,840

 

48%

 

178,608

Equity-Based Awards

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

We have historically made initial awards of stock options to our NEOs upon their commencing employment with us and from time to time thereafter as the Board or Compensation Committee determined appropriate to motivate, retain and reward our NEOs for their performance and our success. Stock options 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 for initial awards) and in 36 monthly installments during the three years thereafter, subject to the holder’s continued service to the Company through each applicable vesting date. Our performance-based stock options are eligible to vest based on achievement of key performance milestones selected by our Board or Compensation Committee with the intent of increasing stockholder value and encouraging long-term commitment to our success.

The 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 the 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 2016.

Name

 

Grant

Date

 

Number of

Option Awards

Granted 1

Robert E. Ward

 

2/10/16

 

156,250

B. Nicholas Harvey

 

2/10/16

 

62,500

Lorraine Fitzpatrick, M.D.

 

2/10/16

 

75,000

David Snow

 

2/10/16

 

75,000

Gregory Williams, Ph.D.

 

2/10/16

 

75,000

1

These stock options vested as to 25% of the underlying shares on February 10, 2017, and the remainder of the stock options vest as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date.

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

Retirement Programs

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

 

Employee Benefits and Perquisites

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

Employment and Severance Arrangements

We consider maintenance of a strong management team essential to our success. To that end, we recognize that the uncertainty which may exist among management with respect to their “at-will” employment with us could result in the departure or distraction of 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. In 2015, the Compensation Committee determined it was appropriate to develop standard severance protections for all of our management employees, including our NEOs other than Mr. Ward, which we collectively refer to as our “Other NEOs.” Mr. Ward’s severance protections are set forth in his employment agreement. The terms of these severance agreements and Mr. Ward’s employment agreement 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 pursuant to which they have agreed not to disclose our confidential information during or after their employment with us or compete with us or solicit our customers or employees for a period of one year following termination or, for Mr. Ward, the longer of one year and the period during which Mr. Ward receives severance payments under his employment agreement.

 

Anti-Hedging Policy

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

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Summary Compensation Table

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

Name and Principal Position

 

Year

 

Salary

($)

 

Bonus (1)

($)

 

Option

Awards (2)

($)

 

Stock

Awards (3)

($)

 

Non-Equity

Incentive Plan

Compensation (4)

($)

 

All Other

Compensation (5)

($)

 

Total

($)

Robert E. Ward

 

2016

 

525,471

 

 

2,505,270

 

 

315,283

 

13,202

 

3,359,226

President, CEO and Director

 

2015

 

477,700

 

 

 

 

300,805

 

9,111

 

787,616

 

 

2014

 

450,000

 

 

7,469,189

 

 

506,250

 

8,832

 

8,434,271

B. Nicholas Harvey

 

2016

 

332,700

 

 

1,002,108

 

 

133,080

 

13,057

 

1,480,945

Chief Financial Officer

 

2015

 

313,900

 

 

 

 

141,067

 

10,391

 

465,358

 

 

2014

 

296,159

 

50,000

 

842,265

 

 

111,060

 

8,484

 

1,307,968

Lorraine Fitzpatrick, M.D. (6)

 

2016

 

378,000

 

 

1,202,530

 

 

151,200

 

14,593

 

1,746,323

Chief Medical Officer

 

2015

 

151,910

 

25,000

 

5,803,500

 

 

65,965

 

6,165

 

6,052,540

 

 

2014

 

 

 

 

 

 

 

David Snow (7)

 

2016

 

396,600

 

 

1,202,530

 

 

190,368

 

13,202

 

1,802,700

Chief Commercial Officer

 

2015

 

119,583

 

 

3,436,000

 

1,239,765

 

44,637

 

3,576

 

4,843,561

 

 

2014

 

 

 

 

 

 

 

Gregory Williams, Ph.D. (8)

 

2016

 

372,100

 

 

1,202,530

 

 

178,608

 

13,193

 

1,766,431

Chief Development Officer

 

2015

 

 

 

 

 

 

 

 

 

2014

 

321,307

 

 

2,162,393

 

 

195,000

 

8,829

 

2,687,529

1

The amount shown for 2014 represents a discretionary bonus received as a result of Mr. Harvey’s efforts during our initial public offering (“IPO”). The amount shown for 2015 represents a cash signing bonus paid in connection with Dr. Fitzpatrick’s commencement of employment with us.

2

Represents the aggregate grant date fair value of stock option awards made during the year computed in accordance with FASB ASC Topic 718. For additional information, including the assumptions used when valuing the awards granted in 2016, refer to Note 11 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 24, 2017.

3

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

4

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

5

For 2016, the amounts include: for Mr. Ward, $2,602 for life insurance premiums paid by us and $10,600 in employer matching contributions made pursuant to our 401(k) plan; for Mr. Harvey, $2,457 for life insurance premiums paid by us and $10,600 in employer matching contributions made pursuant to our 401(k) plan; for Dr. Fitzpatrick, $3,993 for life insurance premiums paid by us and $10,600 of matching contributions made pursuant to our 401(k) plan; for Mr. Snow, $2,602 for life insurance premiums paid by us and $10,600 in employer matching contributions made pursuant to our 401(k) plan; and for Dr. Williams, $2,593 for life insurance premiums paid by us and $10,600 of matching contributions made pursuant to our 401(k) plan.

6

Dr. Fitzpatrick became an employee in July 2015.

7

Mr. Snow became an employee in September 2015.

8

Dr. Williams was not an NEO in 2015.

27


 

2016 Grants of Plan-Based Awards

The following table sets forth information regarding grants of equity and cash bonuses that were awarded to our NEOs in 2016. All awards were granted under our 2011 Equity Incentive Plan.

 

 

 

 

Estimated Future Payouts

Under Non-Equity

Incentive Plan Awards (1)

 

Estimated Future Payouts

Under Equity

Incentive Plan Awards

 

All Other

Option Awards:

Number of

Securities Underlying Options

(#)

 

Exercise or

Base Price

of Option Awards

($/Sh)

 

Grant Date

Fair Value of

Stock and Option

Awards (2)

($)

Name

 

Grant

Date

 

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

 

 

 

 

 

 

Robert E. Ward

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

315,283

 

 

 

 

 

 

 

Options

 

2/10/2016

 

 

 

 

 

 

 

156,250

 

29.89

 

2,505,270

B. Nicholas Harvey

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

133,080

 

 

 

 

 

 

 

Options

 

2/10/2016

 

 

 

 

 

 

 

 

 

 

 

 

 

62,500

 

29.89

 

1,002,108

Lorraine Fitzpatrick, M.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

151,200

 

 

 

 

 

 

 

Options

 

2/10/2016

 

 

 

 

 

 

 

75,000

 

29.89

 

1,202,530

David Snow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

158,640

 

 

 

 

 

 

 

Options

 

2/10/2016

 

 

 

 

 

 

 

75,000

 

29.89

 

1,202,530

Gregory Williams, Ph.D.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Bonus

 

N/A

 

 

148,840

 

 

 

 

 

 

 

Options

 

2/10/2016

 

 

 

 

 

 

 

75,000

 

29.89

 

1,202,530

1

Represent awards under our annual performance-based bonus program. For 2016, the bonus target for Mr. Ward was 60% of his base salary and the bonus target for each of our Other NEOs was 40% of his or her base salary. Refer to our 2016 Summary Compensation Table for the amounts actually paid to our NEOs for 2016 bonuses and to “Compensation Discussion and Analysis—Components of Compensation—Annual Performance-Based Cash Incentives” for additional information about our annual bonus program.

2

Represents the grant date fair value of awards made during the year computed in accordance with FASB ASC Topic 718. For additional information, including the assumptions used when valuing the awards, refer to Note 11 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 24, 2017.

28


 

Outstanding Equity Awards at 2016 Fiscal Year End

The following table provides information regarding the outstanding equity awards held by our NEOs as of December 31, 2016. These awards were granted under our 2003 Equity Incentive Plan and 2011 Equity Incentive Plan.

 

 

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 (7)

($)

Robert E. Ward

 

12,820

 

 

7.80

 

2/15/2024

 

 

 

 

622,132

 

111,653

(1)

7.80

 

2/15/2024

 

 

 

 

107,500

 

107,500

(2)

30.97

 

12/16/2024

 

 

 

 

 

156,250

(6)

29.89

 

2/9/2026

 

 

B. Nicholas Harvey

 

23,416

 

 

2.05

 

7/12/2017

 

 

 

 

27,778

 

 

2.74

 

5/8/2018

 

 

 

 

11,838

 

 

2.74

 

12/3/2018

 

 

 

 

38,095

 

 

7.34

 

11/6/2021

 

 

 

 

25,000

 

25,000

(2)

30.97

 

12/16/2024

 

 

 

 

 

62,500

(6)

29.89

 

2/9/2026

 

 

Lorraine Fitzpatrick, M.D.

 

53,124

 

96,876

(3)

73.76

 

7/26/2025

 

 

 

 

 

75,000

(6)

29.89

 

2/9/2026

 

 

 

 

David Snow

 

31,249

 

68,751

(4)

65.23

 

9/8/2025

 

 

 

 

 

75,000

(6)

29.89

 

2/9/2026

 

 

 

 

 

 

 

 

25,000

(5)

950,750

Gregory Williams, Ph.D.

 

120,613

 

54,825

(8)

7.80

 

2/15/2024

 

 

 

 

40,000

 

40,000

(2)

30.97

 

12/16/2024

 

 

 

 

 

75,000

(6)

29.89

 

2/9/2026

 

 

1

This stock option vested as to: (i) 25% of the unvested shares upon the consummation of our IPO on June 6, 2014, (ii) an additional 18.75% of the unvested shares on December 16, 2014 and (iii) 25% of the unvested shares upon our submitting a New Drug Application for abaloparatide with the U.S. Food and Drug Administration (“FDA”) and the FDA accepting the application in May 2016. The remainder of the stock option vests in substantially equal installments on the 16 th day of each of the 36 consecutive months beginning January 16, 2015, subject to Mr. Ward’s continued employment with the Company on each applicable vesting date. The option is also eligible for accelerated vesting as to 25% of the unvested shares upon our obtaining FDA approval for abaloparatide during Mr. Ward’s employment term, with the 25% portion taken pro rata from the unvested shares subject to the option and the remaining unvested shares continuing to vest as described in the previous sentence. In addition, if a change in control of the Company occurs during Mr. Ward’s employment term, 50% of the outstanding unvested shares subject to the option as of the date of the change in control will become fully vested. This stock option is also eligible for accelerated vesting in connection with certain terminations of Mr. Ward’s employment, as described below under the heading “Potential Payments upon Termination or Change in Control.”

2

This stock option vested as to 25% of the underlying shares on December 17, 2015, and the remainder of the stock option vests as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date. The option is eligible for accelerated vesting in connection with certain terminations of the NEO’s employment as described below under the heading “Potential Payments upon Termination of Change in Control.”

3

This stock option vested as to 25% of the underlying shares on July 27, 2016, and the remainder of the stock option vests as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date. The option is eligible for accelerated vesting in connection with certain terminations of Dr. Fitzpatrick’s employment as described below under the heading “Potential Payments upon Termination or Change in Control.”

29


 

4

This stock option vested as to 25% of the underlying shares on September 9, 2016, and the remainder of the stock option vests as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive mo nths thereafter, subject to continued service to the Company through each applicable vesting date. The option is eligible for accelerated vesting in connection with certain terminations of Mr. Snow’s employment as described below under the heading “Potenti al Payments upon Termination or Change in Control.”

5

These PUs, if earned, entitle Mr. Snow to receive one share of our Common Stock if and when the PU vests. The PUs are earned, if at all, in three increments of 5,000 units, 10,000 units and 10,000 units if the average price of our Common Stock on the NASDAQ Global Market measured over a measurement period of 45 consecutive trading days ending no later than September 9, 2018 exceeds $75, $100 and $120, respectively. Earned units vest on, and are converted into shares of our Common Stock after, the first anniversary of the final day of the measurement period with respect to which the units were earned. If Mr. Snow’s employment is terminated without cause or due to his resignation for good reason within 12 months following a change in control, any unearned or unvested units will be deemed immediately earned and vested.

6

This stock option vested as to 25% of the underlying shares on February 10, 2017, and the remainder of the stock option vests as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date. The option is eligible for accelerated vesting in connection with certain terminations of the NEO’s employment as described below under the heading “Potential Payments upon Termination of Change in Control.”

7

Calculated by multiplying the number of PUs by $38.03, the closing price of our stock on December 30, 2016.

8

This stock option vested as to 25% of the underlying shares on January 6, 2015, and the remainder of the stock option vests as to 1/48 th of the underlying shares on the same day of each of the 36 consecutive months thereafter, subject to continued service to the Company through each applicable vesting date. The option is eligible for accelerated vesting in connection with certain terminations of Dr. Williams’ employment as described below under the heading “Potential Payments upon Termination of Change in Control.”

Options Exercised and Stock Vested in 2016

The following table provides information regarding the value realized by our NEOs from options to purchase our Common Stock exercised by our NEOs during 2016 and shares of restricted stock that vested during 2016. The value realized per share for options is based on the difference between the exercise price and the fair market value of the shares of our Common Stock on the date the options were exercised.

 

 

Option Awards

 

Stock Awards

Name

 

Number of

Shares

Acquired on

Exercise

(#)

 

Value

Realized on

Exercise

($)

 

Number of

Shares

Acquired on

Vesting

(#)

 

Value

Realized on

Vesting

($)

Robert E. Ward

 

10,000

 

383,400

 

 

B. Nicholas Harvey

 

 

 

 

Lorraine Fitzpatrick, M.D.

 

 

 

 

David Snow

 

 

 

 

Gregory Williams, Ph.D.

 

 

 

 

Pension Benefits

None of our NEOs participated in any defined benefit pension plans in 2016.

Nonqualified Deferred Compensation

None of our NEOs participated in any non-qualified deferred compensation plans in 2016.


30


 

Potential Payments upon Termination or Change In Control

We maintain compensation and benefit plans and arrangements that provide payment of compensation to our NEOs in the event of certain terminations of employment or a change in control of our Company. The amount of compensation payable to our NEOs in these situations is described below.

Employment and Severance Agreements

Each of our NEOs has entered into an employment or severance 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.

 

Robert E. Ward

On December 16, 2013, we entered into an employment agreement with Mr. Ward, which was amended on July 1, 2015, pursuant to which Mr. Ward serves as our President and Chief Executive Officer. The agreement, as amended, provides that in the event Mr. Ward’s employment is terminated by us without cause or due to Mr. Ward’s resignation for good reason, then subject to his executing a general release of claims and continued compliance with the terms of his employee confidentiality and non-compete agreement, Mr. Ward will be entitled to receive:

 

base salary continuation payments for 12 months;

 

payment of continued medical care premiums for up to 12 months;

 

any unpaid annual bonus for the year prior to the year in which his termination occurs, based upon actual performance and payable in a lump sum;

 

a pro-rata portion of his bonus for the performance year in which Mr. Ward’s termination occurs, based on actual performance or, if the termination occurs on or before to the date upon which performance goals for the bonus are established, on Mr. Ward’s target bonus, in either case, payable in a lump sum; and

 

accelerated vesting of 25% of the shares subject to the option to purchase 793,974 shares of our Common Stock granted to Mr. Ward on February 16, 2014 (the “Option”) and up to nine months following the termination of his employment to exercise the Option.

If Mr. Ward’s employment is terminated without cause or due to his resignation for good reason within 24 months following a change in control of our Company, then subject to his executing a general release of claims and continued compliance with the terms of his employee confidentiality and non-compete agreement, in lieu of the severance benefits described above, Mr. Ward will be entitled to receive:

 

base salary continuation payments for 18 months;

 

payment of continued medical care premiums for up to 18 months;

 

any unpaid annual bonus for the year prior to the year in which his termination occurs, based upon actual performance and payable in a lump sum;

 

payment of 150% of his target annual bonus for the year in which his termination occurs; and

 

accelerated vesting of all outstanding Company equity awards and up to nine months following the termination of his employment to exercise those awards.

If Mr. Ward’s employment terminates due to his death or disability, he will be entitled to receive:

 

any unpaid annual bonus for the year prior to the year in which his termination occurs, based upon actual performance and payable in a lump sum; and

 

a pro-rata portion of his bonus for the performance year in which Mr. Ward’s termination occurs, based on actual performance or, if the termination occurs on or before to the date upon which performance goals for the bonus are established, on Mr. Ward’s target bonus, in either case, payable in a lump sum.

 


31


 

Other NEOs

During 2015, we entered into severance agreements with each of our Other NEOs. Each agreement provides that if the NEO’s employment is terminated without cause or due to his or her resignation for good reason, then subject to the NEO executing a general release of claims and continuing to comply with the terms of his or her employee confidentiality and non-compete agreement, the NEO will be entitled to receive:

 

base salary continuation for 6 months, and for Dr. Williams, 9 months;

 

payment of continued medical care premiums for up to 6 months; and

 

any unpaid annual bonus for the year prior to the year in which his or her termination occurs, based upon actual performance and payable in a lump sum.

If the NEO’s employment is terminated without cause or due to his or her resignation for good reason within 12 months following a change in control of our Company, then subject to the NEO executing a general release of claims and continuing to comply with the terms of his or her employee confidentiality and non-compete agreement, in lieu of the above severance benefits, the NEO will be entitled to receive:

 

base salary continuation payments for 12 months;

 

payment of continued medical care premiums for up to 12 months;

 

any unpaid annual bonus for the year prior to the year in which his or her termination occurs, based upon actual performance and payable in a lump sum;

 

payment of his or her target annual bonus for the year in which termination occurs; and

 

accelerated vesting of all outstanding unvested Company equity awards that vest solely based on the passage of time.

For purposes of Mr. Ward’s employment agreement and our Other NEOs’ severance agreements:

 

“cause” is generally defined to include, subject to certain notice and cure rights: (i) commission of an act of fraud, embezzlement or theft against the Company or its subsidiaries; (ii) conviction of, or a plea of no contest to, a felony or, for our Other NEOs, a crime involving moral turpitude; (iii) willful nonperformance of material duties as an employee of the Company; (iv) material breach of any material agreement between the executive and the Company or any of its subsidiaries (including, for Mr. Ward, his employment agreement); (v) the gross negligence, willful misconduct or any other act of willful disregard for the Company’s or any of its subsidiaries’ best interests; or (vi) for our Other NEOs, unlawful use (including being under the influence) or possession of illegal drugs on the Company’s (or any of its affiliate’s) premises;

 

“good reason” is generally defined to include, if the NEO has provided timely notice, the Company has failed within 30 days to cure the condition, if curable, and the NEO timely resigns, the following occurrences without the NEO’s consent: (i) a material reduction in base salary or target bonus; (ii) a material diminution in duties, responsibilities, authority or, for Mr. Ward, title; (iii) for Mr. Ward, a requirement to report to a corporate officer or employee instead of reporting directly to the Board, other than any such requirement following a change in control, or a material breach of his employment agreement; (iv) a requirement that the NEO relocate to a principal place of employment more than seventy-five (75) miles from, for our Other NEOs, the location immediately prior to such relocation, or, for Mr. Ward, Cambridge, Massachusetts; (v) for Mr. Ward, the Company’s removal or failure to appoint him as a member of the Board, other than following a change in control; and (vi) for our Other NEOs, the failure of the Company to obtain an agreement from any successor to all or substantially all of the business or assets of the Company to assume the severance agreement; and

 

“change in control” means a change of control within the meaning of our 2011 Equity Incentive Plan.


32


 

Calculation of Potential Paymen ts upon Termination or Change in Control

The following table shows potential payments to our NEOs under the various severance and other arrangements and agreements that were in effect on December 31, 2016 for various scenarios involving a change in control or termination of employment, assuming a December 31, 2016 termination or transaction date and, where applicable, using the closing price of our Common Stock of $38.03 (as reported on the NASDAQ Global Market as of December 30, 2016).

 

 

Form of Payment

Name/Triggering Event

 

Cash

Severance

($)

 

Prorated

Bonus (2)

($)

 

Benefit

Continuation

($)

 

Equity

Awards (3)

($)

 

Company

Provided

Life

Insurance (10)

($)

 

Total (1)

($)

Robert E. Ward

 

 

 

 

 

 

 

 

 

 

 

 

Change in Control (4)

 

 

 

 

1,687,635

 

 

1,687,635

Death/Disability (5)

 

 

315,283

 

 

 

750,000

 

1,065,283

Retirement

 

 

 

 

 

 

Involuntary Termination (6)

 

525,471

 

315,283

 

23,733

 

843,818

 

 

1,708,305

Termination after Change in Control (7)

 

788,207

 

472,924

 

35,599

 

5,406,095

 

 

6,702,825

B. Nicholas Harvey

 

 

 

 

 

 

 

 

 

 

 

 

Change in Control

 

 

 

 

 

 

Death/Disability

 

 

 

 

 

666,000

 

666,000

Retirement

 

 

 

 

 

 

Involuntary Termination (8)

 

166,350

 

 

8,666

 

 

 

175,016

Termination after Change in Control (9)

 

332,700

 

133,080

 

17,333