PDS Biotechnology Corporation
300 Connell Drive
25B Vreeland Road, Suite 4000300
Berkeley Heights,
Florham Park, NJ 07922
07932
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held
On September 24, 2019on January 19, 2022
You are cordially invited to attend the
AnnualSpecial Meeting of Stockholders (the
“Annual“Special Meeting”) of PDS Biotechnology Corporation, a Delaware corporation. The
AnnualSpecial Meeting will be held on
September 24, 2019January 19, 2022 at 9 a.m.
local time atEastern Time. In light of the
officespublic health impact of
DLA Piper LLP (US), 51 John F Kennedy Parkway, Suite 120, Short Hills, New Jersey 07078the coronavirus outbreak, and in order to help protect the health and well-being of our stockholders and employees, the Special Meeting will be held virtually via live webcast. Stockholders will be able to attend the Special Meeting and submit questions and vote their shares during the Special Meeting from any location that has internet connectivity. There will be no physical in-person meeting. You or your proxyholder will be able to participate and vote by visiting www.virtualshareholdermeeting.com/PDSB2022SM and entering your 16-digit control number (included in the proxy card that will be mailed to you). To register and receive access to the virtual meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the enclosed proxy statement. The Special Meeting will be held for the following purposes:
| 1. | To elect three Class A directors of the Company, Gregory Freitag, Stephen Glover and Sir Richard Sykes, to hold office until the 2022 Annual Meeting of Stockholders or until their successors shall have been duly elected and qualified. |
| 2.1.
| To ratify the selectionprior approval of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “Plan Ratification Proposal”), which was adopted at the Company’s 2021 annual meeting of stockholders (the “2021 Annual Meeting of Stockholders”); |
| 3.2.
| To conduct any other business properly brought before the AnnualSpecial Meeting. These items of business are more fully described in this “Proxy Statement.” |
These items of business are more fully described in the proxy statement accompanying this notice.notice (which is incorporated by reference in this notice). Any action on the items of business described above may be considered at the AnnualSpecial Meeting at the time and on the date specified above or at any time and date to which the AnnualSpecial Meeting may be properly adjourned or postponed.
The record date for the AnnualSpecial Meeting is August 13, 2019November 29, 2021 (the “Record Date”).
Only stockholders of record at the close of business on
that datethe Record Date may vote at the
AnnualSpecial Meeting or any adjournment thereof.
This Stockholders of record as of April 26, 2021 (the record date of the 2021 Annual Meeting of Stockholders), other than holders whose identities or addresses cannot be determined from our records, are being given notice of annual meeting, proxy statement, and accompanying formthe Special Meeting, but are not entitled to attend the Special Meeting or vote on any matter presented at the Special Meeting unless they were also holders of proxy card, datedcommon stock as of August 16, 2019the Record Date.
This Notice of Special Meeting and Proxy Statement are
filed and arefirst being
made publicly available on August 16, 2019, and will be mailed to youdistributed on or about
August 23, 2019.By Order ofDecember 10, 2021. Stockholders may submit votes via the Internet, telephone, or mail. To vote online at the Special Meeting, please follow the instructions at www.virtualshareholdermeeting.com/PDSB2022SM. You will need the 16-digit control number, which is included in the proxy card.
This notice and proxy statement can be accessed directly at www.proxyvote.com.
As described in the proxy statement accompanying this notice (which is incorporated by reference in this notice), the Board of Directors
Andrew SaikChief Financial Officer
Berkeley Heights, New JerseyAugust 16, 2019You are cordially invited to attend the Annual Meeting in person. Whether or not you expect to attend the Annual Meeting, please complete, date, sign and return the proxy card, or vote over the telephone or the internet as instructed in these materials, as promptly as possible in order to ensure your representation at the Annual Meeting. Even if you have voted by proxy, you may still vote in person if you attend the Annual Meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder. is submitting certain matters for ratification by the Company’s stockholders pursuant to Section 204 of the Delaware General Corporation Law (the “DGCL”) and Delaware common law. This notice and accompanying proxy statement constitute the notice required to be given to our stockholders under Section 204 of the DGCL in connection with the ratifications contemplated by Proposal 1. Under Sections 204 and 205 of the DGCL, when a matter is submitted for ratification at a stockholder meeting, any claim that a defective corporate act or putative stock ratified under Section 204 is void or voidable due to the failure of authorization, or that the Delaware Court of Chancery should declare in its discretion that a ratification in accordance with Section 204 of the DGCL not be effective or be effective only on certain conditions, must be brought within 120 days from the validation effective time. Accordingly, if Proposal 1 is approved at the Special Meeting, any claim that the effectiveness of the acts ratified is void or voidable due to the failure to receive the requisite stockholder approval at the 2021 Annual Meeting of Stockholders, or that the Delaware Court of Chancery should declare, in its discretion, that the acts so
|
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ratified not be effective or be effective only on certain conditions, must be brought within 120 days from the time at which the ratification is approved by stockholders (which will be the validation effective time for purposes of Section 204 of the DGCL). Our Board of Directors has approved these ratifications pursuant to Section 204 of the DGCL.
By Order of the Board of Directors | | | |
/s/ Frank Bedu-Addo, Ph.D. | | | |
Frank Bedu-Addo, Ph.D. | | | |
President and Chief Executive Officer | | | |
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PDS Biotechnology Corporation
300 Connell Drive
25B Vreeland Road, Suite 4000300
Berkeley Heights,
Florham Park, NJ
0792207932
PROXY STATEMENT
FOR THE 2019 ANNUALSPECIAL MEETING OF STOCKHOLDERS
August 16, 2019
January 19, 2022
ABOUT THE
ANNUALSPECIAL MEETING
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING: This proxy statement and the accompanying notice is available at www.proxyvote.com
QUESTIONS AND ANSWERS ABOUT PROCEDURAL MATTERS
Why am I receiving these proxy materials?
Our
We have delivered paper proxy materials to you, because our board of directors is
providing thesesoliciting your proxy
materials to
you in connection with the solicitation of proxies for usevote at the
AnnualSpecial Meeting to be held on
Tuesday, September 24, 2019Wednesday, January 19, 2022 at 9 a.m.
local time,Eastern Time, and at any adjournment or postponement thereof, for the purpose of considering and acting upon the matters set forth herein.
We intend to mail the notice of Annual Meeting, this proxy statement, accompanying form of proxy card, and our 2018 Annual Report to Stockholders to you on or about August 23, 2019. This proxy statement includes information that we are required to provide to you by the Securities and Exchange Commission (“SEC”), and that is designed to assist you in voting your shares.
What is included in the proxy materials?
The proxy materials include:
This proxy statement for the AnnualSpecial Meeting;
Our 2018 Annual Report to Stockholders, which consists of Edge’s Annual Report on Form 10-K for the year ended December 31, 2018, and our Current Report on Form 8-K/A, filed with the SEC on April 30, 2019, which contains the audited financial statements of Private PDS (see “Explanatory Note” below) for the year ended December 31, 2018; and
The proxy card or a voting instruction form for the Annual Meeting, if you have requested that the proxy materials be mailed to you.Special Meeting.
How do I attend the AnnualSpecial Meeting?
The AnnualSpecial Meeting will be held on September 24, 2019January 19, 2022 at 9 a.m. local timeEastern Time via a virtual stockholder meeting through which you can listen to the meeting, submit questions and vote online. The Special Meeting can be accessed by visiting www.virtualshareholdermeeting.com/PDSB2022SM and entering your 16-digit control number which is included in the proxy card that will be mailed to you. The virtual meeting platform is fully supported across browsers and devices running the most updated version of applicable software and plugins. Participants should ensure that they have a strong Internet connection wherever they intend to participate in the meeting.
We recommend that you log in a few minutes before the Special Meeting on January 19, 2022 to ensure you are logged in when the meeting starts. Online check-in will begin at 8:55 a.m. Eastern Time.
Why is the offices of DLA Piper LLP (US), 51 John F Kennedy Parkway Suite 120, Short Hills, New Jersey 07078. Special Meeting a virtual, online meeting?
We have decided to hold a virtual meeting for efficiency purposes. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at a physical, in-person meeting.
Information on how to vote in person atonline during the AnnualSpecial Meeting is discussed below.
Can I ask questions at the Special Meeting?
Stockholders participating in the virtual meeting may submit questions or comments to the Company’s officers during the meeting.
If you would like to submit a question, you may do so by joining the virtual Special Meeting at www.virtualshareholdermeeting.com/PDSB2022SM and typing your question in the box in the Special Meeting portal.
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To help ensure that we have a productive and efficient meeting, and in fairness to all stockholders in attendance, you will also find posted our rules of conduct for the Special Meeting when you log in prior to its start. In accordance with the rules of conduct, we ask that you limit your remarks to one brief question or comment that is relevant to the Special Meeting or our business and that remarks are respectful of your fellow stockholders and meeting participants. Questions may be grouped by topic by our management with a representative question read aloud and answered. In addition, questions may be ruled as out of order if they are, among other things, irrelevant to our business, related to pending or threatened litigation, disorderly, repetitious of statements already made, or in furtherance of the speaker’s own personal, political or business interests. Questions will be addressed in the Q&A portion of the Special Meeting, as time permits.
What if I need technical assistance accessing or participating in the virtual Special Meeting?
If you encounter any difficulties accessing the virtual Special Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Stockholder Meeting login page. Technical support will be available starting at 8:55 a.m. Eastern Time on January 19, 2022.
Who can vote at the
AnnualSpecial Meeting?
Only stockholders of record at the close of business on the Record Date will be entitled to vote at the
AnnualSpecial Meeting. On
thisthe Record Date, there were
5,278,85028,437,940 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on the Record Date your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A., then you are a stockholder of record. As a stockholder of record, you may vote
in person at the
AnnualSpecial Meeting or vote by proxy. Whether or not you plan to attend the
AnnualSpecial Meeting, we urge you to fill out and return the enclosed proxy card to ensure your vote is counted.
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Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If on the Record Date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the
Noticeproxy card is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the
AnnualSpecial Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the
AnnualSpecial Meeting. However, since you are not the stockholder of record, you may not vote your shares
in person at the
AnnualSpecial Meeting unless you request and obtain a valid proxy from your broker or other agent.
What am I voting on?
There are two matters scheduled for a vote:
Proposal 1: Election
The ratification of
Gregory Freitag, Stephen Gloverthe prior approval of the Second Amended and
Sir Richard Sykes to serve as Class A directors untilRestated PDS Biotechnology Corporation 2014 Equity Incentive Plan, which was adopted at the
20222021 Annual Meeting of
Stockholders or until their successors are duly elected and qualified.Proposal 2: Ratification of the selection by the Board of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019.
Stockholders.
What if another matter is properly brought before the
AnnualSpecial Meeting?
The Board knows of no other matters that will be presented for consideration at the
AnnualSpecial Meeting. If any other matters are properly brought before the
AnnualSpecial Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
Whether you hold shares directly as the proposalstockholder of record or indirectly as the beneficial owner of shares held for you by a broker or other nominee (i.e., in “street name”), you may direct your vote without attending the Special Meeting. You may vote by granting a proxy or, for shares you hold in street name, by submitting voting instructions to elect Gregory Freitag, Stephen Glover and Sir Richard Sykesyour broker or nominee. In most instances, you will be able to do this by internet, telephone or by mail. Please refer to the Board,summary instructions below and those included on your proxy card or, for shares you may either vote “For”hold in street name, the voting instruction card provided by your broker or you may “Withhold” your vote, in each case, for all, some or none of the Board’s nominees. For the proposal to ratify the selection of KPMG LLP, you may vote “For” or “Against” or abstain from voting.nominee.
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The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the AnnualSpecial Meeting, vote by proxy over the telephone, vote by proxy through the internet, or vote by proxy using a proxy card that you may request or that we may elect to deliver to you. Whether or not you plan to attend the AnnualSpecial Meeting, we urge you to vote by proxy to ensure your vote is counted.
Via Webcast: You may
still attend the
AnnualSpecial Meeting
via the Internet and vote
in person even if you have already votedduring the Special Meeting. The Special Meeting can be accessed by
proxy.In Person: To votevisiting www.virtualshareholdermeeting.com/PDSB2022SM and entering your 16-digit control number which is included in person, come to the Annual Meeting by 8:45 am on September 24, 2019. Ballots will be available.
By Mail: To vote using the proxy card simply complete, signthat will be mailed to you. Please have your proxy card in hand when you access the website and datethen follow the instructions.
By Mail: You may vote by proxy by filling out the proxy card you may have received and returnreturning it promptly in the envelope provided. If you return your signed proxy card to us before the AnnualSpecial Meeting, we will vote your shares as you direct.
By Telephone: To vote over the telephone, dial toll-free (800) 690-6903 using a touch-tone phone and follow the recorded instructions. Have your proxy available when you call. You will be asked to provide the company number and control number from the Notice.proxy card. Your telephone vote must be received by 11:59 p.m., Eastern Time on September 23, 2019January 18, 2022 to be counted.
| • | Via the Internet: To vote through the internet, go to www.proxyvote.com and follow the on-screen instructions. Your internet vote must be received by 11:59 p.m., Eastern Time on September 23, 2019Via the Internet: To vote through the internet before the Special Meeting, go to www.proxyvote.com and follow the on-screen instructions. Please have your proxy card in hand when you access the website and then follow the instructions. Your internet vote must be received by 11:59 p.m., Eastern Time on January 18, 2022 to be counted. |
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Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent
If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in the notice to ensure that your vote is counted. Alternatively, you may vote by telephone or on the Internet as instructed by your broker or bank. To vote in persononline at the AnnualSpecial Meeting, please follow the instructions at www.virtualshareholdermeeting.com/PDSB2022SM. You will need the 16-digit control number, which is included in the proxy card that will be mailed to you. Whether or not you plan to attend the Special Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Special Meeting and vote online even if you have already voted by proxy.
Internet proxy voting is provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must
obtain a valid proxybear any costs associated with your Internet access, such as usage charges from
your broker, bank or other agent. Follow the instructions included with these proxy materials, or contact your broker, bank or other agent to request a proxy form.Internet access providers and telephone companies.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of the Record Date.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the
internetInternet or
in person at the
AnnualSpecial Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent
See “What are
broker non-votes?“broker non-votes”?” below.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, “For” the election of each of Gregory Freitag, Stephen Glover and Sir Richard Sykes as directors and “For” the ratification of prior approval of the selectionSecond Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan, which was adopted at the 2021 Annual Meeting of KPMG LLP as our independent registered public accounting firm. Stockholders.
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If any other matter is properly presented at the
AnnualSpecial Meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his
or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting
proxies.proxies as well as hosting the virtual-only Special Meeting. 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 reasonable cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered In addition, we have engaged Morrow Sodali to assist in more than one name orthe solicitation of proxies and provide related advice and information support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $40,000 in different accounts. Please follow the voting instructions on the Notices to ensure that all of your shares are voted.
total.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the
AnnualSpecial Meeting.
Stockholder of Record: Shares Registered in Your Name
If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
You may submit another properly completed proxy card with a later date.
You may grant a subsequent proxy by telephone or through the internet.
You may send a timely written notice that you are revoking your proxy to our Secretary at PDS Biotechnology Corporation at 25B Vreeland Road, Suite 300, Connell Drive, Suite 4000, Berkeley Heights,Florham Park, NJ 07922.
07932.
You may attend the AnnualSpecial Meeting via the Internet and vote in person.online. Simply attending the AnnualSpecial Meeting will not, by itself, revoke your proxy.
Your most current proxy card or telephone or internet proxy is the one that is counted.
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Beneficial Owner: Shares Registered in the Name of Broker, Bank or Other Agent
If your shares are held by your broker, bank or other agent as a nominee, you should follow the instructions provided by your broker, bank or other agent.
When are stockholder proposals and director nominations due for next year’s annual meeting?
Stockholder proposals, including a director nomination, to be considered for inclusion in the proxy statement for the 2020 annual meeting of stockholders must be received by us no later than May 27, 2020. The proposal must comply with SEC regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Upon receipt of any such proposal, we will determine whether or not to include such proposal in the proxy statement for the 2020 annual meeting of stockholders and proxy in accordance with regulations governing the solicitation of proxies.
Stockholders who wish to submit a proposal that is not intended to be included in our annual meeting proxy statement but to be presented for consideration at next year’s annual meeting, or who propose to nominate a candidate for election as a director at that meeting, are required by our bylaws to provide notice of such proposal or nomination no later than the close of business on July 26, 2020, but no earlier than the close of business on June 26, 2020, to be considered for a vote at next year’s annual meeting.
Any proposal, nomination or notice must contain the information required by our bylaws and be delivered to our principal executive offices at PDS Biotechnology Corporation, c/o Corporate Secretary, 300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922.
How are votes counted?
Votes
Before the Special Meeting, our Board will
be counted by the inspectorappoint one or more inspectors of election
appointed for the
Annual Meeting, whomeeting. The inspector(s) will
separatelydetermine the number of shares represented at the meeting, the existence of a quorum and the validity and effect of proxies. The inspector(s) will also receive, count,
forand tabulate ballots and votes and determine the
proposal to elect each of Gregory Freitag, Stephen Glover and Sir Richard Sykes, votes “For,” “Withhold” and broker non-votes; and, with respect to the proposal to ratify the selection of KPMG LLP, votes “For” and “Against,” abstentions and, if applicable, broker non-votes. Abstentions will have the same effect as an “Against” vote for the proposal to ratify the selection of KPMG LLP. Because a director nominee is elected by the affirmative voteresults of the
holders of a plurality ofvoting on each matter that comes before the
shares of common stock voted, abstentions will have no effect on the vote for the proposal to elect each of Gregory Freitag, Stephen Glover and Sir Richard Sykes. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.Special Meeting.
What are “broker
non-votes?”non-votes”?
Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker or nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker or nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under theapplicable rules, and interpretations of Nasdaq, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested) and executive compensation, including the advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation.
The Plan Ratification Proposal is a “non-routine” matter under applicable rules and there are no “routine” matters for which broker non-votes may be submitted at the Special Meeting. Therefore, brokers that hold your shares do not have discretionary authority to vote your shares with respect to the Plan Ratification Proposal and broker non-votes, if any, will be treated as not present at the Special Meeting.
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How many votes are needed to approve each proposal?
For the elections of Gregory Freitag, Stephen Glover and Sir Richard Sykes, a plurality of the votes cast will be required for election. Only votes “For” or “Withheld” will affect the outcome.
To be approved, the ratification of the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019,Plan Ratification Proposal, must receive “For” votes from the holders of a majority of shares present in personat the Special Meeting or represented by proxy and entitled to vote on the matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Broker non-votes are not entitled to vote with respect to the Plan Ratification Proposal and will have no effect.
Non-votes will have no effect.
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What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present at the
AnnualSpecial Meeting
in person or represented by proxy.
Virtual attendance at the Special Meeting constitutes presence in person for purposes of a quorum at the Special Meeting. On the Record Date, there were
5,278,85028,437,940 shares outstanding and entitled to vote. Thus, the holders of
2,639,42514,218,971 shares must be present
in personat the Special Meeting or represented by proxy
at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the AnnualSpecial Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. Broker non-votes will not be treated as present at the Special Meeting and, thus, will not be entitled to vote with respect to the Plan Ratification Proposal and will not be counted for quorum purposes.
If there is no quorum, either the chairman of the
AnnualSpecial Meeting or the holders of a majority of shares present at the
AnnualSpecial Meeting
in person or represented by proxy may adjourn the
AnnualSpecial Meeting to another date.
Abstentions and broker non-votes, if any, will not have any effect on the result of the vote for adjournment.
How can I find out the results of the voting at the
AnnualSpecial Meeting?
Preliminary voting results will be announced at the
AnnualSpecial Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the
AnnualSpecial Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the
AnnualSpecial Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
Who can help answer your questions?
If you have questions about the
AnnualSpecial Meeting or would like additional copies of this Proxy Statement, you should contact
Andrew SaikHillary Yegen at PDS Biotechnology Corporation,
25B Vreeland Road, Suite 300,
Connell Drive, Suite 4000, Berkeley Heights,Florham Park, NJ
07922.07932.
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RATIFICATION OF THE PRIOR APPROVAL OF THE SECOND AMENDED AND RESTATED PDS
BIOTECHNOLOGY CORPORATION 2014 EQUITY INCENTIVE PLAN
Overview
At the Special Meeting, the Company’s stockholders will be asked to ratify the approval of the Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Inventive Plan (the “2014 Plan”). On December 8, 2020, the Board approved the 2014 Plan subject to stockholder approval at the 2021 Annual Meeting of Stockholders. The 2014 Plan was previously submitted for consideration by the Company’s stockholders at the 2021 Annual Meeting of Stockholders. At the 2021 Annual Meeting of Stockholders, the Company determined that the proposal to approve the 2014 Plan received the requisite number of votes for approval. As part of this determination, broker non-votes were treated as having no effect on the outcome of this proposal. Following the 2021 Annual Meeting of Stockholders, a complaint (the “Complaint”) was filed in the Court of Chancery of the State of Delaware (C.A. No. 2021-0644 JRS) against the Company, certain executive officers of the Company, and the members of the Board, in which it was alleged that, under the voting standard contained in the Company’s bylaws in effect at the time of the 2021 Annual Meeting of Stockholders, broker non-votes should have been treated as a vote “AGAINST” the proposal. If the broker non-votes were treated as a vote “AGAINST,” the proposal would not have been approved at the 2021 Annual Meeting of Stockholders.
Although the Company does not believe that the interpretation reflected in the Complaint regarding the bylaws of the Company that were in effect as of the time of the 2021 Annual Meeting of Stockholders was correct, in an effort to resolve any ambiguity regarding the approval of the 2014 Plan at the 2021 Annual Meeting of Stockholder raised by the Complaint, the Company has determined that it would be advisable and in the best interests of the Company and its stockholders to submit this Proposal 1 to the Company’s stockholders for ratification and approval pursuant to Section 204 of the DGCL. Accordingly, the prior approval of the 2014 Plan is being submitted to the Company’s stockholders for consideration and ratification at the Special Meeting.
Under Section 204 of the DGCL, a statutory process exists by which a Delaware corporation can ratify defective corporate acts, retroactive to the date the act was originally taken, if the procedures of Section 204 of the DGCL are followed. A defective corporate act is any act or transaction that would have been within the power of the corporation at the time taken, but which is void or voidable due to a failure of authorization. No defective corporate act will be deemed void or voidable solely as a result of failure of authorization if ratified in accordance with Section 204. On November 29, 2021, the Board, declared the ratification of the 2014 Plan advisable and in the best interest of the Company, approved the ratification of the 2014 Plan and recommended that the stockholders of the Company ratify the prior approval of the 2014 Plan. The resolutions of the Board approving ratification of the 2014 Plan and setting forth the reasons therefor is attached hereto as Exhibit A and the notice required to be given pursuant to Section 204(d) of the DGCL is attached as Exhibit B.
In addition, the Company has issued stock options to purchase an aggregate of 1,224,630 shares of its common stock to certain of its employees, directors and consultants (the “Options”) under the 2014 Plan prior to and since the date of the 2021 Annual Meeting of Stockholders. Accordingly, by ratifying the approval of the 2014 Plan, stockholders will also be ratifying the approval of the Options granted thereunder.
The 2014 Plan is available as Appendix A to the Company’s definitive proxy statement for the 2021 Annual Meeting of Stockholders, filed with the SEC on April 29, 2021.
Reasons for the Ratification of the Prior Approval of the 2014 Plan
As further described in the proxy statement for the 2021 Annual Meeting of Stockholders, the Board, the Compensation Committee and management believe that the effective use of stock-based incentive compensation is vital to our ability to achieve strong performance in the future. The 2014 Plan will allow us to continue to maintain the key policies and practices adopted by our management and Board to align employee and stockholder interests. In addition, our future success depends, in large part, upon our ability to maintain a competitive position in attracting, retaining and motivating key personnel. We believe that the 2014 Plan is essential to permit our management to continue to provide long-term, equity-based incentives to present and future key employees, consultants and directors.
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Effect of the Ratification of the Prior Approval of the 2014 Plan
The ratification of the prior approval of the 2014 Plan will become effective at the time this Proposal 1 is approved by the stockholders. At that effective time, unless otherwise determined in an action brought pursuant to Section 205 of the DGCL (as described below), the prior approval of the 2014 Plan shall no longer be void or voidable, and the effect of the ratification shall be retroactive to June 17, 2021, which was the date of the 2021 Annual Meeting of Stockholders at which the 2014 Plan was approved.
Summary of the 2014 Plan
The 2014 Plan includes a number of features that will reinforce the alignment between the interests of participants in the 2014 Plan and those of the company’s stockholders. These provisions include, but are not limited to, the following:
No Discounted Options or SARs. Stock options and SARs may not be granted with exercise prices lower than the fair market value of the underlying shares on the grant date.
No Repricing, Replacement or Buy Back without Stockholder Approval. PDS may not reprice, replace or buy back any Award, including an underwater stock option or SAR, without stockholder approval.
No Evergreen Provision. The 2014 Plan does not contain an “evergreen” feature that automatically increases the number of shares available for issuance pursuant to awards. Therefore, PDS must obtain stockholder approval each time it desires to authorize additional shares for awards.
No Liberal Share Recycling. Any shares tendered in payment of an exercise price or the tax liability with respect to an award, including shares withheld from any such award, will not be available for future awards under the 2014 Plan.
Non-Employee Director Limit. Under the 2014 Plan, the sum of any cash compensation and the grant date fair value of Awards (as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) granted under the Plan to a non-employee director as compensation for services as a non-employee director during any calendar year may not exceed $500,000 for an annual grant, provided however, in a non-employee director’s first year of service, compensation for services may not exceed $1,000,000. The Compensation Committee may make exceptions to these limits for individual non-employee directors only in extraordinary circumstances.
Recoupment. Awards granted under the 2014 Plan (and all shares acquired thereunder) are subject to mandatory repayment and clawback pursuant to the terms of PDS’s corporate governance guidelines, and as may otherwise be required under any federal or state laws or the listing requirements of any applicable securities exchange.
No Transferability. No Award may be transferred, assigned, pledged or encumbered by a participant to any third party except pursuant to the laws of descent and distribution or as approved by the Compensation Committee for estate planning or charitable purposes.
No Automatic Grants. The 2014 Plan does not provide for “reload” or other automatic grants to participants.
No Tax Gross-Ups. The 2014 Plan does not provide for any tax gross-ups to participants.
General
Under the 2014 Plan, PDS may grant awards, or Awards, with respect to its common stock to employees and consultants of the company and its subsidiaries, as well as non-employee members of any board of directors or board of managers of the company or of its subsidiaries. Awards may consist of restricted stock, restricted stock units, or PDS RSUs, stock options, stock appreciation rights, or SARs, and other stock-based awards. Each Award will be governed by the provisions of the 2014 Plan and the applicable Award agreement. The 2014 Plan is not qualified under Section 401(a) of the Code and is not subject to the Employee Retirement Income Security Act of 1974, as amended.
Purpose
The general purpose of the 2014 Plan is to provide an effective method of compensating employees and consultants, non-employee directors of the company and its subsidiaries and non-employee directors of the board of
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directors of the company, and to align the interests of these individuals with those of the company’s stockholders. The 2014 Plan will accomplish these goals by allowing eligible employees, consultants and non-employee directors of the company and its subsidiaries to receive Awards.
Administration
The 2014 Plan is administered by PDS’s Compensation Committee, which has the power to: (i) select the employees, consultants and non-employee directors who will receive Awards pursuant to the 2014 Plan; (ii) determine the type or types of Awards to be granted to each participant; (iii) determine the number of shares of common stock to which an Award will relate, the terms and conditions of any Award granted under the 2014 Plan, and all other matters to be determined in connection with an Award; (iv) determine the exercise price or purchase price (if any) of an Award; (v) determine whether, to what extent, and under what circumstances an Award may be cancelled, forfeited, or surrendered; (vi) determine whether performance goals to which an Award is subject are satisfied; (vii) correct any defect or supply any omission or reconcile any inconsistency in the 2014 Plan, and adopt, amend and rescind such rules, regulations, guidelines, forms of agreements and instruments relating to the 2014 Plan as it may deem necessary or advisable; and (viii) construe and interpret the 2014 Plan and make all other determinations as it may deem necessary or advisable for the administration of the 2014 Plan. The Compensation Committee may delegate some or all of its powers to any of PDS’s executive officers or any other person, other than its authority to grant Awards to certain individuals (such as board members and executive officers).
Eligibility
All of PDS’s employees and consultants, all employees and consultants of PDS’s subsidiaries, and all non-employee members of PDS’s board of directors and those of PDS’s subsidiaries are eligible to receive Awards under the 2014 Plan. As of the Record Date, six (6) non-employee directors, twenty-two (22) employees, and two (2) consultants are eligible to participate in the 2014 Plan.
Shares Available Under the 2014 Plan
The maximum number of shares authorized for issuance under the 2014 Plan is 3,442,455 shares of common stock (which is equal to 3,339,243, plus the total number of shares that remained available for issuance, that are not covered by outstanding awards issued under the Amended and Restated PDS Biotechnology Corporation Equity Incentive Plan, immediately prior to December 8, 2020). This is referred to as the “Plan Limit.” The Plan Limit shall be, without duplication, (x) reduced on the date of grant of any Award by one share for each share of common stock made subject to an Award granted under the 2014 Plan, (y) increased by the number of shares underlying an Award or portion thereof granted under the 2014 Plan or the Amended and Restated PDS Biotechnology Corporation Equity Incentive Plan (the “Prior Plan”), the Edge Therapeutics, Inc. 2010 Equity Incentive Plan or the Edge Therapeutics, Inc. 2012 Equity Incentive Plan (the “Prior Plans”), that is forfeited, cancelled or otherwise terminates, expires or is settled for any reason whatsoever without an actual distribution of shares, and (z) increased, on the applicable forfeiture date, by the number of shares of common stock that are forfeited back to PDS after issuance due to a failure to meet a contingency or condition with respect to any Award or portion thereof granted under the Prior Plans, 2014 Plan, or the Prior Plan.
Any shares tendered by a participant in payment of an exercise price for an Award (or an award granted under the Prior Plan) or the tax liability with respect to an Award (or an award granted under the Prior Plan) including shares withheld from any such Award or award, will not be available for future Awards hereunder. Common stock awarded under the 2014 Plan may be reserved or made available from PDS’s authorized and unissued common stock or from common stock reacquired and held in PDS’s treasury. Any shares of common stock issued by PDS through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares of common stock available for Awards under the 2014 Plan.
The maximum number of shares that may be granted through the exercise of incentive stock options is 11,000,000 shares. In addition, under the 2014 Plan, the sum of any cash compensation and the grant date fair value of Awards (as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) granted to a non-employee director as compensation for services as a non-employee director during any calendar year may not exceed $500,000 for an annual grant, provided, however, in a non-employee director’s first year of service, compensation for services may not exceed $1,000,000. The Compensation Committee may make exceptions to these limits for individual non-employee directors only in extraordinary circumstances.
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Awards - Generally
Awards may be granted on the terms and conditions described below. In addition, the Compensation Committee may impose on any Award or the settlement or exercise thereof, at the date of grant or thereafter, such additional terms and conditions, not inconsistent with the provisions of the 2014 Plan, as the Compensation Committee may determine, including without limitation terms requiring forfeiture of Awards in the event of the termination of service of the participant. The right of a participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance goals as may be determined by the Compensation Committee. Each Award will be evidenced by an Award agreement that will include additional terms and conditions that may be applicable to such Award.
Awards - Performance Goals
In the discretion of the Compensation Committee, any Award may be granted subject to performance goals that must be met by the end of a certain specified performance period. Performance goals may be described in terms of company-wide objectives or objectives that are related to the performance of the individual participant or the subsidiary, division, department or function within PDS or any subsidiary in which the participant is employed. Performance goals may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Performance goals may, without limitation, be based on the following: specified levels of or increases in return on capital, equity or assets; earnings measures/ratios (on a gross, net, pre-tax or post-tax basis), including diluted earnings per share, total earnings, operating earnings, earnings growth, earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation and amortization (EBITDA); net economic profit (which is operating earnings minus a charge to capital); net income; operating income; sales; sales growth; gross margin; direct margin; share price (including but not limited to growth measures and total shareholder return); operating profit; per period or cumulative cash flow (including but not limited to operating cash flow and free cash flow) or cash flow return on investment (which equals net cash flow divided by total capital); inventory turns; financial return ratios; market share; balance sheet measurements such as receivable turnover; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; debt reduction; strategic innovation, including but not limited to entering into, substantially completing, or receiving payments under, relating to, or deriving from a joint development agreement, licensing agreement, or similar agreement; customer or employee satisfaction; individual objectives; operating efficiency; regulatory body approvals for commercialization of products; implementation or completion of critical projects or related milestones (including, without limitation, milestones such as clinical trial enrollment targets, commencement of phases of clinical trials and completion of phases of clinical trials); partnering or similar transactions; any combination of any of the foregoing criteria; or any other metric as determined by the Compensation Committee.
Awards - Types of Awards
Restricted Stock. In a restricted stock award, a participant receives a grant of shares of common stock that are subject to certain restrictions, including forfeiture of such stock upon the happening of certain events. Unless otherwise provided in an award agreement, during the restriction period, holders of restricted stock will have all the rights of a stockholder with respect to the restricted stock, including, without limitation, the right to receive dividends (whether in cash or additional shares of common stock) and to vote shares of restricted stock, provided that any dividends declared on restricted stock shall be subject to the same restrictions as the underlying restricted stock and any cash dividends shall be held by PDS and released to the participant upon the vesting of the underlying restricted stock.
Restricted Stock Units. A PDS RSU is a grant of the right to receive a payment in PDS’s common stock or cash, or in a combination thereof, equal to the fair market value of a share of PDS’s common stock on the expiration of the applicable restriction period or periods. During such period or periods, the participant will generally have no rights as a stockholder with respect to any such shares. However, the Compensation Committee may provide in an Award that amounts equal to any dividends declared during the restriction period will be credited to the participant’s account and deemed to be reinvested in additional PDS RSUs that will be subject to the same forfeiture restriction as the PDS RSUs to which the dividend equivalent payment relates.
Stock Options. Stock options granted under the 2014 Plan may be either ISOs or non-qualified options. The exercise price of an option shall be determined by the Compensation Committee, but must be at least 100% of the fair market value of PDS’s common stock on the date of the grant. As of the Record Date, fair market value of a share
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of PDS common stock, determined by the last reported sale price per share of common stock on that date was $9.45. If the participant owns, directly or indirectly, shares constituting more than 10% of the total voting power of all classes of PDS’s stock or the stock of any subsidiary, the exercise price of an incentive stock option must be at least 110% of the fair market value of a share of common stock on the date the incentive stock option is granted. Each Award of an option shall specify the time or times at which the option may be exercised and any terms and conditions applicable to the option, including (i) a vesting schedule which may be based upon the passage of time, attainment of performance goals, or a combination thereof, (ii) whether the exercise price for an option shall be paid in cash, with shares of common stock, with a combination of cash and shares of common stock, or with other legal consideration, (iii) the methods of payment, which may include payment through cashless and net exercise arrangements, to the extent permitted by applicable law and (iv) the methods by which, and/or the time at which, common stock will be delivered or deemed to be delivered to a participant upon exercise of an option. The term of an option may not exceed ten years from the date of grant (or five years from the date of grant in the case of an incentive stock option granted to a participant who owns, directly or indirectly, shares constituting more than 10% of the total voting power of all classes of PDS’s stock or the stock of any subsidiary).
Stock Appreciation Rights. A grant of a SAR entitles the holder to receive, upon exercise of the SAR, the excess of the fair market value of one share of PDS’s common stock on the date of exercise over the grant price of the SAR as determined by the Compensation Committee. SARs will be settled either in cash, shares of common stock, or a combination of the foregoing. The grant price of a SAR may never be less than 100% of the fair market value of a share of common stock on the date of grant. The term of an SAR shall be no greater than ten years from the date of grant.
Other Stock-Based Awards. The Compensation Committee is authorized, subject to limitations under applicable law, to grant participants any type of Award that is payable in, or valued in whole or in part by reference to shares of PDS’s common stock, and that is deemed by the Compensation Committee to be consistent with the purposes of the 2014 Plan, including, without limitation, dividend equivalents, performance shares and performance units.
Change in Control and other Corporate Transactions
With respect to SARs and options outstanding on a change of control, the Compensation Committee in its discretion generally may (a) cancel any outstanding options or SARs in exchange for a cash payment in an amount equal to the excess, if any, of the fair market value of the common stock underlying the unexercised portion of the option or SAR as of the date of the change in control over the exercise price or grant price; (b) terminate any option or SAR, effective immediately prior to the change in control, provided that the participant has an opportunity to exercise his or her Award within a specified period following a written notice of the change in control; (c) terminate any options or SARs if the applicable performance goals were not satisfied as of the change in control; (d) require the successor or acquiring company (or its parents or subsidiaries) to assume any outstanding option or SAR or to substitute options or SARs with Awards involving the common equity securities of an acquirer or successor on terms and conditions necessary to preserve the rights of participants, or (e) take such other actions as the Compensation Committee believes may be appropriate. With respect to Restricted Stock, PDS RSUs or other Awards, the Compensation Committee generally may (a) provide in an Award agreement that, upon the occurrence of a change in control, any vested Restricted Stock, PDS RSUs and other Awards shall become immediately vested and/or payable, provided that if such Awards constitute “non-qualified deferred compensation” (within the meaning of Code Section 409A) such change in control satisfies the requirements of Treasury Regulation Section 1.409A-3(i)(5)(v), (vi) or (vii); (b) with respect to any Restricted Stock, PDS RSUs or other Awards that do not constitute “non-qualified deferred compensation,” elect to settle such PDS RSUs and other Awards upon a change in control, (c) terminate any Restricted Stock, PDS RSUs or other Awards if the applicable performance goals were not satisfied as of the change in control, (d) require the successor or acquiring company (or its parents or subsidiaries), following a change in control, to assume such Restricted Stock, PDS RSUs and other Awards or to substitute such Awards with Awards involving the equity securities of the acquiring or successor company on terms and conditions so as to preserve the rights of participants, or (e) take such other actions as the Compensation Committee believes may be appropriate (including terminating such Awards for a cash payment equal to the fair market value of the underlying shares).
Certain Corporate Transactions
In order to prevent dilution or enlargement of the rights of participants under the 2014 Plan as a result of any stock dividend, recapitalization, forward stock split or reverse stock split, reorganization, division, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution or
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other similar corporate transaction or event that affects PDS’s common stock, the Compensation Committee shall adjust (i) the number and kind of shares of common stock which may be issued in connection with Awards to participants, (ii) the number and kind of shares of common stock issuable in respect of outstanding Awards, (iii) the aggregate number and kind of shares of common stock available under the 2014 Plan, and (iv) the exercise or grant price relating to any Award. In addition, the Compensation Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards, including any performance goals, in recognition of unusual or nonrecurring events (including, without limitation, events described above) affecting PDS or any subsidiary, or in response to changes in applicable laws, regulations, or accounting principles.
Termination of Employment or Other Service
Unless otherwise provided in an Award agreement, upon a participant’s termination of employment or other service with PDS, the unvested portion of such participant’s Awards shall cease to vest and shall be forfeited and the vested portion of such participant’s options and SARs shall remain exercisable by the participant or the participant’s beneficiary or legal representative, as the case may be, for a period of (i) 30 days in the event of a termination by PDS or a subsidiary without cause, (ii) 180 days in the event of a termination due to death or disability and (iii) 30 days in the event of the participant’s voluntary termination, but in all cases, not beyond the normal expiration date of the option or SAR. All of a participant’s options and SARs, whether or not vested, shall be forfeited immediately upon such participant’s termination by PDS or a subsidiary for cause.
Amendment and Termination
The 2014 Plan will automatically terminate on December 7, 2030. In addition, prior to the automatic termination of the 2014 Plan, the Board may amend, alter, suspend, discontinue, or terminate the 2014 Plan without the consent of stockholders, except that any such action shall be subject to the approval of PDS’s stockholders if such action would increase the number of shares subject to the 2014 Plan or decrease the price at which Awards may be granted, or if stockholder approval with respect to such action is required by any applicable law or regulation or the rules of any stock exchange on which PDS’s common stock may then be listed or quoted. The Board must also obtain stockholder approval in order to take any action that would result in the repricing, replacement or repurchase of any option Award. The Board may otherwise determine to submit such other changes to the 2014 Plan for approval by PDS’s stockholders in its discretion. Generally, without the consent of an affected participant, no amendment, alteration, suspension, discontinuation, or termination of the 2014 Plan may materially and adversely affect the rights of such participant under any outstanding Award.
Recoupment
Any Award granted under the 2014 Plan will be subject to mandatory repayment by the participant to PDS pursuant to the terms of any company “clawback” or recoupment policy that is directly applicable to the 2014 Plan and set forth in an Award agreement or as required by law.
Transfer Restrictions
The 2014 Plan prohibits participants from pledging, encumbering, assigning or transferring any Award, right or interest under the 2014 Plan to any third party, except for assignments or transfers that occur by way of the laws of descent and distribution. Awards and rights under the 2014 Plan will be exercisable during the life of a participant only by the participant or his legal guardian. However, the Compensation Committee, may in its discretion, permit transfers of options, SARs and/or restricted stock to certain immediate family members of the participant, to trusts for the benefits of such family members and to partnerships in which such family members are the only partners.
Foreign Nationals
Without amending the 2014 Plan, Awards may be granted to participants who are foreign nationals or are employed or providing services outside the United States or both, on such terms and conditions different from those specified in the 2014 Plan as may, in the judgment of the Compensation Committee, be necessary or desirable to further the purpose of the 2014 Plan. Moreover, the Compensation Committee may approve such supplements to, or amendments, restatements or alternative versions of, the 2014 Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the 2014 Plan as in effect for any other purpose.
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Options Previously Granted Pursuant to the 2014 Plan
The following table includes all of the Options, each of which will be ratified by the Board if this Proposal 1 is approved:
Named Executive Officers:
| | | |
Frank Bedu-Addo, Ph.D. | | | 707,800 |
Gregory Conn, Ph.D. | | | 122,400 |
Lauren V. Wood | | | 210,500 |
Non-Employee Directors:
| | | |
Kamil Ali-Jackson, Esq. | | | 9,000 |
Otis Brawley, M.D. | | | 9,000 |
Gregory Freitag, J.D., CPA | | | 9,000 |
Stephen Glover | | | 9,000 |
Ilian Iliev, Ph.D. | | | 9,000 |
Sir Richard Sykes | | | 9,000 |
All Employees and Consultants (Excluding Executive Officers) as a Group | | | 129,930 |
New Plan Benefits
The following table includes additional information regarding the equity awards currently contemplated to be made under the 2014 Plan:
Frank Bedu-Addo, Ph.D.
President, Chief Executive Officer And Director
| | | $1,719,954(1) | | | 707,800 |
Gregory L. Conn, Ph.D.
Chief Scientific Officer
| | | $297,432(1) | | | 122,400 |
Lauren V. Wood, M.D.
Chief Medical Officer
| | | $511,515(1) | | | 210,500 |
Matthew Hill
Chief Financial Officer And Principal Accounting Officer
| | | $0(1) | | | 0 |
All Current Executive Officers As A Group(4) | | | $2,528,901(1) | | | 1,040,700 |
All Current Directors Who Are Not Executive Officers As A Group(5) | | | $537,300(3) | | | 54,000 |
All Employees, Including All Current Officers Who Are Not Executive Officers, As A Group | | | $315,730(1) | | | 129,930 |
(1)
| The dollar value was calculated by multiplying the Number of Shares from the adjacent column by $2.43, which was the closing price per share of PDS common stock on December 8, 2020. |
(2)
| This column corresponds to the number of stock options subject to the Continent Grants and the number of stock options subject to the 2021 Director Grants. |
(3)
| The dollar value was calculated by multiplying the Number of Shares from the adjacent column by $9.95, which was the closing price per share of PDS common stock on June 17, 2021. |
(4)
| The amounts in this row are the aggregate of the Options. |
(5)
| The amounts in this row are the aggregate of the 2021 Director Grants, which consist of an annual grant equal to 9,000 stock options, which are intended to be granted to each non-employee director, subject to the director’s election or re-election at the Annual Meeting. |
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Equity Compensation Plan Information
For information regarding awards made under the 2014 Plan outstanding as of December 31, 2020, see “SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS AS OF DECEMBER 31, 2020” below.
Summary of U.S. Federal Income Tax Consequences
The following discussion is a summary of certain U.S. federal income tax considerations that may be relevant to participants in the 2014 Plan. This discussion is for general informational purposes only and does not purport to address specific federal income tax considerations that might apply to a participant based on his or her particular circumstances, nor does it address state, local or foreign income tax or other tax considerations that may be relevant to a participant.
PARTICIPANTS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR FEDERAL INCOME TAX CONSEQUENCES APPLICABLE TO THEM AS A RESULT OF PARTICIPATING IN THE 2014 PLAN, AS WELL AS WITH RESPECT TO ANY APPLICABLE STATE, LOCAL OR FOREIGN INCOME TAX OR OTHER TAX CONSIDERATIONS.
Incentive Stock Options. Upon the grant of an ISO, the option holder will not recognize any income. In addition, no income for federal income tax purposes will be recognized by an option holder upon the exercise of an ISO if the requirements of the 2014 Plan and the Code are satisfied, including, without limitation, the requirement that the option holder remain employed by the company or a subsidiary during the period beginning on the date of grant and ending on the day three months (or, in the case of the option holder’s disability, one year) before the date the option is exercised. If an option holder has not remained an employee of the company or a subsidiary during the period beginning on the date of grant of an ISO and ending on the day three months (or one year in the case of the option holder’s disability) before the date the option is exercised, the exercise of such option will be treated as the exercise of a non-qualified option and will have the tax consequences described below in the section entitled “Non-Qualified Options.”
The federal income tax consequences upon a disposition of the shares acquired pursuant to the exercise of an ISO depends upon when the disposition of the shares occurs and the type of such disposition.
If the disposition of such shares occurs more than two years after the date of grant of the ISO and more than one year after the date of exercise, any gain or loss recognized upon such disposition will be long-term capital gain or loss and the company or a subsidiary, as applicable, will not be entitled to any income tax deduction with respect to such ISO.
If the disposition of such shares occurs within two years after the date of grant of the incentive stock option or within one year after the date of exercise, or a disqualifying disposition, the excess, if any, of the amount recognized over the option price will be treated as taxable income to the participant and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a deduction equal to the amount of ordinary income recognized by the option holder. The amount of ordinary income recognized by the option holder in a disqualifying disposition (and the corresponding deduction to the company or a subsidiary, as applicable) is limited to the lesser of the gain on such sale and the difference between the fair market value of the shares on the date of exercise and the option price. Any gain recognized in excess of this amount will be treated as short-term or long-term capital gain (depending upon whether the shares have been held for more than one year).
If the option price exceeds the amount recognized upon such a disposition, the difference will be short-term or long-term capital loss (depending upon whether the shares have been held for more than one year).
If a participant is subject to the Alternative Minimum Tax, or the AMT, the tax consequences to the participant may differ from those described above. Under the AMT, a taxpayer will be required to pay an alternative minimum tax if the taxpayer’s “tentative minimum tax” (as defined in Section 55 of the Code) exceeds his or her regular tax for the year in question. For purposes of calculating the AMT, upon the exercise of an ISO, a taxpayer is required to include in his “alternative minimum taxable income” (as defined in Section 55 of the Code) for the taxable year in which such exercise occurs an amount equal to the amount of income the taxpayer would have recognized if the
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option had not been an ISO (i.e., the difference between the fair market value of the shares on the date of exercise and the option’s exercise price). As a result, unless the shares acquired upon the exercise of the ISO are disposed of in a taxable transaction in the same year in which such option is exercised, the option holder may incur AMT as a result of the exercise of an ISO.
Except as provided in the paragraph immediately below, if an option holder elects to tender shares in partial or full payment of the option price for shares to be acquired upon the exercise of an ISO, the option holder will not recognize any gain or loss on such tendered shares. No income will be recognized by the option holder with respect to the shares received by the option holder upon the exercise of the ISO if the requirements of the 2014 Plan and the Code described above are met. The number of shares received equal to the number of shares surrendered will have a tax basis equal to the tax basis of the surrendered shares. Shares received in excess of the number of shares surrendered will have a tax basis of zero. The holding period of the shares received equal to the number of shares tendered will be the same as such tendered shares’ holding period, and the holding period for the excess shares received will begin on the date of exercise. Solely for purposes of determining whether a disqualifying disposition has occurred with respect to shares received upon exercise of the ISO, all shares are deemed to have a holding period beginning on the date of exercise.
If an option holder tenders shares that were previously acquired upon the exercise of an ISO in partial or full payment of the option price for shares to be acquired upon the exercise of another ISO, and each such exercise occurs within two years after the date of grant of such ISO or within one year after such shares were transferred to the option holder, the tender of such shares will be a disqualifying disposition with the tax consequences described above regarding disqualifying dispositions. The shares acquired upon such exercise will be treated as shares acquired upon the exercise of an ISO.
If the holding rules described above are not satisfied, gain recognized on the disposition of the shares acquired upon the exercise of an ISO will be characterized as ordinary income, and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction. The amount of such gain will be equal to the difference between the exercise price and the fair market value of the shares at the time of exercise. Special rules may apply to disqualifying dispositions where the amount recognized is less than the value at exercise. Any excess of the amount recognized upon such disposition over the fair market value at exercise will generally be long-term or short-term capital gain depending on the holding period involved. Notwithstanding the foregoing, in the event that the exercise of the option is permitted other than by cash payment of the exercise price, various special tax rules may apply.
Non-Qualified Options. An option holder will not recognize taxable income, and the company or a subsidiary, as applicable, is not entitled to a deduction, when a non-qualified option is granted. Upon the exercise of a non-qualified option, an option holder will recognize compensation taxable as ordinary income equal to the excess of the fair market value of the shares received over the option price of the non-qualified option and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction. An option holder’s tax basis in the shares received upon the exercise of a non-qualified option will be equal to the fair market value of such shares on the exercise date, and the option holder’s holding period for such shares will begin at that time. Upon the subsequent sale of the shares received in exercise of a non-qualified option, the option holder will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year. The amount of such gain or loss will be equal to the difference between the amount recognized in connection with the sale of the shares and the option holder’s tax basis in such shares.
If a non-qualified option is exercised in whole or in part with shares held by the option holder, the option holder will not recognize any gain or loss on such tendered shares. The number of shares received by the option holder upon such an exchange that are equal in number to the number of tendered shares will retain the tax basis and the holding period of the tendered shares for capital gain purposes. The shares received by the option holder in excess of the number of shares used to pay the exercise price of the option will have a basis equal to the fair market value on the date of exercise and their holding period will begin on such date.
Restricted Stock. Upon the grant of an award of restricted stock, the shares are considered to be subject to a substantial risk of forfeiture for federal income tax purposes. If a participant who receives restricted stock does not make the election described below, the participant does not recognize any taxable income upon the receipt of restricted stock and the company or a subsidiary, as applicable, is not entitled to a deduction at such time. When the forfeiture restrictions with respect to the restricted stock lapse, the participant will recognize compensation taxable
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as ordinary income equal to the fair market value of the shares at that time, less any amount paid for the shares and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction. A participant’s tax basis in restricted stock will be equal to the fair market value of such restricted stock when the forfeiture restrictions lapse, and the participant’s holding period for the shares will begin on such date. Upon a subsequent sale of the shares, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year at the time of sale. Such gain or loss will be equal to the difference between the amount recognized upon the sale of the shares and the tax basis of the shares in the participant’s hands.
Participants receiving restricted stock may make an election under Section 83(b) of the Code to recognize compensation taxable as ordinary income with respect to the shares when such shares are received rather than at the time the forfeiture restrictions lapse. If the participant makes such an election, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction in the year of grant. The amount of such compensation income (and the corresponding deduction) will be equal to the fair market value of the shares when the participant receives them (valued without taking into account restrictions other than restrictions that by their terms will never lapse), less any amount paid for the shares.
By making a Section 83(b) election, the participant will recognize no additional ordinary compensation income with respect to the shares when the forfeiture restrictions lapse, and will instead recognize short-term or long-term capital gain or loss with respect to the shares when they are sold, depending upon whether the shares have been held for more than one year at the time of sale. The participant’s tax basis in the shares with respect to which a Section 83(b) election is made will be equal to their fair market value when received by the participant, and the participant’s holding period for such shares will begin at that time. If the shares are subsequently forfeited, the participant will not be entitled to a deduction as a result of such forfeiture, but will be entitled to claim a short-term or long-term capital loss (depending upon whether the shares have been held for more than one year at the time of forfeiture) with respect to the shares to the extent of the consideration paid by the participant for such shares.
Generally, during the restriction period, dividends and distributions paid with respect to restricted stock will be treated as compensation taxable as ordinary income (not dividend income) received by the participant, and, subject to Section 162(m) of the Code, the company or one of its subsidiaries, as applicable, will receive a corresponding deduction. Dividend payments received with respect to shares of restricted stock for which a Section 83(b) election has been made or which are paid after the restriction period lapses generally will be treated and taxed as dividend income.
SARs. A participant will not recognize taxable income, and the company or a subsidiary, as applicable, is not entitled to a deduction, upon the grant of a SAR. Upon exercise or settlement of a SAR, a participant will recognize compensation taxable as ordinary income in an amount equal to the cash or the fair market value of the shares received and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction. A participant’s tax basis in shares received upon the exercise of a SAR will be equal to the fair market value of such shares on the exercise date, and the participant’s holding period for such shares will begin at that time. Upon the sale of shares received from the exercise of a SAR, the participant will recognize short-term or long-term capital gain or loss, depending on whether the shares have been held for more than one year. The amount of such gain or loss will be equal to the difference between the amount recognized in connection with the sale of the shares and the participant’s tax basis in the shares.
PDS RSUs. A participant will not recognize taxable income upon the grant of PDS RSUs, and the company or a subsidiary, as applicable, is not entitled to a deduction upon such grant. When the award is settled and the participant receives cash or shares, the participant will recognize compensation taxable as ordinary income equal to the amount of cash received or the fair market value of the shares at that time (as applicable) and, subject to Section 162(m) of the Code, the company or one of its subsidiaries will be entitled to a corresponding deduction. A participant’s tax basis in shares received at the end of a restriction period will be equal to the fair market value of the shares when the participant receives them, and the participant’s holding period will begin on such date. Upon the sale of the shares received upon the settlement of restricted stock, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year at the time of sale.
Such gain or loss will be equal to the difference between the amount recognized upon the sale of the shares and the tax basis of the shares in the participant’s hands. Dividend equivalents will be taxable to participants upon
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distribution as compensation, and accordingly, the participant will recognize ordinary income (not dividend income) in such amount and, subject to Section 162(m) of the Code, the company or a subsidiary, as applicable, will receive a corresponding deduction. In addition, as discussed below, PDS RSUs may be considered deferred compensation that must comply with the requirements of Section 409A of the Code in order to avoid early income inclusion and tax penalties.
Withholding. Participants will be responsible for making appropriate provision for all taxes required to be withheld in connection with any awards, including taxes relating to the vesting, exercise and transfer of shares pursuant to the 2014 Plan. The company or a subsidiary is authorized to withhold from any payment relating to an Award under the 2014 Plan, including from a distribution of common stock or any payroll or other payment due to a participant, withholding and other taxes due in connection with any transaction involving an award.
Million Dollar Deduction Limit. In 2017 and prior years, under Section 162(m) of the Code, a publicly-held corporation may not deduct compensation paid in any one taxable year in excess of $1,000,000 to a “covered employee” unless the compensation properly qualifies as “performance-based compensation” subject to certain requirements. Prior to the amendment of Section 162(m) adopted by the Tax Cuts and Jobs Act, as described below, a covered employee for this purpose is the chief executive officer of the corporation and each of the three other most highly compensated officers of the corporation (other than the chief financial officer), as reported to stockholders under the Exchange Act.
The Tax Cuts and Jobs Act, passed by Congress in December 2017, eliminated the “performance-based” compensation exemption under Section 162(m) and revised the definition of “covered employee.” Therefore, for 2018 and going forward, compensation paid to PDS’s chief executive officer, PDS’s chief financial officer and to each of PDS’s other named executive officers (as required to be disclosed in PDS’s annual proxy statement pursuant to the Exchange Act) will not be deductible for federal income tax purposes to the extent such compensation exceeds $1,000,000, regardless of whether such compensation would have been considered “performance-based” under prior law. This limitation on deductibility applies to each individual who is a “covered employee” (as defined in Section 162(m)) in 2017 or becomes a covered employee in any subsequent year, and continues to apply to each such individual for all future years, regardless of whether such individual remains a named executive officer. There is, however, a transition rule that allows “performance-based” compensation in excess of $1,000,000 to continue to be deductible if the remuneration is provided pursuant to a binding contract which was in effect on November 2, 2017 and which was not subsequently materially modified.
Nonqualified Deferred Compensation. Section 409A of the Code contains certain restrictions on the ability to defer receipt of compensation to future tax years. Any award that provides for the deferral of compensation, such as PDS RSUs that are settled more than two and one-half months after the end of the year in which they vest, must comply with Section 409A of the Code or else be subject to further adverse tax consequences. If the requirements of Section 409A of the Code are not met with respect to an award, all amounts deferred under the 2014 Plan during the taxable year and all prior taxable years (to the extent not already included in gross income) will be included in the participant’s taxable income in the later of the year in which such violation occurs or the year in which such amounts are no longer subject to a substantial risk of forfeiture, even if such amounts have not been actually received by the participant. In addition, the violation of Section 409A of the Code will result in an additional tax to the participant of 20% of the deferred amount plus applicable interest computed from the date the award was earned, or if later, the date on which it vested.
Excess Parachute Payments. If the vesting or payment of an award made to a “disqualified individual” (as defined in Section 280G of the Code) occurs in connection with a change in control of the Company, such vesting or payment, either alone or when with other compensation payments which such disqualified individual is entitled to receive, may result in an “excess parachute payment” (as defined in Section 280G of the Code). Section 4999 of the Code generally imposes a 20% excise tax on the amount of any such “excess parachute payment” received by such “disqualified individual” and Section 280G of the Code would prevent the Company or a subsidiary or affiliate, as applicable, from deducting such “excess parachute payment.”
Interests of Certain Persons in the Plan Ratification Proposal
The Company’s directors and executive officers currently are permitted to participate in the 2014 Plan, and therefore they have a substantial interest in the Plan Ratification Proposal.
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Challenges to the Ratification and Time Limitations on Legal Challenges
When an act is ratified under Section 204 of the DGCL, certain specified persons (including any holder of common stock) may file a petition under Section 205 of the DGCL in the Delaware Court of Chancery to challenge the validity and effectiveness of any ratification effected under Section 204 of the DGCL. The Delaware Court of Chancery may make such orders regarding the ratification as it deems proper under the circumstances. Among other things, the Delaware Court of Chancery may declare that a ratification in accordance with and pursuant to Section 204 of the DGCL is not effective or shall only be effective at a time or upon conditions established by the Court.
Under Sections 204 and 205 of the DGCL, any claim that the ratified act is void or voidable due to the identified failures of authorizations, or that the Delaware Court of Chancery should declare in its discretion that the ratification not be effective or be effective only on certain conditions, must be brought within 120 days from the time this Proposal 1 is approved by the stockholders (which is referred to as the “Validation Effective Time” for purposes of Section 204).
Required Vote; Recommendation of Board of Directors
Presuming a quorum is present, the affirmative vote of the holders of a majority of the shares of PDS common stock properly cast at the Special Meeting is required for the ratification of the prior approval of the 2014 Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR” THE RATIFICATION OF THE PRIOR APPROVAL OF THE 2014 PLAN
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Summary Compensation Table
The following table sets forth information for the years ended December 31, 2019 and December 31, 2020 concerning compensation of (i) all individuals serving as our principal executive officer, (ii) our two most highly compensated executive officers, other than our principal executive officer, who were serving as executive officers as of December 31, 2020 and (iii) up to two of our most highly compensated executive officer, other than our principal executive officer, that were not serving as executive officers as of December 31, 2020. We refer to these executives as the named executive officers.
Frank Bedu-Addo, Ph.D.
Chief Executive Officer(5)
| | | 2020 | | | 450,000 | | | 225,000 | | | 139,788 | | | — | | | 814,788 |
| | 2019 | | | 356,250 | | | 395,000(2) | | | 1,832,510 | | | — | | | 2,583,758 |
| | | | | | | | | | | | | | | | | | |
Gregory L. Conn, Ph.D.
Chief Scientific Officer(5)
| | | 2020 | | | 290,000 | | | 87,375 | | | 39,141 | | | 7,417 | | | 423,933 |
| | 2019 | | | 169,167 | | | — | | | 461,603 | | | 38,184(4) | | | 668,954 |
| | | | | | | | | | | | | | | | | | |
Lauren V. Wood, M.D.
Chief Medical Officer(5)
| | | 2020 | | | 320,000 | | | 96,375 | | | 39,143 | | | — | | | 455,518 |
| | 2019 | | | 253,333 | | | — | | | 309,361 | | | — | | | 562,694 |
| | | | | | | | | | | | | | | | | | |
Andrew Saik
Former Chief Financial Officer(3)
| | | 2020 | | | 84,199 | | | — | | | — | | | — | | | 84,199 |
| | 2019 | | | 370,000 | | | — | | | 309,363 | | | — | | | 679,363 |
(1)
| Amounts shown in this column do not reflect actual compensation received by the named executive officers. The amounts reflect the grant date fair value of stock option awards and are calculated in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718-Stock Compensation, and assume no forfeiture rate derived in the calculation of the grant date fair value of these awards. Assumptions used in calculating the value of these awards are included in Note 11, “Stock Based Compensation” in the notes to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The executive will only realize compensation to the extent the trading price of the Company’s common stock is greater than the exercise price of such stock options at the time such options are exercised. On December 8, 2020 Frank Bedu-Addo, Gregory Conn and Lauren Wood were awarded contingent options of 707,800, 122,400 and 210,500 respectively. |
(2)
| Represents a signing bonus paid to Dr. Bedu-Addo. |
(3)
| Mr. Saik resigned from the Company on March 20, 2020. Thereafter, on March 23, 2020 our board of directors appointed Janetta Trochimiuk, the Company’s current Controller, as interim Principal Accounting Officer and Frank Bedu-Addo, Ph.D., the Company’s President and Chief Executive Officer, as interim Principal Financial Officer. On June 23, 2020, our board of directors appointed Michael King as interim Chief Financial Officer and Mr. King replaced Janetta Trochimiuk as interim Principal Accounting Officer and Frank Bedu-Addo, Ph.D., as interim Principal Financial Officer. On January 1, 2021, Dr. Van Voorhees assumed the responsibilities performed by Michael King. Dr. Van Voorhees was terminated without cause on September 30, 2021. Matthew Hill is currently the Company’s Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer. |
(4)
| Includes amounts paid to Dr. Conn as a consultant prior to commencing employment on June 1, 2019. Reflects matching contributions to the Company's 401(k) plan. |
(5)
| Dr. Bedu-Addo and Dr. Wood joined the Company on March 15, 2019, in connection with the Merger. Dr. Conn served as a consultant to the Company beginning on March 15, 2019 through June 1, 2019 at which point Dr. Conn became an employee of the Company. |
Narrative to Summary Compensation Table
Prior to March 15, 2019, we were a clinical-stage biotechnology company known as Edge Therapeutics,
IncInc. (“Edge”). On March 15, 2019, we completed our business combination with privately held PDS Biotechnology Corporation, a Delaware corporation (“Private PDS”), in accordance with the terms of an Agreement and Plan of Merger and Reorganization, dated as of November 23, 2018, as amended on January 24, 2019 (the “Merger Agreement”), that we entered into with Private PDS and Echos Merger Sub, Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Private PDS (the “Merger”), with Private PDS continuing as our wholly owned subsidiary and the surviving corporation of the Merger.
At the closing of the Merger, we issued shares of our common stock to Private PDS stockholders based on an agreed upon exchange ratio, and each option or warrant to purchase Private PDS capital stock became an option or warrant, respectively, to purchase our common stock, subject to adjustment in accordance with the agreed upon exchange ratio. Following the closing of the Merger,
approximately 82,792,437 pre-Reverse Stock Split shares of our common stock were issued or are issuable to Private PDS’s stockholders, warrantholders and optionholders, at an exchange rate of approximately 6.5240 pre-Reverse Stock Split shares of our common stock in exchange for each share of Private PDS capital stock outstanding immediately prior to the Merger, we effected a reverse stock split at a ratio of one new share for every twenty shares our common stock then-outstanding (the “Reverse Stock Split”), our name was changed to PDS Biotechnology Corporation, the name of Private PDS was changed to PDS Operating Corporation
and the business of Private PDS became our
business, and we became a clinical-stage biopharmaceutical company focused on developing multi-dimensional cancer immunotherapies that are designed to overcome the limitations of the current approaches. In connection with the closing of the Merger, our stock began trading on the Nasdaq Capital Market under the symbol “PDSB” on March 18, 2019. Unless otherwise noted, all references to common stock share amounts and prices per share of common stock in this proxy statement give effect to the Merger and the Reverse Stock Split.business. As used herein, the word “Edge” refers to the Company prior to the completion of the Merger and the terms the “Company” and “PDS” refer to our company immediately following the completion of the Merger.
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PROPOSAL 1
Election of Directors
Our Board
Key Performance Factors in Determining Executive Compensation
Because the biopharmaceutical industry is divided into three classes: Class A, Class B and Class C, with each class serving a three-year term. Vacancies on the Board may be filled only by persons electedcharacterized by a majorityvery long product development cycle, including a lengthy R&D period and a rigorous regulatory approval process, including the requirements for multiple phases of human testing and the need to meet a significant number of other government requirements, many of the remaining directors. A director elected bytraditional financial performance metrics, such as product sales, revenues and profits, used to evaluate successful performance are inappropriate for a biopharmaceutical company with a continued development focus, such as PDS. Instead, the Board to fillspecific performance our Compensation Committee considers when evaluating the compensation of our named executive officers include:
key R&D achievements
initiation and progress of clinical trials for our product candidates;
achievement of regulatory milestones;
new business initiatives including financings;
our progress in building out key functions and managing our growth while maintaining a
vacancy in a class, including vacancies created by an increase in the number of directors that may serve on the Board, shall serve for the remainder of the full term of that classhigh-performing organization and
until the director’s successor is duly electedculture: and
qualified.The Board presently has seven members. The three nominees for director this year
increasing shareholder value.
Annual corporate goals are
Gregory Freitag, Stephen Glover and Sir Richard Sykes, each of whom is a current director of PDS. If elected at the Annual Meeting, each of Mr. Freitag, Mr. Glover and Sir Richard Sykes would serve until the 2022 annual meeting and his successor has been duly elected and qualified, or his earlier death, resignation or removal. No director or nominee for director is related to any other director or executive officer of PDS or nominee for director by blood, marriage or adoption. Our directors are expected to attend our Annual Meeting, either in person or telephonically. There are no arrangements or understandings between any nominee and any other person pursuant to which each such the nominee was selected.Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, each of Mr. Freitag, Mr. Glover and Sir Richard Sykes will be elected if he receives a plurality of the votes cast. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of each of Mr. Freitag, Mr. Glover and Sir Richard Sykes. If Mr. Freitag, Mr. Glover or Sir Richard Sykes becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for such person will instead be voted for the election of a substitute nominee proposed by our Board. Mr. Freitag, Mr. Gloversenior leadership team at the beginning of each year and Sir Richard Sykes haveapproved by our Board of Directors. During the first quarter of each agreed to serve if elected. Our management has no reason to believe that either Mr. Freitag, Mr. Glover or Sir Richard Sykes will be unable to serve.
The following table provides information onyear, our Compensation Committee, with the nomineesinput of the senior leadership team, evaluates our corporate performance for the positionprior year against the corporate goals set for that year, and, taking into account other corporate achievements and developments, recommends a corporate performance rating to be approved by our Board of directorDirectors.
During the first quarter of PDSeach year, our Compensation Committee typically evaluates compensation levels for such year of our executive officers, including the amount of each executive officer’s base salary, target annual bonus and annual equity awards, taking into consideration the compensation paid by our peer group, our prior year’s overall corporate performance against the established corporate goals, as well as each individual executive officer’s contributions to achievement of such corporate goals, individual performance and the other factors described above, in making compensation recommendations to our Board of Directors. Our Board of Directors considers these recommendations in determining the compensation for our executive officers for the applicable year.
Elements of Executive Compensation
The compensation of our named executive officers consists of base salary, annual cash bonuses and equity awards, as well as employee benefits that are made available to our salaried employees generally. Our named executives are also entitled to compensation and benefits upon certain terminations of employment, including following a change of control transaction, as described under “Employment Letter Agreements” below.
Base Salaries
We pay our named executive officers a base salary to compensate them for the satisfactory performance of services rendered to the Company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salaries for our named executive officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent and were originally established in each named executive officer’s employment agreement.
Dr. Bedu-Addo received a base salary of $450,000 in 2020. Dr. Conn received a base salary of $ 290,000 in 2020. Dr. Wood received a base salary of $320,000 in 2020. These salaries remained unchanged from the salaries following the Merger. Mr. Saik received his base salary of $84,199 in 2020 until his resignation as of March 23, 2020.
Performance Bonuses
We offer our named executive officers the
Record Dateopportunity to earn annual cash bonuses to compensate them for attaining short-term company and individual performance goals. Each named executive officer has an annual target bonus that is expressed as a percentage of his or her annual base salary. The 2020 target bonus amount for Dr. Bedu-Addo was 50% of his base salary, for Dr. Conn was 30% of his base salary and for
each director continuing in office after the Annual Meeting.NameDr. Wood was 30% of her base salary.
| Age
|
Nominees for Director
| | | |
(Class A − Term expiring at annual meeting of stockholders in 2022)
| | | |
Gregory Freitag, J.D., CPA
| 60
|
Stephen Glover
| 60
|
Sir Richard Sykes
| 77
|
| |
Directors Continuing in Office
| |
(Class B − Term expiring at annual meeting of stockholders in 2020)
| |
James J. Loughlin
| 76
|
Andrew Saik
| 50
|
| |
(Class C − Term expiring at annual meeting of stockholders in 2021)
| |
Frank Bedu-Addo, Ph.D.
| 54
|
De Lyle W. Bloomquist
| 60
|
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CLASS A NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2022 ANNUAL MEETING
Gregory Freitag J.D.
Our Compensation Committee, based upon the recommendation of our Chief Executive Officer, establishes Company performance goals each year and, at the completion of the year, generally determines actual bonus payouts after assessing Company performance against these goals and each named executive officer’s individual performance and contributions to the Company’s achievements. For 2020, bonuses were entirely determined based on Company performance in meeting clinical, business development and financial goals.
Equity Compensation
In 2020 we granted stock option awards to our named executive officers as a long-term incentive component of their compensation. We have historically granted stock option awards to named executive officers when they commenced employment with us and have from time to time thereafter made additional grants as, and when, our Board of Directors determined appropriate to recruit, retain or reward particular named executive officers.
We have three equity compensation plans: the 2009 Stock Option Plan, 2014 Equity Incentive Plan and the 2018 Stock Incentive Plan (the “Plans”).
In 2014, our stockholders approved the 2014 Equity Incentive Plan pursuant to which we may grant up to 91,367 shares as ISOs, NQs and restricted stock units (“RSUs”),
CPAMr. Freitag has servedsubject to increases as hereafter described (the “Plan Limit”). In addition, on PDS’s boardJanuary 1, 2015 and each January 1 thereafter and prior to the termination of directors sincethe 2014 Equity Incentive Plan, pursuant to the terms of the 2014 Equity Incentive Plan, the Plan Limit was and shall be increased by the lesser of (x) 4% of the number of shares of Common Stock outstanding as of the immediately preceding December 2014. Mr. Freitag currently serves31 and (y) such lesser number as the General CounselBoard of Directors may determine in its discretion. In March 2019, the Plan was amended and restated which removed the annual increase component and the available shares at that time under the 2014 Plan was 826,292 shares. See Proposal 1 for further discussion regarding this plan.
In 2018, our stockholders approved the 2018 Stock Incentive Plan pursuant to which the Company may grant up to 558,071 shares as Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Preferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards.
Pursuant to the terms of the Plans, ISOs have a term of ten years from the date of grant or such shorter term as may be provided in the option agreement. Unless specified otherwise in an individual option agreement, ISOs generally vest over a four year term and NQs generally vest over a one to five year terms. Unless terminated by the Board, the Plans shall continue to remain effective for a term of ten years or until such time as no further awards may be granted and all awards granted under the Plans are no longer outstanding. As of December 31, 2020, there were 190,799 shares available for grant under the 2018 Stock Incentive Plan.
On June 17, 2019, our Board adopted the 2019 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of non-qualified stock options. The Inducement Plan was recommended for approval by the Compensation Committee of the Board and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules.
On December 8, 2020, our Board amended the Inducement Plan solely to increase the total number of shares of Common Stock reserved for issuance under the Inducement Plan from 200,000 shares to 500,000 shares. The Inducement Plan will be administered by the Compensation Committee of the Board. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, non-qualified stock options under the Inducement Plan may only be made to an employee who has not previously been an employee or member of the boardBoard (or any parent or subsidiary of directorsthe Company), or following a bona fide period of Axogen, Inc. (NASDAQ: AXGN)non-employment by the Company (or a parent or subsidiary of the Company), if he or she is granted such non-qualified stock options in connection with his or her commencement of employment with the Company or a subsidiary and previously servedsuch grant is an inducement material to his or her entering into employment with the Company or such subsidiary. As of December 31, 2020, there were 421,500 shares available for grant under the Inducement Plan.
Our stock option awards have an exercise price at least equal to the fair market value of our common stock on the date of grant and typically vest as to 25% of the underlying shares on the first anniversary of the date of grant and in equal monthly installments over the following 36 months, subject to the holder’s continued employment with us and potential accelerated vesting in certain circumstances, including as described below for our named executive officers in the section titled “Potential payments upon a change in control.” Our stock option awards may be intended to qualify as incentive stock options under the Code.
In June 2020 we granted Dr. Bedu-Addo, Dr. Conn, and Dr. Wood options to purchase 125,000, 35,000 and 35,000 shares of our common stock, respectively, under the 2014 Plan. In December 2020 we granted
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Dr. Bedu-Addo, Dr. Conn, and Dr. Wood options to purchase 707,800, 122,400 and 210,500 shares of our common stock, respectively, under the 2014 Plan subject to stockholder approval of our Second Amended and Restated 2014 Equity Incentive Plan under Nasdaq Marketplace Rule 5635(c). These options will not be exercisable until stockholder approval has been obtained. See Proposal 1 for further discussion regarding this plan. All options described above vest as to 25% of the total shares underlying the option on the first anniversary of the grant date and in equal monthly installments over the ensuing 36 months, subject to the executive’s continued service with us through the applicable vesting date.
On December 8, 2020 our Interim CFO, Michael King, was granted 50,000 options to purchase shares of our common stock under the 2014 Plan, all of which were fully vested and exercisable as of the date of grant.
Retirement, Health, Welfare and Additional Benefits
Our executive officers are eligible to participate in our employee benefit plans and programs, including medical and dental benefits, flexible spending accounts, short- and long-term disability and life insurance, to the same extent as our other full-time employees, subject to the terms and eligibility requirements of those plans.
We sponsor a 401(k) defined contribution plan in which our executive officers may participate, subject to limits imposed by the Internal Revenue Code of 1986, as amended, to the same extent as our other full-time employees. Currently, we match 100% of each our employees’ contributions up to 3% of their salary and 50% of each employees’ contribution between 3% and 5% of their salary for a maximum contribution of 4% of the applicable employee’s salary.
Employment Agreements
Frank Bedu-Addo Ph.D.
Pursuant to his employment agreement, dated October 11, 2018, Dr. Bedu-Addo will receive an initial base salary of $275,000 per year and this salary will increase to at least $450,000 in the event that Private PDS becomes a public company, which did occur in March, 2019. Dr. Bedu-Addo is eligible to receive an annual performance-based cash bonus in an amount up to 50% of his base salary. In addition, immediately prior to the Merger, (i) all options to purchase PDS common stock held by Dr. Bedu-Addo became fully vested, and (ii) Dr. Bedu-Addo received a one-time cash payment of $395,000 and a one-time grant of 179,486 options to purchase shares of PDS common stock.
If Dr. Bedu-Addo’s employment is terminated by PDS without cause, by Dr. Bedu-Addo for good reason, or by death, Dr. Bedu-Addo (or his estate) will be entitled to receive (i) all earned but unpaid amounts of his base salary, (ii) all reasonable and documented expenses incurred but unpaid, (iii) his base salary for a period of 24 months following his termination, (iv) reimbursement for certain medical expenses, and (v) a lump sum payment in an amount equal to the greater of (a) the annual incentive bonus paid in the year prior to Dr. Bedu-Addo’s termination (prorated for the period of the year Dr. Bedu-Addo was employed) or (b) the annual incentive bonus earned by Dr. Bedu-Addo in the year he was terminated.
Gregory L. Conn, Ph.D.
Effective as of June 1, 2019, PDS entered into an employment agreement with Dr. Conn, pursuant to which Dr. Conn is employed as PDS’s Chief Scientific Officer. The agreement provides that Dr. Conn will receive an initial base salary of $290,000 per year. Dr. Conn is eligible to receive an annual performance-based cash bonus in an amount up to 30% of his base salary.
If Dr. Conn’s employment is terminated by PDS without cause, by Dr. Conn without good reason, or by death, Dr. Conn (or his estate) is entitled to receive (i) all earned but unpaid amounts of his base salary and (ii) his bonus earned for a calendar year ended on or before the date of such termination. In addition, the Dr. Conn will be entitled to receive (i) a lump sum payment of all other amounts owed to Dr. Conn, and (ii) reimbursement for all reasonable and documented expenses.
Effective as of June 17, 2021 PDS entered into an amendment to the employment agreement with Dr. Conn (the “Amendment”). The Amendment reduced Dr. Conn’s base salary to $120,000 per year. The Amendment further amended the terms of Dr. Conn’s employment with the Company to provide that Dr. Conn is only required to work or otherwise provide services to the Company for a minimum of/up to 30 hours per week.
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Lauren Wood, M.D.
Effective February 1, 2019, PDS entered into an offer letter with Dr. Wood pursuant to which Dr. Wood is employed as PDS’s Chief Medical Officer. The agreement provides that Dr. Wood will receive a base salary of $320,000 per year. Dr. Wood is eligible to receive an annual performance-based cash bonus in an amount up to 30% of her base salary.
Andrew Saik
October 31, 2017, Mr. Saik, entered into an employment agreement with Edge pursuant to which he agreed to serve as Edge’s Chief Financial Officer. Mr. Saik remained employed with PDS as its Chief Financial Officer and
Senior Vice Presidentserved as a director of
Business Development. Axogen, Inc. is a leading regenerative medicine company dedicated to peripheral nerve repair. Mr. Freitag was Chief Executive Officer,PDS following the consummation of the Merger and later resigned from his role as Chief Financial Officer and
a board member from June 2010 through September 2011 of LecTec Corporation, an intellectual property licensing and holding company that merged with Axogen in September 2011. Mr. Freitag is a principal of FreiMc, LLC, a health care and life science consulting and advisory firm he founded that provides strategic guidance and business development services. Prior to founding FreiMc, Mr. Freitag was a Director of Business Development at Pfizer Health Solutions, a former subsidiary of Pfizer, Inc. and worked for Guidant Corporation in their business development group. Prior to Guidant Corporation, Mr. Freitag was the Chief Executive Officer of HTS Biosystems, a biotechnology tools start-up company and was the Chief Operating Officer, Chief Financial Officer and General Counsel of Quantech, Ltd. Prior to Quantech, Mr. Freitag practiced corporate law in Minneapolis, Minnesota. Mr. Freitag is alsoas a director
on March 20, 2020 in order to pursue other professional endeavors. As Mr. Saik resigned without good reason, he was not entitled to, and did not receive, any of the
Foundation Board of HealthEast Care System, a health care system in Minnesota. The board of directors believes that Mr. Freitag’s leadership, legal, corporate governance and accounting experiences and knowledge, as well as his familiarity with the life sciences industry and PDS, provide him with the qualifications and skills to serve as a director.Stephen Glover
Mr. Glover joined PDS Biotech’s Board of Directors in April 2019 and is the Chairman of the Board of Directors. Mr. Glover is the Co-Founder and Managing Principal for Asclepius Life Sciences Fund, LP, and the Co-Founder, President and CEO of ZyVersa Therapeutics (formerly Variant Pharmaceuticals), a clinical-stage specialty biopharmaceutical company focused on developing drugs to treat inflammatory and renal diseases. Mr. Glover has extensive experience executing biopharmaceutical company turnarounds and growing top line revenues, with a focus on pharmaceutical business strategy corporate development, product development, commercialization and business optimization. His vast experience spans Fortune 100, start up and entrepreneurial environments and his transaction experience covers over 25 transactions totaling over $10 billion. His strategic and operational experience, which covers most therapeutic classes of biopharmaceuticals, includes strategic planning, corporate development, operations management, product development, clinical and regulatory, product marketing and sales management. Prior to co-founding ZyVersa, Mr. Glover was Co-Founder and Chief Business Officer of Coherus BioSciences, a late-stage commercial biologics platform Company focused on delivering biosimilar therapeutics which went public in 2014. Previously, he was President of Insmed Therapeutic Proteins and EVP and Chief Business Officer of Insmed Incorporated, where he was responsible for the creation of the Company’s biosimilar business unit and divestiture of that business to Merck and led the strategic review process that resulted in the merger of Insmed and Transave. Prior to joining Insmed, Mr. Glover held senior-level positions in sales, marketing and operations at Andrx Corporation, Roche Laboratories, Amgen and IMS Health. He currently serves as a Director of ZyVersa Therapeutics, Incon and Asclepius, as well as a BOD member of the Coulter Foundation as the University of Miami U Innovation Life Sciences Office. He holds a bachelor’s degree in Marketing from Illinois State University. Our Board of Directors believes Mr. Glover’s broad industry experience as well as his experience as a founder and strategic leader provides him with the qualifications and skills to serve as a director.
Sir Richard Sykes
Sir Richard Sykes has served on PDS’s board of directors since December 2014. He is currently Chairman of Imperial College Healthcare King Edward V11 Hospital, Chairman of the Royal Institution of Great Britain, Chairman of the UK Stem Cell Foundation, Chairman of Omnicyte and NetScientific. He was appointed Chancellor of Brunel University in 2013. Prior toseverance payments or benefits that he was Senior Independent Directorwould have otherwise been eligible to receive under his employment agreement had he resigned for good reason or been terminated by us without cause.
Matthew Hill
On September 30, 2021, PDS delivered a notice of termination without cause to Seth Van Voorhees and
non-executive Chairman of ENRCremoved him from
2007 to June 2011, Chairman of NHS London from December 2008 to July 2010, Rector of Imperial College London from 2000 to 2008. He was a non-executive director of Rio Tinto plc from 1997 to 2007, and senior independent director from 2004 to 2007. He has over 30 years’ experience within the TABLE OF CONTENTS
biotechnology and pharmaceutical industries field, serving as Chief Executive and Chairman of GlaxoWellcome from 1995 to 2000 and then as Chairman of GlaxoSmithkline until 2002. Internationally he is Chairman of the International Advisory Board, A*Star Biomedical Research Council, Singapore and a Board member of EDBI. He was awarded Honorary Citizenship of Singapore in 2004 for his contribution to the development of the country’s biomedical sciences industry. Sir Richard holds a number of degrees and awards from Institutions both in the UK and overseas. He is a Fellow of the Royal Society and Academy of Medical Sciences, and an Honorary Fellow of the Royal Academy of Engineering, Royal Society of Chemistry, Royal Pharmaceutical Society, Royal College of Pathologists and the Royal College of Physicians. He is also President of the R and D Society, a position he has held since 2002. He is a Fellow of Imperial College London and the Imperial College School of Medicine, King’s College London and Honorary Fellow of the Universities of Wales and Central Lancashire. Sir Richard received a Knighthood in the 1994 New Year’s Honours list for services to the pharmaceutical industry. The board of directors believes that Sir Richard’s extensive leadership experience, experience in biopharmaceutical product development, deep understanding of pharmaceutical development, and broad experience within the biotechnology and pharmaceutical industries provide him with the qualifications and skills to serve as a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF ITS NOMINEES.
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CLASS B DIRECTORS CONTINUING IN OFFICE UNTIL THE 2020 ANNUAL MEETING
James J. Loughlin
Mr. Loughlin joined PDS’s board of directors following the merger with Edge Therapeutics in March 2019. He served on Edge’s board of directors since November of 2011. Since 2007, he has served on the board of Celgene Corporation (NASDAQ: CELG), where he is chair of the audit committee and a member of the compensation committee. Mr. Loughlin retired in 2003 after 40 years at KPMG LLP, a leading professional accounting and business consulting firm. As a partner at KPMG, he served for five years as a member of the board as well as National Director of the Pharmaceuticals Practice and as Chairman of the pension and investment committee of the KPMG Board from 1995 through 2001. Mr. Loughlin is a certified public accountant and received his B.S. degree in Accounting from St. Peter’s University in 1964. The board of directors believes Mr. Loughlin’s valuable experiences as national director of the pharmaceuticals practice at KPMG LLP, an extensive background in accounting and financial reporting, and prior service on the board of directors of other publicly-held biopharmaceutical companies, provide him with the qualifications and skills to serve as a director.
Andrew Saik
Mr. Saik has been PDS’s Chief Financial Officer and a director since March 15th, 2019. Mr. Saik was most recently Chief Financial Officer at Edge Therapeutics, Inc., since October 2017 where he led the IR function and created a business development function to help grow the company. Mr. Saik managed the external messaging of the company and helped prepare for commercialization of its primary asset. Prior to Edge Mr. Saik was CFO at Vertice Pharma, LLC, from August 2015 where he managed secured a $300 million commitment to fund acquisitions from a prominent private equity firm. Previously, he was Chief Financial Officer at Auxilium Pharmaceuticals, Inc., from August 2014 to April 2015, where he helped lead the execution of Auxilium’s growth strategy and executed a $75M cost reduction program, took out $50M accordion on Term Loan to ensure liquidity though restructuring and negotiated a definitive agreement to sell the company for $33.25 per share (up from $17.51) resulting in an 85% increase in share price in six months. From February 2013 to August 2014 Mr. Saik was Senior Vice President, Finance and Treasurer at Endo Health Solutions, Inc., where he was responsible for internal and external reporting, global consolidations of M&A transactions, cash management, debt financing and risk management. During his tenure at Endo, he helped complete the acquisition of Paladin Labs and restructured $3B of debt into a new corporate structure. Prior to Endo, Mr. Saik served in senior financial management roles with increasing responsibility at Valeant Pharmaceuticals International, including Senior Vice President, Finance and CFO of the Specialty Pharmaceutics Business. At Valeant he also had operational responsibility for the $3B specialty pharmaceutical business where he actively managed the commercial, manufacturing, and research and development operations. He holds a Master of Business Administration from the University of Southern California and a Bachelor of Arts from the University of California, Los Angeles. The Board of Directors believes that Mr. Saik’s perspective and experience as PDS’s Chief Financial Officer, principal financial officer and principal accounting officer. On October 4, 2021, PDS entered into an employment agreement with Matthew Hill, effective as well as his depth of operating and senior management experience in the pharmaceuticals industry and educational background, provide him with the qualifications and abilitiesOctober 18, 2021, pursuant to which Matthew Hill agreed to serve as PDS’s Chief Financial Officer. Mr. Hill will receive an annual salary of $350,000. Mr. Hill is also eligible for an annual performance bonus of 35% of his base salary. The employment agreement further provides that if Mr. Hill’s employment is terminated by PDS without cause or if he resigns for good reason, then, Mr. Hill will be entitled to receive (i) a director.
severance payment equal to twelve months’ of his then-current base salary and (ii) reimbursement for health care continuation (COBRA) premiums for up to 12 months following the date of his termination.Outstanding Equity Awards at Year-End TABLE OF CONTENTS
CLASS C DIRECTORS CONTINUING IN OFFICE UNTIL THE 2021 ANNUAL MEETING
Frank Bedu-Addo, Ph.D.
Dr. Bedu-Addo, one ofThe table below sets forth the founders of PDS, has served as a director, president, and CEO of PDS since its inception in 2005. Dr. Bedu-Addo is a veteran biotech executive with experience successfully starting and growing biotechnology organizations. He has been responsible for the development and implementation of both operational and drug development strategies, supervising and managing both large organizations and emerging biotechnology companies. Dr. Bedu-Addo was a founding and senior executive at KBI BioPharma, Inc. As Vice President of Drug Development, he oversaw all business and drug development operations. Before his tenure at KBI, he successfully started and managed Cardinal Health’s East Coast biotechnology drug development operations. Prior to Cardinal Health, Dr. Bedu-Addo was an Associate Director at Akzo-Nobel, Senior Scientist at Elan (The Liposome Co.), and Principal Scientist at Schering-Plough. In these positions, he contributed to the development of numerous drugs, including antiviral and anticancer products. Dr. Bedu-Addo obtained his M.S. in Chemical Engineering and Ph.D. in Pharmaceutics from the University of Pittsburgh. The board of directors believes that Dr. Bedu-Addo’s perspective and experience as PDS’s President and CEO, as well as his depth of operating and senior management experience in the pharmaceuticals industry and educational background, provide him with the qualifications and abilities to serve as a director.
De Lyle W. Bloomquist
Mr. Bloomquist has served on PDS’s board of Directors since December 2014. Mr. Bloomquist retired in March 2015 as the President, Global Chemicals Business for Tata Chemicals Ltd. as well as the President, CEO and Director of Tata Chemicals North America Inc. (the former General Chemical Industrial Products Inc.), which he was instrumental in selling to Tata Chemicals for over $1 billion in 2008. During his 28-year career, he held positions in finance, manufacturing, sales & marketing, logistics and general management. He has experience in taking companies public and private, raising financing in the public markets as well as with banks and private investors. Mr. Bloomquist serves on the Board of Directors for Rayonier Advanced Materials Inc. (NYSE: RYAM), Crystal Peak Minerals Inc. (TSXV: CPM), Gran Colombia Gold Corporation (TSX: GCM), PDS Biotechnology Corporation, Huber Engineered Materials, and Vivos Therapeutics Inc., and has served in the past on the Board of Directors of ANSAC, Oglebay Norton Corporation, a number of Tata Chemicals entities, and Costa Farms. He currently serves on the compensation and audit committeessecurities underlying outstanding plan awards for each named executive officer as of RYAM; the technical, finance and audit committees of CPM; the audit committee of GCM; and the nomination and governance, and compensation committees of Vivos Therapeutics. He also serves on the Board of Business Advisors for the Tepper School of Business at Carnegie Mellon University. The board of directors believes that Mr. Bloomquist’s experience serving on public company board of directors, financial and managerial experience, and knowledge of PDS provide him with the qualifications and skills to serve as a director.
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CORPORATE GOVERNANCE
Management Following the Merger
In connection with the Merger, the Company’s board was fixed at seven members, four of whom were designated by Private PDS and three of whom were designated by Edge. The Edge designees were Andrew Saik, James J. Loughlin and Robert Spiegel, M.D. The Private PDS designees were Frank Bedu-Addo, Ph.D., Gregory Freitag, J.D., CPA, De Lyle W. Bloomquist and Sir Richard Sykes. In connection with the Merger, Brian Leuthner, Sol Barer, Ph.D., Isaach Blech, Rosemary Crane, Liam Ratcliffe, M.D., Ph.D., and R. Loch Macdonald, M.D., Ph.D. resigned from Edge’s Board. Robert Spiegel, M.D. resigned from the Company’s board of directors on March 26, 2019, in order to focus his time on his other professional endeavors. On April 2, 2019, the Company’s board of directors appointed Stephen Glover as a director. Following the Merger, the Company’s board of directors ratified and adopted all of Edge’s corporate policies and procedures, including all outstanding committee charters.
Independence of the Board of Directors
As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The Board consults with our counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
The Board has undertaken a review of the independence of our directors and has determined that all of our directors, except Frank Bedu-Addo, Ph.D. and Andrew Saik, are independent within the meaning of Section 5605(a)(2) of the Nasdaq Stock Market listing rules. Dr. Bedu-Addo is not an independent director under these rules because he is our President and Chief Executive Officer, and Mr. Saik is not an independent director under these rules because he is our Chief Financial Officer.
Board Leadership Structure
The Board has appointed Mr. Stephen Glover as Chairman of the Board. The Chairman has the authority, among other things, to preside over Board meetings, to set meeting agendas and to perform all other duties delegated to him from time to time by the Board. We believe that separation of the positions of Board Chair and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we believe that having an independent Chairman creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in our best interests and the best interests of our stockholders. As a result, we believe that having an independent Chairman can enhance the effectiveness of the Board as a whole.
Role of the Board in Risk Oversight
One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for us. Our Audit Committee has the responsibility to review and discuss with management and KPMG LLP, the Company’s independent auditors, as appropriate, our guidelines and policies with respect to risk assessment and risk management, including our major financial risk exposures and the steps taken by management to monitor and control these exposures. Our Nominating and Corporate Governance Committee is responsible for developing our corporate governance principles, and periodically reviews these principles and their application. Our Compensation Committee reviews our practices and policies of employee compensation as they relate to risk management and risk-taking incentives, to determine whether such compensation policies and practices are reasonably likely to have a material adverse effect on us.
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Meetings of the Board of Directors
Edge’s Board met ten (10) times and Private PDS’s Board met four (4) times during the year ended December 31, 2018. All directors attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served during 2018 or the portion thereof for which they were directors or committee members.
Information Regarding Committees of the Board of Directors
The Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The following table provides membership information as of the Record Date for each of these standing Board committees. From time to time, our Board and committees also take action by written consent without a meeting. Each of our Board committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
Name2020.
Frank Bedu-Addo, Ph.D. | | | 37,504 | | | 62,496 | | | $5.99 | | | 6/28/2019 | | | 6/29/2029 | | | 53,174 | | | | | | $6.57 | | | 7/27/2011 | | | 7/27/2021 | | | 219,535 | | | | | | $6.57 | | | 12/3/2012 | | | 12/3/2022 | | | 53,173 | | | | | | $9.04 | | | 3/14/2019 | | | 3/14/2029 | | | 179,486 | | | | | | $9.04 | | | 3/14/2019 | | | 3/14/2029 | | | | | | 125,000 | | | $1.45 | | | 6/23/2020 | | | 6/23/2030 | | | | | | 707,800 | | | $2.43 | | | 12/8/2020 | | | 12/8/2030 | | | | | | | | | | | | | | | | | Gregory Conn, Ph.D. | | | 17,764 | | | | | | $6.87 | | | 1/31/2016 | | | 1/31/2026 | | | 14,450 | | | | | | $15.33 | | | 7/6/2018 | | | 7/6/2028 | | | 44,871 | | | | | | $9.04 | | | 3/14/2019 | | | 3/14/2029 | | | 14,998 | | | 25,002 | | | $6.39 | | | 6/6/2019 | | | 6/6/2029 | | | 35,000 | | | 35,000 | | | $1.45 | | | 6/23/2020 | | | 6/23/2030 | | | | | | 122,400 | | | $2.43 | | | 12/8/2020 | | | 12/8/2030 | | | | | | | | | | | | | | | | | Lauren V. Wood, M.D. | | | 23,514 | | | 39,201 | | | $6.39 | | | 6/6/2019 | | | 6/6/2029 | | | | | | 35,000 | | | $1.45 | | | 6/23/2020 | | | 6/23/2030 | | | | | | 210,500 | | | $2.43 | | | 12/8/2020 | | | 12/8/2030 | | | | | | | | | | | | | | | | |
| Audit
| Compensation
| Nominating
and
Corporate
Governance
|
Stephen Glover
| X
| X*
| |
Frank Bedu-Addo, Ph.D.
| | | |
Gregory Freitag, J.D., CPA
| X
| | X
|
De Lyle W. Bloomquist
| | | X*
|
Sir Richard Sykes
| | X
| X
|
Andrew Saik
| | | |
James J. Loughlin
| X*
| X
| |
Audit Committee
Our Audit Committee currently consists of Mr. Freitag, Mr. Glover and Mr. Loughlin, each of whom satisfies the independence requirements under The Nasdaq Capital Market listing standards and Rule 10A-3(b)(1) of the Exchange Act. The chairperson of our Audit Committee is Mr. Loughlin, whom our Board has determined to be an “audit committee financial expert” within the meaning of SEC regulations. Each member of our Audit Committee can read and understand fundamental financial statements in accordance with Audit Committee requirements. In arriving at this determination, the Board has examined each Audit Committee member’s scope of experience and the nature of their employment in the corporate finance sector. Edge’s Audit Committee held seven (7) meetings in 2018.
The primary purpose of our Audit Committee is to assist the Board in the oversight of the integrity of our accounting and financial reporting process, the audits of our financial statements, and our compliance with legal and regulatory requirements. The functions of our Audit Committee include, among other things:
hiring an independent registered public accounting firm to conduct the annual audit of our financial statements and monitoring its independence and performance;
reviewing and approving the planned scope of the annual audit and the results of the annual audit;
pre-approving all audit services and permissible non-audit services provided by our independent registered public accounting firm;
reviewing the significant accounting and reporting principles to understand their impact on our financial statements;
reviewing our internal financial, operating and accounting controls with management and our independent registered public accounting firm;
reviewing with management and our independent registered public accounting firm, as appropriate, our financial reports, earnings announcements and our compliance with legal and regulatory requirements;
reviewing potential conflicts of interest under and violations of our Code of Conduct;
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establishing procedures for the treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and confidential submissions by our employees of concerns regarding questionable accounting or auditing matters;
reviewing and approving related-party transactions;
primary responsibility for overseeing our risk management function; and
reviewing and evaluating, at least annually, our Audit Committee’s charter.
With respect to reviewing and approving related-party transactions, our Audit Committee reviews related-party transactions for potential conflicts of interests or other improprieties. Under SEC rules, related-party transactions are those transactions to which we are or may be a party in which the amount involved exceeds $120,000, and in which any of our directors or executive officers or any other related person had or will have a direct or indirect material interest, excluding, among other things, compensation arrangements with respect to employment and board membership. Our Audit Committee could approve a related-party transaction if it determines that the transaction is in our best interests. Our directors are required to disclose to the committee or the full Board any potential conflict of interest or personal interest in a transaction that our board is considering. Our executive officers are required to disclose any potential conflict of interest or personal interest in a transaction to the Audit Committee. We also poll our directors and executive officers on an annual basis with respect to related-party transactions and their service as an officer or director of other entities. Whenever possible, the transaction should be approved in advance and if not approved in advance, must be submitted for ratification as promptly as practical.
The Board has adopted a charter for the Audit Committee that complies with SEC and Nasdaq Stock Market listing rules. The charter is available on our website at www.pdsbiotech.com.
Compensation Committee
Our Compensation Committee currently consists of Mr. Glover, Mr. Loughlin, and Sir Richard Sykes, each of whom our Board has determined to be independent under the Nasdaq listing standards, a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act, and an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code. The chairperson of our Compensation Committee is Stephen Glover. Edge’s Compensation Committee held four (4) meetings in 2018.
The primary purpose of our Compensation Committee is to assist the Board in exercising its responsibilities relating to compensation of our executive officers and employees and to administer our equity compensation and other benefit plans. In carrying out these responsibilities, this committee reviews all components of executive officer and employee compensation for consistency with its compensation philosophy, as in effect from time to time. The functions of our Compensation Committee include, among other things:
designing and implementing competitive compensation policies to attract and retain key personnel;
reviewing and formulating policy and determining the compensation of our executive officers and employees;
reviewing and recommending to the Board the compensation of our directors;
administering our equity incentive plans and granting equity awards to our employees and directors under these plans;
if required from time to time, reviewing with management our disclosures under the caption “Compensation Discussion and Analysis” and recommending to the full board its inclusion in our periodic reports to be filed with the SEC;
if required from time to time, preparing the report of the Compensation Committee to be included in our annual proxy statement;
engaging compensation consultants or other advisors it deems appropriate to assist with its duties; and
reviewing and evaluating, at least annually, our Compensation Committee’s charter.
The Board has adopted a charter for the Compensation Committee that complies with SEC and Nasdaq Stock Market listing rules. The charter is available on our website at www.pdsbiotech.com.
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Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee has ever been an executive officer or employee of ours. None of our officers currently serve, or served during 2018, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of the Board or Compensation Committee.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee currently consists of Mr. Bloomquist, Mr. Freitag and Sir Richard Sykes, each of whom our Board has determined to be independent under the Nasdaq listing standards. The chairperson of our Nominating and Corporate Governance Committee is Mr. Bloomquist. Edge’s Nominating and Corporate Governance Committee held two (2) meetings in 2018.
The primary purpose of our Nominating and Corporate Governance Committee is to assist the Board in promoting our best interests and the best interests of our stockholders through the implementation of sound corporate governance principles and practices. The functions of our Nominating and Corporate Governance Committee include, among other things:
identifying, reviewing and evaluating candidates to serve on our board;
determining the minimum qualifications for service on our board;
developing and recommending to our board an annual self-evaluation process for our board and overseeing the annual self-evaluation process;
developing, as appropriate, a set of corporate governance principles, and reviewing and recommending to our board any changes to such principles; and
periodically reviewing and evaluating our Nominating and Corporate Governance Committee’s charter.
The Board has adopted a charter for the Nominating and Corporate Governance Committee that complies with SEC and Nasdaq Stock Market listing rules. The charter is available on our website at www.pdsbiotech.com.
While the Nominating and Corporate Governance Committee does not have a formal diversity policy, the Nominating and Corporate Governance Committee recommends candidates based upon many factors, including the diversity of their business or professional experience, the diversity of their background and their array of talents and perspectives. We believe that the Nominating and Corporate Governance Committee’s existing nominations process is designed to identify the best possible nominees for the Board, regardless of the nominee’s gender, racial background, religion, or ethnicity. The Nominating and Corporate Governance Committee identifies candidates through a variety of means, including recommendations from members of the Board and suggestions from our management, including our executive officers. In addition, the Nominating and Corporate Governance Committee considers candidates recommended by third parties, including stockholders. The Nominating and Corporate Governance Committee gives the same consideration to candidates recommended by stockholders as those candidates recommended by members of our Board. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards, should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to our current and long-term objectives, should be willing and able to contribute positively to our decision-making process, should have a commitment to understand PDS and our industry and to regularly attend and participate in meetings of the Board and its committees, should have the interest and ability to understand the sometimes conflicting interests of the various constituencies of PDS, which include stockholders, employees, customers, creditors and the general public, and to act in the interests of all stockholders, should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all our stockholders and to fulfill the responsibilities of a director. Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law. The value of diversity on the Board should be considered.
The Nominating and Corporate Governance Committee considers director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following
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address: PDS Biotechnology Corporation, Attn: Corporate Secretary at 300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922 no earlier than the close of business on June 26, 2020, and no later than the close of business on July 26, 2020. Submissions must be made in accordance with our bylaws and must include the full name and business address of the proposed nominee, a description of the proposed nominee’s principal occupation or employment, the class and series and number of shares of our stock owned by such person, and a description of all arrangements or understandings between the stockholder and each nominee. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. Please refer to Article II of our Second Amended and Restated Bylaws for a description of the formal process to recommend director candidates to the Nominating and Corporate Governance Committee.
Stockholder Communications with the Board of Directors
We do not have a formal process related to stockholder communications with the Board. However, we strive to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe our responsiveness to stockholder communications to the Board has been excellent. If you wish to send a communication to the Board, its chair or the chair of any Board committee, please send your communication to Andrew Saik, our Chief Financial Officer, at PDS Biotechnology Corporation at 300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922, who will forward all appropriate communications as requested.
Code of Business Conduct and Ethics for Employees, Executive Officers and Directors
We have adopted a Code of Conduct, applicable to all of our employees, executive officers and directors. The Code of Conduct is available on our website at www.pdsbiotech.com. The Nominating and Corporate Governance Committee is responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers or directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.
Director Compensation
Edge Director Compensation
Edge’s historical compensation policy for its directors prior to the completion of the Merger is set forth below. Please see the section entitled “Director Compensation Policy Following the Merger” for the Company’s current director compensation policy.
Under Edge’s formal non-employee director compensation plan, commencing on October 1, 2017 and running through June 30, 2018, Edge paid each non-employee director a cash retainer covering such period in the amount of $26,250 ($35,000 on an annualized basis), payable in three equal quarterly installments in arrears on the last day of the fiscal quarter in which such service occurred. Edge paid additional cash retainers on the same schedule to (i) the chair of the Board in the amount of $22,500 ($30,000 annualized), (ii) the chair of the Audit Committee in the amount of $11,250 ($15,000 annualized), (iii) the chair of the Compensation Committee in the amount of $9,000 ($12,000 annualized), (iv) the chair of the Nominating and Corporate Governance Committee in the amount of $6,000 ($8,000 annualized), (v) each other member of the Audit Committee in the amount of $6,000 ($8,000 annualized), (vi) each other member of the Compensation Committee in the amount of $5,250 ($7,000 annualized) and (vii) each other member of the Nominating and Corporate Governance Committee in the amount of $3,000 ($4,000 annualized).
Further, commencing on July 1, 2018 and running through the closing of the Merger, Edge paid each non-employee director an annual cash retainer in the amount of $40,000, payable in equal, quarterly installments in arrears on the last day of the fiscal quarter in which such service occurred. The additional annual cash retainers that Edge provided during such period were paid on the same schedule to (i) the chair of the Board in the amount of $30,000, (ii) the chair of the Audit Committee in the amount of $18,500, (iii) the chair of the Compensation Committee in the amount of $15,000, (iv) the chair of the Nominating and Corporate Governance Committee in the amount of $8,000, (v) each other member of the Audit Committee in the amount of $8,000, (vi) each other member of the Compensation Committee in the amount of $7,000, and (vii) each other member of the Nominating and Corporate Governance Committee in the amount of $4,500.
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In addition to the payment of annual cash retainers, Edge’s compensation plan provided for grants of options to purchase shares of Edge common stock to non-employee directors pursuant to the terms and conditions of Edge’s 2014 Amended and Restated Equity Incentive Plan (the “2014 Plan”). Under the plan, each non-employee new director was granted an option covering 1,500 shares of Edge common stock on the date of his or her initial election to the Board. These options vested 1⁄3 on the one year anniversary of the grant date, 1/3 on the two year anniversary of the grant date and 1⁄3 on the three year anniversary of the grant date, in all cases subject to the non-employee director’s continuing service on the Board. Each continuing non-employee director of Edge, other than the Chairman of the Edge Board, was granted an option covering 750 shares of Edge common stock on the date of the Edge 2018 annual meeting of stockholder (the “2018 Annual Meeting”). These options vested fully on the one year anniversary of the grant date, subject to the non-employee director’s continuing service on the Edge Board. The Chairman of the Edge Board was granted an option covering 1,500 shares of Edge common stock on the date of the 2018 Annual Meeting. These options vested fully on the one year anniversary of the grant date, subject to the Chairman of the Edge Board continuing service on the Edge Board.
The table below summarizes the compensation paid by Edge to each non-employee director for the year ended December 31, 2018:
Name | Fees
Earned
Or Paid
in Cash
($) | Option
Awards
($)(1) | Total
($) |
Sol Barer, Ph.D. | | 92,500 | | | 40,175 | | | 132,675 | |
Isaac Blech | | 41,750 | | | 20,088 | | | 61,838 | |
Kurt Conti(2) | | 21,500 | | | — | | | 21,500 | |
Rosemary Crane | | 51,750 | | | 20,088 | | | 71,838 | |
James I. Healy, M.D., Ph.D.(3) | | 21,500 | | | — | | | 21,500 | |
James J. Loughlin | | 54,250 | | | 20,088 | | | 74,338 | |
Liam Ratcliffe, M.D., Ph.D. | | 44,500 | | | 20,088 | | | 64,588 | |
Robert Spiegel, M.D. | | 69,250 | | | 20,088 | | | 89,338 | |
Andrew Saik(2) | | | | | | 2,500 | | | $299.60 | | | 3/1/2018 | | | 3/1/2028 |
| | | | | 62,715 | | | $6.39 | | | 6/6/2019 | | | 6/6/2029 |
| | | | | 10,000 | | | $214.60 | | | 11/1/2017 | | | 11/1/2027 |
| | | | | 8,300 | | | $22.00 | | | 6/19/2018 | | | 6/19/2022 |
(1)
| (1) | The amounts shown in this column do not reflect actual compensation received by our directors. The amounts reflectExcept as otherwise noted, options vest with respect to one-fourth of the grant date fair value of option awards and are calculated in accordance withunderlying shares on the provisions of FASB Accounting Standards Codification Topic 718 Compensation - Stock Compensation (“ASC Topic 718”), and assume no forfeiture rate derived in the calculationfirst anniversary of the grant date fair valueand in equal installments of these awards. Assumptions used in calculating1⁄36 of the valueunderlying shares on each monthly anniversary of these awards are included in Note 7, “Stock-based Compensation” in the notes to Edge’s financial statements included in our most recent Annual Report on Form 10-K. The director will only realize compensation togrant date thereafter for the extent the trading price of Edge’s common stock is greater than thesubsequent 36 months. On December 8, 2020 Frank Bedu-Addo, Gregory Conn and Lauren Wood were awarded options at an exercise price of such stock$2.43 in the amounts of 707,800, 122,400 and 210,500, respectively, under the 2014 Plan subject to stockholder approval of our Second Amended and Restated 2014 Equity Incentive Plan under Nasdaq Marketplace Rule 5635(c). These options atwill not be exercisable until stockholder approval has been obtained. See Proposal 3 for further discussion regarding this plan. All options described above vest as to 25% of the time such options are exercised.total shares underlying the option on the first anniversary of the grant date and in equal monthly installments over the ensuing 36 months, subject to the executive’s continued service with us through the applicable vesting date. |
| (2)
| Mr. ContiSaik resigned from the Edge BoardCompany on June 19, 2018.March 20, 2020, and all of his outstanding options expired as of December 31, 2020. |
| (3) | Mr. Healy ceased to serve on the Edge Board following the 2018 annual meeting of stockholders held on June 19, 2018. |
The aggregate number of options held by the Edge non-employee directors on December 31, 2018 was as follows:
Name
| Number of
Options
|
Sol Barer, Ph.D.
| | 36,041
| |
Isaac Blech
| | 41,447
| |
Rosemary Crane
| | 3,000
| |
James J. Loughlin
| | 5,996
| |
Liam Ratcliffe, M.D., Ph.D.
| | 3,750
| |
Robert Spiegel, M.D.
| | 6,033
| |
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Private PDS Director Compensation
Prior to the completion of the Merger, the Private PDS board of directors was comprised of 5 members, Frank Bedu-Addo, Ph.D., Ian Postlethwaite, Gregory Freitag, J.D., CPA, De Lyle W. Bloomquist and Sir Richard Sykes. Each member of the Private PDS board currently serves as a member of the Company’s Board except for Mr. Postlethwaite who resigned as a director of Private PDS in connection with the Merger in March 2019.
Private PDS did not adopt a formal non-employee director compensation plan. In October 2018, the Private PDS Board of Directors agreed to grant each of Ian Postlethwaite and Sir Richard Sykes, each directors of Private PDS, shares of Private PDS common stock in lieu of cash compensation for advisory services. The Private PDS Board of Directors also agreed to grant each of Mr. Bloomquist and Mr. Freitag, each directors of Private PDS, options to purchase shares of Private PDS common stock in lieu of cash compensation for advisory services.
Director Compensation Policy
Following the MergerOn June 28, 2019, we adopted a director compensation policy based on Edge’s existing director compensation program. Pursuant to the policy, the annual retainer for non-employee directors is $40,000 and the annual retainer for the chair of the board of directors is $70,000.
This director compensation remained unchanged in 2020. Annual retainers for committee membership are as follows:
Committee | Annual Retainer |
Audit Committee Chairperson | $ | 18,500 | |
Audit Committee Member | $ | 8,000 | |
Compensation Committee Chairperson | $ | 15,000 | |
Compensation Committee Member | $ | 7,500 | |
Nominating and Corporate Governance Committee Chairperson | $ | 8,000 | |
Nominating and Corporate Governance Committee Member | $ | 4,000 | |
Audit Committee Chairperson | | | $18,500 |
Audit Committee Member | | | $8,000 |
Compensation Committee Chairperson | | | $15,000 |
Compensation Committee Member | | | $7,500 |
Nominating and Corporate Governance Committee Chairperson | | | $8,000 |
Nominating and Corporate Governance Committee Member | | | $4,000 |
These fees are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment will be prorated for any portion of such quarter that a director is not serving on our board of directors, on such committee or in such position. Non-employee directors are also reimbursed for reasonable out-of-pocket business expenses incurred in connection with attending meetings of the board of directors and any committee of the board of directors on which they serve and in connection with other business related to the board of directors. Directors may also be reimbursed for reasonable out-of-pocket business expenses authorized by the board of directors or a committee that are incurred in connection with attending conferences or meetings with management in accordance with a travel policy, as may be in effect from time to time.
In addition to the above fees, the board of directors may determine that additional committee fees are appropriate and should be payable for any newly created committee of the board of directors.
In addition, we grant to new non-employee directors upon their initial election to the board of directors, an option to purchase 9,000 shares of our common stock at an exercise price equal to the closing price of our common stock on the date of grant. Each of these options has a term of 10 years from the date of the award and 1/3 of
the these options vest upon each of the first, second and third anniversaries of the date of grant, subject to the non-employee director’s continued service as a director. This vesting accelerates as to 100% of the shares upon a change in control of the Company.
Further, on the dates of each of our annual meetings of stockholders, with the exception of this year’s Annual Meeting, each non-employee director that has served on our board of directors for at least six months automatically receives an option to purchase 9,000 shares of our common stock at an exercise price equal to the closing price of our common stock on the date of the grant and each
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non-employee director that has served on our board of directors for less than six months shall receive a pro rata share of such options. Each of these options has a term of 10 years from the date of the award and 1/3 of
the these options vest upon each of the first, second and third anniversaries of the date of grant, subject to the non-employee director’s continued service as a director, with 100% acceleration of vesting upon a change in control of the Company.
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EXECUTIVE OFFICERS
The following table sets forth information regarding our executive officers as ofbelow summarizes the Record Date.
Name
| Age
| Position
|
Frank Bedu-Addo, Ph.D.
| 54
| President, Chief Executive Officer and Director
|
Andrew Saik
| 50
| Chief Financial Officer and Director
|
Gregory L. Conn, Ph.D.
| 64
| Chief Scientific Officer
|
Lauren Wood, M.D.
| 59
| Chief Medical Officer
|
Biographies forcompensation paid by PDS to each of our executive officers is provided below.
Frank Bedu-Addo, Ph.D.
Please see Dr. Bedu-Addo’s biography on page 11 of this proxy statement under the section “Class C Directors Continuing in Office Until the 2020 Annual Meeting.”
Andrew Saik
Please see Mr. Saik’s biography on page 10 of this proxy statement under the section “Class B Directors Continuing in Office Until the 2020 Annual Meeting.”
Gregory L. Conn, Ph.D.
Dr. Conn was a founding member of the PDS team in 2005 as Chief Scientific Officer and continues to serve PDS in that role. He has more than 35 years of drug-development expertise, including development of antiviral and anticancer drugs through to commercialization. He is a graduate of the Albert Einstein College of Medicine, where he obtained both his M.S. and Ph.D., discovering novel angiogenic molecules in the human brain. Dr. Conn started his pharmaceutical career at Merck, Sharpe, and Dohme, where he continued his work on novel angiogenic factors, discovering and characterizing the VEGF family of growth factors, work which led to the development and commercialization of the anti-cancer drug Avastin. He was later a leading scientist at Regeneron Pharmaceuticals, where he established and headed various groups in the Cell and Molecular Biology and Drug Discovery departments. Dr. Conn subsequently became a Director in the Process Development department at Covance Biotechnology Services Inc., a contract research and development and drug manufacturing organization, where he supervised the analytical development teams responsible for drug characterization, method development and drug stability studies, and program teams responsible for developing drug manufacturing processes. Dr. Conn has expertise across all phases of the drug development process, including FDA and regulatory requirements, is the co-inventor of eight drug patents.
Lauren Wood, M.D.
Dr. Wood has served as Chief Medical Officer of PDS since March 2019. Dr. Wood previously served as the Head of the Vaccine Branch Clinical Trials Teamnon-employee director for the National Cancer Institute Center for Cancer Research from 2005 until 2017, where she was charged with developing a clinical translational research program to develop vaccines and immune-based therapies that harness the immune response to control, eradicate or prevent cancer and HPV. Prior to that, Dr. Wood served as a member of the senior staff of the National Cancer Institute Pediatric HIV Working Group from 1996 to 2005. Dr. Wood completed a combined residence in internal medicine and pediatrics at Baylor College of Medicine Affiliated Hospitals in Houston, Texas and a fellowship with the National Institute of Allergy and Infectious Diseases in allergy and immunology. Dr. Wood obtained a B.A. in Biology from Oberlin College and an M.D. from Duke University School of Medicine.
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EXECUTIVE COMPENSATION
Set forth below is certain information regarding the historical compensation of certain Edge executive officers prior to the completion of the Merger, which we are required by SEC rules to present in this proxy statement. In addition, set forth below is also certain information regarding the historical compensation of certain Private PDS executive officers prior to completion of the Merger, and certain arrangements we have made with certain of our executive officers following the completion of the Merger, both of which we are voluntarily providing.
Edge Executive Compensation
2018 Summary Compensation Table
The following table sets forth information for the yearsyear ended December 31, 2017 and December 31, 2018 concerning compensation of (i) Edge’s principal executive officers, (ii) Edge’s most highly compensated executive officers, other than Edge’s principal executive officer, who were serving as executive officers of Edge as of December 31, 2018 and (iii) up to two additional individuals for whom disclosure would have been made available in this table but for the fact that the individual was not serving as an officer of Edge on December 31, 2018. We refer to these executives as the Edge named executive officers.
Name and Principal Position | Year | Salary
($) | Bonus
($) | Option
Awards(1)
($) | Restricted
Stock
Units(6)
($) | All Other
Compensation(2)
($) | Total
($) |
Brian A. Leuthner
Chief Executive Officer(4)
| 2018 | | 530,000 | | | 318,000 | | | 3,356,300 | | | 143,846 | | | 7,488 | | | 4,355,634 | |
2017 | | 500,000 | | | 255,000 | | | 1,761,831 | | | — | | | 10,800 | | | 2,527,631 | |
R. Loch Macdonald, M.D., Ph.D.
Chief Scientific Officer(3)
| 2018 | | 150,750 | | | — | | | 11,578 | | | 8,510 | | | 272,179 | | | 443,017 | |
2017 | | 402,000 | | | 153,765 | | | 724,493 | | | — | | | 10,800 | | | 1,291,059 | |
Herbert J. Faleck
Chief Medical Officer(4)
| 2018 | | 416,000 | | | 187,200 | | | 646,945 | | | 50,918 | | | 11,000 | | | 1,312,063 | |
2017 | | 400,000 | | | 153,000 | | | 724,493 | | | — | | | 10,800 | | | 1,288,293 | |
Andrew Saik
Chief Financial Officer
| 2018 | | 370,000 | | | 166,500 | | | 660,490 | | | 70,632 | | | — | | | 1,267,622 | |
2017 | | 61,667 | | | — | | | 1,594,402 | | | — | | | — | | | 1,656,069 | |
W. Bradford Middlekauff
SVP, General Counsel and Secretary
| 2018 | | 347,700 | | | 157,470 | | | 791,426 | | | 42,351 | | | 11,000 | | | 1,349,947 | |
2017 | | 328,000 | | | 97,580 | | | 345,782 | | | — | | | 10,800 | | | 782,162 | |
2020:
Gregory Freitag, J.D., CPA(2) | | | 60,856 | | | 10,044(2) | | | 70,900 |
De Lyle W. Bloomquist(3) | | | 41,912 | | | 10,044(3) | | | 51,956 |
Sir Richard Sykes(4) | | | 51,500 | | | 10,044(4) | | | 61,544 |
Stephen Glover(5) | | | 93,000 | | | 10,044(5) | | | 103,044 |
Kamil Ali-Jackson, Esq.(6) | | | 54,603 | | | 12,290(6) | | | 66,893 |
Ilian Iliev, Ph.D.(7) | | | 38,462 | | | 4,570(7) | | | 43,032 |
Otis Brawley, M.D.(8) | | | 6,413 | | | 18,774(8) | | | 25,187 |
(1)
| (1) | AmountsThe amounts shown in this column do not reflect actual compensation received by the Edge named executive officers.our directors. The amounts reflect the grant date fair value of stock option awards and are calculated in accordance with the provisions of Financial Accounting Standards BoardFASB Accounting Standards Codification Topic 718-718 Compensation - Stock Compensation (“ASC Topic 718”), and assume no forfeiture rate derived in the calculation of the grant date fair value of these awards. Assumptions used in calculating the value of these awards are included in Note 7, “Stock Options”11, “Stock-based Compensation” in the notes to Edge’sthe Company’s financial statements included in Edge’sour most recent Annual Report on Form 10-K for the year ended December 31, 2018.10-K. The executivedirector will only realize compensation to the extent the trading price of Edge’sPDS’s common stock is greater than the exercise price of such stock options at the time such options are exercised. |
| (2) | Amounts shown in this column reflect Edge’s matching contributions to Edge’s 401(k) plan. For Dr. Macdonald, the amount shown in this column includes 401K plan contribution of $6,110 and the dollar value of severance benefits paid through December 31, 2018, which is comprised of continuation of Dr. Macdonald’s base salary ($251,250) and reimbursements of amounts paid for health care continuation under COBRA for Dr. Macdonald and his eligible dependents ($14,819). |
| (3) | Dr. Macdonald ceased employment with Edge on May 15, 2018. |
| (4) | Dr. Faleck ceased employment with Edge on December 31, 2018. |
| (5)
| Mr. Leuthner ceased employment with EdgeFreitag was appointed as a director of our Board on March 15, 2019 in connection with the Merger. Mr. Freitag held an aggregate of 46,867 option awards as of December 31, 2020. |
(3)
| Mr. Bloomquist was appointed as a director of our Board on March 15, 2019 in connection with the Merger. Mr. Bloomquist held an aggregate of 29,218 option awards as of December 31, 2020. On January 26, 2021, Mr. Bloomquist did not stand for re-election at the 2021 Annual Meeting of Stockholders and is no longer a director. |
(4)
| Sir Richard Sykes was appointed as director of our Board on March 15, 2019 in connection with the Merger. Sir Richard Sykes held an aggregate of 44,474 option awards as of December 31, 2020. |
(5)
| Mr. Glover was appointed to our Board on April 2, 2019. Mr. Glover held an aggregate of 18,000 option awards as of December 31, 2020. |
(6)
| Ms. Ali-Jackson was appointed to our Board on February 21, 2020. Ms. Ali-Jackson held an aggregate of 12,033 option awards as of December 31, 2020. |
(7)
| Dr. Iliev was appointed to our Board on April 8, 2020. Dr. Iliev held an aggregate of 6,374 option awards as of December 31, 2020. |
(8)
| Dr. Brawley was appointed to our Board on November 3, 2020. Dr. Brawley held an aggregate of 9,000 option awards as of December 31, 2020. |
| (6) | All outstanding Restricted Stock Units (RSUs) vested and converted into shares of PDS common stock at the time of the Merger. |
NarrativeCommitment to Summary Compensation Table
Employment Agreements
Edge entered intoCorporate Responsibility
PDS’s corporate responsibility is fundamental to our long-term success. It is also now more than ever important to our stakeholders. We have a commitment to environmental, social and governance (“ESG”) issues.
Environmental Factors: As we continue to expand our operations, we have initiated certain projects to begin tracking our environmental impact, and where feasible, have taken measures to increase our sustainability efforts. Some of our efforts include our commitment to reduce, reuse or recycle where possible or appropriate.
Social Factors: Our future performance depends significantly upon the continued service of our key employees and personnel and our continued ability to attract and retain highly skilled employees. We provide our employees with competitive salaries and bonuses, opportunities for equity ownership, development programs that enable continued learning and growth and a robust employment agreementspackage that promotes well-being across all aspects of their lives. In addition to salaries, these programs include potential annual discretionary bonuses, stock awards, a 401(k) plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, and flexible work schedules, among other benefits. We have taken proactive, aggressive action throughout the COVID-19 pandemic to protect the health and safety of our employees. We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business. We may take further actions, in compliance with eachall appropriate government regulations, that we determine to be in the best interest of the named executive officers.Other than with respect to Dr. Macdonald, whose employment with Edge terminated on May 15, 2018, Dr. Faleck, whose employment with Edge terminated on December 31, 2018, and Mr. Leuthner whose employment with Edge terminated on March 15, 2019 in connection with the Merger, the term of employment for each Edge named executive officer under his employment agreement continued until the executive’s
our employees.
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employment with Edge terminated
Diversity and Inclusion: We strive to invest in and create ongoing opportunities for any reason. Each employment agreement sets forth the Edge named executive officer’s annual base salaryemployee development in a diverse and target bonus opportunity,inclusive environment in which each team member plays a unique and the Edge named executive officer’s right to participate in Edge’s health insurance program and other benefit programs provided to Edge executives generally. Under the terms of these agreements, the Edge named executive officers’ base salaries were subject to annual review and adjustment by the Edge Board. The base salaries for 2017 and 2018 for each of Edge’s named executive officers are reflected in the table above.Each Edge employment agreement also provided for additional payments and benefits to be made in connection with the Edge named executive officer’s termination of employment, as described below. In addition, in connection with their employment, each Edge named executive officer entered into Edge’s standard confidentiality and invention assignment agreement, which set forth duties of confidentiality and certain intellectual property rights between Edge and Edge’s employees. Each Edge executive employment agreement also provided that equity and incentive compensation is subject to any clawback policy of Edge in effect from time to time, or otherwise required by law or applicable stock exchange.
2017 and 2018 Annual Cash Incentive Compensation
Expressed as a percentage of base salary, the target bonus opportunity for Mr. Leuthner, Dr. Macdonald, Dr. Faleck and Mr. Middlekauff in 2017 was 60%, 45%, 45% and 35%. The ultimate determinations of cash bonuses for the Edge named executive officers are based on the achievement of corporate goals, provided that the Edge Compensation Committee and, for Mr. Leuthner, the Edge Board, retain discretion to award a higher or lower bonus than warranted based on the achievement of the corporate goals. These goals were reviewed and approved by the Edge Compensation Committee and the Edge Boardvital role. It starts at the beginning of each year. At or after the end of such year, the Edge Compensation Committee determined the extent to which these corporate goals had been attained and, based on such determination, the Edge Compensation Committee thereafter approved the annual cash bonus to be awarded. For 2017, the Edge corporate goal categories (and weighting) were as follows: financial goals (15%); clinical/ medical affairs goals (25%); regulatory goals (20%); manufacturing goals (15%); research goals (12%); commercial goals (5%) and corporate goals (8%). After reviewing performance for 2017, the Edge Compensation Committee determined that the performance goals were achieved at 85% of target. The bonus earned by Mr. Leuthner, Dr. Macdonald, Dr. Faleck and Mr. Middlekauff for 2017 is listed in the “Nonequity Incentive Plan Compensation” column in the 2018 Summary Compensation Table above. Mr. Saik was not eligible for any bonus opportunity in 2017 following his hiring on October 31, 2017.
The named executive officers of Edge were not entitled to cash bonus compensation for 2018. However, the named executive officers of Edge other than Dr. Macdonald entered into certain retention arrangements described below in the section titled “Certain Relationships and Related-Party Transactions” under the header “Retention Arrangements.”
Equity Incentive Compensation - Option Awards
On November 3, 2014, Edge stockholders approved the Amended and Restated Edge Therapeutics, Inc. 2014 Equity Incentive Plan, or the Edge Plan. The Edge Plan was the primary program through which Edge granted equity-based incentive compensation to its employees and Edge’s directors. Under the Edge Plan, Edge may grant awards of restricted stock, options, stock appreciation rights, restricted stock units (“RSUs”) and other types of equity-based awards, in each case, with respect to Edge common stock.
Other than the stock options granted in connection with the Retention Arrangements (as described below in the section titled “Certain Relationships and Related Party-Transactions” under the header “Retention Arrangements”), all of the outstanding options granted to Edge’s named executive officers were subject to time-based vesting, such that options vested with respect to one-fourth of the underlying shares on the first anniversary of the grant date and in equal installments of 1⁄48 of the underlying shares thereafter for the subsequent 36 months. Under the employment agreements of Edge’s named executive officers, all equity awards will become 100% vested upon a change in control. However, during 2016, the Edge Compensation Committee reviewed the practice of “single trigger” vesting under Edge’s named executive officers’ employment agreements. In light of such review, the Edge Compensation Committee decided to use a new form of option award for Edge’s executives that eliminates automatic vesting on a change in control, and instead uses “double trigger” vesting (i.e., vesting does not automatically occur upon a change in control). This new vesting provision was adopted after Edge made stock option grants to Edge’s named executive officers in 2016, so none of their
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2016 stock options contain double trigger vesting. However, the stock options granted to Edge’s named executive officers in March 2017 contained double trigger vesting in connection with a change in control, and the double trigger vesting feature supersedes the provisions in Edge’s named executive officers’ employment agreements that specify single trigger vesting upon a change in control. While the Edge Compensation Committee intended to use a “double trigger” vesting approach for new option awards granted to Edge’s named executive officers, it continued to analyze each separate option award to determine whether double trigger vesting was appropriate. Further,top, where double trigger vesting was utilized, Edge intended for the double trigger vesting feature to supersede any provision in Edge’s named executive officers’ employment agreements that specified single trigger vesting with respect to future stock option awards. The stock option awards granted to Edge’s named executed officers under the Edge Plan during 2018, including their vesting terms, are set forth in the Outstanding Equity Awards at Year-End table below.
Outstanding Equity Awards at Year-End
The table below sets forth the number of securities underlying outstanding plan awards for each Edge named executive officer as of December 31, 2018.
Name | Number of
Securities
Underlying
Unexercised
Options
Exercisable | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | Option
Exercise
Price | Grant
Date | Expiration
Date | Number of
Restricted
Stock
Award
Shares
that
have not
Vested | Market
Value of
Restricted
Stock
Award
Shares
that
have not
Vested |
Brian A. Leuthner(1)(2) | | 9,319 | | | — | | $ | 40.80 | | 10/11/2013 | 10/11/2023 | | — | | | — | |
| | 3,472 | | | — | | $ | 165.60 | | 3/27/2014 | 3/27/2024 | | — | | | — | |
| | 25,217 | | | 1,096 | | $ | 127.20 | | 3/11/2015 | 3/11/2025 | | — | | | — | |
| | 8,145 | | | 3,354 | | $ | 139.80 | | 2/16/2016 | 2/16/2026 | | — | | | — | |
| | 6,130 | | | 7,244 | | $ | 177.20 | | 3/13/2017 | 3/13/2027 | | — | | | — | |
| | — | | | 14,000 | | $ | 299.60 | | 3/1/2018 | 3/1/2028 | | — | | | — | |
| | — | | | 16,903 | | $ | 22.00 | | 6/19/2018(3) | 6/19/2022 | | — | | | — | |
| | — | | | — | | | — | | 8/14/2018(4) | NA | | 8,451 | | $ | 54,090 | |
| | | | | | | | | | | | | | | | | |
R. Loch Macdonald, M.D., PhD.(1)(2) | | 3,775 | | | — | | $ | 40.80 | | 10/11/2013 | 3/1/2027 | | — | | | — | |
| | 3,197 | | | — | | $ | 165.60 | | 3/27/2014 | 3/27/2024 | | — | | | — | |
| | 5,482 | | | 365 | | $ | 127.20 | | 3/11/2015 | 3/11/2025 | | — | | | — | |
| | 8,908 | | | 2,055 | | $ | 220.00 | | 9/30/2015 | 9/30/2025 | | — | | | — | |
| | 3,010 | | | 1,239 | | $ | 139.80 | | 2/16/2016 | 2/16/2026 | | — | | | — | |
| | 2,521 | | | 2,979 | | $ | 177.20 | | 3/13/2017 | 3/13/2027 | | — | | | — | |
| | — | | | 1,000 | | $ | 22.00 | | 6/19/2018(3) | 6/19/2022 | | — | | | — | |
| | — | | | — | | | — | | 8/14/2018(4) | NA | | 500 | | $ | 3,200 | |
| | | | | | | | | | | | | | | | | |
Herbert J. Faleck(1)(2) | | 7,417 | | | — | | $ | 165.60 | | 3/27/2014 | 3/27/2024 | | — | | | — | |
| | 5,847 | | | — | | $ | 127.20 | | 3/11/2015 | 3/11/2016 | | — | | | — | |
| | 3,895 | | | 1,604 | | $ | 139.80 | | 2/16/2016 | 2/16/2026 | | — | | | — | |
| | 859 | | | 390 | | $ | 144.80 | | 3/1/2016 | 3/1/2026 | | — | | | — | |
| | 2,521 | | | 2,979 | | $ | 177.20 | | 3/13/2017 | 3/13/2027 | | — | | | — | |
| | — | | | 2,500 | | $ | 202.00 | | 1/2/2018 | 1/2/2028 | | — | | | — | |
| | — | | | 4,500 | | $ | 299.60 | | 3/1/2018 | 3/1/2028 | | — | | | — | |
| | — | | | 5,983 | | $ | 22.00 | | 6/19/2018(3) | 6/19/2022 | | — | | | — | |
| | — | | | — | | | — | | 8/14/2018(4) | NA | | 2,991 | | $ | 19,147 | |
| | | | | | | | | | | | | | | | | |
Andrew Saik(1)(2) | | 2,916 | | | 7,083 | | $ | 214.60 | | 11/1/2017 | 11/1/2027 | | — | | | — | |
| | — | | | 2,500 | | $ | 299.60 | | 3/1/2018 | 3/1/2028 | | — | | | — | |
| | — | | | 8.300 | | $ | 22.00 | | 6/19/2018(3) | 6/19/2022 | | — | | | — | |
| | — | | | — | | | — | | 8/14/2018(4) | NA | | 4,149 | | $ | 26,560 | |
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Name | Number of
Securities
Underlying
Unexercised
Options
Exercisable | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | Option
Exercise
Price | Grant
Date | Expiration
Date | Number of
Restricted
Stock
Award
Shares
that
have not
Vested | Market
Value of
Restricted
Stock
Award
Shares
that
have not
Vested |
W. Bradford Middlekauff(1)(2) | | 3,166 | | | 833 | | $ | 298.40 | | 11/16/2015 | 11/16/2025 | | — | | | — | |
| | 1,239 | | | 510 | | $ | 139.80 | | 2/16/2016 | 2/16/2026 | | — | | | — | |
| | 1,203 | | | 1,421 | | $ | 177.20 | | 3/13/2017 | 3/13/2027 | | — | | | — | |
| | — | | | 3,250 | | $ | 299.60 | | 3/1/2018 | 3/1/2028 | | — | | | — | |
| | — | | | 4,976 | | $ | 22.00 | | 6/19/2018(3) | 6/19/2022 | | — | | | — | |
| | — | | | — | | | — | | 8/14/2018(4) | NA | | 2,488 | | $ | 15,925 | |
| (1) | Except as otherwise noted, options vest with respect to one-fourth of the underlying shares on the first anniversary of the grant date and in equal installments of 1⁄48 of the underlying shares on each monthly anniversary of the grant date thereafter for the subsequent 36 months. |
| (2) | Options granted after November 3, 2014 were granted under the Edge Plan. Options granted prior to such date were granted under the Edge Therapeutics, Inc. 2012 Equity Incentive Plan. |
| (3) | Represents stock options granted in connection with the Retention Arrangements. These options vested on the earliest to occur of (i) the termination of the executive’s employment with Edge other than for cause (as defined in the Edge Plan), (ii) the consummation of a strategic transaction arising out of the strategic review discussed above and (iii) the one-year anniversary of the grant date. All of these stock options vested on March 15, 2019 upon closing of the Merger. |
| (4) | Represents RSUs granted in connection with the Retention Arrangements. These RSUs had the same vesting terms as those described in note (3) above relating to retention stock options. Each of these RSUs vested on March 15, 2019 upon closing of the Merger. |
Potential Payments Upon a Termination or Change in Control
Under the terms of their respective employment agreements, Mr. Leuthner, Dr. Faleck, Mr. Saik and Mr. Middlekauff, Edge’s named executive officers as of December 31, 2018, were entitled to certain payments and benefits in connection with the termination of their employment with Edge under specified circumstances. As disclosed above, Dr. Macdonald received certain payments and benefits in connection with the termination of his employment with Edge on May 15, 2018.
Generally, the employment agreements for Edge’s named executive officers stated that if an Edge named executive officer resigned without good reason, was terminated for cause or, with respect to all of the Edge named executive officers other than Mr. Leuthner, was terminated due to death or disability, the executive was only entitled to receive salary and benefits that were accrued but remained unpaid through the date of termination.
The Edge employment agreements provided severance benefits to be paid to each Edge named executive officer, subject to the effectiveness of a general release of claims, if the Edge named executive officer terminated his employment for good reason or if Edge terminated the named executive officer’s employment without cause. Mr. Leuthner’s employment agreement entitled him to severance benefits upon a termination due to death or disability as if such termination was without cause. The continued provision of severance benefits was conditioned on each Edge executive’s compliance with his release and the terms of Edge’s confidentiality and invention and assignment agreement such that if an executive did not comply with such agreements, severance payments to the executive would cease and previously paid severance benefits would be repaid. The terms “cause” and “good reason”we have the meanings set forth in each named executive officer’s employment agreement with Edge.
Under Mr. Leuthner’s employment agreement, upon a termination of Mr. Leuthner’s employment by Mr. Leuthner for good reason or by Edge without cause, in either case, not in connection with a change in control, Mr. Leuthner was entitled to receive 18 months of continued base salary to be paid in accordance with Edge’s normal payroll practices, plus 18 months of COBRA premium reimbursements for Mr. Leuthner and his eligible dependents. Under the employment agreements of Drs. Macdonald and Faleck and Messrs. Saik and Middlekauff, if the executive terminated his employment for good reason or Edge terminated the executive’s
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employment without cause, and such termination was not in connection with a change in control, such executives were entitled to receive 12 months of continued base salary, to be paid in accordance with Edge’s normal payroll practices, plus 12 months of COBRA premium reimbursements for the executive and his eligible dependents.
The employment agreements for Edge’s named executive officers provided enhanced severance payments upon certain employment terminations that occurred in connection with a change in control. Mr. Leuthner’s employment agreement provided that if Mr. Leuthner terminated his employment for good reason within 12 months following a change in control or if Edge terminated Mr. Leuthner’s employment other than for cause (i) within the 60-day period prior to a change in control or (ii) within the 12-month period following a change in control, then Mr. Leuthner would have been entitled to receive the same severance benefits as provided above, plus a payment equal to 1.5 times his target bonus opportunity and accelerated vesting of all unvested equity awards that did not provide for double-trigger vesting (with performance-based awards, if any, to vest at not less than target).
The employment agreements for Dr. Faleck and Messrs. Saik, Middlekauff and Leuthner provided that if they terminated their employment for good reason within 12 months following a change in control or if Edge terminated the executive’s employment other than for cause (i) within the 60-day period prior to a change in control or (ii) within the 12-month period following a change in control, then, in each case, the executive would have been entitled to receive the same severance benefits as if such termination was not in connection with a change in control. In addition, each executive would have been entitled to accelerated vesting of all unvested equity awards that did not provide for double-trigger vesting (with performance-based awards, if any, to vest at not less than target). In addition, Dr. Faleck’s employment agreement provided that if his employment terminated for any reason (other than for cause) after attaining age 55 and having completed five consecutive years of service to Edge, Dr. Faleck’s unvested options, stock appreciation rights and restricted stock (if any) would remain outstanding and continue to vest, according to the terms of such equity awards, for three years following such termination or, if earlier, until such award is 100% vested.
Each Edge named executive officer’s employment agreement also provided for full vesting of all outstanding and unvested equity awards upon a change in control (with performance-based awards, if any, to vest at not less than target). However, as described above, Edge’s Compensation Committee decided to utilize a “double trigger” vesting approach for option grants made to Edge named executive officers in March 2017 and during the period from March 2017 to the present, and intended to use this approach for future grants (though it reserved the right to use a single trigger approach for any future equity awards). The stock option grants made to Edge named executive officers in March 2017 and during the period from March 2017 through the consummation of the Merger provided for accelerated vesting in connection with a change in control only if the Edge named executive officer’s employment was terminated due to his death or disability, by Edge without cause or by the executive for good reason, in each case, within 12 months immediately following the change in control, and the double trigger vesting feature in these option grants superseded any provision in the Edge named executive officer’s employment agreement specifying single trigger vesting.
The following table sets forth potential payments payable to Edge named executive officers upon a termination of employment without cause or resignation for good reasonracially diverse directors and a termination of employment without cause or resignation for good reason in connection with a change in control. The table below reflects amounts payable to Edge named executive officers assuming their employment was terminated on December 31, 2018 and, if applicable, a change in control also occurred on such date:
| Upon Termination Without Cause or Resignation for
Good Reason-No Change in Control |
| Cash
Payment ($) | Accelerated
Equity Vesting | Other ($)(1) | Total ($) |
Brian A. Leuthner | | 795,000 | | | — | | | 38,105 | | | 833,105 | |
Herbert J. Faleck, D.O.(2) | | 416,000 | | | — | | | 25,403 | | | 441,403 | |
Andrew Saik | | 370,000 | | | — | | | 25,403 | | | 395,403 | |
W. Bradford Middlekauff | | 347,700 | | | — | | | 25,403 | | | 373,103 | |
| (1) | Reflects the value of COBRA premium reimbursements for the named executive officer and his eligible dependents. |
| (2) | Mr. Faleck became entitled to these payments upon the termination of his employment on December 31, 2018. |
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| Upon Termination Without Cause or Resignation for
Good Reason-With Change in Control |
| Cash
Payment ($) | Accelerated
Equity Vesting
($)(1) | Other ($)(2) | Total ($) |
Brian A. Leuthner(3) | | 1,510,500 | | | 4,041,238 | | | 38,105 | | | 5,589,843 | |
Herbert J. Faleck, D.O. | | 416,000 | | | 1,770,053 | | | 25,403 | | | 2,211,456 | |
Andrew Saik | | 370,000 | | | 1,662,394 | | | 25,403 | | | 2,057,797 | |
W. Bradford Middlekauff(4) | | 347,700 | | | 1,036,037 | | | 25,403 | | | 1,409,140 | |
| (1) | Assumes all outstanding options vest upon termination. |
| (2) | Reflects the value of COBRA premium reimbursements for the named executive officer and his eligible dependents. |
| (3) | Mr. Leuthner became entitled to these payments upon closing of the Merger on March 15, 2019. |
| (4) | Mr. Middlekauff resigned his position with PDS on April 12, 2019 to pursue other professional endeavors and outside the definition of Resignation for Good Reason With Change in Control. |
The following table sets forth potential payments payable to Edge named executive officers upon a change in control, regardless of whether a termination of employment occurs. For purposes of this table, the change in control is assumed to occur on December 31, 2018.
| Upon A Change in Control-No Termination of Employment |
| Cash
Payment ($) | Accelerated
Equity Vesting
($)(1) | Other ($) | Total ($) |
Brian A. Leuthner | | — | | | 1,361,534 | | | — | | | 1,361,534 | |
Herbert J. Faleck, D.O. | | — | | | 1,072,108 | | | — | | | 1,072,108 | |
Andrew Saik | | — | | | 1,126,718 | | | — | | | 1,126,718 | |
W. Bradford Middlekauff | | — | | | 402,694 | | | — | | | 402,694 | |
| (1) | Options granted in 2018 are not included in this column because such options have “double trigger” vesting. |
On May 15, 2018, Edge terminated Dr. R. Loch Macdonald’s employment without cause outside the context of a change in control.
On December 31, 2018, Edge terminated Dr. Faleck’s employment without cause outside the context of a change in control.
Pursuant to a letter agreement dated February 3, 2019, by and among Edge, Private PDS and Mr. Brian A. Leuthner, effective upon the closing of the Merger, Mr. Leuthner resigned as President and Chief Executive Officer of Edge and such termination was deemed to be a resignation for good reason in connection with a change in control. Concurrently, Mr. Leuthner resigned from the Edge Board.
Mr. Middlekauff remained employed with the Company following the consummation of the Merger and later resigned from the Company on April 12, 2019 in order to pursue other professional endeavors.
Private PDS Executive Compensation
Set forth below is certain information regarding the historical compensation of certain Private PDS executive officers prior to completion of the Merger, which we are voluntarily providing.
Private PDS’s named executive officers, consisted of its principal executive officer and the next two most highly compensated executive officers and, were:
Frank K. Bedu-Addo, Ph.D., its President and Chief Executive Officer;
Gregory L. Conn, Ph.D., its Chief Scientific Officer; and
Michael King, its Chief Financial Officer.
Dr. Bedu-Addo is currently the President and Chief Executive Officer of the Company and Dr. Conn in currently the Chief Scientific Officer of the Company. Mr. King is currently a consultant of the Company, and is no longer an executive officer.
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2018 Summary Compensation Table
The following table sets forth all of the compensation awarded to, earned by or paid to Private PDS’s named executive officers during 2017 and 2018.
Name and Principal Position | Fiscal
Year | Salary(2)
($) | Bonus
($) | Stock
Awards
($) | Option
Awards(1)
($) | All Other
Compensation
($) | Total
($) |
Frank K. Bedu-Addo, Ph.D.
President and Chief Executive Officer
| 2018 | | 275,000 | | | — | | | — | | | — | | | — | | | 275,000 | |
2017 | | 275,000 | | | — | | | — | | | — | | | — | | | 275,000 | |
Gregory L. Conn, Ph.D.
Chief Scientific Officer
| 2018 | | 106,684 | | | — | | | — | | | 136,267 | | | — | | | 242,951 | |
2017 | | 121,800 | | | — | | | — | | | — | | | — | | | 121,800 | |
Michael King
Chief Financial Officer and Chief Business Officer
| 2018 | | 168,000 | | | — | | | — | | | — | | | — | | | 168,000 | |
2017 | | 168,000 | | | — | | | — | | | — | | | — | | | 168,000 | |
| (1) | Amounts shown in this column do not reflect dollar amounts actually received by Private PDS’s named executive officers. Instead, these amounts reflect the aggregate grant date fair value of the stock option granted in the year ended December 31, 2018, computed in accordance with the provisions of Financial Accounts Standards Board Accounting Standards Codification Topic 718. Assumptions used in the calculation of these amounts are included in Note 10 to Private PDS’s financial statements included in Proxy Statement filed pursuant to Rule 424(b)(b) (Registration Statement No. 333-228937) on February 14, 2019. As required by the SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Private PDS’s named executive officers will only realize compensation to the extent the trading price of Private PDS common stock is greeted than the exercise price of such stock options. |
| (2) | These amounts include deferred salaries. Dr. Bedu-Addo and Mr. King voluntarily elected to defer salary payments of $45,833 and $49,000, respectively, until Private PDS completed a financing or strategic transaction. |
Outstanding Equity Awards at December 31, 2018
The following table provides information regarding outstanding equity awards held by Private PDS’s named executive officers as of December 31, 2018. None of the Private PDS named executive officers exercised any options to purchase Private PDS common stock in 2018.
| | | Option Awards(1) |
Name | Grant Date | Vesting
Commencement
Date | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(2) | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | Option
Exercise
Price Per
Share ($)(3) | Option
Expiration
Date |
Frank K. Bedu-Addo, Ph.D. | | 1/15/2009 | | | 2/1/2009 | | | 53,173 | | | — | | | 5.02 | | | 1/15/2019 | |
| 1/1/2010 | | | 2/1/2010 | | | 17,724 | | | — | | | 4.69 | | | 1/1/2020 | |
| 7/27/2011 | | | 8/1/2011 | | | 53,174 | | | — | | | 6.57 | | | 7/27/2021 | |
| 12/1/2012 | | | 12/1/2012 | | | 219,535 | | | — | | | 6.57 | | | 12/1/2022 | |
Gregory L. Conn, Ph.D. | | 1/1/2016 | | | 1/31/2016 | | | 17,764 | | | — | | | 6.87 | | | 1/31/2026 | |
| 7/6/2018 | | | 7/6/2018 | | | 8,730 | | | 5,719 | | | 15.33 | | | 7/6/2028 | |
Michael King | | 12/15/2014 | | | 12/15/2014 | | | 52,934 | | | — | | | 6.87 | | | 12/15/2024 | |
| (1) | All of the option awards were granted under the PDS Biotechnology Corporation 2009 Stock Option Plan, or the Private PDS 2009 Plan. |
| (2) | Pursuant to the Private PDS 2009 Plan, the vesting of all stock awards, including stock options held by its executive officers, will accelerate upon a change in control if the awardee is not offered employment with the acquirer. |
| (3) | The exercise price per share of the stock options reflects the fair market value per share of Private PDS common stock on the date of grant as determined by the Private PDS Board. |
Pension Benefits
Private PDS’s executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan sponsored by Private PDS during 2017.
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Nonqualified Deferred Compensation
Private PDS’s executive officers did not participate in, or otherwise earn any benefits under, any non-qualified deferred compensation plan sponsored by Private PDS during 2017.
Private PDS’s Employment Arrangements
The key terms of employment with Private PDS’s executive officers are described below. In addition, each of Private PDS’s named executive officers executed standard proprietary information and inventions agreements. Please see the section titled “PDS Executive Compensation-Outstanding Equity Awards at December 31, 2018” for information regarding outstanding stock awards held by Private PDS’s named executive officers.
Frank K. Bedu-Addo, Ph.D. Effective as of October 11, 2018, Private PDS entered into an employment agreement with Dr. Bedu-Addo, pursuant to which Dr. Bedu-Addo was employed as Private PDS’s President andracially diverse Chief Executive Officer. The agreement providedWe believe that Dr. Bedu-Addo would receivea diverse workforce not only positively impacts our performance and strengthens our culture, but it also cultivates an initial base salaryessential pipeline of $275,000 per year. Afterexperienced leaders for management. Hiring for diversity of thought, background and experience, and diversity of personal characteristics such as gender, race and ethnicity continues to be an area of focus as we grow our company.
Ethics and Corporate Governance: We aspire to maintain the Merger, Dr. Bedu-Addo’s base salary was increasedhighest ethical standards. All of our employees are required to at least $450,000. Dr. Bedu-Addo was eligibleadhere to receive an annual performance-based cash bonusour Code of Conduct, which provides, among other things, that all of our employees, officers and directors must (i) act with integrity and observe the highest ethical standards of business conduct in an amount up to 50%his or her dealings with our customers, suppliers, partners, service providers, competitors, employees and anyone else with whom he or she has contact in the course of performing his base salary and was eligible to receive awards under the Private PDS 2009 Plan. In addition, immediately prior to the Merger, (i) all options to purchase Private PDS common stock held by Dr. Bedu-Addo became fully vested,or her job, and (ii) Dr. Bedu-Addo received a one-time cash paymentconduct relationships with colleagues and business relationships with competitors, suppliers and customers free of $395,000 and a one-time grant of 179,486 options to purchase shares of Private PDS common stock. Following the Merger, Dr. Bedu-Addo’s employment agreement continues in full force and effect with PDS.If Dr. Bedu-Addo’s employment is terminated by PDS without cause, by Dr. Bedu-Addo for good reason,any discrimination, including based on race, color, creed, religion, age, sex, sexual preference, national origin, marital status, veteran status, handicap or by death, Dr. Bedu-Addo (or his estate) will be entitled to receive (i) all earned but unpaid amounts of his base salary, (ii) all reasonable and documented expenses incurred but unpaid, (iii) his base salary for a period of 24 months following his termination, (iv) reimbursement for certain medical expenses, and (v) a lump sum payment in an amount equal to the greater of (a) the annual incentive bonus paid in the year prior to Dr. Bedu-Addo’s termination (prorated for the period of the year Dr. Bedu-Addo was employed) or (b) the annual incentive bonus earned by Dr. Bedu-Addo in the year he was terminated.
Gregory L. Conn, Ph.D. Effective as of March 26, 2015, Private PDS entered into a consulting services agreement with Dr. Conn, pursuant to which Dr. Conn agreed to provide advisory and drug development services to Private PDS. The agreement provided that Dr. Conn would receive a $14,500 consulting fee per month. The agreement was terminable by either Private PDS or Dr. Conn with or without cause upon 90 days advance written notice. In addition, immediately prior to the Merger, Dr. Conn received a one-time grant of 44,871 options to purchase shares of Private PDS common stock.
Michael King. Effective as of December 15, 2014, Private PDS entered into a consulting services agreement with Mr. King, pursuant to which Mr. King agreed to provide Private PDS with certain financial advisory services. Pursuant to the agreement, Mr. King initially received a $7,000 fee per month, which was subsequently increased to $14,000 per month. The agreement was terminable by either Private PDS or Mr. King with or without cause upon 90 days advance written notice. In addition, immediately prior to the Merger, Mr. King received a one-time cash payment of $50,000 and a one-time grant of 44,871 options to purchase shares of Private PDS common stock.
Executive Compensation Following the Merger
The following table lists the names and positions of the individuals who are currently serving as executive officers of the Company:
Name
| Age
| Position(s)
|
Executive Officers
| | |
Frank Bedu-Addo, Ph.D.
| 54
| Chief Executive Officer and Director
|
Lauren Wood, M.D.
| 59
| Chief Medical Officer
|
Andrew Saik
| 50
| Chief Financial Officer and Director
|
Gregory L. Conn, Ph.D.
| 57
| Chief Scientific Officer
|
disability.
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Employee Director Compensation Policy
We have adopted a non-employee director compensation policy, pursuant to which non-employee directors will be eligible to receive compensation for service on the combined company’s board of directors and committees of the board of directors.
Compensation
The material terms of the elements of the Company’s executive compensation program for 2018 are described below.
Base Salary
Each named executive officer’s base salary is a fixed component of annual compensation for performing specific duties and functions, and has been established by our board of directors taking into account each individual’s role, responsibilities, skills, and experience.
Non-Equity Incentive Plan Compensation
Our annual bonus program is intended to reward our named executive officers for meeting objective or subjective individual and/or company-wide performance goals for a fiscal year.
Long-Term Equity Incentives
Our equity grant program is intended to align the interests of our named executive officers with those of our stockholders and to motivate them to make important contributions to our performance.
PDS Employment Agreements
Frank K. Bedu-Addo Ph.D.
See the description of Dr. Bedu-Addo’s employment agreement above under the heading “Private PDS’s Employment Arrangements.” Following the Merger, Dr. Bedu-Addo’s employment agreement continues in full force and effect with PDS.
Andrew Saik
Effective as of October 31, 2017, Edge entered into an at-will employment agreement with Andrew Saik, our Chief Financial Officer. Under his agreement, Mr. Saik will receive an annual base salary of $370,000, which may be increased, decreased or stay the same, depending on Mr. Saik’s performance and the performance of PDS. Under his employment agreement, Mr. Saik is eligible to earn an annual discretionary performance-based bonus, with a target bonus opportunity equal to 45% of the base salary, as determined by the Board or the Compensation Committee; provided that Mr. Saik remains employed with us on the last day of the relevant performance period. During his employment, Mr. Saik will be eligible to be granted equity awards by us, as may be determined by the Board or the Compensation Committee. The employment agreement may be terminated by us with or without Cause, on the one hand, or by Mr. Saik with or without Good Reason or upon his death or termination by reason of a Disability, on the other hand (as these terms are defined in the employment agreement). In the event that Mr. Saik’s employment is terminated (a) by us other than for Cause, death or Disability or (b) upon his resignation with Good Reason, Mr. Saik will be entitled to certain severance payments and benefits, including an amount equal to his base salary plus (i) certain Accrued Obligations through the Date of Termination (as these terms are defined in the employment agreement) and (ii) 12 months of COBRA premium reimbursement in exchange for his execution of a release of claims against us. Under the employment agreement, Mr. Saik is also entitled to participate in the employee benefit plans, policies, practices and arrangements and is eligible for the same number of holidays and vacation days, in each case as are generally allowed to other similarly situated executives of PDS. Following the Merger Mr. Saik continued as the Chief Financial Officer of PDS and the terms of his employment agreement remain the same as described above.
Gregory L. Conn, Ph.D.
Effective as of June 1, 2019, PDS entered into an employment agreement with Dr. Conn, pursuant to which Dr. Conn is employed as PDS’s Chief Scientific Officer. The agreement provides that Dr. Conn will receive an initial base salary of $290,000 per year. Dr. Conn is eligible to receive an annual performance-based cash bonus
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in an amount up to 30% of his base salary and was granted an option to purchase 40,000 shares of our common stock, with 10,000 of such option vesting on June 6, 2020, and the remaining 30,000 options vesting in 36 equal monthly installment thereafter, subject to Dr. Conn’s continued service to PDS through each vesting date.
If Dr. Conn’s employment is terminated by PDS without cause, by Dr. Conn without good reason, or by death, Dr. Conn (or his estate) is entitled to receive (i) all earned but unpaid amounts of his base salary and (ii) his bonus earned for a calendar year ended on or before the date of such termination. In addition, the Company shall, (iii) a lump sum payment of all other amounts owed to Dr. Conn, and (iv) all reasonable and documented expenses.
Lauren Wood, M.D.
Effective February 1, 2019 PDS entered into an offer letter with Dr. Wood pursuant to which Dr. Wood is employed as PDS’s Chief Medical Officer. The agreement provides that Dr. Wood will receive a base salary of $320,000 per year. Dr. Wood is eligible to receive an annual performance-based cash bonus in an amount up to 30% of her base salary and was granted an option to purchase 62,715 shares of our common stock, with 15,678 such options vesting one year after date of issuance and in 36 equal monthly installments thereafter, subject to Dr. Wood’s continued service to PDS through each vesting date.
ANTI-HEDGING/ANTI-PLEDGING POLICY
Pursuant to our insider trading policy, our employees, executive officers and directors may not (a) hold our securities in a margin account, (b) pledge our securities as collateral for a loan or (c) enter into hedging or monetization transactions or similar arrangements with respect to our securities, in each case without the advance approval of our compliance officer.
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CERTAIN BENEFICIAL OWNERS AND
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with SEC rules, shares of our common stock which may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60 days of the date of the applicable table below are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person. Subject to community property laws, where applicable, the persons or entities named in the tables below have sole voting and investment power with respect to all shares of our common stock indicated as beneficially owned by them.
The following table sets forth information with respect to the beneficial ownership of our common stock as of
August 13, 2019,November 29, 2021, or the Record Date, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our common stock (our only classes of voting securities), (ii) each of our directors and executive officers, (iii) each of our named executive officers and (iv) all of our directors and executive officers as a group. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o PDS Biotechnology Corporation,
25B Vreeland Road, Suite 300,
Connell Drive, Suite 4000, Berkeley Heights, New Jersey 07922. | Beneficial Ownership |
Name of Beneficial Owner | Shares | %(1) |
Greater than 5% Stockholders:
| | | | | | |
Asklepios Capital LLC(2) | | 605,023 | | | 11.5 | % |
NetScientific plc(3) | | 546,670 | | | 10.4 | % |
Indiana 21st Century Fund, L.P. | | 383,579 | | | 7.3 | % |
PDS Named Executive Officers and Directors:
| | | | | | |
Frank Bedu-Addo(4) | | 1,143,599 | | | 21.7 | % |
Sir Richard Sykes(5) | | 86,967 | | | 1.6 | % |
De Lyle W. Bloomquist(2)(6) | | 813,116 | | | 15.4 | % |
Gregory Freitag(7) | | 30,738 | | | 0.6 | % |
James Loughlin(8) | | 7,276 | | | 0.1 | % |
Stephen Glover(9) | | 19,508 | | | 0.4 | % |
Andrew Saik(10) | | 24,949 | | | 0.5 | % |
Lauren Wood, M.D | | — | | | — | % |
Gregory Conn, Ph.D.(11) | | 192,630 | | | 3.6 | % |
Former Edge Executive Officers and Directors:
| | | | | | |
W. Bradford Middlekauff(12) | | 8,747 | | | 0.2 | % |
Brian A. Leuthner(13) | | 48,572 | | | 0.9 | % |
R. Loch Macdonald, M.D., Ph.D.(14) | | 30,386 | | | 0.6 | % |
Herbert J. Faleck(15) | | 42,808 | | | 0.8 | % |
All current executive officers and directors as a group (9 persons) | | 2,318,783 | | | 43.9 | % |
Florham Park, NJ 07932.
Greater than 5% Stockholders:
| | | | | | |
— | | | — | | | — |
PDS Named Executive Officers and Directors:
| | | | | | |
Frank Bedu-Addo, Ph.D.(2) | | | 1,198,719 | | | 4.2% |
Sir Richard Sykes(3) | | | 480,492 | | | 1.7% |
De Lyle W. Bloomquist(4) | | | 814,868 | | | 2.9% |
Gregory Freitag(5) | | | 83,930 | | | * |
Stephen Glover(6) | | | 72,700 | | | * |
Kamil Ali-Jackson, Esq.(7) | | | 15,734 | | | * |
Ilian Iliev, Ph.D.(8) | | | 2,103 | | | * |
Otis Brawley, M.D. (9) | | | 3,000 | | | * |
Gregory L. Conn(10) | | | 228,457 | | | * |
Lauren V. Wood(11) | | | 49,541 | | | * |
Matthew Hill (12) | | | — | | | * |
Seth L. Van Voorhees, Ph.D.(13) | | | 17,647 | | | * |
Andrew Saik(14) | | | 125,548 | | | * |
All current executive officers and directors as a group (11 persons) | | | 2,949,544 | | | 10.4 % |
(1)
| Percentage ownership is based on 5,278,85028,437,940 shares of common stock outstanding as of the Record Date, together with securities exercisable or convertible into shares of common stock within 60 days after the Record Date, for each shareholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. |
| (2) | Mr. Bloomquist is a partner of Asklepios Capital LLC. The business address of Asklepios Capital LLC is 10244 E. Windrunner Dr., Scottsdale, Arizona 85255. |
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| (3)
| Includes 542,833646,515 shares of common stock and 3,837 shares subject to an outstanding warrant exercisable within 60 days of the Record Date. Sir Richard Sykes is the Chairman of NetScientific plc, or NetScientific. Sir Richard Sykes disclaims beneficial ownership of the shares of the Company’s common stock held by NetScientific. The business address of NetScientific is 6 Bevis Marks, 1st Floor, Bury Court, London EC3A 7BA. |
| (4) | Includes 620,507 shares of common stock and 523,092552,204 shares subject to outstanding options exercisable within 60 days of the Record Date. |
| (5)(3)
| Includes 60,493445,108 shares of common stock and 26,47435,384 shares subject to outstanding options exercisable within 60 days of the Record Date. |
| (6)(4)
| Includes 785,941498,631 shares of common stock held by Asklepios Capital 193,888 held by Mr. Bloomquist individually and 11,2180 shares subject to outstanding options exercisable within 60 days of the Record Date and 15,957 shares subject to outstanding warrants exercisable within 60 days of the Record Date. Mr. Bloomquist is a partner of Asklepios Capital LLC. The business address of Asklepios Capital LLC is 10244 E. Windrunner Dr., Scottsdale, Arizona 85255. As disclosed above, on January 26, 2021, Mr. Bloomquist elected not stand for re-election at the 2021 Annual Meeting of Stockholders and is no longer a director. |
| (7)(5)
| Includes 1,87146,153 shares of common stock and 28,86737,777 shares subject to outstanding options exercisable within 60 days of the Record Date. |
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| (8)(6)
| Includes 1,78163,790 shares of common stock and 5,4958,910 shares subject to outstanding options exercisable within 60 days of the Record Date. |
| (9)(7)
| Includes 19,508 shares held directly by Mr. Glover and 0 shares subject to outstanding options held by Mr. Glover that are exercisable within 60 days of the Record Date. |
| (10) | Includes 4,14911,764 shares of common stock and 20,8003,970 shares subject to outstanding options exercisable within 60 days of the Record Date. |
| (11)(8)
| Includes 115,5452,103 shares subject to outstanding options exercisable within 60 days of the Record Date. On April 8, 2020, the Company’s board, based upon the recommendation of the Nominating and Corporate Governance Committee of the board, appointed Ilian Iliev, Ph.D., as a director and new member of the Board. Dr. Iliev was presented to the Company’s board as a designee for approval by NetScientific plc or NetScientific, pursuant to the board designee rights granted to NetScientific in connection with the Company’s February 2020 public offering, as previously disclosed. Dr. Iliev is a non-executive director of NetScientific. Dr. Iliev is not deemed to be the beneficial owner of any of the shares of our common stock and 77,085or warrants held by NetScientific. |
(9)
| Includes 3,000 shares subject to outstanding options exercisable within 60 days of the Record Date. |
(10)
| (12) | Mr. Middlekauff is the former SVP, General Counsel of Edge and PDS. Mr. Middlekauff resigned as SVP, General Counsel of PDS effective as of April 12, 2019. Mr. Middlekauff’s beneficial ownership includes 3,688Includes 115,545 shares of common stock owned on April 12, 2019, immediately prior to his resignation from PDS, and 4,976112,912 shares subject to outstanding options exercisable within 60 days of the Record Date. |
(11)
| (13) | Mr. Leuthner is the former President and Chief Executive Officer and a former director of Edge. Mr. Leuthner resigned as the President, Chief Executive Officer and as a director of Edge in connection with the Merger. Mr. Leuthner’s beneficial ownership includes 31,669 shares owned on March 15, 2019, immediately prior to his resignation from Edge, and 16,903Includes 49,541 shares subject to outstanding options exercisable within 60 days of the Record Date. |
(12)
| (14)Mr. Hill is the current Chief Financial Officer of the Company, effective as of October 18, 2021. |
(13)
| Includes 17,647 shares of common stock. Dr. MacdonaldVan Voorhees’ employment with the Company was terminated without cause on September 30, 2021. |
(14)
| Mr. Saik is the former Chief ScientificFinancial Officer and a former director of Edge. Dr. Macdonald, ceased his employment with Edgethe Company. Mr. Saik resigned as the Chief Financial Officer and as a director of the Company on May 15, 2018. Dr. Macdonald’sMarch 20, 2020. Mr. Saik’s beneficial ownership includes 29,386125,548 shares owned on May 15, 2018, immediately prior to his separation from Edge,of common stock and 1,0000 shares subject to outstanding options exercisable within 60 days of the Record Date. |
| (15) | Mr. Faleck is the former Chief Medical Officer of Edge. Mr. Faleck ceased his employment with Edge on December 31, 2018. Mr. Faleck’s beneficial ownership includes 4,620 shares owned on December 31, 2018, immediately prior to his separation from Edge, and 38,188 shares subject to outstanding options exercisable within 60 days of the Record Date. |
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers (as defined under Section 16(a) of the Exchange Act), directors and persons who own greater than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. To our knowledge, based solely on a review of the Company’s public filings, we believe that all Section 16(a) filing requirements applicable to Edge’s directors, executive officers and greater-than-ten-percent beneficial owners with respect to 2018 were met.
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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION
PLANS AS OF DECEMBER 31,
2018 | (A) | (B) | (C) |
Plan category | Number of
securities to
be
issued upon
exercise of
outstanding
options,
warrants
and rights | Weighted-
average
exercise price
of outstanding
options,
warrants
and rights
($) | Number of
Securities
Remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected
in column (A)) |
Equity compensation plans approved by security holders | | 366,439 | | | 108.20 | | | 6,811 | |
Equity compensation plans not approved by security holders | | 15,750 | | | 167.00 | | | — | |
Total | | 382,189 | | | 113.60 | | | 6,811 | |
The abovefollowing table providescontains information for Edge’s historicalabout our equity compensation plans as of December 31, 2018, prior to completion of the Merger, and does not include any of Private PDS’s equity compensation plans or any compensation plans adopted by PDS following closing of the Merger on March 15, 2019.
2020.Equity compensation plans approved by security holders(1) | | | 1,530,420 | | | $12.21 | | | 311,755 |
Equity compensation plans not approved by security holders | | | 120,477 | | | $7.53 | | | 442,173 |
Total | | | 1,650,897(1) | | | $11.87 | | | 753,928 |
(1)
| Includes 1,170,630 stock options subject to the continent option grants to executive officers and employees on December 8, 2020. See Proposal 1 of this proxy statement for further discussion on the contingent grants. |
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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONSThe following is a summary of transactions since January 1, 2017 and all currently proposed transactions, to which either Edge or PDS has been a participant, in which:
the amounts exceeded or will exceed $120,000; and
any of the directors, executive officers or holders of more than 5% of the respective capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
Our Audit Committee is charged with the responsibility of reviewing and approving all related person transactions (as defined in SEC regulations), and periodically reassessing any related person transaction entered into by PDS to ensure continued appropriateness. This responsibility is set forth in our Audit Committee charter. A related party transaction will only be approved if the members of the Audit Committee determine that the transaction is in the best interests of PDS. If a director is involved in the transaction, he or she will recuse himself or herself from all decisions regarding the transaction. In addition, the Audit Committee will review these transactions under our Code of Conduct, which governs conflicts of interests, among other matters, and is applicable to our employees, officers and directors.
Edge
Indemnification Agreements
On April 24, 2017, Edge entered into an indemnification agreement with Alyssa Wyant, Edge’s Senior Vice President of Regulatory Affairs.
On September 18, 2017, Edge entered into an indemnification agreement with Rose Crane in connection with her service on the Edge Board.
On October 31, 2017, Edge entered into an indemnification agreement with Andrew Saik, Edge’s Chief Financial Officer.
Pursuant to these agreements, Edge agreed to indemnify Ms. Wyant, Ms. Crane and Mr. Saik against any and all expenses incurred by them resulting from their status as one of Edge’s executive officers or directors, as applicable, to the fullest extent permitted by Delaware law, Edge’s certificate of incorporation and Edge’s bylaws, except in limited circumstances. In addition, these indemnification agreements provide that, to the fullest extent permitted by Delaware law, Edge will pay for all expenses incurred by Ms. Wyant, Ms. Crane and Mr. Saik in connection with a legal proceeding arising out of their service to Edge. Similarly, prior to January 1, 2017, each of Edge’s directors and other officers entered into indemnification agreements on similar terms. PDS assumed these agreements following the Merger. Ms. Crane ended her term as a director at the time of the Merger and Ms. Wyant terminated her employment on December 14, 2018.
PDS entered into Indemnification Agreements consistent with the terms described above with each of PDS’s current executive officers and directors on June 28, 2019.
Employment Agreements
On February 21, 2017, Edge entered into an at-will employment agreement with Ms. Wyant. Under her agreement, Ms. Wyant received an annual base salary of $300,000, which may be increased, decreased or stay the same, depending on Ms. Wyant’s performance and the performance of Edge. Under her employment agreement, Ms. Wyant was eligible to earn an annual discretionary performance-based bonus, with a target bonus opportunity equal to 35% of the base salary, as determined by the Edge Board or the compensation committee of the Edge Board; provided that Ms. Wyant remained employed with Edge on the last day of the relevant performance period. During her employment, Ms. Wyant was eligible to be granted equity awards by Edge, as may be determined by the Edge Board or the compensation committee of the Edge Board. The employment agreement could be terminated by Edge with or without cause, on the one hand, or by Ms. Wyant with or without good reason or upon her death or termination by reason of a disability, on the other hand. Under her employment agreement, Ms. Wyant was also entitled to participate in the employee benefit plans, policies, practices and arrangements and was eligible for the same number of holidays and vacation days, in each case as are generally allowed to other similarly situated executives of Edge. Edge and Ms. Wyant are parties to a
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separation agreement pursuant to which (i) Ms. Wyant will receive a cash payment in the amount of $125,400 on the first payroll date after February 1, 2019 and (ii) all of Ms. Wyant’s stock options and Edge RSUs, in each case, (4,976 stock options granted on June 14, 2018 and 2,488 Edge RSUs granted on August 14, 2018) became fully vested upon the effectiveness of the release of claims in her separation agreement. All such stock options will remain exercisable for a period of three years following her termination date (which was December 14, 2018).
On October 31, 2017, Edge entered into an at-will employment agreement with Mr. Saik and this agreement is described above in the section titled “Executive Compensation“ under the header “PDS Employment Agreements“.
Retention Arrangements
On April 27, 2018, in connection with the subsequent announcement by Edge of the determination by the Edge Board to review strategic alternatives and to streamline its operations, the compensation committee of the Edge Board approved certain retention compensation, which consists of grants to the executive officers named below of Edge of certain stock options and Edge RSUs under the 2014 Equity Incentive Plan and cash compensation. Grants of the options, Edge RSUs and cash compensation to the executive officers were granted in the following amounts:
Recipient | Title | Shares with a
Grant Date of
June 15, 2018 | Shares with a
Grant Date of
August 14, 2018 | Cash
Compensation |
Brian A. Leuthner | President and Chief Executive Officer | | 16,903 | | | 8,451 | | $ | 318,000 | |
Andrew Saik | Chief Financial Officer | | 8,300 | | | 4,149 | | $ | 166,500 | |
W. Bradford Middlekauff | Senior Vice President, General Counsel and Secretary | | 4,976 | | | 2,488 | | $ | 157,470 | |
Herbert J. Faleck | Chief Medical Officer | | 5,983 | | | 2,991 | | $ | 187,200 | |
One-third of the total shares granted to each executive officer as indicated above were allocated as Edge RSUs. The options have an exercise price equal to the closing price of Edge common stock on the applicable grant date.
All options and Edge RSUs shall vest upon the earliest to occur, for any executive officers, of (i) the termination, other than for cause (as such term is defined in the 2014 Equity Incentive Plan), of such executive officer by Edge, (ii) the consummation of a strategic transaction arising out of the strategic review referred to above and (iii) the one-year anniversary of the grant date. The exercise period for the options shall be at any time until the three-year anniversary of the vesting date.
All of the cash compensation set forth above shall be paid, upon the earliest to occur, for any executive officer, of (i) the termination, other than for Cause (as such term is defined in the 2014 Equity Incentive Plan), of such executive by Edge, (ii) the consummation of a strategic transaction arising out of the strategic review referred to above and (iii) February 1, 2019. All of the cash compensation set forth above was paid on February 1, 2019.
Separation Agreements
Pursuant to a letter agreement dated February 3, 2019 , Edge, PDS and Mr. Brian A. Leuthner agreed: (1) to amend the agreed upon list of post-closing directors and officers included in the Agreement and Plan of Merger and Reorganization, dated as of November 23, 2018, as amended, by and among Edge, Echos Merger Sub, Inc. and PDS to no longer include Mr. Leuthner; (2) that Mr. Leuthner will resign for Good Reason in connection with a Change of Control (each as defined in the Second Amended and Restated Executive Employment Agreement, dated June 10, 2015, between Edge and Mr. Leuthner) as President and Chief Executive Officer and a member of Edge’s board of directors, effective upon the closing of the transactions contemplated by the Merger Agreement, and (3) to accept Mr. Leuthner’s resignation. Mr. Leuthner’s resignation as President and Chief Executive Officer and a member of Edge’s board of directors is not the result of any disagreement with Edge on any matter relating to Edge’s operations, policies or practices.
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PDS Related Party Transactions
Employment Agreements
PDS employment agreements are described fully above under “Executive Compensation.”
Private PDS Related Party Transactions
In November 2015, PDS received $1,000,000 from the Mr. Bloomquist in exchange for a convertible promissory note. The promissory note plus related accrued interest totaling $1,056,301 was converted into equity in December 2016, resulting in the issuance of 45,190 shares of PDS common stock to Mr. Bloomquist at a price of $23.38 per share. In August 2016, PDS received $218,767 from Mr. Bloomquist in exchange for a convertible promissory note. The promissory note plus related accrued interest totaling $223,442 was converted into equity in December 2016, resulting in the issuance of 8,496 shares of PDS common stock to Mr. Bloomquist at a price of $26.30 per share. In December 2016, Mr. Bloomquist purchased 8,556 shares of PDS common stock in conjunction with a stock offering at a price of $29.22 per share, resulting in the receipt of $250,000 by PDS.
In May 2016, PDS received $500,000 from NetScientific plc in exchange for a convertible promissory note. The promissory note plus related accrued interest totaling $516,096 was converted into equity in December 2016, resulting in the issuance of 22,079 shares of PDS common stock to NetScientific at a price of $23.92 per share. Sir Richard Sykes is the Chairman of NetScientific, and Mr. Postlethwaite is the Chief Financial Officer and Secretary of NetScientific.
In November 2015, PDS received $500,000 from The Sherrie Labrum Trust, or the Labrum Trust, in exchange for a convertible promissory note. The promissory notes plus related accrued interest totaling $528,151 were converted into equity in December 2016, resulting in the issuance of 22,595 shares of PDS common stock at a price of $23.38 per share. In August 2016, PDS received $218,767 from The Sherrie Labrum Trust in exchange for a convertible promissory note. The promissory notes plus related accrued interest totaling $223,442 were converted into equity in December 2016, resulting in the issuance of 8,496 shares of PDS common stock at a price of $8.58 per share. As of December 31, 2018, the Labrum Trust owned approximately 5.5% of the outstanding shares of PDS common stock.
In January 2018, the PDS Board approved the reduction in the conversion or purchase price per share, as applicable, for each of the transactions described above (other than the exercise of warrants by NetScientific) to $15.33 per share. As a result, PDS issued an additional (i) 7,700; 40,671 and 7,647 shares of PDS common stock to Mr. Bloomquist, for the December 2016 private placement, the November 2015 convertible promissory note, and the August 2016 convertible promissory note, respectively, (ii) 19,871 shares of PDS common stock to NetScientific for the May 2016 convertible promissory note, and (iii) 20,300 and 7,647 shares of PDS common stock to the Labrum Trust for the November 2015 convertible promissory note and the August 2016 convertible promissory note, respectively.
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PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee has selected KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Representatives of KPMG LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of KPMG LLP as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of KPMG LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine that such a change would be in our best interests and the best interests of our stockholders.
Principal Accountant Fees and Services
The following table represents aggregate fees billed to Edge for the fiscal years ended December 31, 2018 and 2017 by KPMG LLP, Edge’s independent registered public accounting firm.
| Fiscal Year
Ended
2018 | Fiscal Year
Ended
2017 |
Audit Fees | $ | 398,000 | | $ | 398,000 | |
Audit-related Fees | | 58,450 | | | 12,000 | |
Tax Fees | | — | | | 97,650 | |
All Other Fees | | — | | | — | |
Total Fees | $ | 456,450 | | $ | 507,650 | |
Audit fees: Audit fees consist of fees associated with the annual audit of our financial statements, the reviews of our interim financial statements, and all services that are normally provided by the accounting firm in connection with statutory and regulatory filings or engagements.
Audit-related fees: Audit-related fees consist of fees incurred in connection with the issuance of consent and comfort letters in connection with registration statement filings with the SEC.
Tax fees: Tax fees consist of fees for tax services, including tax compliance, and related expenses.
All KPMG LLP services and fees in the fiscal years ended December 31, 2018 and December 31, 2017 were pre-approved by the Audit Committee or its properly delegated authority.
Pre-approval Policies and Procedures
The Audit Committee pre-approves audit and non-audit services rendered by our independent registered public accounting firm, KPMG LLP. The Audit Committee pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting.
If KPMG LLP renders services other than audit services to us, the Audit Committee will determine whether the rendering of these services is compatible with maintaining KPMG LLP’s independence.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
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Report of the Audit Committee of the Board of Directors
This report is furnished by the current Audit Committee of the Board of Directors with respect to our financial statements for the year ended December 31, 2018. Prior to the Merger, the audit committee of Edge consisted of Kurt Conti, James Healy and James Loughlin, each of whom, except for Mr. Loughlin, no longer serve as directors of PDS (the “Predecessor Committee”). Mr. Loughlin served as the chair and “audit committee financial expert” within the meaning of SEC regulations of the Predecessor Committee, and he continues to serve as the chair and audit committee financial expert of the current Audit Committee.
One of the purposes of the Audit Committee is to oversee our accounting and financial reporting processes and the audit of our annual financial statements. Our management is responsible for the preparation and presentation of complete and accurate financial statements. Our independent registered public accounting firm is responsible for performing an independent audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and for issuing a report on their audit.
Edge’s Audited Financial Statements
KPMG LLP was the independent registered public accounting firm for the Edge audited financial statements for the year ended December 31, 2018. The Predecessor Committee discussed with KPMG LLP the matters required to be discussed under the Public Company Accounting Oversight Board standards. The Predecessor Committee received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding communications with audit committees concerning independence. The Predecessor Committee discussed with KPMG LLP the firm’s independence and concluded that KPMG LLP is independent from the company and management.
In performing its oversight role, the Predecessor Committee reviewed and discussed Edge’s audited financial statements for the year ended December 31, 2018 with management and KPMG LLP. Based on the foregoing, the Predecessor Committee recommended to the Board that the Edge audited financial statements for the fiscal year ended December 31, 2018, be included in Edge’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
Private PDS Audited Financial Statements
Haynie & Company was the independent registered public accounting firm for the Private PDS audited financial statements for the years ended December 31, 2018 and 2017. The current Audit Committee discussed the matters required to be discussed under the Public Company Accounting Oversight Board standards for such financial statements. The current Audit Committee received the written disclosures and the letter from Haynie & Company required by the applicable requirements of the Public Company Accounting Oversight Board regarding communications with audit committees concerning independence. The current Audit Committee discussed the independence of Haynie & Company and concluded that Haynie & Company is independent from the company and management.
In performing its oversight role, the current Audit Committee reviewed and discussed Private PDS’s audited financial statements for the years ended December 31, 2018 and 2017 with management and Haynie & Company. Based on the foregoing, the current Audit Committee recommended to the Board that the Private PDS audited financial statements for the years ended December 31, 2018 and 2017 be included on PDS’s Current Report on Form 8-K/A filed with the SEC on April 30, 2019.
The foregoing report has been furnished by the current Audit Committee.
Mr. Gregory Freitag
Mr. Stephen Glover
Mr. James J. Loughlin
The foregoing report of the Audit Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by PDS (including any future filings) under the Securities Act or the Exchange Act of 1934, as amended, or the Exchange Act, except to the extent PDS specifically incorporates such report by reference therein.
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HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for mailing of Proxy Materials or other
AnnualSpecial Meeting materials with respect to two or more stockholders sharing the same address by delivering a single mailing of Proxy Materials or other
AnnualSpecial Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are PDS stockholders will be “householding” our proxy materials. A single mailing
of Proxy Materials
or other Special Meeting materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate mailing of Proxy Materials, please notify us or your broker. Direct your written request to Investor Relations, PDS Biotechnology Corporation at
25B Vreeland Road, Suite 300,
Connell Drive, Suite 4000, Berkeley Heights,Florham Park, NJ
0792207932 or by phone at (800) 208-3343. Stockholders who currently receive multiple copies of Proxy Materials at their addresses and would like to request “householding” of their communications should contact their brokers.
The Board of Directors knows of no other matters that will be presented for consideration at the
AnnualSpecial Meeting. If any other matters are properly brought before the
AnnualSpecial Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
Andrew Saik
Frank Bedu-Addo, Ph.D.
Chief
FinancialExecutive Officer
August 16, 2019
A copy of our Annual Report to the SEC on Form 10-K for the fiscal year ended
December 31, 2018[], 2021
This Proxy Statement is available
withoutfree of charge
upon written request to: Secretary, PDS Biotechnology Corporation at
300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922.www.proxyvote.com.
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EXHIBIT A
RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS
OF THE COMPANY ON NOVEMBER 29, 2021
Ratification under Section 204 of the DGCL
WHEREAS, on June 17, 2021, the Company held its 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”), at which the Company’s stockholders, among other items, voted on the approval and adoption of the Company’s Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “2014 Plan Approval”);
WHEREAS, on July 23, 2021, David R. Rosener, a purported stockholder of the Company, filed a putative class action and shareholder derivative complaint in the Court of Chancery of the State of Delaware (C.A. No. 2021-0644 JRS) (the “Delaware Action”), in which plaintiff alleged that under the voting standards applicable to the 2014 Plan Approval, as set forth in the Company’s then current bylaws, broker non-votes were required to be treated as a vote “against” the 2014 Plan Approval;
WHEREAS, the plaintiff in the Delaware Action alleged that the Company’s stockholders did not approve the 2014 Plan Approval and their adoption was defective because the Company did not treat broker non-votes as votes “against” the 2014 Plan Approval, and had the Company treated broker non-votes as “against” votes, the 2014 Plan Approval would have had more “against” votes than “for” votes; and
WHEREAS, although the Company does not believe that the interpretation reflected in the Delaware Action regarding the bylaws of the Company that were in effect as of the time of the 2021 Annual Meeting was correct, in an effort to resolve any ambiguity regarding the 2014 Plan Approval raised by the Delaware Action, based on plaintiff’s allegation in the Delaware Action that the 2014 Plan Approval was purportedly defective, the Board has determined that it would be in the best interests of the Company and its stockholders to make best efforts to secure ratification of the 2014 Plan Approval pursuant to Section 204 of the DGCL at a special meeting of stockholders (the “Special Meeting”);
WHEREAS, the Board previously approved November 29, 2021 as the record date for determining the stockholders entitled to notice of and to vote at the Special Meeting or any adjournment or adjournments thereof; and
WHEREAS, the quorum threshold and the vote required to secure ratification of the 2014 Plan Approval pursuant to Section 204 of the DGCL is a majority of the number of shares of stock present in person or represented by proxy at the stockholder meeting of the Company and entitled to vote thereat at which a quorum is present and at which such ratification vote will be held.
NOW, THEREFORE, BE IT, RESOLVED, that the Board hereby determines that it is advisable and in the best interests of the Company and its stockholders to ratify and submit the 2014 Plan Approval for ratification by the Company’s stockholders pursuant to Section 204 of the DGCL; and be it
FURTHER RESOLVED, that the Board hereby ratifies, confirms and approves 2014 Plan Approval and confirms that the 2014 Plan Approval be submitted to the Company’s stockholders for ratification pursuant to Section 204 of the DGCL at the Special Meeting; and be it
FURTHER RESOLVED, that the notice to be given pursuant to Section 204(d) of the DGCL (the “Section 204(d) Notice”) shall be given to all holders of each class and series of valid stock and putative stock of the Company, whether voting or non-voting, who held such shares of stock of record as of April 26, 2021 (the record date of the 2021 Annual Meeting), such notice to be directed to the address of each such holder as it appears or most recently appeared, as appropriate, on the records of the Company; and be it
FURTHER RESOLVED, that the Section 204(d) Notice shall be in the form attached hereto as Exhibit A.
General
NOW, THEREFORE, BE IT RESOLVED, that the officers of the Company be, and each of them hereby is, authorized, empowered and directed to execute any applications, certificates, agreements or any other instruments or documents or amendments or supplements to such documents, including any blue sky filings and stock certificates, or to do or to cause to be done any and all other acts and things as such officers, in their discretion, may deem necessary or advisable and appropriate to carry out the purposes of the foregoing resolutions; and be it
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FURTHER RESOLVED, that any and all lawful actions heretofore taken by any officer or directors of the Company in connection with the foregoing resolutions or the 2014 Plan Approval be, and hereby are, ratified, confirmed, approved and adopted.
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EXHIBIT B
SECTION 204(D) NOTICE
NOTICE TO STOCKHOLDERS AND CERTAIN FORMER STOCKHOLDERS OF
PDS BIOTECHNOLOGY CORPORATION
Pursuant to Section 204(d) of the
Delaware General Corporation Law
Notice is hereby given pursuant to Section 204(d) of the Delaware General Corporation Law (the “DGCL”) that on November 29, 2021, the Board of Directors (the “Board”) of PDS Biotechnology Corporation (the “Company”) adopted resolutions pursuant to Section 204 of the DGCL (the “Board Ratification Resolutions”), approving the ratification of certain corporate actions, as more particularly described below (the “Ratified Approvals”). The Board Ratification Resolutions attached hereto as Exhibit A are incorporated herein by reference.
On June 17, 2021, the Company held its 2021 Annual Meeting of Stockholders (the “2021 Annual Meeting”) at which the Company’s stockholders, among other items, voted on the approval and adoption of the Company’s Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan (the “2014 Plan Approval”).
On July 23, 2021, David R. Rosener, a purported stockholder of the Company, filed a putative class action and shareholder derivative complaint in the Court of Chancery of the State of Delaware (C.A. No. 2021-0644 JRS) (the “Delaware Action”), in which plaintiff alleged that under the voting standards applicable to the 2014 Plan Approval, as set forth in the Company’s then current bylaws, broker non-votes were required to be treated as a vote “against” the 2014 Plan Approval.
The plaintiff in the Delaware Action alleged that the Company’s stockholders did not approve the 2014 Plan Approval and their adoption was defective because the Company did not treat broker non-votes as votes “against” the 2014 Plan Approval, and had the Company treated broker non-votes as “against” votes, the 2014 Plan Approval would have had more “against” votes than “for” votes.
Although the Company does not believe that the interpretation reflected in the Delaware Action regarding the bylaws of the Company that were in effect as of the time of the 2021 Annual Meeting was correct, in an effort to resolve any ambiguity regarding the 2014 Plan Approval raised by the Delaware Action, the Board has determined that it would be advisable and in the best interests of the Company and its stockholders for the Company to make best efforts to secure ratification pursuant to Section 204 of the DGCL of the 2014 Plan Approval.
Any claim alleging that any defective corporate acts or any equity awards issued pursuant to the Second Amended and Restated PDS Biotechnology Corporation 2014 Equity Incentive Plan is void or voidable due to failure of authorization, or that the Court of Chancery of the State of Delaware should declare in its discretion that a ratification in accordance with Section 204 of the DGCL not be effective or be effective only on certain conditions, must be brought within 120 days from the date of the Ratified Approvals (i.e., no later than 120 days after the date of the stockholders meeting).
This Notice is being mailed to all holders of valid stock and putative stock of the Company, whether voting or nonvoting, as of April 26, 2021 (the record date of the 2021 Annual Meeting) at the address of such holders as it appears or most recently appeared, as appropriate, on the records of the Company.
No further stockholder action is necessary with respect to the foregoing.
PDS BIOTECHNOLOGY CORPORATION | | | |
| | | | | | |
By: | | | /s/ Frank Bedu-Addo | | | |
Name: | | | Frank Bedu-Addo | | | |
Title: | | | President and Chief Executive Officer | | | |
