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Management Following the Merger
Prior to March 15, 2019, we were a clinical-stage biotechnology company known as Edge Therapeutics, Inc. (“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. Following the closing of the Merger, 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. 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.
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. 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.
On April 2, 2019, the Company’s board appointed Stephen Glover as a director. On December 9, 2019, James J. Loughlin resigned from the Company’s board to focus on his health and family and on February 21, 2020, the Company’s board appointed Kamil Ali-Jackson, Esq. as a director to fill the vacancy created by Mr. Loughlin’s resignation. Thereafter, on March 20, 2020, Andrew Saik resigned from the Company’s board and as Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer of the Company in order to pursue other professional endeavors.
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 Company’s board of directors. Dr. Iliev was presented to the Company’s board as a designee for approval by NetScientific plc (“NetScientific”), pursuant to the board designee rights granted to NetScientific in connection with the Company’s February 2020 public offering, as previously disclosed.
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 Ilian Iliev, Ph.D., 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 the Board has determined that Dr. Iliev is not an independent director because of his relationship with NetScientific plc, a current stockholder of the company.
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
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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.
Meetings of the Board of Directors
Edge’s Board met three (3) times and PDS’s Board met six (6) times during the year ended December 31, 2019. All directors attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served during 2019 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.
Stephen Glover
| | | X
| | | X*
| | | | Kamil Ali-Jackson, Esq.
| | | X
| | | | | | X*
| Frank Bedu-Addo, Ph.D.
| | | | | | | | | | De Lyle W. Bloomquist
| | | | | | | | | | Gregory Freitag, J.D., CPA
| | | X*
| | | | | | X
| Ilian Iliev, Ph.D.
| | | | | | | | | | Sir Richard Sykes
| | | | | | X
| | | X
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Audit Committee
Our Audit Committee currently consists of Mr. Freitag, Mr. Glover and Ms. Ali-Jackson, 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. Freitag, whom our Board has determined to be an “audit committee financial expert” within the meaning of SEC regulations. Each member of our Audit
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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 met one (1) time in 2019. PDS’s Audit Committee held six (6) meetings in 2019.
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;
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, Ms. Ali-Jackson, 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. PDS’s Compensation Committee held three (3) meetings in 2019.
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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.
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 2019, 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 Ms. Ali-Jackson, 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 Ms. Ali-Jackson. PDS’s Nominating and Corporate Governance Committee held two (2) meetings in 2019.
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
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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 address: PDS Biotechnology Corporation, Attn: Corporate Secretary at 303A College Road East, Princeton NJ 08540 no earlier than the close of business on March 25, 2021, and no later than the close of business on April 24, 2021. 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 Frank Bedu-Addo, our Chief Executive Officer, at PDS Biotechnology Corporation at 303A College Road East, Princeton NJ 08540, 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.
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The following table sets forth information regarding our executive officers as of the Record Date.
Frank Bedu-Addo, Ph.D.
| | | 55
| | | President, Chief Executive Officer and Director
| Gregory L. Conn, Ph.D.
| | | 65
| | | Chief Scientific Officer
| Lauren Wood, M.D.
| | | 60
| | | Chief Medical Officer
| Janetta Trochimiuk
| | | 57
| | | Controller and Principal Accounting Officer
|
Biographies for each of our executive officers is provided below.
Frank Bedu-Addo, Ph.D.
Please see Dr. Bedu-Addo’s biography on page 9 of this proxy statement under the section “Class C Directors Continuing in Office Until the 2021 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.
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