UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

☒

Filed by the Registrant  ☐☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

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☒   Preliminary Proxy Statement

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

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☐   Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12§240.14a-l2

RECRO PHARMA, INC.Societal CDMO, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate boxbox):

☒

No fee required.

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

1)

Title of each class of securities to which transaction applies:

2)

Aggregate number of securities to which transaction applies:

3)

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

4)

Proposed maximum aggregate value of transaction:

5)

Total fee paid:

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided   Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rule 0-11(a)(2)Rules 14a-6(i)(1) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

1)

Amount Previously Paid:

2)

Form, Schedule or Registration Statement No.:

3)

Filing Party:

4)

Date Filed:

0-11.

 

 

 

LOGO

1 E. Uwchlan Ave., Suite 112

Exton, Pennsylvania 19341

PRELIMINARY PROXY STATEMENT

SUBJECT TO COMPLETION, DATED MARCH 21, 2022

490 Lapp Road

Malvern, PA 19355

20202022 ANNUAL MEETING OF SHAREHOLDERS

To be Held on                     May 7, 2020, 2022

March 27, 2020                    , 2022

Dear Shareholder:

We are pleased to invite you to attend Recro Pharma, Inc.’s, or Recro’s, or the Company’s, 20202022 Annual Meeting of Shareholders, or Annual Meeting, of Societal CDMO, Inc., or Societal or the Company, which will be held at 9:10:00 a.m., Eastern time, on                     Thursday, May 7, 2020, at the offices of Pepper Hamilton LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, PA 19312. Depending on concerns about the Coronavirus, or COVID-19, we may hold a virtual Annual Meeting. We would publicly announce a determination to hold a virtual, 2022. The Annual Meeting in a press release available at www.recrogainesville.com as soon as practicable beforecan be accessed via the meeting. In that event, the Annual Meeting would be conducted solely virtually, on the above date and time, via live audio webcast.

Throughout 2019, our board of directors, or Board, worked together with management and in consultation with its outside advisors to provide oversight of corporate strategy, business objectives and potential risks facing the Company.Internet at: www.virtualshareholdermeeting.com/SCTL2022.

Details regarding admission to the Annual Meeting and the business to be conducted are more fully described in the accompanying Notice of 20202022 Annual Meeting of Shareholders, or Notice, and 20202022 Annual Meeting Proxy Statement, or Proxy Statement. Other than the proposals described in the Proxy Statement, theour board of directors, or Board, is not aware of any other matters to be presented for a vote at the Annual Meeting.  We are pleased to take advantage of the Securities and Exchange Commission, or SEC, rules that allow companies to furnish their proxy materials over the internet.

Your vote is important. Whether or not you plan to virtually attend the Annual Meeting, we hope you will vote as soon as possible. Information about voting methods is set forth in the accompanying Notice and Proxy Statement.

If you have any questions with respect to voting, please call our Chief Financial Officer, Ryan D. Lake, at (484) 395-2436.

SINCERELY,Sincerely,

Wayne B. Weisman

Chairman of the Board

Gerri HenwoodJ. David Enloe, Jr.

Director, President and Chief Executive Officer

THIS PROXY STATEMENT AND ENCLOSED PROXY CARD ARE

FIRST BEING MADE AVAILABLE TO SHAREHOLDERS ON OR ABOUT                     MARCH 27, 2020., 2022.

LOGO

NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS

PRELIMINARY PROXY STATEMENT

SUBJECT TO COMPLETION, DATED MARCH 21, 2022

Dear Shareholders:Shareholder:

You are invited to attend Recro’sthe Annual Meeting. At the Annual Meeting, shareholders will vote:vote on the following:

to elect the two director nominees that are set forth in the attached Proxy Statement to serve as Class IIIII directors, whose term will expire in 2023;2025;

to approve a one-time stock option exchange for non-executive employees;

to approve, on an advisory basis, the compensation of our named executive officers as disclosed in thisthe attached Proxy Statement;

to indicate on an advisory basis, the preferred frequency of future shareholder advisory votes on the compensation of our named executive officers; and

to ratify the selection of KPMG LLP, or KPMG, as our independent registered public accounting firm for the 20202022 fiscal year.

Shareholders also will transact any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

MEETING INFORMATION:

Date:

May 7, 2020

Time:

9:00 a.m.

Location:

Pepper Hamilton LLP
400 Berwyn Park
899 Cassatt Road
Berwyn, PA 19312*

Record Date:

Date:                    , 2022

Time: 10:00 a.m.

Location: Via the Internet

www.virtualshareholdermeeting.com/SCTL2022

Record Date:You can vote if you were a shareholder of record on March 16, 2020.

*Depending on                     concerns about COVID-19, we may hold a virtual Annual Meeting. We would publicly announce a determination to hold a virtual Annual Meeting in a press release available at www.recrogainesville.com as soon as practicable before the meeting. In that event, the Annual Meeting would be conducted solely virtually, on the above date and time, via live audio webcast., 2022.

Your vote matters. Whether or not you plan to virtually attend the Annual Meeting, please ensure that your shares are represented by voting, signing, dating and returning your proxy in the enclosed envelope, which requires no postage if mailed in the United States.

INTERNET AVAILABILITY OF PROXY MATERIALS

As permitted by Securities and Exchange Commission, or SEC, rules, we are making this proxy statement and our Annual Report on Form 10-K, or Annual Report, available to our shareholders primarily via the Internet, rather than mailing printed copies of these materials to each shareholder. We believe that this process will expedite shareholders’ receipt of the proxy materials, lower the costs of the Annual Meeting and help to conserve natural resources. On or about                     , 2022, we intend to begin mailing to each shareholder a Notice of Internet Availability of Proxy Materials, containing instructions on how to access and review the proxy materials, including our Proxy Statement and our Annual Report, on the Internet and how to access an electronic proxy card to vote on the Internet or by telephone. The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive a paper copy of the proxy materials. If you receive the Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you request one. If you receive the Notice of Internet Availability of Proxy Materials by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included therein. Only shareholders who owned our common stock on                     , 2022 are entitled to vote at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Shareholders to be Held on                , 2022:

The Notice, Proxy Statement, and our 2021 Annual Report on Form 10-K are available at:

www.proxyvote.com

By Order of the Board of Directors,

Carla Lusby

Corporate Secretary

March 27, 2020, 2022

IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS.  This Proxy Statement and the proxy card are being furnished to our shareholders on or about March 27, 2020.  This Proxy Statement and our Annual Report on Form 10-K for the

fiscal year ended December 31, 201, or 2019 Annual Report, are available to holders of our common stock at www.proxyvote.com.  If you would like to receive, without charge, a paper copy of our 2019 Annual Report, including the financial statements, please send your request to Chief Financial Officer, Recro Pharma, Inc., 490 Lapp Road, Malvern, PA 19355.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | i

SUMMARY INFORMATION (continued)

SUMMARY INFORMATION

  PROXY SUMMARY

To assist you in reviewing this year’s proposals, we call your attention to the following proxy summary. This is only a summary; please review this Proxy Statement and our 20192021 Annual Report in full.

SUMMARY OF SHAREHOLDER VOTING MATTERS

PROXY SUMMARY

Summary of Shareholder Voting Matters

Proposal

  ProposalFor More
Information

Board of Directors

Recommendation

Item 1: Election of two Class III DirectorsII directors for a Three-Year Term Expiringthree-year term expiring in 2023
2025

Page 31

44

✓ FOR Each Nominee

William Ashton Dr. Michael BerelowitzJ. David Enloe, Jr.                     Bryan M. Reasons

 

Item 2: Approval on an Advisory Basis, of the Compensation of the Company’s Named Executive Officersa one-time stock option exchange for non-executive employees

Page 31

45

✓ FOR

Item 3: Indication,Approval, on an Advisory Basis,advisory basis, of the Preferred Frequencycomprensation of Future Shareholder Advisory Votes on the Compensation of the Company’s Named Executive Officersour named executive officers

Page 31

52

✓ FOROne Year

Item 4: Ratification of Appointmentappointment of KPMG LLP as our Independent Registered Public Accounting Firmindependent registered public accounting firm for 20202022

Page 32

53

✓ FOR

Our Director NomineesOUR DIRECTOR NOMINEES

You are being asked to vote on the election of William AshtonJ. David Enloe, Jr. and Dr. Michael BerelowitzBryan M. Reasons as Class IIIII directors, each to serve for a three-year term expiring at our 20232025 Annual Meeting of Shareholders. The number of members of our Board is currently set at seveneight members and is divided into three classes, each of which has a three-year term. Currently, Class I hasand Class III each consist of three directors and Classesdirectors; Class II and III consistconsists of two directors.

The term of office of our Class IIIII directors expires at the Annual Meeting. We are nominating William AshtonJ. David Enloe, Jr. and Dr. Michael BerelowitzBryan M. Reasons for re-electionelection at the Annual Meeting to serve until the 20232025 Annual Meeting of Shareholders and until their successors, if any, are elected or appointed, or their earlier death, resignation, retirement, disqualification or removal. Directors are elected by a plurality of the votes cast by our shareholders at the Annual Meeting. The two nominees receiving the most FOR votes (among votes properly cast in person or by proxy) will be elected. If no contrary indication is made, shares represented by executed proxies will be voted FOR the election of Mr. AshtonEnloe and Dr. Berelowitz.Mr. Reasons. Each nominee has agreed to serve as a director if elected, and we have no reason to believe that any nominee will be unable to serve.


  Name

 

 

Age

 

 

Director
Since

 

 

Occupation

 

 

Independent

 

 

 

Committee

Memberships

 

 

Other Current Public

Company Boards

 

AC

 

 

CC

 

 

GC

 

 

J. David Enloe, Jr.

 

 

 

58

 

 

 

2020

 

 

President and Chief Executive Officer of the Company

 

 No - - - N/A

Bryan M. Reasons

 

 54 2017 

Chief Financial Officer,

Mallinckrodt PLC

 

 Yes C - - Aclaris Therapeutics, Inc.

 

AC = Audit Committee

 

 

CC = Compensation Committee

  

 

C = Chair

  

 

GC = Nominating and Corporate Governance Committee

 

 

   M = Member  

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | ii

SUMMARY INFORMATION (continued)

Name

Age

Director

Since

Occupation

Independent

Committee

Memberships

Other Current

Public

Company

Boards

AC

CC

NCGC

William Ashton

69

2009

Director

Yes

 

C

M

Spectrum Pharmaceuticals, Inc.;

Baudax Bio, Inc.

Dr. Michael Berelowitz

75

2014

Director

Yes

M

 

M

None

AC = Audit Committee

 

 

CC = Compensation Committee

 

C = Chair

 

NCGC = Nominating and Corporate Governance Committee

 

M = Member

 

 

 

 

 

CORPORATE GOVERNANCE SUMMARY FACTS

The following table summarizes our current Board structure and key elements of our corporate governance framework:

Governance Items

 Governance Items

Size of Board (set by the Board)

7

8            

Number of Independent Directors

6

7            

Independent Chairman of the Board

Yes

Board Self-Evaluation

Annual

 Board Self-Evaluation

Annual            
Review of Independence of Board

Annual

Independent Directors Meet Without Management Present

Yes

Voting Standard for Election of Directors in Uncontested Elections

Plurality

Diversity of Board background, experience and skills

Yes


Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | iiiRECENT CORPORATE HIGHLIGHTS

 

SUMMARY INFORMATION (continued)In March 2022, we rebranded from Recro Pharma, Inc. to “Societal CDMO, Inc.” to more accurately reflect our commitment to customer-centric service and make clear that we are a company that helps its customers make a difference.

 

Recent Corporate Highlights

On November 5, 2019,In August 2021, we announcedacquired IriSys, LLC, a San Diego-based CDMO that possesses capabilities that complement and expand our plan to separate our acute care segment from our contract development and manufacturing, or CDMO, segment, creating two independent, publicly traded companies.

On November 21, 2019, Baudax Bio, Inc., or Baudax Bio, became an independent publicly traded company asown. We acquired IriSys for approximately $50 million in a resultcombination of a pro rata distribution of its common stock to our shareholders, which we refer to herein as the Separation. In the Separation, our shareholders of record as of November 15, 2019 received one share of Baudax Bio common stock, par value $0.01 per share, for every two and one-halfcash, shares of our common stock par value $0.01 per share and cash in lieua seller promissory note. With our acquisition of any fractional sharesIriSys, we have transformed our organization into a full service CDMO with operations on both the East and West Coast of Baudax Biothe U.S. capable of offering our now expanded global client base access to services spanning from pre-Investigational New Drug development to commercial manufacturing and packaging for wide range of dosage forms.

In June 2021, we appointed Laura L. Parks, Ph.D. to our Board. Dr. Parks is an experienced business leader with a track record of developing high performance, market-focused teams at a number of leading global biopharma, CDMO and food industry companies. Retired since 2017, her more than three decades of expertise spans global leadership team collaboration, profit and loss accountability, team culture development, product lifecycle planning and brand development.

In May 2021, we announced the closing of an underwritten public offering of our common stock. We received approximately $34.5 million in gross proceeds from the offering, before underwriting discounts and commissions and estimated offering expenses.

Following the Separation,During 2021, we have concentratedentered into two amendments to our efforts on driving growth and building on the strength and commercial success of our CDMO business. The Separation is further described in our 2019 Annual Report.

We continueoutstanding credit agreement with Athyrium Capital Management to, achieve consolidated operating profitability and we set an annual revenue recordamong other things, allow for the year endedIriSys acquisition described above and extend the maturity date of the loan issued under the credit agreement from March 2023 to December 31, 2019, generating revenues of $99.2 million.2023.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | iv

TABLE OF CONTENTS

SUMMARY INFORMATION  TABLE OF CONTENTS

i

PROXY SUMMARY

i

1

GENERAL INFORMATION ABOUT THE MEETING

1

5

BOARD OF DIRECTORS

3

8

BOARD STRUCTURE AND COMPOSITION

3

8

CRITERIA FOR BOARD MEMBERSHIP

3

9

SELECTION OF CANDIDATES

4

10

POTENTIAL DIRECTOR CANDIDATES

5

10

DIRECTOR NOMINEES

6

12

CONTINUING DIRECTORS

6

14

CORPORATE GOVERNANCE AND RISK MANAGEMENT

12

20

BOARD INDEPENDENCE

12

20

BOARD LEADERSHIP STRUCTURE

12

20

BOARD COMMITTEES

12

20

RISK MANAGEMENT

12

20

EVALUATING BOARD EFFECTIVENESS

13

21

CODE OF CONDUCT

13

22

DIRECTOR ORIENTATION AND CONTINUING EDUCATION

14

22

RESCTRICTIONSRESTRICTIONS ON THE HEDGING AND PLEDGING OF RECROSOCIETAL SHARES

12

22

CORPORATE GOVERNANCE GUIDELINES

14

22

BOARD ATTENDANCE, COMMITTEE MEETINGS AND COMMITTEE MEMBERSHIP

16

23

FAMILY RELATIONSHIPS

17

25

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

17

25

SHAREHOLDER ENGAGEMENT

26

17OUR VALUES – ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE

26

DIRECTOR COMPENSATION

18

COMPENSATION PROGRAM

18

29

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

20

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

20

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

20

31

AUDIT COMMITTEE REPORT

21

32

EXECUTIVE OFFICERS

22

33

EXECUTIVE COMPENSATION

23

34

SUMMARY COMPENSATION TABLE

23

34

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 20192021

24

36

EMPLOYMENT AGREEMENTS

25

37

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

27

EMPLOYMENT OF CERTAIN RELATED PERSONS

27

POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS

27

39

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

40

29EQUITY COMPENSATION PLAN INFORMATION

43

ITEMS TO BE VOTED ON

31

44

ITEM  1: ELECTION OF CLASS IIIII DIRECTORS FOR A THREE-YEAR TERM EXPIRING IN 20232025

31

44

ITEM  2: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATIONAPPROVAL OF A ONE-TIME STOCK OPTION EXCHANGE FOR NON-EXECUTIVE EMPLOYEES

31

45

ITEM  3: ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATIONOFFICERS

31

52

ITEM  4: RATIFICATION OF APPOINMENTAPPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FORMFIRM FOR 20202022

32

53

OTHER INFORMATION

33

54

OTHER MATTERSAPPENDIX A

33

REQUIREMENTS FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR NEXT YEAR’S ANNUAL MEETING

33

SHAREHOLDER COMMUNICATIONS TO THE BOARD

33

AVAILABILITY OF MATERIALS

33

PROXY STATEMENT

This Proxy Statement, with the enclosed proxy card, is being furnished to shareholders of RecroSocietal in connection with the solicitation by our Board of proxies to be voted at our Annual Meeting and at any postponements or adjournments thereof. The Annual Meeting will be held on                     Thursday, May 7, 2020,, 2022, at 9:10:00 a.m., Eastern time atvia the offices of Pepper Hamilton LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, PA 19312. Depending on concerns about COVID-19, we may hold a virtual Annual Meeting. We would publicly announce a determination to hold a virtual Annual Meeting in a press release availableInternet at www.recrogainesville.com as soon as practicable before the meeting. In that event, the Annual Meeting would be conducted solely virtually, on the above date and time, via live audio webcast. www.virtualshareholdermeeting.com/SCTL2022.

This Proxy Statement and the enclosed proxy card are first being furnishedmade available to our shareholders on or about                     March 27, 2020.  The Notice of Internet Availability of Proxy Materials being mailed to the shareholders is not part of the Proxy Statement., 2022.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | v

TABLE OF CONTENTS (continued)

GENERAL INFORMATION

  GENERAL INFORMATION ABOUT THE MEETING

PROXY SOLICITATION

Our Board is soliciting your vote on matters that will be presented at the Annual Meeting and at any adjournment or postponement thereof. This Proxy Statement contains information on these matters to assist you in voting your shares.

This Proxy Statement and the proxy card are being furnished to our shareholders on or about                     March 27, 2020., 2022. This Proxy Statement and our 20192021 Annual Report are available to holders of our common stock atwww.proxyvote.com. If you would like to receive, without charge, a paper copy of our 2019 Annual Report, including the financial statements, please send your request to Chief Financial Officer, Recro Pharma, Inc., 490 Lapp Road, Malvern, PA 19355.

SHAREHOLDERS ENTITLED TO VOTE

All shareholders of record of our common stock at the close of business on                     March 16, 2020,, 2022, or the Record Date, are entitled to receive the Notice and to vote their shares at the Annual Meeting. As of that date, 23,455,226 shares of our common stock were outstanding. Each share is entitled to one vote on each matter properly brought to the meeting.

VOTING METHODS

You may vote at the Annual Meeting by delivering a proxy card in person (virtually) or you may cast your vote in any of the following ways:

LOGO

LOGO		LOGO

Mailing your signed proxy card or voter instruction card

Using the internet atwww.proxyvote.com

Calling toll-free from the United States, U.S. territories and Canada to 1-800-690-6903.

HOW YOUR SHARES WILL BE VOTED

In each case, your shares will be voted as you instruct. If you return a signed card, but do not provide voting instructions, your shares will be voted FOR each of the proposals in Items 1, 2, 3, and 4, and FOR ONE YEAR for the proposal in Item 3.4. If you are the record holder of your shares, you may revoke or change your vote any time before the proxy is exercised. To do so, you must do one of the following:

Vote over the internet or by telephone as instructed above. Only your latest internet or telephone vote is counted. You may not revoke or change your vote over the internet or by telephone after 11:59 p.m., Eastern time, on                     May 6, 2020;, 2022;

Sign a new proxy card and submit it by mail, which must be received no later than                     May 6, 2020., 2022. Only your latest dated proxy card will be counted;

Attend the Annual Meeting and vote in person as instructed above (attending the Annual Meeting will not by itself revoke a previously granted proxy); or

•

Virtually attend the Annual Meeting at www.virtualshareholdermeeting.com/SCTL2022. Virtually attending the Annual Meeting will not by itself revoke a previously granted proxy; or

Give our Corporate Secretary written notice before or at the meeting that you want to revoke your proxy.

If your shares are held by your broker, bank or other holder of record as a nominee or agent (i.e., the shares are held in “street name”), you should follow the instructions provided by your broker, bank or other holder of record.

Deadline for Voting. The deadline for voting by telephone or internet, other than virtually attending the Annual Meeting, is 11:59 p.m., Eastern time on                      May 6, 2020., 2022. If you are a registered shareholder and virtually attend the Annual Meeting, you may deliver your completed proxy card in person. “Street name” shareholders who wish to vote atonline during the Annual Meeting will need to obtain a proxy form from the institution that holds their shares.Meeting.

BROKER VOTING AND VOTES REQUIRED FOR EACH PROPOSAL

If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of shares held in street name. The Notice has been forwarded to you by your broker, bank or other holder of record who is considered

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | vi

the shareholder of record of those shares. As the beneficial owner, you may direct your broker, bank or other holder of record on how to vote your shares by using the proxy card included in the materials made available or by following their instructions for voting on the internet.

A broker non-vote occurs when a broker or other nominee that holds shares for another does not vote on a particular item because the nominee does not have discretionary voting authority for that item and has not received instructions from the beneficial owner of the shares. The following table summarizes how broker non-votes and abstentions are treated with respect to our proposals:

Proposal

ProposalVotes Required

Treatment of

Abstentions and Broker


Non-Votes

Broker


Discretionary


Voting

Item 1: Election of Class III DirectorsII directors for a Three-Year Term Expiringthree-year term expiring in 20232025

Plurality of the
votes cast

Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal

No

Item 2: Approval on an Advisory Basis, of the Compensation of the Company’s Named Executive Officersa one-time stock option exchange for non-executive employees

Majority of the
votes cast

Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal

No

Item 3: Indication,Approval, on an Advisory Basis,advisory basis, of the Preferred Frequencycompensation of Future Shareholder Advisory Votes on the Compensation of the Company’s Named Executive Officersour named executive officers

Majority of the
votes cast

Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal

No

Item 4: Ratification of Appointmentappointment of KPMG LLP as our Independent Registered Public Accounting Firmindependent registered public accounting firm for 20202022

Majority of the
votes cast

Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal

Yes

QUORUM

We must have a quorum to conduct business at the Annual Meeting. A quorum consists of the presence at the meeting either in personvirtually or represented by proxy of the holders of a majority of the outstanding shares of our common stock entitled to vote. For the purpose of establishing a quorum, abstentions, including brokers holding customers’ shares of record who cause abstentions to be recorded at the Annual Meeting, and broker non-votes are considered shareholders who are present and entitled to vote, and count toward the quorum. If there is no quorum, the holders of a majority of shares present atvirtually attending the Annual Meeting in person or represented by proxy or the chairman of the Annual Meeting may adjourn the meeting to another date.

PROXY SOLICITATION COSTS

We pay the cost of soliciting proxies. Proxies will be solicited on behalf of the Board by mail, telephone, and other electronic means or in person. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

HOUSEHOLDING

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and other Annual Meeting materials with respect to two or more shareholders sharing the same address by delivering a proxy statement or other Annual Meeting materials addressed to those shareholders. This process, which is commonly referred to as householding, potentially provides extra convenience for shareholders and cost savings for companies. Shareholders who participate in householding will continue to be able to access and receive separate proxy cards.

If you share an address with another shareholder and have received multiple copies of our proxy materials, you may write us at the address below to request delivery of a single copy of the Notice of Annual MeetingInternet Availability of ShareholdersProxy Materials and, 2020 Proxy Statement |if applicable, other proxy materials in the future. We undertake to deliver promptly upon written or oral request a separate copy of the proxy materials, as requested, to a shareholder at a shared address to which a single copy of the proxy materials was delivered. If you hold stock as a record shareholder and prefer to receive separate copies of our proxy materials either now or in the future, please contact us at 1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341, Attn: Corporate Secretary. If your stock is held through a brokerage firm or bank and you prefer to receive separate copies of our proxy materials either now or in the future, please contact your brokerage firm or bank.

GENERAL INFORMATION ABOUT THE MEETING (continued)

BOARD OF DIRECTORS

  BOARD OF DIRECTORS

Our Board has nominated William AshtonJ. David Enloe, Jr. and Dr. Michael Berelowitz for re-electionBryan M. Reasons as Class IIIII directors at our Annual Meeting to hold office until our 20232025 Annual Meeting of Shareholders.

Our Board is the Company’s ultimate decision-making body, except with respect to those matters reserved to the shareholders. Our Board selects the members of our senior management team, who in turn are responsible for the day-to-day operations of the Company. Our Board acts as an advisor and counselor to senior management and oversees its performance.

Our Board consists of directors divided into three classes, with each class holding office for a three-year term. William AshtonJ. David Enloe, Jr. and Dr. Michael Berelowitz,Bryan M. Reasons, current Class IIIII directors, have been nominated by our Board for electionre-election at the Annual Meeting for three-year terms that will expire at the 20232025 Annual Meeting of Shareholders and until their successors, if any, are elected or appointed, or their earlier death, resignation, retirement, disqualification or removal. Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, the Nominating and Corporate Governance Committee, or the Governance Committee, of our Board will recommend to our Board a replacement nominee. The Board may then designate the other nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for his or her replacement.

BOARD STRUCTURE AND COMPOSITION

The Governance Committee of our Board is responsible for recommending the composition and structure of our Board and for developing criteria for Board membership. The Governance Committee regularly reviews director competencies, qualities and experiences, with the goal of ensuring that our Board is comprised of an effective team of directors who function collegially and who are able to apply their experience toward meaningful contributions to our business strategy and oversight of our performance, risk management, organizational development and succession planning.

Our Third Amended and Restated Bylaws, or Bylaws, provide that the number of members of our Board shall be fixed by the Board from time to time. Our Board is currently fixed at seveneight members. Our Board is divided into three classes with staggered three-year terms. The Governance Committee is responsible for identifying individuals that it believes are qualified to become Board members.

BOARD DIVERSITY

Board diversity and inclusion is critical to our success. While we do not have a formal policy on Board diversity, the Board is committed to building a Board that consists of the optimal mix of skills, expertise, and diversity capable of effectively overseeing the execution of our business and meeting our evolving needs, with diversity reflecting gender, age, race, ethnicity, background, professional experience and perspectives. The Governance Committee considers the value of diversity on the Board in evaluating director nominees. Accordingly, the Governance Committee’s evaluation of director nominees includes consideration of their ability to contribute to the diversity of personal and professional experiences, opinions, perspectives and backgrounds on the Board.

As presently constituted, the Board represents a deliberate mix of members who have a deep understanding of our business as well as members who have different skill sets and points of view.

The matrix below provides certain highlights of the composition of our Board members based on self-identification. Each of the categories listed in the matrix below has the meaning as it is used in Nasdaq Listing Rule 5605(f).

 Board Diversity Matrix (As of                     , 2022)     
 Total Number of Directors     8    
   Female Male    Non-Binary Did Not Disclose
 Part I: Gender Identity     
      
 Directors 1 7  —   —  
      
 Part II: Demographic Background          
 African American or Black —   —     —   —  
 Alaskan Native or Native American —   —     —   —  
 Asian —   —     —   —  
 Hispanic or Latinx —   —     —   —  
 Native Hawaiian or Pacific Islander —   —     —   —  
 White 1 7   —   —  
 Two or More Races or Ethnicities —   —     —   —  
 LGBTQ+     1    
 Did Not Disclose Demographic Background     —      

CRITERIA FOR BOARD MEMBERSHIP

The Governance Committee has identified certain criteria that it will consider in identifying director nominees. Important general criteria and considerations for Board membership include:

General Criteria

GENERAL CRITERIA

➢

Ability to contribute to the Board’s range of talent, skill and experience to provide sound and prudent guidance with respect to the Company’s strategy and operations, including, but not limited to:

•  Experience at senior levels in public companies;

•  Technology and financial expertise;

•  Experience in leadership roles in the life sciences, healthcare or public health fields, including experience in the areas of development and commercialization of drug products and pharmaceutical manufacturing and quality control, including oversight and expansion of contract manufacturing and development operations;

•  Personal integrity and ethical character, commitment and independence of thought and judgment;

•  Capability to fairly and equally represent our shareholders;

•  Confidence and willingness to express ideas and engage in constructive discussion with other Board members and management, to actively participate in the Board’s decision-making process and make difficult decisions in the best interest of the Company;

•  Willingness and ability to devote sufficient time, energy and attention to the affairs of the Company and the Board; and

•  Lack of actual and potential conflicts of interest.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  2

The Governance Committee also considers, on an ongoing basis, the background, experience and skills of the incumbent directors that are important to our current and future business needs, including, among others, the combined mix of experience in the following areas:

Director Skills and Experience

DIRECTOR SKILLSAND EXPERIENCE

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Business Leadership & Operations

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International Business

Medicine & Science

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Medicine & Science

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Risk Management

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Life Sciences, Healthcare & Public Health

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Government, Regulatory & Public Policy

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Financing & Accounting

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Pharmaceutical Manufacturing & Supply

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Government, Regulatory & Public Policy

Academia

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Pharmaceutical Product Reimbursement

Pharmaceutical Manufacturing & Supply

Pharmaceutical Marketing & Sales

Technology

Financing & Accounting

Academia

SELECTION OF CANDIDATES

Director Skill Set Considerations; Use of Matrix

In recruiting and selecting Board candidates, the Governance Committee takes into account the size of the Board and considers a skills matrix. This skills matrix helps the Governance Committee determine whether a particular Board member or candidate possesses one or more of the skill sets, as well as whether those skills and/or other attributes qualify him or her for service on a particular committee. The Governance Committee also considers a wide range of additional factors, includingincluding: each director’s andor candidate’s projected retirement date, to assist in Board succession planning; other positions the director or candidate holds, including other boards of directors on which he or she serves; and the independence of each director andor candidate, to ensure that a substantial majority of the Board is independent. While the Company does not have a formal policy on Board diversity, the Governance Committee considers the value of diversity on the Board in evaluating director nominees. Accordingly, the Governance Committee’s evaluation of director nominees includes consideration of their ability to contribute to the diversity of personal and professional experiences, opinions, perspectives and backgrounds on the Board.

POTENTIAL DIRECTOR CANDIDATES

On an ongoing basis, the Governance Committee considers potential director candidates identified on its own initiative as well as candidates referred or recommended to it by other directors, members of management, search firms, shareholders and others (including individuals seeking to join the Board). Shareholders who wish to

recommend candidates may contact the Governance Committee in the manner described under the heading “Shareholder Communications to the Board” in this Proxy Statement. Shareholder nominations must be made according to the procedures required under our Bylaws and described in this Proxy Statement under the heading “Requirements for Submission of Shareholder Proposals for Next Year’s Annual Meeting.” Shareholder-recommended candidates and shareholder nominees whose nominations comply with these procedures and who meet the criteria referred to above will be evaluated by the Governance Committee in the same manner as the Governance Committee’s nominees.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 3

BOARD OF DIRECTORS (continued)

In each of the director nominee and continuing director biographies that follow, we highlight the specific experience, qualifications, attributes and skills that led the Board to conclude that the director nominee or continuing director should serve on our Board at this time.

DIRECTOR NOMINEES

CLASS III DIRECTORS— PRESENTII DIRECTORS — TERMS EXPIRING AT THE ANNUAL MEETING AND PROPOSED TERMS TO EXPIRE IN 2023

 

J. DAVID ENLOE, JR.

Age: 58

Director Since: 2020

Committee Memberships: None

Other Public Directorships: None

  LOGO     

Business

Leadership

& Operations

J. David Enloe, Jr. has been a member of our Board since December 2020. Mr. Enloe has served as our President and Chief Executive Officer since December 2020 and formerly served as President and Chief Executive Officer of Ajinomoto Bio-Pharma Services, a global, fully integrated CDMO from December 2013 to December 2020. Before joining Ajinomoto, Mr. Enloe served as the Head of the Viral Therapeutics Business Unit at Lonza Group AG, a Swiss multinational chemicals and biotechnology company, which unit was the result of Lonza’s acquisition of Vivante GMP Solutions, a gene therapy CDMO, that Mr. Enloe founded in June 2009 and where he served as President and CEO until its sale to Lonza AG. Before founding Vivante, Mr. Enloe spent 14 years with Introgen Therapeutics, joining as its first employee in 1995 and spending several years as Senior Vice President and COO before ultimately being named President and CEO. He is a Certified Public Accountant and started his career in public accounting with Arthur Andersen & Co. Mr. Enloe received a B.B.A. in Accounting from the University of Texas at Austin.

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Life Sciences,

Healthcare

& Public Health

  LOGO     

International

Business

  LOGO     

Government,

Regulatory

& Public

Policy

  LOGO     

Risk

Management

  LOGO     

Finance &

Accounting

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Medicine

& Science

Skills & Qualifications: Mr. Enloe’s extensive leadership experience in the CDMO industry, including holding senior leadership positions at a number of CDMOs, along with his deep knowledge of the pharmaceutical industry and insights into the CDMO market contributed to our Board’s conclusion that he should serve as a director of our Company.

BRYAN M. REASONS

William L. AshtonAge: 54

Director Since: 2017

Committee Memberships:
Audit (Chair)		Other Public Directorships:
Aclaris Therapeutics, Inc.

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Business

Leadership

& Operations

Bryan M. Reasons has been a member of our Board since 2017. Mr. Reasons has served as the Chief Financial Officer of Mallinckrodt plc, a global specialty pharmaceutical company since March 2019. Prior to that, Mr. Reasons served as the Senior Vice President, Finance and Chief Financial Officer of Impax Laboratories, Inc., or Impax, a specialty pharmaceutical company, from December 2012 until February 2019. He previously served as the Acting Chief Financial Officer of Impax from June 2012 to December 2012 and as the Vice President, Finance of Impax from January 2012 to June 2012. Prior to joining Impax, Mr. Reasons served as Vice President, Finance, from January 2010 to November 2011 and as Vice President, Risk Management and General Auditor, from October 2005 to January 2010 at Cephalon, Inc., or Cephalon, a biopharmaceutical company. Following the acquisition of Cephalon by Teva Pharmaceutical Industries Ltd., or Teva, a generic pharmaceuticals company, he served as Vice President, Finance of Teva from November 2011 to January 2012. Prior to joining Cephalon, Mr. Reasons held various finance management positions at E.I. Du Pont De Nemours and Company from 2003 to 2005 and served as senior manager at PricewaterhouseCoopers LLP from 1992 to 2003. Mr. Reasons currently serves as a director and chair of the audit committee of Aclaris Therapeutics, Inc., a position he has held since April 2018. Mr. Reasons has a B.S. in accounting from Pennsylvania State University and an M.B.A. from Widener University and is a certified public accountant.

Age: 69  LOGO     

Finance &

Accounting

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Life Sciences,

Healthcare

& Public

Health

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Risk

Management

Skills & Qualifications: Mr. Reasons’ extensive experience in the pharmaceutical industry, including his experience in senior leadership positions at a number of large pharmaceutical companies, as well as his expertise in financial and accounting matters, contributed to our Board’s conclusion that he should serve as a director of our Company.

CONTINUING DIRECTORS

CLASS III DIRECTORS — TERMS EXPIRING AT THE 2023 ANNUAL MEETING OF SHAREHOLDERS

WILLIAM L. ASHTON

Age: 71

Director Since: 2009

Committee Memberships:
Compensation (Chair), Nominating and Corporate Governance

Other Public Directorships:
Spectrum Pharmaceuticals, Inc.; Baudax Bio, Inc.

  LOGO     

Business

Leadership

& Operations

Government, Regulatory & Public Policy

Risk Management

Academia

Medicine & Science

Pharmaceutical Marketing & Sales

Pharmaceutical Product Reimbursement

William L. Ashton has been a member of our Board since 2009. Since the beginning of 2013, Mr. Ashton has been a principal at Harrison Consulting Group, Inc., a privately-held biopharmaceutical consulting firm. From August 2009 to June 2013, Mr. Ashton was the senior vice president of external affairs reporting to the president and an assistant professor at the University of the Sciences in Philadelphia, Pennsylvania. From August 2005 to August 2009, Mr. Ashton was the founding Dean of the Mayes College of Healthcare Business and Policy. Mr. Ashton has 29 years’ experience in the biopharmaceutical industry. From 1989 to 2005, Mr. Ashton held a number of positions at Amgen Inc., a biotechnology company, including vice president of U.S. sales and vice president of commercial and government affairs. Mr. Ashton currently serves on the boards of directors of Spectrum Pharmaceuticals, Inc. and Baudax Bio. He previously served on the board of directors of Galena Biopharma, Inc. from April 2013 until January 2018. He is also a member of the board of directors of the National Osteoporosis Foundation and Friends of the National Library of Medicine at the National Institutes of Health. Mr. Ashton holds a B.S. in Education, from the California University of Pennsylvania and an M.A. in Education, from the University of Pittsburgh.

 

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Government,

Regulatory &

Public Policy

  LOGO     

Risk

Management

  LOGO     

Academia

  LOGO     

Medicine

& Science

Skills & Qualifications: Mr. Ashton’s extensive experience with pharmaceutical and biological product commercialization and reimbursement issues, including developing and leading a commercial sales force, his past advisory role during the early years of Auxilium Pharmaceuticals, Inc., as well as his governance experience as a board member of public and privately-held companies and his reimbursement and scientific expertise contributed to our Board’s conclusion that he should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  4

BOARD OF DIRECTORS (continued)

Dr. Michael Berelowitz

DR. MICHAEL BERELOWITZ

Age: 75Age: 77

Director Since: 2014

Committee Memberships: Audit, Nominating and Corporate
Governance

(Chair)

Other Public Directorships: None

  LOGO     

Medicine

& Science

Life Sciences, Healthcare & Public Health

Academia

Government, Regulatory & Public Policy

Risk Management

 

Dr. Michael Berelowitz has been a member of our Board since 2014. Since 2011, Dr. Berelowitz has served as our biopharmaceutical consultant. From 2009 to 2011, Dr. Berelowitz was Senior Vice President and Head of Clinical Development and Medical Affairs in the Specialty Care Business Unit at Pfizer, Inc., or Pfizer, a pharmaceutical company. From 1996 to 2009, he held various other roles at Pfizer, Inc., beginning as a Medical Director in the Diabetes Clinical Research team and then assuming positions of increasing responsibility. Prior to that, Dr. Berelowitz spent a number of years in academia. Dr. Berelowitz previously served on the board of directors of Oramed Pharmaceuticals Inc. from June 2010 to August 2016, Kamada Ltd. and Cellect Biotherapeutics Ltd. Among his public activities, Dr. Berelowitz has served on the board of directors of the American Diabetes Association and the Clinical Initiatives Committee of the Endocrine Society and has chaired the Task Force on Research of the New York State Council on Diabetes. He has also served on several editorial boards, including the Journal of Clinical Endocrinology and Metabolism and Endocrinology, Reviews in Endocrine and Metabolic Disorders and Clinical Diabetes. Dr. Berelowitz has authored and co-authored more than 100 peer-reviewed journal articles and book chapters in the areas of pituitary growth hormone regulation, diabetes and metabolic disorders. Dr. Berelowitz holds adjunct appointments as Professor of Medicine in the Divisions of Endocrinology and Metabolism at SUNY –— StonyBrook and Mt. Sinai School of Medicine in New York. Dr. Berelowitz holds a MBChB degree from University of Cape Town School of Medicine.

 

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Life Sciences,

Healthcare &

Public Health

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Academia

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Government,

Regulatory &

Public Policy

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Risk

Management

Skills & Qualifications: Dr. Berelowitz’s years of experience in management roles in the pharmaceutical industry, his experience in overseeing and reviewing clinical trials and drug development, as well as his vast medical skill and scientific expertise in the fields of endocrinology and diabetes, contributed to our Board’s conclusion that he should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  5

BOARD OF DIRECTORS (continued)

CONTINUING DIRECTORS

CLASS I DIRECTORS —TERMS EXPIRING AT THE 2021 ANNUAL MEETING OF SHAREHOLDERS

LAURA L. PARKS, PH.D.

Winston J. ChurchillAge: 63

Director Since: 2021

Committee Memberships:
Audit and Compensation		Other Public Directorships: None

  LOGO     

Business

Leadership

& Operations

Laura L. Parks, Ph.D., has most recently served on the executive leadership team at Patheon, a global biopharma CDMO, until its acquisition by Thermo Fischer Scientific in 2017. In this role, she led strategic commercial and operational initiatives including development and execution of an end-to-end pharmaceutical services offering, as well as global strategic enterprise accounts organization. Prior to her role with Patheon, she served as president of DSM Pharmaceuticals, the CDMO subsidiary of DSM focused on finished dose pharmaceuticals, including sterile injectables, orals and topicals, from June 2012 until its merger in March 2014 with Patheon. Dr. Parks also has extensive experience in the food ingredient industry, having served as vice president of sales for Solae, a division of DuPont. While at Solae, Dr. Parks also held the position of regional vice president, North America, leading the company’s $120 million food ingredients business. She currently serves on the advisory board of Lindy BioSciences, a Durham, NC-based development-stage protein therapeutic formulations company. Dr. Parks earned a Ph.D. in food science from the University of Georgia and bachelor’s degree from Ohio State University.

Age: 79  LOGO     

Government,

Regulatory &

Public Policy

  LOGO     

Risk

Management

  LOGO     

Academia

  LOGO     

Medicine

& Science

Skills & Qualifications: Dr. Parks’ extensive executive leadership experience as well as her many years of experience in the biopharma industry contributed to our Board’s conclusion that she should serve as a director of our Company.

CLASS I DIRECTORS — TERMS EXPIRING AT THE 2024 ANNUAL MEETING OF SHAREHOLDERS

   WINSTON CHURCHILL

Age: 81

Director Since: 2008

Committee Memberships: Compensation, Nominating
Audit and Corporate Governance (Chair)

Compensation

Other Public Directorships: Innovative Solutions and Support, Inc., Amkor Technology, Inc., Baudax Bio, Inc.

Business Leadership & Operations

Finance & Accounting

Medicine & Science

Risk Management

Life Sciences, Healthcare & Public Health

Technology

  

LOGO     

 

Business

Leadership

& Operations

Winston J. Churchill has been a member of our Board since 2008. Since 2007, Mr. Churchill has been a director of the corporate general partner of the common general partner of SCP Vitalife Partners II, L.P. and SCP Vitalife Partners (Israel) II, L.P., collectively referred to herein as SCP Vitalife, which beneficially owns         12%% of our outstanding stock as of                 March 19, 2020., 2022. He has also served as a managing member of SCP Vitalife Management Company, LLC, which by contract provides certain management services to the common general partner of SCP Vitalife. Mr. Churchill has also served since 1993 as the President of CIP Capital Management, Inc., the general partner of CIP Capital, L.P., ana Small Business Administration-licensed private equity fund. Prior to that, Mr. Churchill was a managing partner of Bradford Associates, which managed private equity funds on behalf of Bessemer Securities Corporation and Bessemer Trust Company. From 1967 to 1983, Mr. Churchill practiced law at the Philadelphia firm of Saul Ewing, LLP, where he served as Chairman of the Banking and Financial Institutions Department, Chairman of the Finance Committee and was a member of the Executive Committee. Mr. Churchill is a director of Innovative Solutions and Support, Inc., Amkor Technology, Inc., Baudax Bio and various SCP Vitalife portfolio companies and he previously served as a director of Griffin Industrial Realty from April 1997 until May 2016. In addition, he serves as a director on the boards of a number of charities and as a trustee of educational institutions including the Gesu School and Young Scholars Charter School and is a Trustee Fellow of Fordham University. From 1989 to 1993, Mr. Churchill served as Chairman of the Finance Committee of the Pennsylvania Public School Employees’ Retirement System. He was awarded a B.S. in Physics, summa cum laude, from Fordham University followed by an M.A. in Economics from Oxford University, where he studied as a Rhodes Scholar, and a J.D. from Yale Law School.

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Finance &

Accounting

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Medicine &

Science

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Risk

Management

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Life Sciences,

Healthcare &

Public Health

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Technology

Skills & Qualifications: Mr. Churchill’s insight into financial and investment matters from his experience in private equity investing in life sciences companies, his financial and corporate governance experience from serving on numerous public and private boards of directors, as well as his long service as a director on our Board, where he gained extensive knowledge of our business and history, contributed to our Board’s conclusion that he should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  6

BOARD OF DIRECTORS (continued)

JAMES C. MILLER

Wayne B. WeismanAge: 71

Director Since: 2021

Committee Memberships:
Audit and Compensation		Other Public Directorships: None.

  LOGO     

Pharmaceutical

Manufacturing

& Supply

James Miller has been a member of our Board since February 2021. Mr. Miller previously served as the founder and president of PharmSource Information Services, Inc., a market intelligence service, from 1996 to February 2018. Since February 2018, Mr. Miller has provided pharmaceutical manufacturing strategy consulting services to various pharmaceutical manufacturing companies. Mr. Miller previously served as a consultant in corporate strategy at the Boston Consulting Group and as an economist at The World Bank. Mr. Miller serves on the advisory boards of Ajinomoto Bio-Pharma Services, a contract development and manufacturing organization, and C-Squared Pharma, a generic active pharmaceutical ingredient supplier. Mr. Miller received a bachelors in International Study and Economics from American University, a Masters of Regional Planning at the University of North Carolina, Chapel Hill and an MBA from Stanford University Graduate School of Business.

Age: 64  LOGO     

Business

Leadership &

Operations

  LOGO     

Financing &

Accounting

   LOGO     

Life Sciences,

Healthcare &

Public Health

  LOGO     

Medicine &

Science

Skills & Qualifications: Mr. Millers’ extensive experience with pharmaceutical and biological contract manufacturing and development, his deep industry knowledge and his experience as a pharmaceutical and biological manufacturing consultant contributed to our Board’s conclusion that he should serve as a director of our Company.

   WAYNE B. WEISMAN

Age: 66

Director Since: 2008

Committee Memberships: Nominating and Corporate Memberships: Governance

Other Public Directorships: Directorships: ReWalk Robotics Ltd., Baudax Bio, Inc.

  LOGO     

Business

Leadership

& Operations

Finance & Accounting

Medicine & Science

Life Sciences, Healthcare & Public Health

International Business

Risk Management

Technology

Wayne B. Weisman has been a member and the chairman of our Board since 2008. Since 2007, Mr. Weisman has been a director of the corporate general partner of the common general partner of SCP Vitalife, which beneficially owns approximately         12%% of our outstanding stock as of                 March 19, 2020., 2022. He has also served as a managing member of SCP Vitalife Management Company, LLC, which by contract provides certain management services to the common general partner of SCP Vitalife. He has also led the activities of SCP Private Equity Partners II, L.P., a venture capital fund of which he and Mr. Churchill are principals, in the life sciences area; these activities include investments in the United States and Israel. He has also led several other technology investments for SCP Private Equity Partners II, L.P. He has been a member of the investment committee of the Vitalife Life Sciences funds since their inception in 2002 and has worked closely with these funds since then. Mr. Weisman was a member of the board of directors of CIP Capital, L.P., a small business investment company licensed by the U.S. Small Business Administration since its inception in 1991 until 2017. From 1992 to 1994, Mr. Weisman was executive vice president and member of the board of a public drug delivery technology company. In addition, he also operated a management and financial advisory firm focusing on the reorganization and turnaround of troubled companies and began his career practicing reorganization law at a large Philadelphia law firm. Mr. Weisman possesses extensive experience in venture capital investing, particularly in the life sciences area. In addition to being our Chairman, Mr. Weisman serves on the board of directors of ReWalk Robotics Ltd. and Baudax Bio and on the board of directors for a number of private companies. He is the Vice Chairman of the board of trustees of Young Scholars Charter School, and was chairman of that board from 2010 to 2017. He is also an advisory board member of the Philadelphia-Israel Chamber of Commerce and Mid-Atlantic Diamond Ventures, the venture forum of Temple University. Mr. Weisman holds a B.A. from the University of Pennsylvania, and a J.D. from the University of Michigan Law School.

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Finance &

Accounting

  LOGO     

Medicine &

Science

  LOGO     

Life Sciences,

Healthcare &

Public Health

  LOGO     

International

Business

  LOGO     

Risk

Management

  LOGO     

Technology

Skills & Qualifications: As a long time director of our company, Mr. Weisman'sWeisman’s extensive knowledge of our business and history, experience as a board member of multiple publicly-traded and privately-held companies and expertise in developing, financing and providing strong executive leadership to numerous growing life science companies contributed to our Board’s conclusion that he should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  7

BOARD OF DIRECTORS (continued)

Arnaud Ajdler

Age: 44  CORPORATE GOVERNANCE AND RISK MANAGEMENT

Director Since: 2019

Committee Memberships: Audit, Compensation

Other Public Directorships: Hill International, Inc.

Business Leadership & Operations

Finance & Accounting

International Business

Risk Management

Academia

Arnaud Ajdler has been a member of our Board since March 2019.  Mr. Ajdler founded and has been the managing partner of Engine Capital L.P., a value-oriented investment firm, since 2013. Prior to that, he was a senior managing director and a partner at Crescendo Partners, a value-oriented activist investment firm, from 2003 to 2013. Before joining Crescendo Partners, Mr. Ajdler worked as a management consultant for Mercer Management Consulting and Boston Consulting Group, as well as at Deutsche Bank. He is also an adjunct professor at the Columbia Business School where he teaches a course in Value Investing. Mr. Ajdler has been a board member and chair of the compensation committee of Hill International, Inc. since October 2018. He also served as a director and on various committees on the boards of a number of companies, including Stewart Information Services Corporation, Charming Shoppes, Inc., Imvescor Restaurant Group Inc., StarTek, Inc., Destination Maternity, O'Charley's Inc., and The Topps Company. Mr. Ajdler was appointed to our Board pursuant to an agreement between the Company and Engine Capital, L.P., Engine Jet Capital, L.P., Engine Investments, LLC and Mr. Ajdler, dated March 25, 2019.  Mr. Adler earned a B.Sc. in Mechanical Engineering from the Free University of Brussels, Belgium, an SM in Aeronautics from the Massachusetts Institute of Technology and an MBA from Harvard Business School.

Skills & Qualifications: Mr. Ajdler’s significant investment experience and extensive corporate governance experience gained from his participation on multiple public company boards, contributed to our Board’s conclusion that he should serve as a director of our Company.


Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  8

BOARD OF DIRECTORS (continued)

CLASS II DIRECTORS —TERMS EXPIRING AT THE 2022 ANNUAL MEETING OF SHAREHOLDERS

Gerri Henwood

Age: 67

Director Since: 2008

Committee Memberships: None

Other Public Directorships: Tetraphase Pharmaceuticals, Inc., Baudax Bio, Inc.

Business Leadership & Operations

Gerri Henwood has served as our President and Chief Executive Officer and a member of our Board since our inception in 2008. Ms. Henwood also serves as Chief Executive Officer and a director of Baudax. From 2006 to 2013, Ms. Henwood served as the President of Malvern Consulting Group, or MCG, a pharmaceutical incubator and consulting firm. From 1999 to 2006, Ms. Henwood was the President and Chief Executive Officer of Auxilium Pharmaceuticals, Inc., a biopharmaceutical company she founded in late 1999. From 1985 to 1999, Ms. Henwood was the founder and Chief Executive Officer of IBAH, Inc., a contract research organization. Ms. Henwood began her career with Smith Kline & French, now part of GlaxoSmithKline plc. She rose through the ranks to be a Brand Manager, then the head of Regulatory and Medical Affairs for the U.S. business and then to the position of Group Director—Marketing in the International Pharmaceutical Division. Ms. Henwood currently serves on the board of directors of Tetraphase Pharmaceuticals, Inc., a commercial stage biopharmaceutical company, a position she has held since May 2015, and she previously served on the board of directors of Alkermes, Inc. and its successor company, Alkermes, plc, a global biopharmaceutical company, from 2003 until March 2015, and on the board of directors of MAP Pharmaceuticals, Inc., a biopharmaceuticals company, from 2004 until its acquisition by Allergan, Inc. in March 2013. Ms. Henwood also serves on the compensation committee of the board of directors of Tetraphase Pharmaceuticals, Inc. Ms. Henwood holds a B.S. in Biology from Neumann University.

Finance & Accounting

Life Sciences, Healthcare & Public Health

Pharmaceutical Marketing & Sales

International Business

Government, Regulatory & Public Policy

Risk Management

Medicine & Science

Skills & Qualifications: Ms. Henwood’s expertise in developing, financing and providing strong executive leadership to numerous biopharmaceutical companies, her strong background in pharmaceutical marketing and commercialization, clinical and product development and substantial knowledge of the pharmaceutical industry, her corporate governance experience as a board member of multiple publicly-traded and privately-held companies, as well as her extensive knowledge of our business and history as a founder of our company, contributed to our Board’s conclusion that she should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  9

BOARD OF DIRECTORS (continued)

Bryan M. Reasons

Age: 52

Director Since: 2017

Committee Memberships: Audit (Chair)

Other Public Directorships: Aclaris Therapeutics, Inc.

Business Leadership & Operations

Finance & Accounting

Life Sciences, Healthcare & Public Health

Pharmaceutical Marketing & Sales

Risk Management

Bryan M. Reasons has been a member of our Board since 2017. Mr. Reasons has served as the Chief Financial Officer of Mallinckrodt plc, a global specialty pharmaceutical company, since March 2019. Prior to that, Mr. Reasons served as the Senior Vice President, Finance and Chief Financial Officer of Impax Laboratories, Inc., or Impax, a specialty pharmaceutical company, from December 2012 until February 2019. He previously served as the Acting Chief Financial Officer of Impax from June 2012 to December 2012 and as the Vice President, Finance of Impax from January 2012 to June 2012. Prior to joining Impax, Mr. Reasons served as Vice President, Finance, from January 2010 to November 2011 and as Vice President, Risk Management and General Auditor, from October 2005 to January 2010 at Cephalon, Inc., or Cephalon, a biopharmaceutical company. Following the acquisition of Cephalon by Teva Pharmaceutical Industries Ltd., or Teva, a generic pharmaceuticals company, he served as Vice President, Finance of Teva from November 2011 to January 2012. Prior to joining Cephalon, Mr. Reasons held various finance management positions at E.I. Du Pont De Nemours and Company from 2003 to 2005 and served as senior manager at PricewaterhouseCoopers LLP from 1992 to 2003. Mr. Reasons currently serves as a director and chair of the audit committee of Aclaris Therapeutics, Inc., a position he has held since April 2018. Mr. Reasons has a B.S. in accounting from Pennsylvania State University and an M.B.A. from Widener University d is a certified public accountant.

Skills & Qualifications: Mr. Reasons’ extensive experience in the pharmaceutical industry, including his experience in senior leadership positions at a number of large pharmaceutical companies, as well as his expertise in financial and accounting matters, contributed to our Board’s conclusion that he should serve as a director of our Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  10

BOARD OF DIRECTORS (continued)

CORPORATE GOVERNANCE AND RISK MANAGEMENT

We are committed to good corporate governance and integrity in our business dealings. Our governance practices are documented in our Second Amended and Restated Articles of Incorporation, as amended, or Articles of Incorporation, our Bylaws, our Code of Business Conduct and Ethics, or the Code of Conduct, our Corporate Governance Guidelines and the charters of the committees of theour Board, or collectively, the Committees. Aspects of our governance documents are summarized below. You can find our charters for each Committee and our Code of Conduct on our websitewww.recrogainesville.com www.societalcdmo.com  under “News & Investors—Governance—“Investors — Governance — Governance Documents.”

BOARD INDEPENDENCE

Our Board has determined allthat each individual that served as a director of our directors,the Company during the year ended December 31, 2021, except for Ms. Henwood areand Mr. Enloe, was an “independent” directors,director, as defined under the rules of the Nasdaq Capital Market, or Nasdaq. Ms. Henwood resigned as a director on January 18, 2022.

In making such determination, the Board considered the relationships that each such non-employee director has with the Company and all other facts and circumstances that the Board deemed relevant in determining their independence, including the beneficial ownership of our common stock by each non-employee director. Our independent directors generally meet in executive session at each regularly scheduled Board meeting. Until their resignations in 2020, Ms. Karen Flynn and Mr. Alfred Altomari were independent directors as defined by Nasdaq while they served on our Board in 2019.

BOARD LEADERSHIP STRUCTURE

The Board does not have a formal policy with respect to the separation of the offices of Chief Executive Officer, or CEO, and Chairman of the Board. It is the Board’s view that rather than having a rigid policy, the Board, with the advice and assistance of the Governance Committee, and upon consideration of all relevant factors and circumstances, will determine, as and when appropriate, whether the two offices should be separate. Currently, our leadership structure separates the offices of CEO and Chairman of the Board with Ms. HenwoodMr. Enloe serving as our CEO and Mr. Weisman serving as Chairman of the Board. Our Board believes that the separation of the positions of CEO and Chairman of the Board reinforces the independence of the Board from management, creates an environment that encourages objective oversight of management’s performance and enhances the effectiveness of our Board as a whole.

BOARD COMMITTEES

Our Board has established various Committees to assist in discharging its duties: the Audit Committee, the Compensation Committee and the Governance Committee. Each member of our Committees is an independent director as that term is defined by the SEC and Nasdaq. The primary responsibilities of each of the Committees and the Committee memberships are provided below under the section entitled “Board Attendance, Committee Meetings and Committee Membership.”

Each of the Committees has the authority, as its members deem appropriate, to engage legal counsel or other experts or consultants in order to assist the Committee in carrying out its responsibilities.

RISK MANAGEMENT

The Board’s role in risk oversight is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure and the Board actively overseeing management of our risks—risks – both at the Board and Committee level. The risk oversight process includes receiving regular reports from Committees and our executive officers to enable our Board to understand our risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, operations (including cyber-security)cybersecurity), finance, legal, regulatory, strategic and reputational risk.

The Board focuses on the overall risks which may affect us. Each Committee has been delegated the responsibility for the oversight of specific risks that fall within its areas of responsibility. For example:

The Audit Committee oversees management of financial reporting, compliance and litigation risks, including risks related to our insurance, information technology, cybersecurity, human resources and regulatory matters, as well as the steps management has taken to monitor and control such exposures.

The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation policies, plans and arrangements and the extent to which those policies or practices increase or decrease risk for the Company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  11

 

The Governance Committee manages risks associated with the independence of the Board, potential conflicts of interest and the effectiveness of the Board.

•

The Governance Committee manages risks associated with the independence of the Board, potential conflicts of interest and the effectiveness of the Board.

While each Committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through Committee reports about such risks. Matters of significant strategic risk are considered by our entire Board.

EVALUATING BOARD EFFECTIVENESS

The Board is committed to continuous improvement and annual self-evaluations are an important tool for evaluating effectiveness. The Board and each Committee conduct a rigorous annual self-evaluation of their performance and effectiveness.

 

PROCESS BEGINS

EVALUATION

PRESENTATION OF

EVALUATION RESULTS

FOLLOW-UP

Process beginsEvaluationPresentation of evaluation
results		Follow-up

The Governance Committee initiates and oversees the Board evaluation process, which is conducted in the earlylater part of the calendar year.

Each Committee beginsconducts an initial evaluation of its own effectiveness.

During the evaluation, the Governance Committee assesses several factors, including:

•  Director independence and qualifications to serve on various Committees; and

•  Committee chair assignments and membership rotations.

The results of the Board and Committees’ evaluations are presented, in executive session, at a subsequent Board meeting.

Any results requiring additional consideration are addressed at future Board and Committee meetings, as appropriate.

 

The Governance Committee also reviews the effectiveness of the overall evaluation process and considers whether to:

incorporate individual director evaluations into the process; or

to conduct the evaluation through an external third-party provider.

In 2019,2021, the Governance Committee determined that no modifications to the existing process were warranted and to maintain the evaluation process in its current form.

The results of the Board and Committees’ evaluations are presented, in executive session, at a subsequent Board meeting.		Any results requiring additional consideration are addressed at future Board and Committee meetings, as appropriate.

CODE OF CONDUCT

We have a written Code of Conduct that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Conduct covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoiding conflicts of interest, the protection and use of our property and information and compliance with legal and regulatory requirements. Any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website at www.recrogainesville.comwww.societalcdmo.com.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 12

CORPORATE GOVERNANCE AND RISK MANAGEMENT (continued)

DIRECTOR ORIENTATIONORIENTATION AND CONTINUING EDUCATION

Our director orientation programs familiarize new directors with the Company’s businesses, strategies, and policies, and assist new directors in developing the skills and knowledge required for their service on the Board. All other directors are also invited to attend the orientation programs. From time to time, management advises, or invites outside experts to attend Board meetings to advise, the Board on its responsibilities, management’s responsibilities, developments relevant to corporate governance and best corporate practices. Additionally, Board members may attend, and are encouraged to attend, accredited director education programs at the Company’s expense.

RESTRICTIONS ON THE HEDGING AND PLEDGING OF RECROSOCIETAL SHARES

Pursuant to the Company’s Insider Trading Policy, which applies to all officers, all directors and all employees of the Company and any of the Company’s subsidiaries, or the Covered Individuals, the Covered Individuals are prohibited from purchasing financial instruments or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of any equity security of RecroSocietal or any such subsidiary. Covered Individuals are also prohibited from selling “short” any securities of those companies.)

Covered Individuals are further prohibited from holding any equity securities of Societal or any such subsidiary in a margin account or otherwise pledging such securities as collateral for a loan. Additionally, standing and limit orders create heightened risks for insider trading, with the possibility that such a transaction will be entered at a time when a director, officer, or other employee holds material, nonpublic information. Societal discourages these types of transactions. If placed, their timeframe should be short in duration and comply with the Additional Procedures of the Company’s Insider Trading Policy.

These prohibitions also apply to family members living in the same household as Covered Individuals, as well as entities influenced or controlled by the Covered Individuals.

Pursuant to the Insider Trading Policy, the Covered Individuals are also prohibited from holding any equity securities of Recro or any such subsidiary in a margin account or otherwise pledging such securities as collateral for a loan.

CORPORATE GOVERNANCE GUIDELINES

We have a written set of corporate governance guidelines that are designed to help ensure effective corporate governance of our Company. Our corporate governance guidelinesCorporate Governance Guidelines cover topics including, but not limited to, director qualification criteria, director responsibilities, director compensation, director orientation and continuing education, the annual evaluations of our Board and its Committees and succession planning. Succession planning for the Board is critical to our success. Our goal is to achieve a Board that provides effective oversight of the Company through the appropriate balance of diversity of perspectives, experience, expertise and skills. Our corporate governance guidelinesCorporate Governance Guidelines are reviewed at least annually by the Governance Committee and amended by our Board when appropriate.

BOARD ATTENDANCE, COMMITTEE MEETINGS AND COMMITTEE MEMBERSHIP

Director

Independence

Board

AC

CC

NCGC

Arnaud Ajdler

Yes

M

M

M

 

William Ashton

Yes

M

 

C

M

Michael Berelowitz

Yes

M

M

 

M

Winston Churchill

Yes

M

 

M

C

Gerri Henwood

No

M

 

 

 

Bryan M. Reasons

Yes

M

C

 

 

Wayne Weisman

Yes

C

 

 

M

2019 Meetings

N/A

17

5

7

6

AC = Audit Committee

CC = Compensation Committee

C = Chair

 

 

NCGC = Nominating and Corporate Governance Committee

M = Member

 

 

      
Director  Independent  Board  AC  CC  GC
  
William Ashton  Yes  M   

 

  C  M
  
Michael Berelowitz  Yes  M   

 

   

 

  C
  
Winston Churchill  Yes  M  M  M   

 

  
J. David Enloe, Jr.  No  M   

 

   

 

   

 

  
Gerri Henwood*  No  M   

 

   

 

   

 

  
James Miller  Yes  M  M  M   

 

  
Laura L. Parks, Ph.D.  Yes  M  M  M   

 

  
Bryan M. Reasons  Yes  M  C   

 

   

 

  
Wayne B. Weisman  Yes  C   

 

   

 

  M
  
2021 Meetings  N/A  12  4  3  3

AC = Audit CommitteeCC = Compensation CommitteeC = Chair
GC = Governance CommitteeM = Member

*

Ms. Henwood resigned as a director on January 18, 2022.

During 2019,2021, each director attended at least 75% of the meetings of the Board and meetings of each Committee on which he or she served. Although we do not have a formal policy regarding attendance by members of our Board at our Annual Meeting, we encourage all of our directors to attend. All of our then-serving directors attended our 20192021 Annual Meeting of Shareholders.

Audit Committee

The Audit Committee assists the Board by providing oversight of our financial management, independent auditor and financial reporting procedures, as well as such other matters as directed by the Board or the Audit Committee Charter.

Among other things, the Audit Committee’s responsibilities include:

appointing, retaining, compensating, overseeing, evaluating, and, when appropriate, terminating our independent registered public accounting firm;

Notice of Annual Meeting of Shareholders

discussing with management and 2020 Proxy Statement  13the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

CORPORATE GOVERNANCE AND RISK MANAGEMENT (continued)

 

•

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

periodically reviewing policies and procedures with respect to data privacy and security we employ in conducting our business;

reviewing with management its assessment of our internal control over financial reporting, disclosure controls and procedures;

reviewing our Code of Conduct and recommending any changes to the Board;

overseeing our risk assessment and risk management processes;

reviewing and ratifying all related party transactions, based on the standards set forth in our Related Party Transactions Policy; and

preparing and approving the Audit Committee report required to be included in our annual proxy statement.

The members of our Audit Committee are Mr. Ajdler,Reasons (chair), Messrs. Churchill and Miller, and Dr. Berelowitz and Mr. Reasons (chair).Parks. All members of our Audit Committee are deemed “independent” and financially literate under the applicable rules and regulations of the SEC and Nasdaq. Mr. Reasons also qualifies as an “audit committee financial expert” within the meaning of SEC regulations.

Compensation Committee

The Compensation Committee reviews the performance and development of our management in achieving corporate goals and objectives and assures that our executive officers (including our CEO) are compensated effectively in a manner consistent with our strategy, competitive practice and shareholder interests, as well as such other matters as directed by the Board or the Compensation Committee Charter. Among other things, the Compensation Committee’s responsibilities include:

annually reviewing and recommending to the Board for approval the corporate goals and objectives applicable to the compensation of our CEO and other executive officers and evaluating at least annually our CEO’s and other executive officers’ performance in light of those goals and objectives;

annually reviewing and approving our peer group for compensation benchmarking;

determining and approving our CEO’s and other executive officers’ compensation level (including salary, cash and equity-based incentive awards and any personal benefits);

administering, or where appropriate, overseeing the administration of, executive and equity compensation plans and such other compensation and benefit plans that are adopted by us from time to time;

determining stock ownership guidelines for our CEO and other executive officers and monitoring compliance with such guidelines, if deemed advisable by our Board or the Compensation Committee; and

overseeing risks and exposures associated with executive compensation plans and arrangements.

Our Compensation Committee has delegated authority to our CEO to grant options or other stock awards, in accordance with guidelines established by our compensation consultant, to our non-executive officers. Our Compensation Committee also has the authority to form and delegate authority to one or more subcommittees as it deems appropriate from time to time under the circumstances.

Our CEO annually reviews the performance of each of the other executive officers, including the other named executive officers. SheHe then recommends annual merit salary adjustments and any changes in annual or long-term incentive opportunities for other executives. The Compensation Committee considers our CEO’s recommendations in addition to data and recommendations presented by our executive compensation consultant.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  14

CORPORATE GOVERNANCE AND RISK MANAGEMENT (continued)

Pay Governance, LLC, or Pay Governance, is our executive compensation consultant. Pay Governance reports directly to the Compensation Committee and provides various executive compensation services to the Compensation Committee, including advising the Compensation Committee on the principal aspects of our executive compensation program and evolving industry practices and providing market information and analysis regarding the competitiveness of our program design and our award values in relation to performance. Upon request by the Compensation Committee, a representative of Pay Governance attended Compensation Committee meetings. Pay Governance does not provide services to us other than its advice to the Compensation Committee on executive and director compensation matters. The Compensation Committee determined Pay Governance to be independent under the Nasdaq and SEC regulations.

The members of our Compensation Committee are Mr. Ajdler, Mr. Ashton (chair), Messrs. Churchill and Mr. Churchill.Miller, and Dr. Parks. The Board has determined that all Compensation Committee members are independent under the listing standards of Nasdaq, and that they are “non-employee“non-employee directors”for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code, or the Code.Act.

Nominating and Corporate

Governance Committee

The Governance Committee identifies qualified individuals for membership on the Board, recommends to the Board the director nominees to fill vacancies on the Board and to stand for election at the next annual meeting of shareholders, develops and recommends to the Board a set of corporate governance guidelines for the Board and provides oversight of the corporate governance affairs of the Board, as well as such other matters as directed by the Board or the Governance Committee Charter. Among other things, our Governance Committee’s responsibilities include:

developing and submitting to the Board for its adoption a list of selection criteria for new directors to serve on the Board;

identifying, reviewing and evaluating candidates, including candidates submitted by shareholders, for election to the Board and recommending to the Board (i) nominees to fill vacancies or new positions on the Board and (ii) the slate of nominees to stand for election by the Company’s shareholders at each annual meeting of shareholders;

developing, recommending, and overseeing the implementation of and monitor compliance with, our corporate governance guidelines, and periodically reviewing and recommending any necessary or appropriate changes to our corporate governance guidelines;

annually recommending to the Board (i) the assignment of directors to serve on each Committee; (ii) the chairperson of each Committee and (iii) the chairperson of the Board or lead independent director, as appropriate;

periodically assessing the appropriate size and composition of the Board as a whole, the needs of the Board and the respective committees of the Board, and the qualification of director candidates in light of these needs;

reviewing the adequacy of the Articles of Incorporation and Bylaws and recommending to the Board, as conditions dictate, amendments for consideration by the shareholders;

reviewing any proposals submitted by shareholders for action at the annual meeting of shareholders and make recommendations to the Board regarding action to be taken in response to each proposal; and

implementing policies with respect to governance risk oversight, assessment and management of risk associated with the independence of our Board and director nominees, potential conflicts of interest of members of our Board and our executive officers and the effectiveness of the Board and the committees thereof.

The Governance Committee is responsible for identifying individuals that the Committee believes are qualified to become Board members, as described above in the section entitled “Board Structure and Composition.”

The members of our Governance Committee are Mr. Berelowitz (chair), and Messrs. Ashton Dr. Berelowitz, Mr. Churchill (chair) and Mr. Weisman. The Board has determined that all Governance Committee members are independent under the listing standards of Nasdaq.

FAMILY RELATIONSHIPS

There are no family relationships among any of our directors or executive officers.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  15

CORPORATE GOVERNANCE AND RISK MANAGEMENT (continued)

COMPENSATION COMMITTEECOMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 20192021 and as of the date of this Proxy Statement, none of the members of the Compensation Committee was or is one of our officers or employees, and none of our executive officers has served or serves on the compensation committee or board of directors of any company that employed or employs any member of our Compensation Committee or Board.

SHAREHOLDER ENGAGEMENT

 

LOGO

Connect

Engaging with investors is fundamental to our commitment to good governance and essential to maintaining strong corporate governance practices. Throughout the year, we seek opportunities to connect with our investors to gain and share valuable insights into current and emerging global governance trends.

Collaborate

We strive for a collaborative approach to shareholder engagement and value the variety of investors’ perspectives received, which helps deepen our understanding of their interests and motivations.

Communicate

Our goal is to communicate with our shareholders through various platforms, including via our website, in print and in person at investor presentations or shareholder meetings. We view communication between our shareholders and the Board as a dialogue.

How to Communicate

with our Directors

By mail:

The Corporate Secretary, Recro Pharma,Societal CDMO, Inc. 490 Lapp Road1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341

Malvern, PA 19355

OUR VALUES — ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE

Societal CDMO “Bringing Science to Society”, it’s in our name and our DNA. Our new identity is intended to capture the company’s vision for establishing itself as a premier, trusted growth-focused CDMO that is expertly and actively facilitating its customers’ objectives of delivering impactful medicines to society. Our name has a purpose, one which exemplifies the commitment our employees demonstrate every day to making a positive impact within communities across the country and around the world.

Our Nominating and Corporate Governance Committee oversees ESG matters and practices. Included below is a description of a few topics that we view as key to promoting our long-term sustainability.

We are working with a third party to progress our ESG efforts further in 2022 by aligning with SASB pharmaceutical and biotech disclosure topics and metrics.

Sustainability

Environmental and Sustainability Mission

At Societal, we are committed to environmental sustainability through the active support and investment in programs and initiatives which reduce the company’s environmental impact. Our mission is to direct the

company’s efforts to efficiently utilize materials, water, and energy consumption while minimizing waste. Since 2019, we have implemented several initiatives to support three main goals:

Actively pursue and implement programs to offset our carbon emissions and minimize the use of energy and water;

 

NoticeCreate a sustainable culture through employee engagement, community outreach, and continuous improvement; and

Implement programs to minimize and responsibly manage our waste.

Building a Sustainable Culture

We recognize that building a sustainability mindset starts with our most important resource: our people. Creating a culture focused on sustainability and environmental governance must begin with how we operate in our everyday lives. Here are some of Annual Meetingthe ways we demonstrate our commitment to building a sustainable culture:

Establishment of Shareholdersa dedicated Environmental Sustainability Team that is responsible for advising, overseeing, and 2020 Proxy Statementimplementing the company’s efforts in this area;

Transition to digital communications, documentation, and marketing collateral;

Implementation of mass recycling program;

Designated electric vehicle charging stations to reduce carbon environmental impact;

Empowerment and encouragement of employees to implement environmental and process improvements;

Cultivated an agile, diverse team by expanding the remote workforce to 10% in 2021;

Advancement of employees’ well-being through numerous programs that focus on the whole employee (mental, emotional, financial, and physical); and

Establishment of safety at the forefront of what we do – we empower everyone to have a zero injury mindset.

Achieving Results Starts With Change

We know that creating a sustainably focused company takes time. But it all starts with change. Since its inception, the Environmental Sustainability Team at Societal has dedicated its efforts to implementing changes across the organization to reduce energy use and streamline waste management. Below are some of the annual savings* realized to date by the incorporated changes:

LED light replacement project — saving 300,000 kWh;

Installation of office HVAC Smart Thermostat — saving 7,000 kWh;

Upgrading of demand staging utility equipment — saving 352,000 kWh and 10,000 BTUs; and

Other projects resulted in a savings of 1,344,509 pounds of CO2 and 306,000 gallons of water.

Today and Beyond

At Societal, the health and well-being of our community have always been at the forefront of our daily activities. However, as we move forward, environmental and sustainability initiatives will become even more critical. We continue to learn from industry experts and implement environmental and sustainability initiatives and best practices within our organization. With the dedication of our 16employee-run Environmental Sustainability Team and the support of Societal leadership, we continue to discover and apply learnings to the way we do business, not just for our benefit, but for the betterment of our customers and patients alike.

CORPORATE GOVERNANCE AND RISK MANAGEMENT (continued)

DIRECTOR COMPENSATION

At Societal, we believe the initiatives outlined above and others that we have already implemented will allow us to be better partners for our clients, patients, and community. By enacting these new programs, we believe we can achieve meaningful long-term results, including the following targets, by the end of 2023:

Save 937,500 tons of carbon dioxide emissions

Reuse and save 200,000 gallons of water

Recycle 30% of our bulk waste

Reduce our hazardous waste generation by 4%

Sequester 5,760 pounds of CO2 by maintaining our green space and forest

*

Estimated savings based on annual use according to www.epa.gov and other websites.

Diversity, Equity & Inclusion

At Societal, we believe that a diverse and engaged team contributes to greater business success. We strive to build a diverse community and foster a culture of belonging where we openly share our thoughts, ideas, and perspectives and encourage others to do the same. We are committed to putting resources and attention toward attracting diverse talent, improving engagement, and development of the amazing talent we have, including the goals set forth below.

Recruiting for the Future

Create a workforce broadly reflective of the larger communities in which we operate

Developing and Thriving

Support employees in building the skills and capacity to work in an inclusive environment

Promote internal development through multiple learning channels, special projects, and promotions

A Belonging Culture

Build a welcoming workplace where employees recognize that their unique characteristics, skills, and experiences are respected, valued, and celebrated

Looking Forward

We believe that the company’s investment in, and a strong commitment to, diversity, equity & inclusion will solidify Societal as a great place to work and a premier, trusted CDMO that brings tailored solutions to our clients while fostering engaging and rewarding careers for our people.

  DIRECTOR COMPENSATION

We have designed and implemented our compensation program for our non-employee directors to attract, motivate and retain individuals who are committed to our values and goals and who have the expertise and experience that we need to achieve those goals.

COMPENSATION PROGRAM

The table below depicts our compensation program for our non-employee directors:

Compensation Elements — Non-Employee Director Compensation Program

Cash

 

Annual Cash Retainer

$40,000

Annual Committee Chair RetainerRetainer:

 

Audit

$20,000

Compensation

$15,000

Nominating and Corporate

Governance

$9,000

10,000

Committee Member RetainerRetainer:

 

Audit

$10,000

Compensation

$7,500

Nominating and Corporate

Governance

$5,000

Annual Non-Executive Chairman of the Board Cash Retainer

$30,000

40,000

Retainer

Equity

 

Initial Equity Grant

A stock option to purchase 20,000 shares of our common stock vesting in three equal annual installments

Annual Equity Retainer

$70,000 in restricted stock units and $65,000 in stock options, granted annually following our annual meeting of shareholders, and in each case vesting on the first anniversary of the date of grant

Cash fees are paid quarterly and are typically pro-rated for non-employee directors who cease to provide services mid-year. Our non-employee directors are also reimbursed for their business-related expenses incurred in connection with attendance at Board and Committee meetings and related activities. Our only employee director, Ms.  Henwood,Mr. Enloe, receives no separate compensation for herhis service in such capacity.

On December 5, 2019, we granted each of our non-employee directors “make-whole grants” of restricted stock units under our equity plan. The make-whole grants were awarded in lieu of any adjustments to outstanding restricted stock unit and option awards held by these non-employee directors upon the Separation.

DIRECTOR COMPENSATION 20192021

The following table provides summary information regarding 20192021 compensation to our non-employee directors.

Name

Fees Earned or Paid in

Cash ($)

Option Awards

($)(1)

Stock Awards

($)(1)

Total ($)

Arnaud Ajdler

43,125

155,201

190,872

389,198

Alfred Altomari (2)

63,125

65,001

318,337

446,463

William L. Ashton

51,250

65,001

355,679

471,930

Michael Berelowitz

55,000

65,001

295,002

415,003

Winston Churchill

56,500

65,001

318,337

439,838

Karen Flynn (3)

59,375

65,001

249,875

374,252

Bryan M. Reasons

60,000

65,001

218,757

343,758

Wayne B. Weisman

75,000

65,001

318,337

458,338

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  17

 

     
NameFees Earned or Paid
in Cash ($)		Option Awards
($)(1)		Stock Awards
($)(1)		Total ($)
  

William L. Ashton

 65,000 65,001 70,000 200,001
  

Michael Berelowitz

 52,500 65,001 70,000 187,501
  

Winston Churchill

 57,250 65,001 70,000 192,251
  

Gerri Henwood(2)

 40,000 65,001 70,000 175,001
  

James C. Miller(3)

 48,043 120,287 70,000 238,330
  

Laura L. Parks, Ph.D.(4)

 30,489 30,240 —   60,729
  

Bryan M. Reasons

 60,000 65,001 70,000 195,001
  

Wayne B. Weisman

 82,500 65,001 70,000 217,501

(1)

Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards, Codification Topic 718, Compensation — Stock Compensation, or ASC 718. The assumptions made in these valuations are included in Note 15 of the Notesnote 14 to the Annual Financial Statements included in our 2021 Annual Report on Form 10-K.Report. As of December 31, 2019,2021, (i) Mr. Ajdler had stock options to purchase 30,888 shares of common stock, (ii) each of Messrs. Altomari, Churchill, and Weisman had stock options to purchase 71,853 shares of common stock, (iii) Mr. Ashton had stock options to purchase 83,853122,270 shares of our common stock, (iv)(ii) Dr. Berelowitz had stock options to purchase 64,353114,770 shares of our common stock, (v) Ms. Flynn(iii) Mr. Churchill had stock options to purchase 49,853122,270 shares of common stock, (iv) Ms. Henwood had stock options to purchase 58,012 shares of common stock that were issued in connection with her service on the Board and 32,932 restricted stock units and stock options to purchase 789,500 shares of common stock that were issued in connection with her previous service as our Chief Executive Officer, (v) Mr. Miller had stock options to purchase 58,012 shares of common stock, (vi) Dr. Parks had stock options to purchase 20,000 shares of common stock, and (vi)(vii) Mr. Reasons had stock options to purchase 39,85390,270 shares of our common stock. In addition, as of December 31, 2019, (i) Mr. Ajdler2021, Messrs. Ashton, Berelowitz, Churchill, Reasons and Weisman, and Ms. Henwood with respect to her service on the Board, each had 15,39426,923 outstanding and unvested restricted stock units, (ii) each of Messrs. Altomari, Churchill, and Weisman had 23,237 outstanding and unvested restricted stock units, (iii) units.

(2)

Ms. Henwood resigned as a director on January 18, 2022.

(3)

Mr. Ashton had 25,535 outstanding and unvested restricted stock units, (iv) Miller was appointed as a director on February 9, 2021.

(4)

Dr. Berelowitz had 21,801 outstanding and unvested restricted stock units, (v) Ms. Flynn had 19,024 outstanding and unvested restricted stock units, and (vi) Mr. Reasons had 17,109 outstanding and unvested restricted stock units.Parks was appointed as a director on June 14, 2021.

(2)

Mr. Altomari is no longer a member of our Board as of March 6, 2020.

  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

(3)

Ms. Flynn is no longer a member of our Board as of January 8, 2020.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 18

DIRECTOR COMPENSATION (continued)

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

The Audit Committee works with our management in order to negotiate appropriate fees with KPMG and is ultimately responsible for approving those fees. The following is a summary and description of audit fees paid or payable to KPMG for services providedeach of the years ended December 31, 2021 and 2020 and the fees billed by KPMG for other services in 2019 and 2018.each of those years:

Service

2019

2018

Audit Fees

$785,000

$574,000

Audit-Related Fees

$315,000

—

Tax Fees

$157,933

$184,826

All Other Fees

—

—

Total

$1,257,933

$759,326

   
Service  2021   2020 

Audit fees

  $865,830   $665,600 

Audit-related fees

   116,888    —   

Tax fees

   99,580    167,908 

All other fees

   —      —   

Total

  $1,082,298   $833,508 

“Audit fees” represented the aggregate fees for professional services rendered for the audit of our annual consolidated financial statements on Forms 10-K, consents for the use of audit reports and reference to the auditor as an expert in our registration statements, and professional services rendered for the review of our quarterly consolidated financial statements on Forms 10-K and 10-Q respectively, that are customary under the standards of the Public Company Accounting Oversight Board (United States), and in connection with regulatory filings. Our audit fees in 2019 included an auditor’s attestation relating to our internal control over financial reporting in our 2019 Annual Report, which was filed with the SEC on March 4, 2020 in connection with our exit from emerging growth status.

“Audit-related fees”fees” consisted of due diligence fees related to the audits and reviewsacquisition of the carve out financial statements of our acute care segment related to the Separation.  IriSys, LLC.

“Tax fees” consisted of fees related to tax compliance, tax planning and tax advice.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee is responsible for appointing, setting compensation for, and overseeing the work of the independent registered public accounting firm. The Audit Committee’s charter establishes a policy that all audit and permissible non-audit services provided by the independent registered public accounting firm will be pre-approved by the Audit Committee.

All such audit and permissible non-audit services were pre-approved in accordance with this policy during the fiscal year ended December 31, 2019.2021. These services may include audit services, audit-related services, tax services and other services. The Audit Committee considers whether the provision of each non-audit service is compatible with maintaining the independence of our independent registered public accounting firm. The responsibility to pre-approve audit and non-audit services may be delegated by the Audit Committee to one or more members of the Audit Committee; provided that any decisions made by such member or members must be presented to the full Audit Committee at its next scheduled meeting.


Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  19

AUDIT COMMITTEE REPORT

  AUDIT COMMITTEE REPORT

The primary purpose of the Audit Committee is to assist the Board in its general oversight of the Company’s financial reporting process.

Management is primarily responsible for the preparation, presentation, and integrity of the Company’s consolidated financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. The Company’s independent registered public accounting firm for the fiscal years 2019, 20182021, 2020 and 2017,2019, KPMG, is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those consolidated financial statements with generally accepted accounting principles.

The Audit Committee and the chairman of the Audit Committee have met with management during fiscal year 20192021 to consider the adequacy of the Company’s internal controls, and discussed these matters and the overall scope and plans for the audit of the Company with KPMG. The Audit Committee also discussed with management and KPMG the Company’s disclosure controls and procedures.

The Audit Committee has reviewed and discussed management’s assessment of the effectiveness of the Company’s internal controls and the audited consolidated financial statements contained in the Company’s 20192021 Annual Report with management. The Audit Committee has discussed with KPMG the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, “Communication with Audit Committees.” In addition, KPMG has provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG its independence.

The Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with the auditor’s independence. The Audit Committee has concluded that the independent registered public accounting firm is independent from the Company and its management. Based on the considerations and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s 20192021 Annual Report.

Audit Committee

Bryan Reasons (Chairman)

Arnaud AjdlerWinston J. Churchill

Michael Berelowitz, M.D.James C. Miller

Laura L. Parks, Ph.D.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 20

EXECUTIVE OFFICERS

  EXECUTIVE OFFICERS

The following table sets forth the name, age and position of each of our executive officers as of the date of this Proxy Statement:

Name

Position

NamePositionAge

Gerri HenwoodJ. David Enloe, Jr.

President, Chief Executive Officer

67

58

Ryan D. Lake

Chief Financial Officer

42

44

Gerri HenwoodJ. David Enloe, Jr. — For biographicalSee biography information for Gerri Henwood, see “Board of Directors — Continuing Directors.”above.

Ryan D. Lake has served as our Chief Financial Officer since January 2018. He had previously served as our Senior Vice President of Finance and Chief Accounting Officer since June 2017. Mr. Lake has also served as the Chief Financial Officer of Baudax Bio sincefollowing the separation of Baudax Bio from the Company, or the Separation, infrom November 2019.2019 to December 2020. Mr. Lake has over 20 years of senior financial and life sciences leadership experience. Prior to joining us, Mr. Lake served as Chief Financial Officer and Vice President of Finance of Aspire Bariatrics, Inc., a privately-held, commercial-stage, medical device company from July 2015 to May 2017. From 2012 to 2015, Mr. Lake held executive management and senior finance positions, including Director of the Natural Materials Division, Controller and Senior Director of Finance, at DSM Biomedical (successor to Kensey Nash Corporation after its acquisition in 2012), a division of Royal DSM (listed on Euronext Amsterdam), a global science-based company active in health, nutrition and materials. From 2002 to 2012, Mr. Lake held various senior financial positions of increasing responsibility, most notably Senior Director of Finance and Interim Chief Financial Officer, with Kensey Nash Corporation, a medical device company. Earlier in his career, Mr. Lake worked at Deloitte & Touche, LLP. Mr. Lake has a B.S. degree in Accounting from West Chester University of Pennsylvania and is a certified public accountant and Chartered Global Management Accountant.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  21

EXECUTIVE COMPENSATION

  EXECUTIVE COMPENSATION

In 2019,2021, our named executive officers were Gerri Henwood,J. David Enloe, Jr., our President and CEO;CEO, and Ryan D. Lake, our Chief Financial Officer; and Michael Celano, our Chief Operating Officer, until the termination of his employment in May 2019. Officer.

In connection with the Separation, we entered into a Transition Services Agreement with Baudax Bio, whereby we agreed that Ms. Henwood and Mr. Lake would be employed by Baudax Bio but continue to provide services to usboth companies for a twelve monthtwelve-month period following the Separation. Under this agreement, in 2019, we reimbursed Baudax Bio approximately 50% in respect of Ms. Henwood’s services and 50% in respect of Mr. Lake’s services.

Ms. Henwood2020 salary, and approximately 50% of the bonus awarded to Mr. Lake were also named executive officers ofby Baudax Bio for 2020. Accordingly, we have shown in 2019. the Summary Compensation Table below, in the “Salary” and “Bonus” columns, 2020 amounts for Mr. Lake that we funded, even though not directly paid by us.

For more information about the compensation paid by Baudax Bio to Ms. Henwood and Mr. Lake inwith respect to the services they rendered to Baudax Bio after the Separation, see Baudax Bio’s proxy statement for its 20202021 annual meeting of shareholders, filed with the SEC on or around March 23, 2020, or the Baudax Bio Proxy Statement.shareholders.

This section discusses the material components of the executive compensation program for our named executive officers.

SUMMARY COMPENSATION TABLE

The following table sets forth information concerning the compensation of our named executive officers during the fiscal years ended December 31, 20192021 and December 31, 2018:2020:

Name and Principal Position

 

Year

Salary ($)

Bonus

($)(1)(2)

Stock

Awards

($)(3)(4)

Option Awards ($)(3)

Non-Equity Incentive

Plan

Compensation

($)(2)

All Other

Compensation

($)(5)

Total ($)

Gerri Henwood

2019

553,846

—

2,608,537

1,062,199

360,000

38,402

4,622,984

President and Chief Executive Officer

2018

598,662

—

1,008,000

600,000

183,600

37,172

2,427,434

Michael Celano(6)

2019

167,721

—

416,753

635,331

—

478,804

1,698,609

Chief Operating Officer

2018

415,261

—

403,200

240,000

84,925

45,488

1,188,874

Ryan Lake

2019

319,777

69,440

623,276

334,200

138,880

44,038

1,529,611

Chief Financial Officer

2018

309,231

—

231,840

138,000

63,240

41,823

784,134

         
Name and Principal Position Year Salary
($)		 Bonus
($)(1)		 Stock
Awards
($)(2)(3)		 Option
Awards
($)(2)		 Non-Equity
Incentive Plan
Compensation
($)(4)		 All Other
Compensation
($)(5)		 Total ($)
J. David Enloe, Jr.   2021   550,000   —     120,793   —     377,190   49,062   1,097,045

President and Chief Executive Officer

   2020   10,577   —     459,999(6)   400,544   —     1,678   872,798
Ryan D. Lake   2021   425,385   —     867,815   744,327   242,887   49,062   2,329,476

Chief Financial Officer

   2020   198,985   48,000(1)   439,440(6)   744,327   107,640   24,673   1,563,065

(1)

(1)

Reflects discretionary bonusBaudax Bio awarded 2020 annual incentives to Mr. Lake based on the achievement of performance metrics. Baudax Bio satisfied Mr. Lake’s award 100% in cash. Pursuant to the Transition Services Agreement, we reimbursed Baudax Bio for approximately 50% of the cost of such annual incentives, which amounts are reflected above. For more information about the compensation paid by Baudax Bio to Mr. Lake in respect to the services rendered to Baudax Bio after the Separation, see Baudax Bio’s proxy statement for performance in excessits 2021 annual meeting of corporate and individual objectives under our annual performance cash bonus plan.shareholders, filed with the SEC on or around March 11, 2021.

(2)

The amounts represent annual performance cash bonuses earned in 2019 and 2018 and paid in the following year.

(3)

Reflects the grant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards, Codification Topic 718, Compensation — Stock Compensation, or ASC 718. The assumptions made in these valuations are included in Note 15 of the Notesnote 14 to the Annual Financial Statements included in our 2021 Annual Report. For Mr. Celano, the amounts in this column include the incremental accounting charge to us for our acceleration of vesting and extension of the exercisability period for Mr. Celano’s options and restricted stock units in connection with his termination of employment.

(3)

(4)

The 2019 amounts reflectCompensation for 2021 reflects both time-based and performance-based restricted stock unit awards, of which certain performance-based awards were forfeited and canceled as the performance criteria was based on acute care segment goals. Refer to the Outstanding Equity Awards at Fiscal Year-End for 2019 table for more information.awards. The value of the performance-based restricted stock unit awards at the grant date reportedgranted in 2021 is shown in the table assumingin accordance with SEC rules based on the maximum achievement ofweighted average grant date fair value determined in accordance with U.S. GAAP.

(4)

The amounts represent annual performance cash bonuses earned in the year shown and paid in the following year. Mr. Lake’s amount for 2020, as described below, represents a 2020 annual performance conditionscash bonus that was $761,847 for Ms. Henwood, $269,663 for Mr. Celano and $239,700 for Mr. Lake.  This amount also includes make-whole equity grants of $1,520,188 and $280,849 for Ms. Henwood and Mr. Lake, respectively, which were awardedlater decided to be satisfied 100% in lieu of any adjustments to outstanding restricted stock unit and option awards held by Ms. Henwood and Mr. Lake upon the Separation.during 2021 instead of cash.

(5)

These amounts consist of 401(k) matching contributions, the cost of medical benefits and life and disability insurance premiums. For Mr. Celano, this amount represents severance payments, pro-rata bonus and health benefits pre- and post-termination.

(6)

(6)

For the 2021 proxy statement, we disclosed the value of performance-based restricted stock awards in the summary compensation table based on the legal grant date, rather than the grant date for accounting purposes in accordance with ASC 718. We have revised the table to disclose the value of these performance-based restricted stock awards in the summary compensation table based on the grant date fair value determined in accordance with ASC 718. As a result, the value of the 2020 stock awards disclosed in the table above was reduced by $200,000 for Mr. Celano’s employment with us terminatedEnloe and $498,600 for Mr. Lake, compared to the amounts historically presented. These performance-based restricted stock awards have been included in the value of the 2021 stock awards in the summary compensation table based on May 9, 2019.their grant date fair values of $120,793 for Mr. Enloe and $162,175 for Mr. Lake.

Base Salaries

On December 15, 2020, we entered into employment agreements with Mr. Enloe and Mr. Lake pursuant to which Mr. Enloe’s and Mr. Lake’s base salaries were initially set at $550,000 and $425,000, respectively.

In January 2019,2022, the Compensation Committee approved the following base salaries for our named executive officers: $600,000 for Ms.  Henwood, $347,200$575,000 for Mr. Lake,Enloe and $437,115$440,000 for Mr. Celano. Lake.

Following the Separation, we ceased to directly pay an annual salary to our named executive officers directly.Mr. Lake with respect to the period prior to December 15, 2020. However, in 2019,2020, we reimbursed Baudax Bio approximately 50% in respect of Ms. Henwood’s services and 50% in respect of Mr. Lake’s services for the period after the Separation.cash compensation earned before his resignation as Chief Financial Officer of Baudax Bio in December 2020. The amounts that we reimbursed to Baudax Bio are reflected in the “Salary” column to the Summary Compensation Table above.

Annual Bonuses

In 2019,Mr. Enloe and Mr. Lake were each of our named executive officers was eligible in 2021 to receiveearn an annual performance cash bonus from Societal based on the achievement of pre-established corporate and individual objectives as determined by our Board and our Compensation Committee, in consultation

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 22

with Pay Governance, with respect to Mr. Lake, and upon review of the recommendations of our CEO for our other named executive officers.  Each officer wasCEO. Mr. Enloe and Mr. Lake were assigned a target bonus opportunity expressed as a percentage of his or hertheir respective base salary.  Actualsalaries. Their actual bonus payments could be higher or lower than the target bonus amount, based on the achievement of corporate and individual objectives. The Compensation Committee retains the discretion to make adjustments to the calculated bonus amount based on unexpected or unplanned events, our overall financial condition, extraordinary performance or underperformance or other factors deemed appropriate by the Compensation Committee. The target bonus opportunitiesopportunity in 20192021 for Ms.  Henwood,Mr. Enloe and Mr. Lake was 60% and Mr. Celano were 60%, 40% and 40%,50% of their respective base salaries, respectively.salaries.

In determining the amount of the performance bonus awardsaward actually paid, our Compensation Committee determined the level of achievement of the corporate goals and individual goals for the year. These goals primarily included meeting certain revenue and EBITDA levels, development of new business, maintaining high quality standards, managing cash to budget and delivering manufactured products on time in full. The Compensation Committee and the Board determined that the percentage attainment of our corporate goals for 2021 was 104.3%. In determining the level of achievement for our other named executive officers,Mr. Lake’s individual performance, our Compensation Committee reviewed and considered the recommendations of our CEO.  These achievement levels were usedMr. Enloe. Our Compensation Committee approved a 2021 annual bonus payment to determine each named executive officer’s bonus.

ActualMr. Enloe in an amount equal to 114.3% of his target bonus amounts paid areamount and Mr. Lake in an amount equal to 114.3% of his target bonus amount. This amount is reflected in the “Non-Equity“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.  To the extent that our Compensation Committee determined that our named executive officers exceeded their respective corporate and individual performance goals, certain discretionary amounts were awarded in excess of the non-equity incentive plan compensation. These discretionary amounts are reflected in the “Bonus” column of the Summary Compensation Table above.

Equity Compensation

In 2019,2020 and 2021, we awarded equity compensation under our 2018 amendedAmended and restated equity planRestated Equity Incentive Plan, or the 2018 Plan, to our named executive officers based on their performance in the form of time- vestingtime-vesting stock options and time- and

performance-vested restricted stock units. In addition, in 2020 we awarded time-vesting stock options and restricted stock units to Mr. Enloe as an inducement material to his acceptance of employment with the Company in accordance with NASDAQ Listing Rule 5635(c)(4). We determine equity award amounts based on the judgment of our Compensation Committee, taking into account information and recommendations provided by our compensation consultant. With respect to our named executive officers other than our CEO,Mr. Lake, the Compensation Committee also considers recommendations provided by our CEO. In determining the amount of awards, the Compensation Committee generally does not consider an employee’s current equity ownership in our common stock or the prior awards that are fully vested, but may consider competitive market factors in our industry.

Our stock option awards typically vest over a four-year period, in 48 equal monthly installments, subject to the continued service of the employee with us. Our time-based restricted stock unit awards typically vest in equal annual installments over a four-year period subject to the continued service of the employee with us. Our performance-based restricted stock unit awards include vesting criteria relating to the achievement of certain development, commercialization and financial goals. We believe these vesting arrangements encourage our named executive officers to continue service with us for a longer period of time and remain focused on our multi-year long-term drug development and commercialization programs.

Impact of the Separation on Equity AwardsQualified Plan

On December 5, 2019, we granted Ms. Henwood and Mr. Lake “make-whole grants” under our equity plan. The make-whole grants were awarded in lieu of any adjustments to outstanding restricted stock unit and option awards held by these named executive officers upon the Separation. Ms. Henwood received 93,550 make-whole restricted stock units and Mr. Lake received 17,283 make-whole restricted stock units, which will vest on December 5, 2020 (or if earlier,We maintain a change in control of the Company), subject to continued employment.

QUALIFIED AND NON-QUALIFIED PLANS

The Company maintains a tax-qualified savings plan under Section 401(k) of the Internal Revenue Code. Employees who participate in the plan may make elective deferrals to the plan, subject to the limitations imposed by the Internal Revenue Code. In addition, the Companywe currently matchesmatch 100% of employee deferrals under the plan, up to a limit of 5% of the employee’s eligible compensation. Mr. Enloe began participating in the Company’s plan in early 2021. Mr. Lake previously participated in the Baudax Bio plan and began participating in our plan upon entering his employment agreement on December 15, 2020.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 20192021

The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2019:2021:

   
  

 

 OPTION AWARDS  STOCK AWARDS 
    
  

 

 Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable		  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable		  Option
Exercise
Price
($)		  Option
Expiration
Date		  Number
of time-
based
vesting
shares or
units of
stock
that have
not
vested		  Market
value of
time-
based
vesting
shares or
units of
stock
that have
not
vested
($)(1)		  Number of
performance-
based
vesting
shares or
units of stock
that have not
vested (#)		  Market value
of
performance-
based
vesting
shares or
units of stock
that have not
vested ($)(1)		 

J. David Enloe, Jr.

  48,544  145,631(2)   3.03   12/14/2030      
       99,009(3)   169,305    
                           66,007(4)   112,872 

Ryan D. Lake

  65,000   —  (5)   7.58   6/4/2027      
   22,521   479(6)   9.04   1/1/2028      
   43,750   16,250(7)   7.99   1/17/2029      
   20,625   24,375(8)   16.62   2/2/2030      
   29,126   87,379(9)   3.03   12/14/2030      
       2,875(10)   4,916    
       6,428(11)   10,992    
       9,000(12)   15,390    
       59,406(13)   101,584    
       100,000(14)   171,000    
                           39,604(4)   67,723 

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 23

EXECUTIVE COMPENSATION (continued)

 

OPTION AWARDS

STOCK AWARDS

 

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Option Exercise Price ($)

Option Expiration Date

Number of time-based vesting shares or units of stock that have not vested

Market value of time-based vesting shares or units of stock that have not vested ($)(1)

Number of performance-based vesting shares or units of stock that have not vested (#)

Market value of performance-based vesting shares or units of stock that have not vested ($)(1)

Gerri Henwood

60,000

—

8.00

03/11/2024

 

 

 

 

 

40,000

—

7.00

04/07/2024

 

 

 

 

 

123,500

—

2.47

12/16/2024

 

 

 

 

 

105,300

 

8.41

12/15/2025

 

 

 

 

 

105,300

—

7.86

12/01/2026

 

 

 

 

 

105,510

39,190 (2)

7.33

01/17/2027

 

 

 

 

 

47,917

52,083 (3)

9.04

01/01/2028

 

 

 

 

 

43,702

146,998 (4)

7.99

01/17/2029

 

 

 

 

 

 

 

 

 

10,000(5)

$183,300

 

 

 

 

 

 

 

37,500(6)

$687,375

 

 

 

 

 

 

 

40,864(7)

$749,037

 

 

 

 

 

 

 

93,550(8)

$1,714,772

 

 

 

 

 

 

 

 

 

95,350 (9)

$1,747,766

Ryan D. Lake

40,625

24,375 (10)

7.58

06/04/2027

 

 

 

 

 

11,021

11,979 (3)

9.04

01/01/2028

 

 

 

 

 

13,750

46,250 (4)

7.99

01/17/2029

 

 

 

 

 

 

 

 

 

5,000(11)

$91,650

 

 

 

 

 

 

 

8,625(6)

$158,096

 

 

 

 

 

 

 

12,857(7)

$235,669

 

 

 

 

 

 

 

17,283(8)

$316,797

 

 

 

 

 

 

 

 

 

30,000 (9)

$549,900

(1)

The market value is based on the closing stock price of $18.33$1.71 on December 31, 20192021 (the last trading date in the 20192021 fiscal year).

(2)

(2)

The stock option is an inducement grant under Nasdaq listing rule 5635(c)(4). The stock option vests in equal monthly installments over 48 months, beginning on February 18, 2017,January 15, 2021, subject to continued employmentservice with us.

(3)

The restricted stock option vests in equal monthly installments over 48 months, beginning on February 2, 2018, subject to continued employment with us.

units are an inducement grant under Nasdaq listing rule 5635(c)(4)

The stock option vests in equal monthly installments over 48 months, beginning on February 18, 2019, subject to continued employment with us.

(5)

. The restricted stock units vest in four equal annual installments beginning January 18, 2018,on December 15, 2021, subject to continued employmentservice with us.

(6)

The restricted stock units vest in four equal annual installments beginning January 2, 2019, subject to continued employment with us.

(7)

The restricted stock units vest in four equal annual installments beginning January 18, 2020, subject to continued employment with us.

(8)

The restricted stock units vest in full on the earlier (i) a change of control of the Company or (ii) December 5, 2020, subject to continued employment with us.

(9)

(4)

The performance-based restricted stock units would have vestedawarded to Mr. Enloe are an inducement grant under Nasdaq listing rule 5635(c)(4). Vesting of these performance-based restricted stock units were based upon meeting certain 20192021 performance criteria, subject to continued employmentservice with us. All of suchus through the date on which performance achievement is determined by the Board. These performance-based restricted stock units were forfeited and canceledvested in the first quarter of 2020 as2022 when the performance criteria was based on acute care segment goals. The performance-based restricted stock units are shown here at the target level of performance.were deemed to have been fully met.

(10)

(5)

The stock option is an inducement grant under Nasdaq listing rule 5635(c)(4). The stock option vests in equal monthly installments over 48 months, beginning on July 5, 2017, subject to continued employmentservice with us.

(6)

(11)The stock option vests in equal monthly installments over 48 months, beginning on February 2, 2018, subject to continued service with us.

(7)

The stock option vests in equal monthly installments over 48 months, beginning on February 18, 2019, subject to continued service with us.

(8)

The stock option vests in equal monthly installments over 48 months, beginning on March 3, 2020, subject to continued service with us.

(9)

The stock option vests in equal monthly installments over 48 months, beginning on January 15, 2021, subject to continued service with us.

(10)

The restricted stock units vest in four equal annual installments beginning June 5, 2018,January 2, 2019, subject to continued employmentservice with us.

(11)

The restricted stock units vest in four equal annual installments beginning January 18, 2020, subject to continued service with us.

(12)

The restricted stock units vest in four equal annual installments beginning February 3, 2021, subject to continued service with us.

(13)

The restricted stock units vest in four equal annual installments beginning December 15, 2021, subject to continued service with us.

(14)

The restricted stock units vest as follows: 18,000 on April 8, 2021; 18,000 on July 8, 2021; 100,000 on December 31, 2021; and 100,000 in 24 equal monthly installments beginning January 31, 2022. Each of the vests are subject to continued service with us.

EMPLOYMENT AGREEMENTS

We traditionally hadentered into employment agreements with each of our named executive officers.J. David Enloe, Jr. and Ryan D. Lake, or the Employment Agreements, on December 15, 2020.

Compensation

The employment agreementsEmployment Agreements provided for annual base salaries for each of our named executive officers,Mr. Enloe and Mr. Lake, or, together, the Company Executive Officers, subject to adjustment from time to time. In addition, the employment agreements providedEmployment Agreements provide that each of our named executive officers wasthe Company Executive Officers are eligible to participate in our Company’s incentive bonus program. The base salaries and target bonus opportunities that were in in effect for 20192021 are described in the “Base Salaries” and “Annual Bonuses” sections above.

Termination and Severance

The employment agreements historically providedEmployment Agreements each provide the named executive officersCompany Executive Officers with certain severance rights if we terminated oneterminate the employment of our named executive officer’s employmentsuch Company Executive Officer without cause or such named executive officer resignedCompany Executive

Officer resigns because of certain material adverse changes to the terms and conditions of his or her employment within 12 months of a change of control (in either case, an Involuntary Termination), or such named executive officerCompany Executive Officer died or became disabled.  Generally,

Pursuant to the Employment Agreements, if we terminate one of our Company Executive Officers’ employment without cause (as defined below) or such named executive officers were eligible to receive base salary and health care continuation at active employee ratesCompany Executive Officer resigns for certain reasons described below within 12 months upon an Involuntary Termination.

Notice of Annual Meetinga change of Shareholders and 2020 Proxy Statement  24

EXECUTIVE COMPENSATION (continued)

Messrs. Celano and Lake were alsocontrol (as defined below), such Company Executive Officer will generally be entitled to receive any earned but unpaid bonus in respect of the year preceding the Involuntary Termination, a pro rata annual bonus in respect of the year in which the Involuntary Termination occurred, and outplacement services up to $25,000. Upon death or disability, the named executive officers were generally eligible to receive base salary and health care continuation at active employee rates for 6 months (for Ms. Henwood, 12 months in the event of death). Messrs. Celano and Lake were also eligible to receive any earned but unpaid bonus in respect of the year preceding the death or disability, and a pro rata annual bonus, calculated as though the “target” level of performance had been achieved, in respect of the year in which the death or disability occurred. The severance benefits were generally subjectreceive:

(i)

any accrued but unused vacation and paid time off and any earned but unpaid bonus in respect of the prior year (referred to as the Accrued Benefits);

(ii)

continuation of such named executive officer’s base salary and health insurance benefits (including for eligible dependents), at active employee rates, for a period of 12 months following the date of termination, with respect to Mr. Lake, and for a period of 18 months following the date of termination, with respect to Mr. Enloe;

(iii)

a pro-rata annual bonus in respect of the fiscal year in which the effective date of termination occurs, to the extent such bonus is earned based on the applicable criteria, paid at the same time it would have otherwise been paid absent the named executive officer’s termination of employment; and

(iv)

outplacement services for a period of 12 months following the date of termination, which shall not exceed $25,000.

If a Company Executive Officer’s employment is terminated as a result of such Company Executive Officer’s disability or death, such Company Executive Officer or such Company Executive Officer’s estate will be entitled to receive:

(i)

the Accrued Benefits;

(ii)

continuation of such named executive officer’s base salary and health insurance benefits (including for eligible dependents) at active employee rates for a period of 18 months following the date of termination, with respect to Mr. Enloe, and a period of 12 months following the date of termination, with respect to Mr. Lake; and

(iii)

a pro-rata target bonus in respect of the fiscal year in which the effective date of termination occurs, paid within 30 days of termination.

The severance benefits are subject to the Company Executive Officer’s execution of a release of claims in favor of the Company. In addition, the agreements generally providedprovide that if the payments and benefits would be subject to an excise tax under Section 280G of the Code, they would be reduced to the maximum amount that would not trigger the excise tax unless the executive would be better off (on an after-tax basis) receiving all of the payments and benefits and paying all necessary applicable taxes.

In connection with Mr. Celano’s departure from the Company in May of 2019, the Company and Mr. Celano entered into a Separation and Mutual Release Agreement, or the Separation Agreement. Pursuant to the Separation Agreement, in exchange for a general release of all claims against the Company, Mr. Celano received: (1) continued base salary and health benefits for 13 months (12 months per his employment agreement, and an additional month as a result of his waiver of a 30 day notice period); (2) a pro-rated target bonus in respect of the 2019 fiscal year ($87,423), to be paid when annual bonuses for the 2019 fiscal year are paid to other executives; and (3) a $25,000 payment to cover outplacement services. In addition, pursuant to the Separation Agreement, Mr. Celano received accelerated vesting of a portion of his outstanding equity awards, resulting in 142,757 options and 5,937 time-based restricted stock units becoming vested as of the termination date. Mr. Celano also immediately vested into his 2019 performance-based restricted stock unit award as through the target level of performance had been achieved, resulting in the vesting of an additional 33,750 restricted stock units. Mr. Celano also received an extension of the exercise period for vested options until the 18-month anniversary of the termination date. The total value of the accelerated vesting of his various equity awards, calculated based upon our stock price on his termination date, and the extension of his exercise period was $290,879.

Restrictive Covenants

Under the employment agreements, the named executive officers are bound by a non-solicitation of employees and customers and a non-compete during their employment and the one-year period thereafter. Under the terms of Mr. Celano’s Separation Agreement, he acknowledged his ongoing obligation to abide by these restrictive covenants, and agreed to an extended non-solicitation period of 18 months.

Agreements following the Separation

Following the Separation, our employment agreements with Ms. Henwood and Mr. Lake were superseded by agreements that they entered into with Baudax Bio, or the Baudax Bio Agreements. Pursuant to the Baudax Bio Agreements, all of the named executive officers’ rights under their prior employment agreements were terminated. We have no further obligations to the named executive officers under the prior employment agreements (compensatory or otherwise), other than an obligation to (i) continue to indemnify the named executive officers in accordance with our governing documents and to maintain directors’ and officers’ insurance coverage for the named executive officers and to (ii) maintain outstanding equity incentive awards held by the named executive officers, which awards continue to vest into these awards based on those officers’ continued service with us. In addition, pursuant to the Baudax Bio Agreements, the named executive officers reaffirmed that their existing obligations to us under the confidentiality, non-solicitation, non-competition, non-disparagement and intellectual property assignment provisions of the prior employment agreements remain in full force and effect. The named executive officers also agreed, that during the time they are dually employed by us and Baudax Bio, they will devote such time and energy as necessary to fulfill their duties to each company.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  25

EXECUTIVE COMPENSATION (continued)

CERTAIN RELATIONSHIPS

  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Since January 1, 2019,2020, we have engaged in the following transactions with our directors, executive officers, holders of more than 5% of our voting securities, and affiliates or immediate family members of our directors, executive officers, and holders of more than 5% of our voting securities. We believe that all of these transactions were on terms as favorable as could have been obtained from unrelated third parties.

RELATIONSHIP WITH BAUDAX BIO AND THE SEPARATION

Prior to completion of the Separation, we owned all of the outstanding shares of common stock of Baudax Bio. Following the Separation, we no longer own any shares of Baudax Bio common stock and each company now operates as a separate, independent public companies.company.

In connection with the Separation, Recrowe and Baudax Bio entered into a Separation Agreement, Employee Matters Agreement, Tax Matters Agreement and Transition Services Agreement. These agreements govern the relationship RecroSocietal and Baudax Bio, including the allocation of various assets, liabilities, rights and obligations, as well as transition services to be provided by RecroSocietal to Baudax Bio and by Baudax Bio to Recro.Societal. For a more complete description of each of these agreements, see our Current Report on Form 8-K, filed November 26, 2019, as well as Exhibits 2.1, 10.1, 10.2, and 10.3 filed thereto.

We also entered into an Assignment, Assumption and Bifurcation Agreement with Baudax Bio, Recro Gainesville LLC, or Recro Gainesville, and Alkermes Pharma Ireland Limited, pursuant to which Recro Gainesville assigned, conveyed and transferred to Baudax Bio the exclusive worldwide license, to certain nanotechnology intellectual property.property. For a more complete description of this agreement, see our Current Report on Form 8-K, filed November 26, 2019, as well as Exhibit 10.4 filed thereto.

EMPLOYMENT OF CERTAIN RELATED PERSONS

Mr. Chris Sharr, Ms.  Henwood’s brother, was our Vice President, Manufacturing beginning in 2017 and until the Separation in November 2019, when he was offered and accepted a similar position at Baudax Bio.  Mr. Sharr earned $334,355 in compensation in 2019, including base salary, bonus allocable to Recro, and any other compensation.  Mr. Sharr also earned $235,299 in equity compensation, which is determined in accordance with ASC 718. The assumptions made in the valuation of Mr. Sharr’s equity compensation are included in Note 15 of the Notes to the Annual Financial Statements included in our 2019 Annual Report.  Mr. Sharr’s compensation was approved by our Compensation Committee and Audit Committee.

Ms. Suzanne Sharr, Ms.  Henwood’s sister-in-law, was our Senior Director of Human Resources until May 2019.  Ms. Sharr earned $170,743 in compensation in 2019, including base salary and any other compensation.  Ms. Sharr also earned $117,650 in equity compensation, which is determined in accordance with ASC 718. The assumptions made in the valuation of Ms. Sharr’s equity compensation are included in Note 15 of the Notes to the Annual Financial Statements included in our 2019 Annual Report.  Ms. Sharr’s compensation was approved by our Compensation Committee and Audit Committee.

Ms. Diane Myers, Ms.  Henwood’s sister, was our Senior Vice President, Regulatory and Quality beginning in 2014 and until the Separation in November 2019, when she was offered and accepted a similar position at Baudax Bio.  Ms. Myers earned $452,574 in compensation in 2019, including base salary, bonus allocable to Recro, and any other compensation.  Ms. Myers also earned $355,230 in equity compensation, which is determined in accordance with ASC 718. The assumptions made in the valuation of Ms.  Myers’ equity compensation are included in Note 15 of the Notes to the Annual Financial Statements included in our 2019 Annual Report.  Ms. Myers’ compensation was approved by our Compensation Committee and Audit Committee.

Each of Ms. Myers, Ms. Sharr and Mr. Sharr participated in our general welfare and benefit plans.  Ms. Henwood did not have a material interest in the employment of Ms. Myers, Ms. Sharr or Mr. Sharr, nor did she share a household with any of them.

Our Compensation Committee and Audit Committee approve the compensation of all related persons.

POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS

Our Board has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related-person transactions. This policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest. Our management is responsible for determining whether a transaction is a related party transaction subject to our policy, and upon subject determination, is responsible for disclosing the

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  26

material facts concerning the transaction and the related party’s interest in our transaction to our Audit Committee. In reviewing and approving any such transactions, our Audit Committee is tasked to consider all relevant facts and circumstances with respect to the transaction and shall evaluate all available options, including ratification, revision or termination of the transaction. All of the transactions described above either were approved or ratified in compliance with this policy.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 27

EXECUTIVE COMPENSATION (continued)

SECURITY OWNERSHIP

  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of common stock as of                     March 19, 2020, 2022 by (a) each person known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, (b) each named executive officer identified in the Summary Compensation Table above, (c) each director and nominee for director, and (d) all executive officers and directors as a group.

The percentage of common stock outstanding is based on                  23,455,226 shares of our common stock outstanding as of                     March 19, 2020., 2022. For purposes of the table below, and in accordance with the rules of the SEC, we deem shares of common stock subject to options that are currently exercisable or exercisable within sixty days of                     March 19, 2020, 2022 to be outstanding and to be beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person, but we do not treat them as outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise noted, each of the persons or entities in this table has sole voting and investing power with respect to all of the shares of common stock beneficially owned by them, subject to community property laws, where applicable. Except as otherwise noted below, the street address of each beneficial owner is c/o Recro Pharma,Societal CDMO, Inc., 490 Lapp Road, Malvern, PA 19355.1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341.

 

Shares Beneficially Owned

Name of Beneficial Owner

Number

of

Shares

Percentage

5% or Greater Shareholders

 

 

SCP Vitalife Partners II, L.P.(1)

1200 Liberty Ridge Drive

Suite 300

Wayne, PA 19087

2,172,900

9.3%

SCP Vitalife Partners (Israel) II, L.P.(1)

32B Habarzel St.

Ramat Hachayal

Tel Aviv 69710 Israel

726,055

3.1%

Blackrock, Inc.(2)
55 East 52nd Street

New York, NY 10055

1,332,988

5.7%

Named Executive Officers and Directors

 

 

Gerri Henwood(3)

818,579

3.5%

Ryan Lake(4)

97,689

*

Arnaud Ajdler (5)

1,130,055

4.8%

William L. Ashton(6)

111,267

*

Michael Berelowitz(7)

91,767

*

Winston J. Churchill(8)(1)

2,998,222

12.8%

Bryan M. Reasons(9)

62,842

*

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  28

 

Wayne Weisman(1)(10)

3,005,222

12.8%

All executive officers and directors as a group (8 persons)(11)

5,416,688

23.1%

Shares Beneficially Owned
Name of Beneficial OwnerNumber of SharesPercentage

5% or Greater Shareholders

Entities affiliated with SCP Vitalife(1)

1200 Liberty Ridge Drive

Suite 300

Wayne, PA 19087

Entities affiliated with Athyrium Capital Management(2)

505 Fifth Avenue, Floor 18

New York, NY 10017

Entities and persons affiliated with Samjo Capital, LLC(3)

99 Lexington Avenue, 27th Floor

New York, NY 10022

Entities affiliated with AWM Investment Company, Inc.(4)

c/o Special Situations Funds,

527 Madison Avenue, Suite 2600,

New York, NY 10022

Named Executive Officers and Directors

J. David Enloe, Jr.(5)

Ryan D. Lake(6)

William L. Ashton(7)

Michael Berelowitz(8)

Winston J. Churchill(1)(9)

James Miller(10)

Laura L. Parks, Ph.D.(11)

Bryan M. Reasons(12)

Wayne B. Weisman(1)(13)

All executive officers and directors as a group (9 persons)(10)

*

*

Less than 1%

(1)

Based upon information set forth in the Schedule 13D filed on March 21, 2014 and information set forth in Form 4s filed through                     March 19, 2020, 2022 by SCP Vitalife Partners II, L.P., or SCP Vitalife Partners, SCP Vitalife Partners (Israel) II, L.P., or SCP Vitalife Israel, SCP Vitalife II Associates, L.P., or SCP Vitalife Associates, SCP Vitalife II GP, LTD, or SCP Vitalife GP, Winston J. Churchill, Jeffrey Dykan, Abraham Ludomirski and Wayne B. Weisman. SCP Vitalife Partners beneficially owns 2,172,9002,097,938 shares of common stock and SCP Vitalife Israel beneficially owns 726,055701,017 shares of common stock. As the general partner of SCP Vitalife Partners and SCP Vitalife Israel, SCP Vitalife Associates may be deemed to beneficially own 2,898,9552,789,955 shares of common stock. As the general partner of SCP Vitalife Associates, SCP Vitalife GP may be deemed to beneficially own 2,898,9552,789,955 shares of common stock. As directors of SCP Vitalife GP, Messrs. Churchill, Dykan, Ludomirski and Weisman may be deemed to beneficially own 2,898,9552,798,955 shares of common stock. SCP Vitalife Partners shares dispositive and voting power with respect to the 2,172,9002,097,938 shares of common stock owned. SCP Vitalife Israel shares dispositive and voting power with respect to the 726,055701,017 shares of common stock owned. SCP Vitalife Associates, SCP Vitalife GP, Messrs. Churchill, Dykan, Ludomirski and Weisman have shared dispositive and voting power with respect to the aggregate 2,898,9552,798,955 shares of common stock owned by SCP Vitalife Partners and SCP Vitalife Israel.

(2)

Based upon information set forth in the Schedule 13G filed on February 7, 2020,26, 2021 by BlackRock, Inc., BlackRockAthyrium Opportunities II Acquisition LP, or AOII Acquisition LP, Athyrium Opportunities III Acquisition LP, or AOIII Acquisition LP, Athyrium Opportunities Associates II LP, or Associates II LP, Athyrium GP Holdings LLC, or GP Holdings, Athyrium Opportunities Funds GP Holdings LLC, or Funds GP Holdings, Athyrium Opportunities Associates III LP, or Associates III LP, Athyrium Opportunities Associates III GP LLC, or Associates III GP and Jeffrey Ferrell. As the general partner of AOII Acquisition LP, Associates II LP may be deemed to beneficially own the shares of common stock held by AOII Acquisition LP and, as the general partner of AOIII Acquisition LP, Associates III LP may be deemed to beneficial own the shares common stock held by AOIII Acquisition LP. As the general partner of Associates II LP, GP Holdings may be deemed to beneficially own the shares held by Associates II LP and AOII Acquisition LP and as the general partner of Associates III LP, Associates III GP may be deemed to beneficially own the shares held by AOIII Acquisition LP and Associates III LP.

(3)

Based solely upon information set forth in the Schedule 13G/A filed on February 8, 2022 by Samjo Capital, LLC, Samjo Management, LLC, and Andrew N. Wiener. In addition to his role as the sole Managing Member of Samjo Capital LLC and Samjo Management LLC, Mr. Wiener is also one of the portfolio managers of the CPA Samjo Investment Program, or SI, employed by Cowen Prime Advisors LLC, BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Financialor CPA. The clients of Samjo Management Inc. and BlackRock InvestmentSamjo Capital employ investment strategies that are similar to those employed in the CPA SI program. Samjo Capital, Samjo Management LLC.and their clients are not affiliated with CPA and Mr. Wiener does not have beneficial ownership over the shares held in the CPA SI program except for shares held in accounts owned by Mr. Wiener and his immediate family members. As a result, Samjo Capital and Samjo Management do not make joint filings with respect to any shares of the issuer held by any CPA clients except with respect to shares held in accounts owned by Mr. Wiener and his immediate family members. To the best of Samjo Capital’s, Samjo Management’s and Mr. Wiener’s knowledge and belief, CPA reports the ownership of shares by such CPA clients separately to the extent required and is identified as the reporting person.

(3)

(4)

Ms. HenwoodBased solely upon information set forth in the Schedule 13G/A filed on February 11, 2022 by AWM Investment Company, Inc., a Delaware Corporation, or AWM. AWM is the investment adviser to Special Situations Cayman Fund, L.P., or Cayman, Special Situations Fund III QP, L.P. , or SSFQP, and Special Situations Private Equity Fund, L.P., or SSPE. Cayman, SSFQP and SSPE are collectively referred to as the “AWM Funds.” As the investment adviser to the AWM Funds, AWM holds (i) 141,996 shares of our common stock, including 50,000sole voting and investment power over 1,103,377 shares of our common stock held by Ms.  Henwood’s husband, Thomas Henwood,Cayman, 3,153,693 shares of our common stock held by SSFQP, and (ii)824,831 shares of our common stock held by SSPE. Austin W. Marxe, or Marxe, David M. Greenhouse, or Greenhouse, and Adam C. Stettner, or Stettner, are members of: SSCayman, L.L.C., a Delaware limited liability company, the general partner of Cayman. Greenhouse and Stettner are members of MGP Advisers Limited Partnership, a Delaware limited partnership, the general partner of SSFQP; and MG Advisers, L.L.C., a New York limited liability company, the general partner of SSPE. Marxe, Greenhouse and Stettner are also controlling principals of AWM.

(5)

Mr. Enloe holds stock options to purchase 676,583              shares of our common stock that may be exercised within 60 days of                     March 19, 2020.  As spouses, , 2022. None of these options were granted pursuant to any of our equity compensation plans and were granted as an inducement grant pursuant to Nasdaq listing rule 5635(c)(4).

(6)

Mr. and Ms.  Henwood may be deemed to beneficially own theLake holds             shares of our common stock, that are held by the other spouse.  Mr. and Ms.  Henwood disclaim beneficial ownership of the shares of our common stock that are held by the other spouse.

(4)

Mr. Lake holds 14,063 shares of our common stock and stock options to purchase 83,626             shares of our common stock that may be exercised within 60 days of                     March 19, 2020., 2022 and restricted stock units covering             shares of our common stock that may vest and be settled within 60 days of                     , 2022. Of thesethe options, stock options to purchase 47,396             shares of our common stock were not granted pursuant to any of our equity compensation plans and were granted as an inducement grant pursuant to Nasdaq listing rule 5635(c)(4).

(5)

(7)

Mr. AjdlerAshton holds              shares of our common stock, stock options to purchase 17,554             shares of our common stock that may be exercised within 60 days of                     March 19, 2020, 2022 and restricted stock units covering 7,955             shares of our common stock that may vest and be settled within 60 days of                     March 19, 2020.  Mr. Ajdler has shared voting and investment power with respect to 1,104,546 shares of our common stock that are held by Engine Capital Management, LP, of which he is a managing partner., 2022.

(6)

(8)

Mr. AshtonDr. Berelowitz holds 19,459             shares of our common stock, stock options to purchase 83,853             shares of our common stock that may be exercised within 60 days of                     March 19, 2020, 2022 and restricted stock units covering 7,955             shares of our common stock that may vest and be settled within 60 days of                     March 19, 2020., 2022.

(7)

(9)

Dr. BerelowitzMr. Churchill holds 19,459             shares of our common stock, stock options to purchase 64,353             shares of our common stock that may be exercised within 60 days of                     March 19, 2020, 2022 and restricted stock units covering 7,955             shares of our common stock that may vest and be settled within 60 days of                     March 19, 2020.

(8)

Mr. Churchill holds 19,459 shares of our common stock, stock options to purchase 71,853 shares of our common stock that may be exercised within 60 days of March 19, 2020 and restricted stock units covering 7,955 shares of our common stock that may vest and be settled within 60 days of March 19, 2020., 2022. Mr. Churchill has shared voting and investment power with respect to 2,898,955 shares of our common stock that are held by SCP Vitalife, of which he is a partner. Mr. Churchill disclaims beneficial ownership of 83,664 shares of our common stock that are held by the Sharbaugh Trust for the benefit of his son.

(9)

Mr. Reasons holds 15,034 shares of our common stock, stock options to purchase 39,853 shares of our common stock that may be exercised within 60 days of March 19, 2020 and restricted stock units covering 7,955 shares of our common stock that may vest and be settled within 60 days of March 19, 2020.

(10)

Mr. Weisman holds 26,459 shares of our common stock, stock options to purchase 71,853 shares of our common stock that may be exercised within 60 days of March 19, 2020 and restricted stock units covering 7,955 shares of our common stock that may vest and be settled within 60 days of March 19, 2020.  Mr. Weisman has shared voting and investment power with respect to 2,898,9552,798,955 shares of our common stock that are held by SCP Vitalife, of which he is a partner.

(11)

(10)

IncludesMr. Miller holds             shares of our common stock, stock options to purchase 1,109,52852,258 shares of our common stock that may be exercised within 60 days of                     March 19, 2020, 2022 and restricted stock units covering 47,7308,363 shares of our common stock that may vest and be settled within 60 days of                     March 19, 2020., 2022.

(11)

Dr. Parks holds             shares of our common stock, stock options to purchase             shares of our common stock that may be exercised within 60 days of                     , 2022 and restricted stock units covering             shares of our common stock that may vest and be settled within 60 days of                     , 2022.

(12)

Mr. Reasons holds             shares of our common stock, stock options to             shares of our common stock that may be exercised within 60 days of                     , 2022 and restricted stock units covering             shares of our common stock that may vest and be settled within 60 days of                     , 2022.

(13)

Mr. Weisman holds             shares of our common stock, stock options to purchase             shares of our common stock that may be exercised within 60 days of                     , 2022 and restricted stock units covering             shares of our common stock that may vest and be settled within 60 days of                 , 2022. Mr. Weisman has shared voting and investment power with respect to 2,798,955 shares of our common stock that are held by SCP Vitalife, of which he is a partner.

NoticeDELINQUENT SECTION 16(a) REPORTS

Section 16 of Annual Meetingthe Exchange Act requires the Company’s directors, certain officers, and beneficial owners of Shareholdersmore than ten percent of the Common Stock to file reports with the SEC indicating their holdings of and 2020transactions in the Company’s equity securities and to provide copies of such reports to the Company. Based solely on a review of such copies and written representations from the Company’s reporting persons, the Company believes that all Section 16 filing requirements were fulfilled on a timely basis except that the following individuals who failed to timely file certain Section 16 reports due to administrative delays: (i) Mr. Lake failed to timely file a Form 4 on two occasions; (ii) Mr. Miller failed to timely file a Form 4 on one occasion; and (iii) Dr. Parks failed to timely file a Form 4 on one occasion.

  EQUITY COMPENSATION PLAN INFORMATION

The following table presents information about equity compensation plans and individual compensation arrangements as of December 31, 2021:

    
   

Number of securities
to be issued upon
exercise of
outstanding options
and other rights

(a)

  

Weighted average
exercise price of
outstanding options
and other rights (1)

(b)

  

Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected in
column (a))

(c)

 

Equity compensation plans approved by security holders

  5,111,851(2)  $6.79   4,964,705 

Equity compensation plans not approved by security holders

  1,125,781(3)   5.00   —  (4) 

Total

  6,257,632  $6.47   4,964,705 

(1)

Represents the weighted-average exercise price of outstanding stock options and does not include restricted stock units.

(2)

Consists of outstanding options to purchase 4,301,802 shares of common stock and restricted stock units covering an aggregate of 810,049 shares of common stock. Shares of common stock in settlement of vested restricted stock units are deliverable within 30 days of the vesting date.

(3)

Consists of outstanding options to purchase 945,765 shares of common stock and restricted stock units covering an aggregate of 180,016 shares of common stock. that were “inducement grants” as defined under Nasdaq Listing Rule 5635(c)(4).

(4)

Our board of directors has not established any specific number of shares that could be issued without shareholder approval. Inducement grants to new key employees are determined on a case-by-case basis. Other than possible inducement grants, we expect that all equity awards will be made under shareholder-approved plans.

Our inducement grants typically contain terms and conditions that are materially the same as standard grants made under our 2018 Plan. Our inducement option grants typically have a ten-year term and vest in equal monthly installments over 48 months, subject generally to the continued service of the employee with us. Our inducement time-based restricted stock unit awards typically vest in equal annual installments over a four-year period, subject generally to the continued service of the employee with us.

Other information with respect to this item is set forth in this Proxy Statement | 29under the headings “Security Ownership of Directors, Certain Beneficial Owners and Management,” “Executive Compensation,” and “Director Compensation,” and is incorporated herein by reference.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (continued)

ITEMS TO BE

  ITEMS TO BE VOTED ON

ITEM 1: ELECTION OF CLASS IIIII DIRECTORS FOR A THREE-YEAR TERM EXPIRING IN 20232025

At the Annual Meeting, our shareholders will vote on the election of two Class IIIII director nominees named in this Proxy Statement as directors, each to serve until our 20232025 Annual Meeting of Shareholders and until their respective successors are elected and qualified. Our Board has unanimously nominated William AshtonJ. David Enloe, Jr. and Dr. Michael BerelowitzBryan M. Reasons for election to our Board at the Annual Meeting.

Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, the Governance Committee will recommend to our Board a replacement nominee. The Board may then designate the other nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for his or her replacement.

OUR BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS

VOTE FORTHE ELECTION OF WILLIAM ASHTONJ. DAVID ENLOE, JR. AND DR. MICHAEL BERELOWITZ.BRYAN M. REASONS.

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ITEM 2: APPROVAL OF A ONE-TIME STOCK OPTION EXCHANGE FOR NON-EXECUTIVE EMPLOYEES

Overview

We are seeking shareholder approval of a one-time stock option exchange program, or the Exchange Program, for current non-executive employees, whom we refer to as the Eligible Participants. If implemented, the Exchange Program would permit Eligible Participants to surrender certain “out-of-the-money” stock options (meaning outstanding stock options that have an exercise price that is greater than the current market price for our common stock, also known as “underwater” stock options), or Eligible Options, issued and outstanding in exchange for a grant of restricted stock units, or RSUs, that may be settled for shares of our common stock under our 2018 Plan.

Shareholder-Friendly Design

In discussing strategies to address our out-of-the-money stock options, we were particularly focused on creating a strategy that is compatible with the interests of our shareholders. We believe that the Exchange Program that is being proposed meets that objective by providing a more cost-effective and shareholder-friendly retention and incentive tool than simply issuing additional equity awards or paying cash compensation in order to effectively retain and motivate our non-executive employees. We believe that the benefits of the proposed exchange program, including reducing our overhang (meaning potential shares committed but unissued), and approximate value-neutrality (i.e., keeping the aggregate value of the old versus replacement awards approximately consistent), contribute to an alignment of the program with the interests of our shareholders. In particular (and as discussed in more detail below):

We believe that the Exchange Program would result in a net reduction of the overhang from our equity compensation program (up to 5% of our overhang on account of stock options, depending upon the level of participation in the Exchange Program).

Exchange ratios for the Exchange Program are intended to result in a “value for value” exchange, meaning that the accounting fair value of replacement RSUs granted is expected to be less than or equal to the fair value of the stock options that are surrendered, so that from that perspective the exchange does not result in a windfall to participants.

Shares from exchanged options that are in excess of the shares needed to issue replacement grants of RSUs will not be returned to the 2018 Plan pool, limiting the future dilution that could otherwise have resulted from the program.

Our executive officers, directors, consultants and former employees are excluded from the program, to keep the focus on the retention of our non-executive workforce.

Only options granted before July 1, 2020 and that have an exercise price above our 52-week high stock price (determined immediately before the exchange offer commences) will be eligible for exchange, to make clear that the program is not designed to address merely immaterial or fleeting changes in our stock price.

We believe that these design features, among others, mean that the proposed Exchange Program is aligned with the interests of our shareholders.

The Exchange Program is subject to the approval of our shareholders under applicable Nasdaq Listing Rules. Our Board believes that the Exchange Program is in the best interests of our Company and our shareholders for the reasons described below.

Reasons for the Exchange Program

In late 2019, we became a dedicated CDMO business following the spin-off of our acute care research and development business. This resulted in a bifurcation of our company’s total value between the spun-off business and our dedicated CDMO business, although no adjustment was then made to the exercise prices of our outstanding stock options.

Our stock closed at $18.78 on February 13, 2020. Since then, our stock price has declined significantly. We believe that this was the result of the bifurcation of value as previously discussed as well as a series of negative events that were outside of the control of our employees. These events included:

the onset of the COVID-19 pandemic, which resulted in a decrease in prescriptions filled for a number of the commercial products we manufacture for our customers;

the return to the market of a competitor to one of our commercial partners, which reduced our commercial partner’s market share of certain product strengths by approximately 50%; and

notification from two of our commercial partners of the discontinuation of two commercial product lines that would result in a year-over-year reduction of approximately $6 million in our revenue.

The resulting declines in our stock price have steadily eroded the retentive and incentive value of stock options granted. For example, on November 4, 2020, our stock closed at $1.60.

In December 2020, the Company announced the start of our CEO and CFO, and through the first half of 2021, the Company also announced new members of the Board that have significant CDMO experience. Together, our new executive management and the Board began to design and implement a turnaround strategy for the company over the remainder of 2021.

Meanwhile, employee turnover had been steadily increasing across the U.S. due to various factors primarily related to the COVID-19 pandemic. We experienced a record 21% employee turnover in 2021.

As part of this effort, the Compensation Committee began considering, with input from Pay Governance, who serves as the Compensation Committee’s independent compensation consultant, whether conducting an option exchange program would assist with our retention efforts. These discussions were undertaken in the context of the sustained decline in the trading price of the Company’s shares, which at the time had resulted in a situation where, as of early October 2021, the Company had issued approximately 4.7 million outstanding stock options, 100% of which were underwater. Excluding executive officers, directors, consultants and former employees, non-executive active employees held approximately 1.4 million of the underwater stock options. Approximately half of those awards, equivalent to 15% of the 4.7 million underwater stock options, would ultimately be eligible for the proposed Exchange Program (see below).

Our turnaround strategy includes the establishment of an industry-leading employee experience and corporate culture. We believe that our strategy will allow us to strengthen recruitment, employee engagement and retention, leading to a better workplace, better performance and better outcomes for our clients and for our company’s financial performance. Taking this into account in addition to the advice of Pay Governance and other relevant considerations, the Compensation Committee determined that a program under which current non-executive employees could exchange Eligible Options for RSUs was most attractive for a number of reasons, summarized below.

•

The Exchange Program will have a positive impact on our employee experience and culture. Our non-executive employees will see our internal and external public announcements about the Exchange Program, which will increase confidence that we are working to reasonably address the perceived lack of value in our equity incentive program.

•

The Exchange Program will have a positive impact on employee engagement and retention. The RSUs issued in the Exchange Program will replace underwater stock options. If the vesting conditions are

met, these RSUs may be settled for shares of our common stock under our 2018 Plan, thus providing an incentive for non-executive employees to stay with the company, unlike Eligible Options which are substantially underwater even though they may be vested.

•

The Exchange Program will allow us to obtain value for previous compensation expense. We have incurred compensation expense in respect of our current stock option awards, even though those awards no longer have any meaningful retention or incentive effects. The RSUs that will be issued in exchange for the cancelled stock options in the Exchange Program are not expected to result in significant additional compensation expense and therefore will not have a material adverse impact on our reported earnings.

•

The Exchange Program will reduce our “equity award overhang.” Outstanding stock options cannot be removed from our equity award overhang until they are exercised, expire or are terminated. Under the proposed Exchange Program, Eligible Participants will receive fewer replacement RSUs in exchange for their surrendered stock options, which will reduce overall the number of shares underlying outstanding equity awards. Based on the assumptions described below, if all Eligible Options are exchanged, stock options to purchase approximately 750,000 shares will be surrendered and canceled, while only approximately 310,000 RSUs will be granted. Accordingly, the Exchange Program could result in a significant reduction in our outstanding equity awards. All Eligible Options that are not exchanged will remain outstanding and in effect in accordance with their existing terms.

As a result, we determined that a program under which Eligible Participants could exchange out-of-the-money stock options for a lesser number of RSUs was the most attractive means available to us to restore incentives for our non-executive employees.

Other Alternatives Considered

When considering how best to continue to incentivize and reward our employees who have out-of-the-money stock options, the Compensation Committee engaged Pay Governance to review and evaluate strategies to address this issue. These strategies included the stock option exchange program, as well as other alternatives, including the following:

•

Increase cash compensation. To replace equity incentives, we considered whether we could substantially increase bonus cash compensation. However, significant increases in cash compensation would substantially increase our compensation expenses and reduce the cash available for other initiatives, which could adversely affect our business and operating results.

•

Grant additional equity awards. We also considered special grants of additional stock options at current market price. However, these additional grants could substantially increase our overhang and the dilution to our shareholders and may not eliminate the employee retention, motivation and morale issues associated with these prior awards.

•

Exchange options for cash. We also considered implementing a program to exchange underwater options for cash payments. However, an exchange program for cash would also increase our compensation expenses and reduce our cash flow from operations, which could adversely affect our business and operating results. In addition, we do not believe that such a program would have significant long-term retention value.

•

Exchange options for options. We also considered implementing a program to exchange underwater options for new stock options. However, we believe such a program would not achieve the Compensation Committee’s desired effect of reducing the amount of overhang from outstanding underwater options to the same extent, as an option-for-option exchange would require options with respect to more shares than the proposed option-for-RSU exchange.

Summary of the Exchange Program Features

An overview of the key features of the proposed Exchange Program is provided below.

Eligible ParticipantsApproximately 150 current employees, excluding executive officers, directors, consultants, and former employees
Type of ExchangeOptions for RSUs
Eligible Options

Options with exercise prices above the 52-week high for Company stock (which was $3.94 as of March 10, 2022)

Options are excluded from participating in the offer that are scheduled to expire before the exchange closes

Options that were granted after June 30, 2020 are excluded from participating in the offer

ElectionsEmployees may elect to exchange individual grants; however, if an employee elects to exchange a specific grant, all options granted on the same date must be exchanged
Vesting of Replacement GrantReplacement awards will vest 50% on the first anniversary of the replacement grant and 50% on the second anniversary of the replacement grant, subject in each case to continued employment
Plan to Be Issued UnderReplacement awards will be issued under the 2018 Plan; excess shares resulting from exchange will not be returned to the plan pool
Illustrative Exchange RatiosExchange ratios depend on the value of the underwater options, which are grouped to simplify administration; exchange ratios are expected to range from 2.1-to-1 to 3.0-to-1 (described in more detail below)
Total Grants Eligible for Exchange, Price, and TermOptions to purchase approximately 750,000 shares with a weighted average exercise price of approximately $10 per share and a weighted average remaining term of approximately six years are expected to be eligible for the Exchange Program
Total Replacement GrantsAssuming 100% participation, approximately 310,000 RSUs are expected to be granted as replacement for Eligible Options with an aggregate fair value of approximately $650,000. The RSUs expected to be granted would have an average fair value of just over $4,000 per employee, or approximately 10% of the approximately $37,000 average grant-date fair value of Eligible Options exchanged.

Eligible Options. Only stock options with exercise prices above the 52-week high for Company stock as of a date shortly prior to the Exchange Commencement Date will be eligible to be exchanged for RSUs. Options that are scheduled to expire before the Exchange Program closes or options that were granted after June 30, 2020 are excluded from participating in the Exchange Program. As of March 10, 2022, approximately 750,000 shares were subject to Eligible Options.

Eligible Participants. We intend to make the Exchange Program available to all of our non-executive employees. To be eligible, an employee must be employed by us or one of our subsidiaries both on the Exchange Commencement Date and on the date on which the surrendered stock options are canceled and the RSUs are granted to replace them. As of March 10, 2022, there were 153 Eligible Participants. Because the Exchange Program is designed to improve the retentive element of our equity-based awards, former employees are excluded.

Establishment of a New Vesting Period. New RSUs will be subject to new vesting conditions, such that the RSUs will vest 50% on the first anniversary of the replacement grant and 50% on the second anniversary of the

replacement grant, subject in each case to continued employment. These vesting conditions support the retentive value of the new awards, acknowledge that employees may be surrendering fully-vested but significantly underwater awards, and further align the interests of our shareholders with those of our non-executive employees.

Exchange Ratio. Exchange ratios utilized will result in grants of new RSUs with a fair value, for accounting purposes, that will be less than or equal to the fair value of the Eligible Options that are surrendered in the exchange. Shortly before the start of the Exchange Program, our Compensation Committee will determine exchange ratios by assigning an average exchange ratio to each of the pools of Eligible Options based on the closing price of our common stock on that date.

The exchange ratios will be determined with reference to the fair value of the eligible options (calculated using the Black-Scholes option valuation model) within the relevant grouping. In determining fair value, the Black-Scholes model takes into account many variables and estimates, such as our current stock price, the volatility of the price of our common stock, and the remaining term of an eligible stock option. Setting the exchange ratios in this manner is intended to result in the issuance of replacement RSUs that have an aggregate fair value less than or equal to the aggregate fair value of the surrendered options they replace. This will avoid any additional compensation cost that we must recognize on the new RSUs, other than compensation expense resulting from fluctuations in our stock price after the exchange ratios have been set but before the exchange actually occurs.

Sample Exchange Ratios for Eligible Options

The table below illustrates for Eligible Options, the applicable exercise price range, the approximate number of options in each such range (along with the weighted average exercise price and remaining term for options in that category), the applicable exchange ratio and the approximate number of new RSUs issuable with respect to exchanged options, assuming 100% participation in the offer, had the offer been commenced as of March 10, 2022. The exercise price ranges and exchange ratios will be determined immediately prior to the commencement of the Exchange Program in a manner consistent with that used to formulate the illustration below.

Exercise Price

  Option Shares
Outstanding		   Weighted Average
Remaining Life
(in Years)		   Exchange Ratio   New RSUs 

$4.06 to $7.90

   210,000    5.9    2.1 to 1    100,000 

$7.99 to $9.64

   270,000    6.5    2.2 to 1    120,000 

$10.17 to $16.62

   270,000    6.1    3.0 to 1    90,000 
  

 

 

       

 

 

 

Total (weighted average exercise price of $9.77 per option)

   750,000    6.2    2.4 to 1    310,000 
  

 

 

       

 

 

 

The foregoing exchange ratios are provided solely as examples. We will apply a substantially similar methodology closer to the commencement of the Exchange Program.

Participation in the Exchange Program. Participation in the Exchange Program is voluntary. Eligible Participants will have an election period of at least 20 business days following the Exchange Commencement Date in which to determine whether to participate. Upon the commencement of the Exchange Program, eligible employees holding Eligible Options will receive printed exchange offer materials explaining the precise terms and timing of the Exchange Program. If an Eligible Participant does not elect to participate in the Exchange Program, then his or her eligible stock options will remain outstanding in accordance with their current terms.

Implementation of the Exchange Program Following Shareholder Approval. If we receive the required shareholder approval, the Exchange Program will commence within six months after the date of shareholder approval. The actual implementation date within that 6-month period will be determined by our Compensation Committee. If the Exchange Program does not commence within this time frame, we will not conduct the Exchange Program without again seeking shareholder approval. Our Board reserves the right to amend, postpone, or under certain circumstances cancel the Exchange Program once it has commenced.

Effect on Shareholders. The Exchange Program is designed to provide renewed incentives and motivate the Eligible Participants to continue to create shareholder value and is also designed to reduce the number of shares currently subject to outstanding stock options, thereby avoiding the dilution in ownership that normally results from supplemental grants of new stock options or other awards that would be required to be granted if these options remained outstanding. We are unable to predict the precise impact of the Exchange Program on our shareholders because we cannot predict which or how many employees will elect to participate in the Exchange Program, nor can we predict which or how many Eligible Options such employees will elect to exchange.

Effect on our 2018 Plan. Shares from exchanged options that are in excess of the shares needed to issue replacement grants of RSUs will not be returned to the 2018 Plan pool, limiting the future dilution that could otherwise have resulted from the Exchange Program. If all of the Eligible Options are exchanged for RSUs in accordance with the assumed exchange ratios, eligible stock options for approximately 750,000 shares would be surrendered and canceled, and approximately 310,000 RSUs would be issued.

Effect of a Change of Control. As with all other equity awards granted under the 2018 Plan, in the event of a “change of control” (as defined in the 2018 Plan), unless otherwise provided in a recipient’s employment or service agreement, our Board may take whatever action with respect to awards under the 2018 Plan it deems necessary or desirable, including, without limitation, accelerating the vesting of an award, terminating an award or redeeming an award.

Summary of U.S. Federal Income Tax Consequences of Exchange Program for Participating Employees

The following is a summary of the anticipated material U.S. federal income tax consequences of participating in the Exchange Program. A more detailed summary of the applicable tax considerations for participants will be provided in the exchange offer materials that will be made available to employees upon the commencement of the Exchange Program. The law and regulations themselves are subject to change, and the U.S. Internal Revenue Service is not precluded from adopting a contrary position. The exchange of Eligible Options for RSUs pursuant to the Exchange Program should be treated as a non-taxable exchange and we and participating employees generally should recognize no income for U.S. federal income tax purposes upon the surrender of eligible stock options and the grant of RSUs.

Overall Effect of Exchange Program

Because the decision whether to participate in the Exchange Program is completely voluntary, we are not able to predict how many employees will elect to participate, how many stock options will be surrendered for exchange, or the number of RSUs that may be granted in exchange for stock options under the program.

Implementation of the Exchange Program

We have not commenced the Exchange Program and we will not do so unless our shareholders approve this proposal. If our shareholders approve this proposal, and our Board determines to proceed, we expect the Exchange Program to commence within six months after the date of shareholder approval of the proposal. If the Exchange Program does not commence within this time frame, we would not conduct another stock option exchange program without first seeking shareholder approval. Even if the Exchange Program is approved by our shareholders, our Board will retain the authority, in its discretion, to terminate, amend or postpone the Exchange Program at any time prior to expiration of the election period under the Exchange Program.

Upon the commencement of the Exchange Program, Eligible Participants holding Eligible Options will receive written materials in the form of an “Offer to Exchange” explaining the precise terms and timing of the Exchange Program. At or before the commencement of the Exchange Program, we will file an Offer to Exchange with the SEC as part of a tender offer statement on Schedule TO. Eligible Participants, as well as shareholders and members of the public, will be able to obtain the Offer to Exchange and other documents filed by us with the

SEC free of charge from the SEC’s website at www.sec.gov. The tender offer that we will commence in connection with the Exchange Program is referred to herein as the “Exchange Offer.” Eligible Participants will be given at least 20 business days to elect to surrender their Eligible Options in exchange for RSUs, which period may be extended by us subject to our compliance with applicable law. Once the offer to exchange is closed, Eligible Options that were surrendered for exchange will be canceled, and our board of directors will approve grants of RSUs to participating Eligible Participants in accordance with the established exchange ratios. All such RSUs will be granted under our 2018 Plan and will be subject to the terms of such plan and a RSU agreement to be entered into between us and each participant.

We may decide not to implement the Exchange Program even if shareholder approval of the Exchange Program is obtained, or we may amend or terminate the Exchange Program once it is in progress. Although we do not anticipate that the staff of the SEC will require us to materially modify the terms of the Exchange Program, it is possible that we may need to alter the terms of the Exchange Program to comply with comments from the SEC. It is also possible that we may need to make modifications to the Exchange Program for other legal, tax or accounting reasons. Our Compensation Committee will retain the discretion to make any such changes to the terms of the Exchange Program.

Financial Statements

Our financial statements are incorporated by reference from our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 1, 2022.

IF YOU ARE BOTH A SHAREHOLDER AND AN EMPLOYEE HOLDING ELIGIBLE OPTIONS, PLEASE NOTE THAT VOTING TO APPROVE THE EXCHANGE PROGRAM DOES NOT CONSTITUTE AN ELECTION TO PARTICIPATE IN THE EXCHANGE PROGRAM.

OUR BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTEFORTHE APPROVAL OF A ONE-TIME STOCK OPTION EXCHANGE FOR NON-EXECUTIVE EMPLOYEES

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ITEM 2:3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 14A of the Exchange Act, we are conducting a shareholder advisory vote on the compensation paid to our named executive officers. This proposal, commonly known as “say-on-pay,“say-on-pay,” gives our shareholders the opportunity to express their views on our named executive officers’ compensation. The vote is advisory, and, therefore, it is not binding on the Board, the Compensation Committee, or the Company. Nevertheless, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. We currently intend to conduct this advisory vote annually, subject to the outcome of the advisory vote on the frequency of future advisory votes on named executive officer compensation, as discussed in Proposal 3.annually.

Our executive compensation program is designed to attract, motivate and retain our named executive officers who are critical to our success. Our Board believes that our executive compensation program is well tailored to retain and motivate key executives while recognizing the need to align our executive compensation program with the interests of our shareholders and our “pay-for-performance”“pay-for-performance” philosophy. Our Compensation Committee continually reviews the compensation programs for our named executive officers to ensure they achieve the desired goals of aligning our executive compensation structure with our shareholders’ interests and current market practices.

We encourage our shareholders to read the “Summary Compensation Table” table and other related compensation tables and narrative disclosures, which describe the 20192021 compensation of our named executive officers.

We are asking our shareholders to indicate their support for the compensation of our named executive officers as described herein. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and our executive compensation philosophy, programs, and practices as described in this Proxy Statement.

OUR BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS

VOTEFORTHE APPROVAL OF, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AT THE ANNUAL MEETING

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ITEM 3: ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

In Proposal 2, we are providing our shareholders the opportunity to vote to approve, on an advisory, non-binding basis, the compensation of our named executive officers. In this Proposal 3, we are asking our shareholders to cast a non-binding advisory vote regarding the frequency of future executive compensation advisory votes. Shareholders may vote for a frequency of every one, two, or three years, or may abstain.

Our Board will take into consideration the outcome of this vote in making a determination about the frequency of future executive compensation advisory votes. However, because this vote is advisory and non-binding, our Board may decide that it is in the best interests of our shareholders and the Company to hold the advisory vote to approve executive compensation more or less frequently.

Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  30

In the future, we will propose an advisory vote on the frequency of the executive compensation advisory vote at least once every six calendar years.

After careful consideration, our Board believes that the executive compensation advisory vote should be held annually, and therefore our Board recommends that you vote for a frequency of ONE YEAR for future executive compensation advisory votes. The Board believes that an annual executive compensation advisory vote will facilitate more direct shareholder input about executive compensation. An annual executive compensation advisory vote is consistent with our policy of reviewing our compensation program annually, as well as seeking frequent input from our shareholders on corporate governance and executive compensation matters.

OUR BOARD UNANIMOUSLY RECOMMENDS SHAREHOLDERS VOTE FOR “ONE YEAR” AS THE PREFERRED FREQUENCY OF FUTURE SHAREHOLDER ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

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ITEM 4: RATIFICATION OF APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 20202022

The Audit Committee of the Board has appointed and engaged KPMG to serve as our independent registered public accounting firm to audit the consolidated financial statements of the Company and its subsidiaries for the 20202022 fiscal year, and to perform audit-related services. KPMG has served as our independent registered public accounting firm since 2009.

Shareholders are hereby asked to ratify the Audit Committee’s appointment of KPMG as our independent registered public accounting firm for the 20202022 fiscal year.

The Audit Committee is solely responsible for selecting our independent auditors. Although shareholder ratification of the appointment of KPMG to serve as our independent registered public accounting firm is not required by law or our organizational documents, the Board has determined that it is desirable to seek shareholders ratification as a matter of good corporate governance in view of the critical role played by independent registered public accounting firms in maintaining the integrity of financial controls and reporting. If the shareholders do not ratify the appointment of KPMG, the Audit Committee will reconsider its selection and whether to engage an alternative independent registered public accounting firm.

Representatives of KPMG are expected to virtually attend the Annual Meeting where they will be available to respond to appropriate questions and, if they desire, to make a statement.

THE BOARD UNANIMOUSLY RECOMMENDS A VOTEFORTHE RATIFICATION

OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.2022.

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Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 31

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (continued)

OTHER INFORMATION

  OTHER INFORMATION

OTHER MATTERS

The Annual Meeting is called for the purposes set forth in the Notice. Our Board does not know of any other matters to be considered by the shareholders at the Annual Meeting other than the matters described in the Notice. However, the enclosed proxy confers discretionary authority on the persons named in the proxy card with respect to matters that may properly come before the Annual Meeting and that are not known to our Board at the date this Proxy Statement was printed. It is the intention of the persons named in the proxy card to vote in accordance with their best judgment on any such matter.

REQUIREMENTS FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR NEXT YEAR’S ANNUAL MEETING

Shareholders intending to present a proposalProposals to be considered for inclusion in theour proxy statement for our 2021the 2023 Annual Meeting of Shareholders shareholder proposals must be received by us no later than             November 27, 2020.. If we change the date of the 20212023 Annual Meeting of Shareholders by more than 30 days from the anniversary of this year’s Annual Meeting, shareholder proposals must be received a reasonable time before we begin to make available the proxy materials for the 20212023 Annual Meeting in order to be considered for inclusion in our proxy statement. Proposals must be sent via registered, certified, or express mail (or other means that allows the shareholder to determine when the proposal was received by the Corporate Secretary) to the Corporate Secretary, Recro Pharma,Societal CDMO, Inc., 490 Lapp Road, Malvern, PA 19355.1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341. Proposals must contain the information required under our Bylaws, a copy of which is available upon request to our Corporate Secretary, and also must comply with the SEC’s regulations regarding the inclusion of shareholder proposals in Company-sponsored proxy materials.

Shareholders intending to present a proposal or nominate a director for election at our 20212023 Annual Meeting of Shareholders without having the proposal or nomination included in our proxy statement must comply with the requirements set forth in our Bylaws. Our Bylaws require, among other things, that our Corporate Secretary receive the proposal or nomination no earlier than the close of business on the 150th150th day, and no later than the close of business on the 120th120th day, prior to the first anniversary of the preceding year’s Annual Meeting. Accordingly, for our 20212023 Annual Meeting of Shareholders, our Corporate Secretary must receive the proposal or nomination no earlier than              December 8, 2020 and no later than the close of business on             January 7, 2021.. The proposal or nomination must contain the information required by the Bylaws, a copy of which is available upon request to our Corporate Secretary. If the shareholder does not meet the applicable deadlines or comply with the requirements of SEC Rule 14a-4, we may exercise discretionary voting authority under proxies we solicit to vote, in accordance with our best judgment, on any such proposal.

SHAREHOLDER COMMUNICATIONS TO THE BOARD

Shareholders and other interested parties may communicate with the Board by writing to the Corporate Secretary, Recro Pharma,Societal CDMO, Inc., 490 Lapp Road, Malvern, PA 19355.1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341. Communications intended for a specific director or directors should be addressed to their attention to the Corporate Secretary at the address provided above. Communications received from shareholders are forwarded directly to Board members as part of the materials mailed in advance of the next scheduled Board meeting following receipt of the communications. The Board has authorized the Corporate Secretary, in her discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening, or similarly inappropriate. Advertisements, solicitations for periodical or other subscriptions, and other similar communications generally will not be forwarded to the directors.

AVAILABILITY OF MATERIALS

Our 20192021 Annual Report, including the financial statements and financial statement schedules, has been filed with the SEC and provides additional information about us, which is incorporated by reference herein. It is

available on the internet atwww.recrogainesville.com www.societalcdmo.com and is available in paper form (other than exhibits thereto) by first class mail or other equally prompt means to beneficial owners of our common stock without charge upon written request to Chief Financial Officer, Recro Pharma,Societal CDMO, Inc., 490 Lapp Road, Malvern, PA 19355.1 E. Uwchlan Ave., Suite 112, Exton, Pennsylvania 19341. In addition, it is available to beneficial and record holders of our common stock atwww.proxyvote.com..


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Notice of Annual Meeting of Shareholders and 2020 Proxy Statement  32


Notice of Annual Meeting of Shareholders and 2020 Proxy Statement | 33

SOCIETAL CDMO, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. PO BOX 1342 BRENTWOOD, NY 11717 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET -Before The Meeting—Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on                 May 6th, 2020., 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS  If you would likeDuring The Meeting—Go to reducewww.virtualshareholdermeeting.com/SCTL2022 You may attend the costs incurred by our company in mailing proxy  materials, you can consent to receiving all future proxy statements, proxy  cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up  for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy  materials electronicallyis printed in future years.the box marked by the arrow available and follow the instructions. VOTE BY PHONE - PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on          May 6th, 2020.��      , 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. RECRO PHARMA,TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D75757-P70523 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY SOCIETAL CDMO, INC. C/O BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.  PO BOX 1342  BRENTWOOD, NY 11717  D05448-P36539  RECRO PHARMA, INC.The Board of Directors recommends you vote FOR the following: 1. Election of Class II directors for a three-year term expiring in 2025 Nominees: 01) J. David Enloe, Jr. 02) Bryan M. Reasons For All   Withhold  All For All  Except To withhold authority to vote for any individual All All Except nominee(s), mark "For“For All Except"Except” and write the number(s) of the nominee(s) on the line below. The Board of Directors recommends you vote FOR the  following:  !  !  !  1. Election of Directors   Nominees:   01) William Ashton   02) Michael Berelowitz  For   The Board of Directors recommends you vote FOR the following proposal:  Against  Abstain  !  !  !proposals 2, 3 and 4. 2. Approval of a one-time option exchange for non-executive employees. 3. Approval, on an advisory basis, of the compensation of the Company'sour named executive officers.  The Board of Directors recommends you vote 1 YEAR on the following proposal:  3 Years  1 Year  2 Years  Abstain  !  !  !  !  3. Indication of, on an advisory basis, the preferred frequency of future shareholder advisory votes on the compensation of the Company's  named executive officers.  The Board of Directors recommends you vote FOR the following proposal:  For   Against  Abstain  !  !  ! 4. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2020 fiscal year.2022. NOTE: Such other business as may properly come before the annual meeting or any adjournment or postponement thereof. For Against Abstain Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice &and Proxy Statement and Form 10-K are available at www.proxyvote.com. D05449-P36539  RECRO PHARMA,SOCIETAL CDMO, INC. 20202022 Annual Meeting of Shareholders                May 7, 2020 - 9:, 2022—10:00 AM EDT This proxy is solicited by the Board of Directors The undersigned hereby appoints Gerri HenwoodJ. David Enloe, Jr. and Ryan D. Lake, or either of them, as proxies, each with the power to appoint their substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of RECRO PHARMA,SOCIETAL CDMO, INC. that the undersigned is entitled to vote at the 20202022 Annual Meeting of Shareholders to be held virtually at 9:10:00 AM, EDT, on                May 7, 2020 at Pepper Hamilton LLP, 400 Berwyn Park, 899 Cassatt Road, Berwyn, PA 19312,, 2022 via www.virtualshareholdermeeting.com/ SCTL2022, and any adjournment or postponement thereof. Depending on concerns about the Coronavirus (COVID-19), RECRO PHARMA, INC.  may hold a virtual Annual Meeting of Shareholders. The determination to hold a virtual Annual Meeting of Shareholders will be  announced in a press release available at www.recrogainesville.com as soon as practicable before the meeting. In that event, the  Annual Meeting of Shareholders would be conducted solely virtually, on the above date and time, via live audio webcast. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors'Directors’ recommendations. Continued and to be signed on reverse side