☒
☐
☐ | | | Preliminary Proxy Statement |
☐ | | | Confidential, For Use of the Commission |
☒ | | | Definitive Proxy Statement |
☐ | | | Definitive Additional Materials |
☐ | | | Soliciting Materials Pursuant to Rule 14a-12 |
MATINAS BIOPHARMA HOLDINGS, INC. |
(Name of Registrant as Specified in Its Charter) |
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
Payment of Filing Fee (Check the appropriate box): | ||||||
☒ | | | No fee required. | |||
☐ | | | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
| | (1) | | | Title of each class of securities to which transaction applies: | ||
| | | | | |||
| | (2) | | | Aggregate number of securities to which transaction applies: | ||
| | | | | |||
| | (3) | | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||
| | | | | |||
| | (4) | | | Proposed maximum aggregate value of transaction: | ||
| | | | | |||
| | (5) | | | Total fee paid: | ||
| | | | | |||
☐ | | |||||
Fee paid previously with preliminary materials: | ||||||
☐ | | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
| | (1) | | | Amount Previously Paid: | ||
| | | | | |||
| | (2) | | | Form, Schedule or Registration Statement No.: | ||
| | | | | |||
| | (3) | | | Filing Party: | ||
| | | | | |||
| | (4) | | | Date Filed: | ||
| | | |||||
January 26, 2021
| | | By Order of the Board of Directors | |
| | | ||
| | | /s/ Jerome D. Jabbour | |
| | Jerome D. Jabbour Chief Executive Officer |
October 1,
January 26, 2021.
Who can attend the meeting?
This year’s Annual
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
At the Annual Meeting, seven directors are to be elected. Adam Stern will not be standing for reelection. All directors of the Company will hold office until the next Annual Meeting of Stockholders or until their respective successors are duly elected and qualified or their earlier resignation or removal. REVERSE STOCK SPLIT PROPOSAL
ItBoard, whereby each outstanding 2 to 15 shares would be combined, converted and changed into 1 share of our common stock. This proposal is referred to in this Proxy Statement as the intention“Reverse Stock Split Proposal.” If the stockholders approve the Reverse Split Amendment, the Board will have discretion to determine, as it deems to be in the best interest of our stockholders, the specific ratio to be used within the range described above and the timing of the persons named inreverse stock split, which must occur any time prior to the proxiesfirst anniversary of its approval by the stockholders.
Director Nominees
The following table sets forth the name, age, position and tenure of each of the director nominees up for election at the 2020 Annual Meeting as well as Adam Stern, who is currently a director and is not standing for reelection:
| Name | Age | Position(s) | Served as an Officer or Director Since | |||
| Herbert Conrad | 87 | Chairman of the Board | 2013 | |||
| Patrick LePore | 65 | Vice Chairman of the Board | 2018 | |||
| Jerome D. Jabbour | 46 | Chief Executive Officer and Director | 2013 | |||
| Natasha Giordano | 59 | Director | 2020 | |||
| Eric Ende | 52 | Director | 2017 | |||
| James Scibetta | 55 | Director | 2013 | |||
| Matthew Wikler | 70 | Director | 2018 | |||
Adam Stern* | 56 | Director | 2013 |
*Mr. Stern is not standing for reelection at the 2020 Annual Meeting.
The following biographical descriptions set forth certain information with respect to the director nominees and Mr. Stern, based on information furnished to the Company by each such individual.
Herbert Conrad has served as our Chairman of the Board since July 2013 andto effect the reverse stock split will expire as Chairman of the Boardclose of Matinas BioPharma, Inc. since October 2012. He also servesbusiness on January 26, 2022.
Patrick LePore has served as our Vice Chairman of the Board since September 5, 2018. Mr. LePore served as chairman, chief executive officer and president of Par Pharmaceuticals, Inc. (NYSE:PRX), an operating company of Endo International plc, a generics and specialty branded pharmaceutical company, from September 2006 until the company’s acquisition by private equity investor TPG in November 2012. He remained as chairman of the new company where he led the salehave less third-party analysis of the company available to Endo Pharmaceuticals (NASDAQ: ENDP). Mr. LePore began his careerinvestors. We believe that the reduction in the number of issued and outstanding shares of our common stock caused by the reverse stock split, together with Hoffmann LaRoche. Later, he founded Boron LePorethe anticipated increased stock price immediately following and Associates,resulting from the reverse stock split, may encourage broader interest and trading in our common stock and thus possibly promote greater liquidity for our stockholders, thereby resulting in a medical communications company,broader market for our common stock than that which he took publiccurrently exists.
Jerome D. Jabbour See description under “Management.”
Eric Ende has served onfollowing initial listing, maintenance of a continued price of at least $1.00 per share. On the record date, the sale price of our board of directors since April 2017. Dr. Ende is president of Ende BioMedical Consulting Group, a privately-held consulting company which is focused on helping life sciences companies raise capital, identify licensing partners, and optimize corporate structure as well as analyzing both private and public investment opportunities for clients within the life sciences industry, a position he has held since 2009. Dr. Ende serves as co-founder, chief executive and chief financial officer of WellFit Holdings, LLC, a private company focused on developing fitness technologies. In addition, Dr. Ende consulted with Icahn Enterprises in their efforts to appoint board members at Forest Labs, Genzyme, Biogen IDEC, and Amylin. Dr. Ende servedcommon stock on the boardNYSE American was $1.04 per share. A decrease in the number of directorsissued and asoutstanding shares of our common stock resulting from the reverse stock split should, absent other factors, assist in ensuring that our per share market price of our common stock remains above the required price. However, we cannot provide any assurance that (i) we will pursue a member of the audit and risk management committee of Genzyme Corp. (NASDAQ: GENZ) from 2010 until it was acquired by Sanofi (NSYE: SNY) in 2011. Dr. Ende is currently servinglisting on the Technology Transfer CommitteeNew York Stock Exchange, the Nasdaq Global Market, or any other tier of Mount Sinai Innovation Partners and served asThe NASDAQ Stock Market or (ii) even if we do, our minimum bid price would remain over the Chairman of the Unsecured Creditor’s Committee overseeing the bankruptcy of Egenix, Inc. From 2002 through 2008, Dr. Ende was the senior biotechnology analyst at Merrill Lynch. From 2000 through 2002, Dr. Ende was the senior biotechnology analyst at Banc of America Securities and, from 1997 to 2000, he was a biotechnology analyst at Lehman Brothers. Dr. Ende received an MBA in Finance & Accounting from NYU – Stern Business School in 1997, an MD from Mount Sinai School of Medicine in 1994, and a BS in Biology and Psychology from Emory University in 1990. We believe Dr. Ende is qualified to serve on our board of directors due to his industry experience, including as president of Ende BioMedical Consulting Group and as a biotechnology analyst, and his prior public company board experience.
Natasha Giordano. Ms. Giordano has served as a member of our board of directors since September 2020. Ms. Giordano has been President, Chief Executive Officer and director of PLx Pharma Inc. (NASDAQ: PLXP) since January 2016. Previously, Ms. Giordano served as the Interim Chief Executive Officer of ClearPoint Learning, Inc., a privately held learning and training platform company, from May 2015 through November 2015. She also served on the ClearPoint board of directors from December 2009 through November 2015. Previously, Ms. Giordano served as the Chief Executive Officer of Healthcare Corporation of America (NYSE: HCA), a leading healthcare provider, from January 2014 through August 2014. From June 2009 to August 2012, Ms. Giordano served as Chief Operating Officer and then as Chief Executive Officer, President and a member of the board of directors of Xanodyne Pharmaceuticals, Inc., a privately-held a branded specialty pharmaceutical company with development and commercial capabilities focused on pain management and women’s health. Prior to that, she served as President, Americas, for Cegedim Dendrite (formerly Dendrite International Inc.), a global technology services company, from 2007 to 2008 and as Senior Vice President of the Global Customer Business Unit of Cegedim Dendrite from 2004 to 2007. Ms. Giordano holds a Bachelor of Science degree in nursing from Wagner College. We believe Ms. Giordano is qualified to serve as a director due to her extensive experience in commercialization, general management and knowledge of the pharmaceutical and health care industries.
James S. Scibetta has served as a member of our board of directors since November 2013. He is currently Chief Executive Officer of Maverick Therapeutics, a development stage immune-oncology company. Prior to Maverick, he was President and Chief Financial Officer of Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX), a specialty pharmaceutical company, a position he has held since October 2015. Prior to that, Mr. Scibetta was the Chief Financial Officer of Pacira since 2008. Prior to joining Pacira in August 2008, he served as a consultant to Genzyme Corporation following the sale of Bioenvision Inc. (NASDAQ: BIVN) to Genzyme in 2007. From 2006 to 2007 Mr. Scibetta was CFO of Bioenvision. From 2001 to 2006, he was Executive Vice President and Chief Financial Officer of Merrimack Pharmaceuticals Inc. (NASDAQ: MACK). Mr. Scibetta has previously served on the board of directors at the following life sciences companies: Nephros Inc. (NASDAQ: NEPH), Merrimack Pharmaceuticals and Labopharm Inc. Prior to his executive management experience, Mr. Scibetta spent over a decade in investment banking where he was responsible for sourcing and executing transactions for a broad base of public and private healthcare and life sciences companies. Mr. Scibetta received his Bachelor of Science in Physics from Wake Forest University and an MBA from the University of Michigan. We believe Mr. Scibetta is qualified to serve on our board of directors because of his extensive management experience in the pharmaceutical industry, his investment banking experience and his experience as a chief financial officer and audit committee member of several publicly traded companies.
Matthew Wikler has served as a member of our board of directors since January 2018. Dr. Wikler currently serves as the Principal of Infectious Disease Technology Development Consulting (IDTD Consulting), a privately-held consulting firm, where he provides clinical, medical and regulatory strategic insight to companies developing new technologies for the treatment and prevention of infectious diseases, a position he has held since 2015. Prior to that from 2012 to 2015, Dr. Wikler served at The Medicines Company (NASDAQ: MDCO), a biopharmaceutical company, as VP, New Business Ventures and VP and Medical Director, Infectious Disease Care. Over the course of his career Dr. Wikler held senior leaderships positions for a number of pharmaceutical companies, including as Chief Development Officer of Rib-X Pharmaceuticals, Inc., a privately-held biopharmaceutical company developing new antibiotics to provide superior coverage, safety and convenience for the treatment of serious and life-threatening infections, President and Chief Executive Officer of IASO Pharma Inc., a privately-held clinical stage biotechnology company focused on the development of antibacterial and antifungal therapeutics, the Institute for One World Health, a 501(c)(3) nonprofit drug development organization, Mpex Pharmaceuticals, Inc., a privately-held company focused on developing and manufacturing therapies for antibiotic resistance with focus on gram-negative organisms, Peninsula Pharmaceuticals, Inc., a privately held biopharmaceutical company focused on developing and commercializing antibiotics to treat life-threatening infections (acquired by Johnson & Johnson (NYSE: JNJ)), ViroPharma Incorporated (NASDAQ: VPHM), Bristol-Myers Squibb Company (NYSE:BMY), and Ortho-McNeil Pharmaceutical (a division of Johnson & Johnson). Dr. Wikler began his career at Smith Kline & French/Smith Kline Beecham where he held positions of increasing responsibilities over ten years. Dr. Wikler held a variety of positions at the FDA, including the Deputy Director of the Division of Anti-Infective Drug Products. Dr. Wikler earned a B.A. in Chemistry from Franklin and Marshall, an M.D. degree from Temple University School of Medicine, and his M.B.A. from the University of Pennsylvania Wharton School of Business. He completed his Infectious Diseases Fellowship at the Hospital of the University of Pennsylvania and is a Fellow of the Infectious Diseases Society of America. We believe Mr. Wikler is qualified to serve on our board of directors because of his extensive management experience in the pharmaceutical industry and his clinical and regulatory experience in the area of infectious diseases.
Adam Stern has served as a member of our board of directors since July 2013 and is not standing for reelection at the 2020 Annual Meeting. Mr. Stern has been the head Private Equity Banking at Aegis Capital Corp. and CEO of SternAegis Ventures since 2012 and became one of our directors in July 2013. Prior to Aegis, from 1997 to November 2012, he was with Spencer Trask Ventures, Inc., most recently as a Senior Managing Director, where he managed the structured finance group focusing primarily on the technology and life science sectors. Mr. Stern held increasingly responsible positions from 1989 to 1997 with Josephthal & Co., Inc., membersminimum bid price requirement of the New York Stock Exchange where he served as Senior Vice President and Managing Director of Private Equity Marketing. He has been a FINRA licensed securities broker since 1987 and a General Securities Principal since 1991. Mr. Stern is a director of Dance Biopharm, Inc. Mr. Stern is a former director of InVivo Therapeutics Holdings Corp. (OTCQB: NVIV), Organovo Holdings, Inc. (NYSE MKT: ONVO), and PROLOR Biotech Ltd., which was sold to Opko Health, Inc. (NYSE: OPK) for approximately $600 million in 2013. Mr. Stern holds a Bachelor of Arts degree with honors from The University of South Florida in Tampa. Mr. Stern was qualified to serve on our board of directors because of his extensive experience in corporate finance and experience in the life science industries.
There are no family relationships among any of our directors or executive officers.
Vote Required
Directors will be elected by a pluralitytier of the votes cast virtually or by proxy at the annual meeting. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will have no effect on the vote for election of directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE DIRECTOR NOMINEES.
Corporate Governance Matters
Board of Director Composition
Our board of directors currently consists of eight members, although Mr. Stern is not standing for reelection at the 2020 Annual Meeting. We have no formal policy regarding board diversity. Our priority in selection of board members is identification of members who will further the interests of our stockholders through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, knowledge of our business and understanding of the competitive landscape.
Board of Director Meetings
Our Board met six times in 2019. Each of the directors attended at least 75% of the aggregate of (i) the total number of meetings of our Board (held during the period for which such directors served on the Board) and (ii) the total number of meetings of all committees of our BoardNasdaq Stock Market on which the director served (during the periods for which the director served on such committee or committees). The Company does not have a formal policy requiring members of the Board to attend our annual meetings. Jerome D. Jabbour, our Chief Executive Officer and member of our Board, attended the 2019 Annual Meeting of Stockholders.
Director Independence
Our common stock is listed on the NYSE MKT. Our board of directors undertook a review of its composition, the composition of its committees and the independence of each director. Based on information requested from and provided by each of our directors, our board of directors has determined that Messrs. Herbert Conrad, Patrick LePore, Eric Ende, James Scibetta, Matthew Wikler and Ms. Natasha Giordano are “independent directors” as such term is definedwe may list.
There are no family relationships among any of our directors or executive officers.
Board Committees
Our board of directors has four standing committees — an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Scientific Advisory Committee.
Audit Committee. The Audit Committee oversees and monitors our financial reporting process and internal control system, reviews and evaluates the audit performed by our registered independent public accountants and reports to the Board any substantive issues found during the audit. The Audit Committee is directly responsible for the appointment, compensation and oversight of the work of our registered independent public accountants. The Audit Committee reviews and approves all transactions with affiliated parties. James Scibetta, Herbert Conrad, Eric Ende and Natasha Giordano currently serve as members of the Audit Committee, with James Scibetta, serving as its chairman. All members of the Audit Committee have been determinedorder to be financially literateincluded in certain biotechnology and are considered independent directors as defined under the NYSE MKT’s listing standardspharmaceutical trading indices and applicable SEC rules and regulations. Mr. Scibetta qualifies as an audit committee “financial expert” as that term is defined by SEC rules and regulations. The Audit Committee met four times during 2019. Our Board has adopted an Audit Committee Charter, which is available for viewing at www.matinasbiopharma.com.
Compensation Committee. The Compensation Committee provides advice and makes recommendations to the Board in the areas of employee salaries, benefit programs and director compensation. The Compensation Committee also reviews the compensation ofexchange-traded funds (ETFs), our executive officers,stock must meet certain eligibility requirements, including, our chief executive officer, and makes recommendations in that regard to the Board as a whole. Eric Ende, Patrick LePore, James Scibetta and Matthew Wikler currently serve as members of the Compensation Committee, with Eric Ende serving as its chairman. All members of the Compensation Committee are considered independent directors as defined under the NYSE MKT’s listing standards. The Compensation Committee met twice during 2019. Our Board has adopted a Compensation Committee Charter, which is available for viewing at www.matinasbiopharma.com.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee nominates individuals to be elected to the full Board by our stockholders. The Nominating and Corporate Governance Committee considers recommendations from stockholders if submitted in a timely manner in accordance with the procedures set forth in our Bylaws and applies the same criteria to all persons being considered. Herbert Conrad, Eric Ende, Patrick LePore and James Scibetta currently serve as members of the Nominating and Corporate Governance Committee, with Herbert Conrad serving as its chairman. All members of the Nominating and Corporate Governance Committee are considered independent directors as defined under the NYSE MKT’s listing standards. The Nominating and Corporate Governance Committee met once during 2019. Our Board has adopted a Nominating and Corporate Governance Charter, which is available for viewing at www.matinasbiopharma.com.
Scientific Advisory Committee. The Board of Directors has established a Scientific Advisory Committee consisting of Dr. Matthew Wikler, Chair, and Jerome D. Jabbour. The primary function of the Scientific Advisory Committee is to assist the Board in undertaking periodic reviews of our research and development efforts, and clinical trials, and reporting to the Board about developments and strategy, at such times as the Committee determines to be appropriate.
Stockholder nominations for directorships
Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates by submitting their names and background to the Secretary of the Company at the address set forth below under “Stockholder Communications.” All such recommendations will be forwarded to the Nominating and Corporate Governance Committee, which will review and only consider such recommendations if appropriate biographical and other information is provided, as described below, on a timely basis. All security holder recommendations for director candidates must be received by the Company in the timeframe(s) set forth under the heading “Stockholder Proposals” below.
Assuming that appropriate information is provided for candidates recommended by stockholders, the Nominating and Corporate Governance Committee will evaluate those candidates by following substantially the same process, and applying substantially the same criteria, as for candidates submitted by members of the Board or other persons, as described above and as set forth in its written charter.
Board Leadership Structure and Role in Risk Oversight
The positions of our chairman of the board and chief executive officer are separated. Separating these positions allows our chief executive officer to focus on our day-to-day business, while allowing the chairman of the board to lead the board of directors in its fundamental role of providing advice to and independent oversight of management. Our board of directors recognizes the time, effort and energy that the chief executive officer must devote to his position in the current business environment, as well as the commitment required to serve as our chairman, particularly as the board of directors’ oversight responsibilities continue to grow. Our board of directors also believes that this structure ensures a greater role for the independent directors in the oversight of our company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our board of directors. Our board of directors believes its administration of its risk oversight function has not affected its leadership structure.
Although our bylaws do not require our chairman and chief executive officer positions to be separate, our board of directors believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.
Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. Our board of directors is actively involved in oversight of risks that could affect us. This oversight is conducted primarily by our full board of directors, which has responsibility for general oversight of risks, and our standing board committees.
Our board of directors satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight of particular risks within our company. Our board of directors believes that full and open communication between management and the board of directors is essential for effective risk management and oversight.
Stockholder Communications
The Board will give appropriate attention to written communications that are submitted by stockholders, and will respond if and as appropriate. Absent unusual circumstances or as contemplated by committee charters, and subject to advice from legal counsel, the Secretary of the Company is primarily responsible for monitoring communications from stockholders and for providing copies or summaries of such communications to the Board as he considers appropriate.
Communications from stockholders will be forwarded to all directors if they relate to important substantive matters or if they include suggestions or comments that the Secretary considers to be important for the Board to know. Communication relating to corporate governance and corporate strategy are more likely to be forwarded to the Board than communications regarding personal grievances, ordinary business matters, and matters as to which the Company tends to receive repetitive or duplicative communications.
Stockholders who wish to send communications to the Board should address such communications to: The Board of Directors, Matinas BioPharma Holdings, Inc., 1545 Route 206 South, Suite 302, Bedminster, NJ 07921, Attention: Secretary.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial and accounting officer, or persons performing similar functions. A copy of the code is posted on the corporate governance section of our website, which is located at www.matinasbiopharma.com. If we make any substantive amendments to, or grant waivers from, the code of business conduct and ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website.
Executive Officers
The following table sets forth certain information regarding our current executive officers:
| Name | Age | Position(s) | Served as an Officer Since | |||
| Jerome D. Jabbour | 46 | Chief Executive Officer and Director | 2013 | |||
| James J. Ferguson | 67 | Chief Medical Officer | 2019 | |||
| Keith A. Kucinski | 50 | Chief Financial Officer | 2019 | |||
| Raphael J. Mannino | 73 | Chief Scientific Officer | 2015 | |||
| Theresa Matkovits | 53 | Chief Development Officer | 2018 |
Our executive officers are elected by, and serve at the discretion of, our board of directors. The business experience for the past five years, and in some instances, for prior years, of each of our executive officers is as follows:
Management
Jerome D. Jabbour, JD was appointed Chief Executive Officer in March 2018. He has served as our President since March 2016. Prior to that he served as our Executive Vice President, Chief Business Officer, General Counsel and Secretary since October 2013 and as one of our directors from April 2012 until November 2013. Mr. Jabbour is also a Co-founder of Matinas BioPharma. Prior to joining our management team, he was the Executive Vice President and General Counsel of MediMedia USA, or MediMedia, from 2012 to October 2013, a privately held diversified health care services company. Prior to MediMedia, he was the Senior Vice President, Head of Global Legal Affairs of Wockhardt Limited (2008-2012), a global pharmaceutical and biotechnology company, and Senior Counsel and Assistant Secretary at Reliant (2004-2008). Earlier in his career, he held positions as Commercial Counsel at Alpharma, Inc. (2003-2004) and as a Corporate Associate at Lowenstein Sandler LLP (1999-2003). Mr. Jabbour earned his J.D. from Seton Hall University School of Law in New Jersey and a B.A. in Psychology from Loyola University in Baltimore.
James J. Ferguson, MD was appointed Chief Medical Officer in February 2019. Prior to joining the Company he served as the Cardiovascular and Bone Therapeutic Area Head for U.S. Medical Affairs, at Amgen (NASDAQ: AMGN), multinational biopharmaceutical company. Prior to Amgen Dr. Ferguson held a number of senior positions at AstraZeneca, a multinational pharmaceutical and biopharmaceutical company, including Vice President of US Cardiovascular Medical and Scientific External Relations, Therapeutic Area Vice President of Cardiovascular Global Medical Affairs, U.S. Development Brand Leader for BRILINTA®, and Senior Director, Clinical Research. Before joining AstraZeneca he was Vice President of Surgical and Critical Care for The Medicines Company. In addition, Dr. Ferguson had more than 20 years of academic experience as the Associate Director of Clinical Cardiology Research at the Texas Heart Institute, Co-Director of the Cardiology Fellowship Training Program at St. Luke’s Episcopal Hospital in Houston, where he was an Associate Professor of Medicine at Baylor College of Medicine, and a Clinical Assistant Professor at the University of Texas Health Science Center at Houston. Dr. Ferguson has served on the Editorial Board of numerous peer-reviewed journals and has over 400 publications and book chapters. Dr. Ferguson received his B.A. (cum Laude) in Biology from Harvard University, his M.D. from the University of Pennsylvania School of Medicine and completed his post-graduate training at the University of Michigan Medical Center, Ann Arbor, Michigan and Beth Israel Hospital, Boston, Massachusetts.
Keith A. Kucinski was appointed Chief Financial Officer in January 2019. He most recently served as Chief Financial Officer at RemedyOne, a privately held healthcare consulting organization. Prior to that, he served as Vice President & Treasurer at Par Pharmaceutical Companies, Inc., an operating company of Endo International plc, a leading generics and specialty-branded pharmaceutical company. In addition, Mr. Kucinski held various roles at Barr Pharmaceuticals, Inc., including Senior Director, Finance & Corporate Development and Assistant Treasurer & Senior Director, Finance. Mr. Kucinski is a Certified Public Accountant. He received his Bachelor of Business Administration in Accounting from the University of Notre Dame and an M.B.A. in Finance & Management from the Leonard N. Stern School of Business at New York University.
Raphael J. Mannino has served as our Chief Scientific Officer since September 2015. From 1990 until August 2015, Dr. Mannino was an Associate Professor of Pathology and Laboratory Medicine at Rutgers University, New Jersey Medical School. Dr. Mannino founded BioDelivery Sciences, Inc., and served as its President, Chief Executive Officer and Chief Scientific Officer and a member of its Board of Directors from 1995 to 2000, when it was acquired by BioDelivery Sciences International, Inc. (NASDAQ: BDSI). Dr. Mannino served as BDSI’s Executive Vice President and Chief Scientific Officer from 2001 to 2009 and a member of its Board of Directors from 2000 to 2007. Dr. Mannino’s previous experience includes positions as Assistant, then Associate Professor, Albany Medical College (1980 to 1990), and Instructor then Assistant Professor, Rutgers Medical School (1977 to 1980). His postdoctoral training was from 1973 to 1976 at the Biocenter in Basel, Switzerland. Dr. Mannino received his Ph.D. in Biological Chemistry in 1973 from the Johns Hopkins University, School of Medicine.
Theresa Matkovits, PhD has served as Chief Development officer since September 2018. She joined the Company after having most recently served as the Chief Operating Officer of ContraVir Pharmaceuticals (NASDAQ: CTRV) (now Hepion Pharmaceuticals), a clinical stage biopharmaceutical company. From 2013 to 2015, Dr. Matkovits served as Global Program Leader at NPS Pharmaceuticals, a specialty pharmaceutical company that was purchased by Shire in 2015. Prior to her time at NPS, Dr. Matkovits was Vice President, Innovation Leader at The Medicines Company. Earlier in her career, Dr. Matkovits held a number of global leadership positions at Novartis across Global Development and the U.S. Commercial Organization, including as Head, Strategic Planning and Operations, U.S. Medical and Drug Regulatory Affairs. Dr. Matkovits began her career at the Roche Institute of Molecular Biology and Organon where she held positions in clinical development in women’s health and research in the area of infertility. Dr. Matkovits serves on the Board of Directors of BioSurplus and also serves as an Independent Director of Aradigm Corporation (NASDAQ: ARDM). Dr. Matkovits was recently appointed to serve on the Board of Appili Therapeutics. Dr. Matkovits was selected to participate in Women in Bio’s Boardroom Ready Program in 2016. Dr. Matkovits earned her Ph.D. in Biochemistry and Molecular Biology from the University of Medicine and Dentistry of NJ.
EXECUTIVE COMPENSATION
Summary Compensation Table – 2019
The following table presents information regarding the total compensation awarded to, earned by, or paid to our chief executive officer, chief financial officer and the three most highly-compensated executive officers (other than the chief executive officer) who were serving as executive officers as of December 31, 2019 for services rendered in all capacities to us for the years ended December 31, 2019 and December 31, 2018 and up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer of the Company as of December 31, 2019. These individuals are our named executive officers for 2019.
| Name and Principal Position (1) | Year | Salary ($) | Bonus ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||
| Jerome D. Jabbour | 2019 | 444,792 | 200,000 | 680,384 | - | 1,325,176 | ||||||||||||||||||
| Chief Executive Officer | 2018 | 366,458 | 84,000 | 804,269 | - | 1,254,727 | ||||||||||||||||||
| Keith A. Kucinski | 2019 | 249,053 | - | 377,542 | - | 626,595 | ||||||||||||||||||
| Chief Financial Officer | 2018 | - | - | - | - | - | ||||||||||||||||||
| James J. Ferguson | 2019 | 319,444 | 50,000 | 319,926 | 62,945 | (2) | 752,315 | |||||||||||||||||
| Chief Medical Officer | 2018 | - | - | - | - | - | ||||||||||||||||||
| Theresa Matkovits | 2019 | 350,000 | 30,625 | 317,513 | - | 698,138 | ||||||||||||||||||
| Chief Development Officer | 2018 | 74,263 | - | 232,037 | - | 306,300 | ||||||||||||||||||
| Roelof Rongen(3) | 2019 | - | - | - | 183,333 | (4) | 183,333 | |||||||||||||||||
| Former Chief Executive Officer | 2018 | 183,333 | - | - | 216,667 | (4) | 400,000 | |||||||||||||||||
(1)Amounts reflect the grant date fair value of option awards granted in 2019 and 2018 in accordance with Accounting Standards Codification Topic 718. These amounts do not correspond to the actual value that will be recognized by the named executive officers.
(2)Mr. Ferguson was reimbursed for relocation costs.
(3)Mr. Rongen resigned on March 15, 2018.
(4)Amounts reflect severance payments made to Mr. Rongen in connection with his resignation.
Narrative Disclosure to Summary Compensation Table
Employment Agreements with Our Named Executive Officers
Jabbour
On March 22, 2018, we entered into an employment agreement with Mr. Jabbour. Under the terms of Mr. Jabbour’s employment agreement, Mr. Jabbour received a signing bonus of $84,000 and a base salary of $350,000 per year. In addition, Mr. Jabbour is eligible to receive an annual bonus, which is targeted at 50% of his base salary but which may be adjusted by our Compensation Committee based on his individual performance and our performance as a whole. Mr. Jabbour is also eligible to receive option grants at the discretion of our Compensation Committee. Mr. Jabbour received an option grant to purchase 1,000,000 shares on March 22, 2018 and is also be eligible to receive additional option grants and equity grants at the discretion of our Compensation Committee. If we terminate Mr. Jabbour’s employment without cause or Mr. Jabbour resigns with good reason (absent a change of control), we are required to pay him severance of up to twelve months of his base salary plus COBRA benefits for twelve months. In addition, the vesting of 50% of his outstanding options will be accelerated in full upon such termination and Mr. Jabbour will be provided with an extension through two years after the separation date of the exercise period for his vested stock options. If we terminate Mr. Jabbour’s employment without cause during the 24 month period immediately following a change of control or Mr. Jabbour resigns with good reason during the 24 month period immediately following a change of control, we are required to pay him severance of up to 24 months of his base salary and his target annual bonus plus 18 months of COBRA benefits. In addition, his outstanding options will be vested in full and Mr. Jabbour will be provided with an extension through two years after the separation date of the exercise period for his vested stock options. Mr. Jabbour is also subject to a customary non-disclosure agreement, pursuant to which Mr. Jabbour has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen months following termination of his employment.
Kucinski
On December 31, 2018, we entered into an employment agreement with Mr. Kucinski which was effective as of January 2, 2019. Under the terms of Mr. Kucinski’s employment agreement, Mr. Kucinski receives a base salary of $250,000 per year. In addition, Mr. Kucinski is eligible to receive an annual bonus, which is targeted at 30% of his base salary but which may be adjusted by our Compensation Committee based on his individual performance and our performance as a whole. Mr. Kucinski is also eligible to receive option grants at the discretion of our Compensation Committee. If we terminate Mr. Kucinski’s employment without cause or Mr. Kucinski resigns with good reason, we are required to pay him severance of up to twelve months of his base salary plus benefits. In addition, the vesting of his outstanding options will be accelerated by six months upon such termination. Mr. Kucinski is also subject to a customary non-disclosure agreement, pursuant to which Mr. Kucinski has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen months following termination of his employment.
Ferguson
On February 22, 2019, we entered into an employment agreement with Mr. Ferguson which was effective as of February 25, 2019. Under the terms of Mr. Ferguson’s employment agreement, Mr. Ferguson receives a base salary of $375,000 per year. In addition, Mr. Ferguson is eligible to receive an annual bonus, which is targeted at 35% of his base salary but which may be adjusted by our Compensation Committee based on his individual performance and our performance as a whole. Mr. Ferguson is also eligible to receive option grants at the discretion of our Compensation Committee. If we terminate Mr. Ferguson’s employment without cause or Mr. Ferguson resigns with good reason, we are required to pay him severance of up to twelve months of his base salary plus benefits. In addition, the vesting of 50% of his outstanding options will be accelerated in full upon such termination. Mr. Ferguson is also subject to a customary non-disclosure agreement, pursuant to which Mr. Ferguson has agreed to be subject to a non-compete during the term of his employment and for a period of eighteen months following termination of his employment.
Matkovits
On September 25, 2018, we entered into an employment agreement with Ms. Matkovits which was effective as of October 15, 2018. Under the terms of Ms. Matkovits’ employment agreement, Ms. Matkovits receives a base salary of $350,000 per year. In addition, Ms. Matkovits is eligible to receive an annual bonus, which is targeted at 35% of her base salary but which may be adjusted by our Compensation Committee based on her individual performance and our performance as a whole. Ms. Matkovits is also eligible to receive option grants at the discretion of our Compensation Committee. If we terminate Ms. Matkovits’ employment without cause or Ms. Matkovits resigns with good reason, we are required to pay her severance of up to twelve months of his base salary plus benefits. In addition, the vesting of 50% of her outstanding options will be accelerated in full upon such termination. Ms. Matkovits is also subject to a customary non-disclosure agreement, pursuant to which Ms. Matkovits has agreed to be subject to a non-compete during the term of her employment and for a period of eighteen months following termination of his employment.
Rongen
On March 27, 2017, the Company entered into an employment agreement with Mr. Rongen, with the terms effective as of March 1, 2017. Under the terms of Mr. Rongen’s employment agreement, he received a base salary of $400,000 per year, subject to periodic adjustments as determined by our Board or Compensation Committee. In addition, Mr. Rongen was eligible to receive an annual bonus, targeted at 50% of his base salary based on his individual performance and our performance as a whole, as determined by our Board or Compensation Committee. If we terminated Mr. Rongen’s employment without cause or Mr. Rongen resigned with good reason, subject to Mr. Rongen’s execution and non-revocation of a release and compliance with any post-termination obligations owed to us, we were required to pay him severance of up to twelve months of his base salary, in effect on the date of termination, plus COBRA payments for twelve months. In addition, the vesting of his outstanding options, and any other outstanding equity held by him at the time of his termination, would be accelerated by six months upon such termination. If we terminated Mr. Rongen’s employment without cause during the 24 month period immediately following a change of control or Mr. Rongen resigned with good reason during the 24 month period immediately following a change of control, subject to Mr. Rongen’s execution and non-revocation of a release and compliance with any post-termination obligations owed to us, we were to pay him severance of up to eighteen months of his base salary, in effect on the date of termination, and his target annual bonus for the year in which the termination occurs plus COBRA payments for eighteen months. In addition, his outstanding options and any other outstanding equity held by him at the time of his termination, would vest in full upon such termination. Mr. Rongen is also subject to a customary non-disclosure agreement, pursuant to which Mr. Rongen has agreed to be subject to a non-compete and non-solicit covenant during for a period of eighteen months following termination of his employment.
We entered into a separation agreement dated March 15, 2018 with Mr. Rongen pursuant to which, among other things, Mr. Rongen received 15 monthsminimum daily trading volume and bid price standards. As noted above, we believe that the reduction in base salary as severance, paid in accordancethe number of issued and outstanding shares of our common stock caused by the reverse stock split, together with the Company’s standard payroll practices over 15 months, Mr. Rongen agreed to provide transition services toanticipated increased stock price immediately following and resulting from the reverse stock split, should, absent other factors, assist in meeting such requirements. However, we cannot provide any assurance that we will meet any such index or ETF standards or that our common stock will ever be included in any such indices or ETFs following the transition processreverse stock split.
Outstanding Equity Awards at Fiscal Year-End Table – 2019
The following table summarizes,issued and outstanding);
| Option Awards | ||||||||||||||
| Name | Number of securities Underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Option exercise price ($) | Option expiration date | ||||||||||
| Jerome D. Jabbour | - | 750,000 | $ | 1.08 | Feb 10, 2029 | |||||||||
| 437,500 | 562,500 | $ | 0.98 | Mar 21, 2028 | ||||||||||
| 388,889 | 11,111 | $ | 3.32 | Feb 20, 2027 | ||||||||||
| 350,000 | - | $ | 0.43 | Feb 4, 2026 | ||||||||||
| 175,000 | - | $ | 0.41 | Jan 27, 2025 | ||||||||||
| 350,000 | - | $ | 1.28 | July 20, 2024 | ||||||||||
| 350,000 | - | $ | 0.94 | Oct 3, 2023 | ||||||||||
| Keith A. Kucinski | - | 250,000 | $ | 0.61 | Jan 1, 2029 | |||||||||
| - | 275,000 | $ | 1.08 | Feb 10, 2029 | ||||||||||
| James J. Ferguson | - | 350,000 | $ | 1.09 | Feb 25, 2029 | |||||||||
| Theresa Matkovits | - | 350,000 | $ | 1.08 | Feb 10, 2029 | |||||||||
| 102,084 | 247,916 | $ | 0.79 | Oct 14, 2028 | ||||||||||
| Roelof Rongen | 333,333 | - | 3.32 | March 15, 2021 | ||||||||||
| 333,333 | - | 0.43 | March 15, 2021 | |||||||||||
| 300,000 | - | 0.41 | March 15, 2021 | |||||||||||
| 350,000 | - | 1.28 | March 15, 2021 | |||||||||||
| 350,000 | - | 0.94 | March 15, 2021 | |||||||||||
General
On August 2, 2013,reserved for future awards under our Board of Directors adopted theAmended and Restated 2013 Equity Compensation Plan pursuant to the terms described herein.Plan. The 2013 Equity Compensation Plan was approved by the stockholders on August 7, 2013. Effective May 8, 2014, upon the approvalper share exercise price of our Board of Directorsall outstanding option awards will be increased proportionately and our stockholders, we amended and restated our 2013 Equity Compensation Plan, primarily to include “evergreen” provisions, which state provide that number of shares of common stock available for issuance under the Plan is subject to an automatic annual increase on January 1 of each year beginning in 2015 equal to 4% of the number of shares of common stock issuable upon the exercise of all outstanding on December 31option awards will be reduced proportionately. These adjustments will result in approximately the same aggregate exercise price being required to be paid for all outstanding option awards upon exercise, although the aggregate number of shares issuable upon exercise of such option awards will be reduced proportionately following the preceding calendar year or a lesserreverse stock split. The number of shares of outstanding restricted stock subject to outstanding awards will be reduced proportionately.
The general purpose of the 2013 Plan is to provide an incentive to our employees, directors, consultants and advisors by enabling them to share in the future growthissued upon a conversion of our business. Our Board of Directors believes thatSeries B Preferred Stock. The conversion price applicable to the granting of stock options, restricted stock awards, unrestricted stock awards and similar kinds of equity-based compensation promotes continuity of management and increases incentive and personal interest in the welfare of our Company by those who are primarily responsible for shaping and carrying out our long range plans and securing our growth and financial success.
Our Board of Directors believes that the 2013 Plan will advance our interests by enhancing our ability to (a) attract and retain employees, consultants, directors and advisors who are in a position to make significant contributions to our success; (b) reward our employees, consultants, directors and advisors for these contributions; and (c) encourage employees, consultants, directors and advisors to take into account our long-term interests through ownership of our shares.
Description of the 2013 Equity Compensation Plan
The following description of the principal terms of the 2013 Plan is a summary and is qualified in its entirety by the full text of the 2013 Plan, which is attached as Exhibit 10.6 hereto.
Administration. The 2013 PlanSeries B Preferred Stock will be administered by the Compensation Committee of our Board of Directors, provided that the entire Board of Directors may act in lieu of the Compensation Committee on any matter, subject to certain requirements set forth in the 2013 Plan. The Compensation Committee may grant options to purchase shares of our common stock, stock appreciation rights, stock units, restricted shares of our common stock, performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards. The Compensation Committee also has broad authority to determine the terms and conditions of each option or other kind of award, and adopt, amend and rescind rules and regulations for the administration of the 2013 Plan. Subject to applicable law, the Compensation Committee may authorize one or more reporting persons (as defined in the 2013 Plan) or other officers to make awards (other than awards to reporting persons, or other officers whom the Compensation Committee has specifically authorized to make awards). No awards may be granted under the 2013 Plan on or after the ten year anniversary of the adoption of the 2013 Plan by our Board of Directors, but awards granted prior to such tenth anniversary may extend beyond that date.
Eligibility. Awards may be granted under the 2013 Plan to any person who is an employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary, or any person who is determined by the Compensation Committee to be a prospective employee, officer, director, consultant, advisor or other individual service provider of the Company or any subsidiary.
Shares Subject to the 2013 Plan. As of September 29, 2020increased proportionately, which will reduce the aggregate number of shares of common stock available for issuance in connectionissuable upon any such conversion or redemption proportionately with awards granted under the 2013 Plan is 28,947,923 shares, subjectreduction to customary adjustments for stock splits, stock dividends or similar transactions (the “Initial Limit”). Incentive Stock Options may be granted under the 2013 Plan with respect to all of those shares. The number of shares of common stock available for issuance under the 2013 Plan will automatically increase on January 1st of each year for a period of ten years, commencing on January 1, 2015, in an amount equal to four percent (4%) of the total number of shares of outstanding common stock.
Tofractional shares that may result from the extent that any award underreverse stock split.
| | | Pre-Reverse Split | | | 1-for-2 | | | 1-for-5 | | | 1-for-10 | | | 1-for-15 | |
Number of authorized shares of Common Stock | | | 500,000,000 | | | 500,000,000 | | | 500,000,000 | | | 500,000,000 | | | 500,000,000 |
Number of outstanding shares of common stock | | | 199,641,758 | | | 99,820,879 | | | 39,928,352 | | | 19,964,176 | | | 13,309,451 |
Number of shares of common stock issuable upon exercise of outstanding stock options | | | 23,022,938 | | | 11,511,469 | | | 4,604,588 | | | 2,302,294 | | | 1,534,863 |
Number of shares of Common Stock issuable upon exercise of outstanding warrants | | | 1,327,810 | | | 663,905 | | | 265,562 | | | 132,781 | | | 88,521 |
Number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock | | | 8,732,000 | | | 4,366,000 | | | 1,746,400 | | | 873,200 | | | 582,133 |
Number of shares of Common Stock reserved for issuance in connection with future awards under the Company’s Amended and Restated 2013 Equity Compensation Plan | | | 3,009,734 | | | 1,504,867 | | | 601,947 | | | 300,973 | | | 200,649 |
Number of shares of Common Stock authorized, but unissued and unreserved | | | 264,265,760 | | | 382,132,880 | | | 452,853,151 | | | 476,426,576 | | | 484,284,384 |
Termsdirect registration system for securities. These stockholders will not have stock certificates evidencing their ownership of our common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.
If on the date of grant theour common stock is listed on a stock exchange or national market system, the fair market value shall generally be the closing sale price as of such date, or if there were no trades recorded on such date, then the most recent date preceding such date on which trades were recorded. If on the date of grant the common stock is traded in an over-the-counter market, the fair market will generally be the average of the closing bid and asked prices for the shares of common stock as of such date, or, if there are no closing bid and asked prices for the shares of common stock on such date, then the average of the bid and asked prices for the shares of common stock on the most recent date preceding such date on which such closing bid and asked prices are available. If the common stock is not listed on a national securities exchange or national market system or traded in an over-the-counter market, the fair market value shall be determinedmultiplied by the Compensation Committee in a manner consistent with Section 409Aaggregate number of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, if on the date of grant the common stock is listed on a stock exchange or is quoted on a national market system, or is traded in an over-the-counter market, then solely for purposes of determining the exercise price of any grant of a stock option or the base price of any grant of a stock appreciation right, the Compensation Committee may, in its discretion, base fair market value on the last sale before or the first sale after the grant, the closing price on the trading day before or the trading day of the grant, the arithmetic mean of the high and low prices on the trading day before or the trading day of the grant, or any other reasonable method using actual transactions of the common stock as reported by the exchange or market on which the common stock is traded. In addition, the determination of fair market value also may be made using any other method permitted under Treasury Regulation section 1.409A-1(b)(5)(iv).
No option may be exercisable for more than ten years from the date of grant (five years in the case of an incentive stock option granted to a ten-percent stockholder). Options granted under the 2013 Plan will be exercisable at such time or times as the Compensation Committee prescribes at the time of grant. No employee may receive incentive stock options that first become exercisable in any calendar year in an amount exceeding $100,000. The Compensation Committee may, in its discretion, permit a holder of a nonqualified stock option to exercise the option before it has otherwise become exercisable, in which case the shares of our common stock issued and outstanding, will be reduced proportionately at the effective time of the reverse stock split. Correspondingly, our additional paid-in capital, which consists of the difference between our stated capital and the aggregate amount paid to us upon the issuance of all currently outstanding shares of our common stock, will be increased by a number equal to the recipientdecrease in stated capital. Further, net loss per share, book value per share and other per share amounts will continuebe increased as a result of the reverse stock split because there will be fewer shares of our common stock outstanding.
Generally, the option price may be paid in cash or by bank check, or such other means as the Compensation Committee may accept. As set forth in an award agreement or otherwise determined by the Compensation Committee, in its sole discretion, at or after grant, payment in full or part
No option may be transferred other than by will or by the laws of descent and distribution, and during a recipient’s lifetime an option may be exercised only by the recipient or the recipient’s guardian or legal representative. However, the Compensation Committee may permit the transfer of a nonqualified stock option, share-settled stock appreciation right, restricted stock award, performance share or share-settled other stock-based award either (a) by instrument to the participant’s immediate family (as defined in the 2013 Plan), (b) by instrument to an inter vivos or testamentary trust (or other entity) in which the award is to be passed to the participant’s designated beneficiaries, or (c) by gift to charitable institutions. The Compensation Committee will determine the extent to which a holder of a stock option may exercise the option following termination of service.
Stock Appreciation Rights. The Compensation Committee may grant stock appreciation rights independent of or in connection with an option. The Compensation Committee will determine the terms applicable to stock appreciation rights. The base price of a stock appreciation rightvote. There will be determined by the Compensation Committee, but will not be less than 100% of the fair market value of a share of our common stockno broker non-votes with respect to the date of grant of such stock appreciation right. The maximum term of any SAR granted under the 2013 Plan is ten years from the date of grant. Generally, each SAR stock appreciation right will entitle a participant upon exercise to an amount equal to:
Payment may be made in shares of our common stock, in cash, or partly in common stock and partly in cash, all as determined by the Compensation Committee.
Restricted Stock and Stock Units. The Compensation Committee may award restricted common stock and/or stock units under the 2013 Plan. Restricted stock awards consist of shares of stock that are transferred to a participant subject to restrictions that may result in forfeiture if specified conditions are not satisfied. Stock units confer the right to receive shares of our common stock, cash, or a combination of shares and cash, at a future date upon or following the attainment of certain conditions specified by the Compensation Committee. The Compensation Committee will determine the restrictions and conditions applicable to each award of restricted stock or stock units, which may include performance-based conditions. Dividends with respect to restricted stock may be paid to the holder of the shares as and when dividends are paid to stockholders or at the times of vesting or other payment of the restricted stock award. Stock unit awards may be granted with dividend equivalent rights, which may be accumulated and may be deemed reinvested in additional stock units, as determined by the Compensation Committee in its discretion. If any dividend equivalents are paid while a stock unit award is subject to restrictions, the dividend equivalents shall be subject to the same restrictions on transferability as the underlying stock units, unless otherwise set forth in an award agreement. Unless the Compensation Committee determines otherwise, holders of restricted stockthis proposal. Abstentions will have the right tosame effect as a vote against the shares.
Performance Shares and Performance Units. The Compensation Committee may award performance shares and/or performance units under the 2013 Plan. Performance shares and performance units are awards which are earned during a specified performance period subject to the attainment of performance criteria, as established by the Compensation Committee. The Compensation Committee will determine the restrictions and conditions applicable to each award of performance shares and performance units.
Incentive Bonus Awards. The Compensation Committee may award Incentive Bonus Awards under the 2013 Plan. Incentive Bonus Awards may be based upon the attainment of specified levels of Company or subsidiary performance as measured by pre-established, objective performance criteria determined at the discretionproposal.
Other Stock-Based and Cash-Based Awards. The Compensation Committee may award other types of equity-based or cash-based awards under the 2013 Plan, including the grant or offer for sale of unrestricted shares of our common stock and payment in cash or otherwise of amounts based on the value of shares of common stock.
Effect of Certain Corporate Transactions. The Compensation Committee may, at the time of the grant of an award, provide for the effect of a change in control (as defined in the 2013 Plan) on any award, including (i) accelerating or extending the time periods for exercising, vesting in, or realizing gain from any award, (ii) eliminating or modifying the performance or other conditions of an award, (iii) providing for the cash settlement of an award for an equivalent cash value, as determined by the Compensation Committee, or (iv) such other modification or adjustment to an award as the Compensation Committee deems appropriate to maintain and protect the rights and interests of participants upon or following a change in control. The Compensation Committee may, in its discretion and without the need for the consent of any recipient of an award, also take one or more of the following actions contingent upon the occurrence of a change in control: (a) cause any or all outstanding options and stock appreciation rights to become immediately exercisable, in whole or in part; (b) cause any other awards to become non-forfeitable, in whole or in part; (c) cancel any option or stock appreciation right in exchange for a substitute option; (d) cancel any award of restricted stock, stock units, performance shares or performance units in exchange for a similar award of the capital stock of any successor corporation; (e) redeem any restricted stock, stock unit, performance share or performance unit for cash and/or other substitute consideration with a value equal to the fair market value of an unrestricted share of our common stock on the date of the change in control; (f) cancel any option or stock appreciation right in exchange for cash and/or other substitute consideration based on the value of our common stock on the date of the change in control , and cancel any option or stock appreciation right without any payment if its exercise price exceeds the value of our common stock on the date of the change in control; (g) cancel any stock unit or performance unit held by a participant affected by the change in control in exchange for cash and/or other substitute consideration with a value equal to the fair market value per share of common stock on the date of the change in control, or (h) make such other modifications, adjustments or amendments to outstanding awards as the Compensation Committee deems necessary or appropriate.
Amendment, Termination. The Compensation Committee may amend the terms of awards in any manner not inconsistent with the 2013 Plan, provided that no amendment shall adversely affect the rights of a participant with respect to an outstanding award without the participant’s consent. In addition, our board of directors may at any time amend, suspend, or terminate the 2013 Plan, provided that (i) no such amendment, suspension or termination shall materially and adversely affect the rights of any participant under any outstanding award without the consent of such participant and (ii) to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the 2013 Plan requires us to obtain stockholder consent. Stockholder approval is required for any plan amendment that increases the number of shares of common stock available for issuance under the 2013 Plan or changes the persons or classes of persons eligible to receive awards.
Tax Withholding
The Company has the power and right to deduct or withhold, or require a participant to remit to the Company, the minimum statutory amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulations to be withheld.
Director Compensation
In October 2013, we adopted a compensation policy pursuant to which our non-employee directors receive annualized compensation of $20,000 per year, with an additional $10,000 per year for the Chairman of the Board and the Chair of the Audit Committee, as well as an additional $5,000 per year for the Chairs of the Compensation and Nomination & Governance Committees. In addition, our independent board members will receive an option grant of 150,000 options, with the exception of the Chairman of the Board, who will be granted 200,000 options. In August 2014, we revised our compensation policy to provide that directors will receive restricted stock in lieu of cash fees.
In January 2018, we adopted an amended compensation policy for our non-employee directors. The amended policy provides for the following compensation amounts payable in cash, or upon election by such non-employee director, in shares of unrestricted common stock: (i) each non-employee director, other than the chairman of the board is entitled to receive an annual fee of $50,000, (ii) the chairman of the board is entitled to receive an additional annual fee of $25,000, (iii) the chair of our audit committee is entitled to receive an annual fee from us of $15,000 and other members of our audit committee are entitled to receive $7,500; (iv) the chair of our compensation committee is entitled to receive an annual fee from us of $10,000 and other members of our compensation committee are entitled to receive $6,000; and (v) the chair of our nominating and corporate governance committee is entitled to receive an annual fee from us of $7,500 and other members are entitled to receive $4,000. In addition, In September 2018, our Board approved an additional annual fee of $20,000 for our vice chair.
As of the date of each annual meeting of the shareholders, each non-employee director will receive an option grant to purchase shares of our common stock valued at $80,000 as determined by the Black Scholes method on the date of grant under our existing equity incentive plan, or any other equity incentive plan we may adopt in the future, which shall vest in twelve equal monthly installments.
All fees under the director compensation policy are paid on a quarterly basis in arrears and no per meeting fees are paid. All fees may be paid in unrestricted shares of common stock at the election of the director. We also reimburse non-employee directors for reasonable expenses incurred in connection with attending board of director and committee meetings.
Director Compensation Table – 2019
The following table summarizes the annual compensation for our non-employee directors during 2019.
| Name | Cash Compensation ($) | Stock Awards ($) (1) | Option Awards ($) (1) | Total ($) | ||||||||||||
| Herbert Conrad | - | 96,000 | 80,000 | 176,000 | ||||||||||||
| Eric Ende | 71,500 | - | 80,000 | 151,500 | ||||||||||||
| Patrick G. LePore | 80,000 | - | 80,000 | 160,000 | ||||||||||||
| James S. Scibetta | - | 75,000 | 80,000 | 155,000 | ||||||||||||
| Adam Stern(2) | 50,000 | - | 80,000 | 130,000 | ||||||||||||
| Matthew Wikler | - | 63,500 | 80,000 | 143,500 | ||||||||||||
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors is currently composed of the following four non-employee directors: Eric Ende, Chair, Patrick G. LePore, James Scibetta and Matthew Wikler. During the last fiscal year, the Compensation Committee was composed of the following five non-employee directors: Eric Ende, Chair, Herbert J. Conrad, Patrick G. LePore, James Scibetta and Matt Wikler. No member of the Compensation Committee is or was formerly an officer or an employee of the Company during the last fiscal year. In addition, no executive officer of the Company serves on the compensation committee or board of directors of a company for which any of the Company’s directors serve as an executive officer.
REPORT OF THE AUDIT COMMITTEE*
The undersigned members of the Audit Committee of the Board of Directors of Matinas BioPharma Holdings, Inc. (the “Company”) submit this report in connection with the committee’s review of the financial reports for the fiscal year ended December 31, 2019 as follows:
In addition, the Audit Committee considered whether the provision of non-audit services by EisnerAmper LLP is compatible with maintaining its independence. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board of Directors has approved)recommends that the audited financial statements be included instockholders vote “FOR” the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for filing with the Securities and Exchange Commission.
Audit Committee,
James Scibetta, Chairman
Herbert Conrad
Eric Ende
Security Ownership of Certain Beneficial Owners and Management
Adjournment Proposal.
Name of Beneficial Owner | | | Number of Shares Beneficially Owned | | | Percentage of Shares Beneficially Owned |
5% Stockholders | | | | | ||
Boxer Capital, LLC(1) | | | 11,478,634 | | | 5.7% |
Vivo Capital, LLC(2) | | | 11,279,323 | | | 5.6% |
| | | | | |||
Directors and Executive Officers | | | | | ||
Jerome D. Jabbour(3) | | | 2,820,992 | | | 1.4% |
Herbert Conrad(4) | | | 5,722,642 | | | 2.8% |
Eric Ende(5) | | | 944,035 | | | *% |
Natasha Giordano(6) | | | 47,987 | | | * % |
Patrick LePore(7) | | | 801,515 | | | * % |
James Scibetta(8) | | | 1,512,401 | | | * % |
Matthew Wikler(9) | | | 868,123 | | | * % |
James J. Ferguson(10) | | | 303,126 | | | * % |
Keith A. Kucinski(11) | | | 457,001 | | | * % |
Hui Liu(12) | | | 0 | | | * % |
Raphael Mannino(13) | | | 2,189,775 | | | 1.1* |
Theresa Matkovits(14) | | | 466,667 | | | * % |
Directors and Executive Officers as a group (12 persons)(15) | | | 16,134,264 | | | 7.8% |
| * | Less than 1% |
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
| 5% Stockholders | ||||||||
| Vivo Opportunity, LLC & Vivo Capital IX LLC (1) | 12,103,478 | 6.1 | % | |||||
| Boxer Capital, LLC (2) | 10,188,312 | 5.1 | % | |||||
| Directors and Executive Officers | ||||||||
| Jerome D. Jabbour (3) | 3,074,116 | 1.5 | % | |||||
| Herbert Conrad (4) | 5,681,773 | 2.8 | % | |||||
| Eric Ende (5) | 896,222 | * % | ||||||
| Natasha Giordano (6) | 23,994 | * % | ||||||
| Patrick LePore (7) | 748,146 | * % | ||||||
| James Scibetta (8) | 1,471,532 | * % | ||||||
| Adam Stern (9) | 9,426,836 | 4.7 | % | |||||
| Matthew Wikler (10) | 791,946 | * % | ||||||
| James J. Fergusen (11) | 153,125 | * % | ||||||
| Keith A. Kucinski (12) | 329,397 | * % | ||||||
| Raphael Mannino (13) | 2,143,941 | 1.1 | % | |||||
| Theresa Matkovits (14) | 335,417 | * % | ||||||
| Directors and Executive Officers as a group (12 persons) (15) | 25,076,445 | 12.0 | % | |||||
* Less than 1%
| (1) | Based solely on information contained in a Schedule |
| (2) | Based solely on information contained in a Schedule 13F filed on November 13, 2020. The address for the reporting person is 192 Lytton Avenue, Palo Alto, CA 94301. |
| (3) | Includes (i) 15 convertible preferred shares convertible into 30,000 shares of common stock, and (ii) |
| (4) | Includes (i) 100 convertible preferred shares convertible into 200,000 shares of common stock, and (ii) |
| (5) | Includes (i) 12 convertible preferred shares convertible into 24,000 shares of common stock, and (ii) |
| (6) | Includes |
| (7) | Includes |
| (8) | Includes (i) 12 convertible preferred shares convertible to 24,000 shares of common stock, and (ii) |
| (9) | Includes (i) 6 convertible preferred shares convertible into 12,000 shares of common stock, and (ii) |
| (10) | Includes |
| (11) | Includes |
| (12) | |
| (13) | Includes (i) 10 convertible preferred shares that are convertible into 20,000 shares of common stock, and (ii) |
| (14) | Includes |
| (15) | See notes (3) through (14). |
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information with respect to our compensation plans under which equity compensation was authorized as of December 31, 2019.
| Plan Category | Number of Shares of Common Stock to be Issued upon Exercise of Outstanding Options (a) | Weighted- Average Exercise Price Outstanding (b) | Number of Options Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c)(2) | |||||||||
| Equity compensation plans approved by stockholders(1) | 17,529,081 | $ | 1.11 | 2,520,580 | ||||||||
| Equity compensation plans not approved by stockholders | — | — | — | |||||||||
| Total | 17,529,081 | $ | 1.11 | 2,520,580 | ||||||||
Certain Relationships and Related Party Transactions
Other than compensation arrangements for our named executive officers and directors, we describe below each transaction or series of similar transactions, since January 1, 2019, to which we were a party or will be a party, in which:
Indemnification Agreements
We entered into indemnification agreements with our directors and executive officers. The indemnification agreements provide for indemnification against expenses, judgments, fines and penalties actually and reasonably incurred by an indemnitee in connection with threatened, pending or completed actions, suits or other proceedings, subject to certain limitations. The indemnification agreements also provide for the advancement of expenses in connection with a proceeding prior to a final, non-appealable judgment or other adjudication, provided that the indemnitee provides an undertaking to repay to us any amounts advanced if the indemnitee is ultimately found not to be entitled to indemnification by us. The indemnification agreement set forth procedures for making and responding to a request for indemnification or advancement of expenses, as well as dispute resolution procedures that apply to any dispute between us and an indemnitee arising under the Indemnification Agreements.
Policies and Procedures for Related Party Transactions
We have adopted a policy that our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock, any members of the immediate family of any of the foregoing persons and any firms, corporations or other entities in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest, which we refer to collectively as related parties, are not permitted to enter into a transaction with us without the prior consent of our board of directors acting through the audit committee or, in certain circumstances, the chairman of the audit committee. Any request for us to enter into a transaction with a related party, in which the amount involved exceeds $100,000 and such related party would have a direct or indirect interest must first be presented to our audit committee, or in certain circumstances the chairman of our audit committee, for review, consideration and approval. In approving or rejecting any such proposal, our audit committee, or the chairman of our audit committee, is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the benefits to us, the availability of other sources of comparable products or services and the extent of the related party’s interest in the transaction.
Director Independence
Based on information requested from and provided by each of our directors, our board of directors has determined that Messrs. Herbert Conrad, Eric Ende, Patrick LePore, James Scibetta, Matthew Wikler and Ms. Natasha Giordano are “independent directors” as such term is defined in the rules of the NYSE American’s corporate governance requirements and Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended.
PROPOSAL 2: RATIFY THE APPOINTMENT OF EISNERAMPER LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2020
The Audit Committee has reappointed EisnerAmper LLP as our independent registered public accounting firm to audit the financial statements of the Company for the fiscal year ending December 31, 2020, and has further directed that management submit their selection of independent registered public accounting firm for ratification by our stockholders at the Annual Meeting. Neither the accounting firm nor any of its members has any direct or indirect financial interest in or any connection with us in any capacity other than as public registered accounting firm.
Principal Accountant Fees and Services
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2019 and 2018, by EisnerAmper LLP, the Company’s independent registered public accounting firm.
| Years Ended December 31, | ||||||||
| 2019 | 2018 | |||||||
| (in thousands) | ||||||||
| Audit Fees | $ | 370 | $ | 245 | ||||
| Tax Fees | - | - | ||||||
| Total Fees | $ | 370 | $ | 245 | ||||
Audit Fees consist of fees billed for professional services rendered for the audit of our annual financial statements, audit of internal controls over financial reporting, review of our interim consolidated financial statements and comfort letters.
Tax Fees are for tax-related services related primarily to tax consulting and tax planning.
The Audit Committee pre-approves all auditing services and any non-audit services that the independent registered public accounting firm is permitted to render under Section 10A (h) of the Exchange Act. The Audit Committee may delegate the pre-approval to one of its members, provided that if such delegation is made, the full Audit Committee must be presented at its next regularly scheduled meeting with any pre-approval decision made by that member.
Attendance at Annual Meeting
Representatives of EisnerAmper LLP are expected to be present at the Annual Meeting and available to respond to appropriate questions from stockholders.
Vote Required
The affirmative vote of a majority of the total votes cast virtually or by proxy is required to approve this proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
PROPOSAL NO. 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
We are asking our stockholders to provide an advisory vote to approve the compensation of our named executive officers, including the CD&A, the compensation tables and narrative disclosures as described in this Proxy Statement. This is the first time the Company has been required to hold such an advisory vote, and this proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers.
Please see the CD&A section of this Proxy Statement, the compensation tables and the narrative disclosures that accompany the compensation tables for greater detail about our executive compensation programs, including information about the fiscal year 2019 compensation of our named executive officers.
We believe that our overall compensation program and philosophy support and help drive the Company’s long-term value creation, business strategy and operating performance objectives. We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement by voting “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”
While this say-on-pay vote is advisory and does not bind the Company to any particular action, the Board and the Compensation Committee value your opinion. Accordingly, the Board and the Compensation Committee will consider the outcome of this vote when making future compensation decisions for the Company’s named executive officers.
Vote Required
The affirmative vote of a majority of the total votes cast virtually or by proxy is required to approve this proposal.
The Board unanimously recommends a vote “FOR” the approval
of the compensation of our named executive officers, as disclosed in this Proxy Statement.
Proposal No. 4: Advisory Vote to Determine Frequency of Future Advisory Votes on Executive Compensation
In accordance with Section 14A of the Securities Exchange Act of 1934 (“Exchange Act”), we are providing our stockholders with the opportunity to indicate how frequently we should seek an advisory vote on the compensation of our named executive officers (commonly referred to as the “Say-On-Frequency” vote). By voting on this Proposal No. 4, stockholders can indicate whether they would prefer an advisory vote on executive compensation every year, every two years or every three years, or abstain on this matter. Our Compensation Committee and Board believe it is good corporate governance practice to vote on and consider our stockholders’ input on executive compensation on an annual basis. As required by Section 14A of the Exchange Act, we are submitting a proposal on Say-On-Frequency to our stockholders.
The Board has determined that holding an advisory vote on named executive officer compensation every year is the appropriate policy for the Company at this time. An annual, non-binding vote on executive compensation will allow our stockholders to provide input on our executive compensation policies and practices every year.
Although the vote is non-binding, our Board will take into account the outcome of the vote when determining how frequently the Company will seek an advisory vote on named executive officer compensation. We seek and are open to input from our stockholders regarding Board and governance matters, as well as our executive compensation program, and we strive to ensure there are avenues for our stockholders to provide feedback to the Company.
Vote Required
The affirmative vote of a majority of the total votes cast virtually or by proxy is required to approve this proposal.
The Board of Directors Recommends a Vote for the Option “One Year” as the Frequency for Future Advisory Votes on the Compensation of our Named Executive Officers.
STOCKHOLDER PROPOSALS
Stockholder Proposals for 2020 Annual Meeting
FOR 2021 ANNUAL MEETING
ANNUAL REPORT
Copies of our Annual Report on Form 10-K (including audited financial statements) filed with the SEC may be obtained without charge by writing to Matinas BioPharma Holdings, Inc., 1545 Route 206 South, Suite 302, Bedminster, New Jersey 07921, Attn.: Corporate Secretary. A request for a copy of our Annual Report on Form 10-K must set forth a good-faith representation that the requesting party was either a holder of record or a beneficial owner of our common stock on September 16, 2020. Exhibits to the Form 10-K will be mailed upon similar request and payment of specified fees to cover the costs of copying and mailing such materials.
Our audited financial statements for the fiscal year ended December 31, 2019 and certain other related financial and business information are contained in our 2019 Annual Report to Stockholders, which is being made available to our stockholders along with this proxy statement, but which is not deemed a part of the proxy soliciting material.
| | | By Order of the Board of Directors | |
| | | ||
| | | /s/ Jerome D. Jabbour | |
| | Jerome D. Jabbour, Chief Executive Officer |
October 1,
