(Rule
SECURITIES EXCHANGE ACT OF 1934
☐ | Preliminary Proxy Statement | |||||
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||
þ | Definitive Proxy Statement | |||||
☐ | Definitive Additional Materials | |||||
☐ | Soliciting Material under 240.14a-12 |
þ | No fee required. | |||||
☐ | Fee paid previously with preliminary materials | |||||
☐ | Fee computed on table |
MEETING DATE |
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Notice of Special Meeting of Stockholders
TIME | 8:30 a.m. (Pacific Time) | |||||
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A special
www.meetingcenter.io/209257542 www.meetnow.global/MZWGY79 on the meeting date and at the time described in the accompanying proxy statement. The password for the meeting is LGND2020. There is no physical location for the specialannual meeting. The specialannual meeting will be held for the following purposes:
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We have elected to use the internet as our primary means of providing our proxy materials to stockholders. Most stockholders will receive only a Notice of Internet Availability of Proxy Materials with instructions for accessing the proxy materials, including our Proxy Statement and annual report, and for voting via the internet. The Notice of Internet Availability of Proxy Materials also provides information on how stockholders may obtain paper copies of our proxy materials free of charge, if they so choose.
By Order of the Board of Directors, | ||
/s/ CHARLES S. BERKMAN | ||
Charles S. Berkman Senior Vice President, General Counsel & Secretary |
November , 2020
Item | Description of Proposal | Recommendation | Page | ||||||||
1 | Election of directors | FOR | |||||||||
2 | Ratification of independent registered public accounting firm | FOR | |||||||||
3 | Approval of compensation of named executive officers | FOR | |||||||||
4 | Approval of the amended and restated Ligand Pharmaceuticals Incorporated 2002 Stock Incentive Plan | FOR |
Name | Age* | Director Since | Professional Background | ||||||||
John W. Kozarich, Ph.D. (N) | 72 | 2003 | Interim CEO of Curza Global, LLC Former Vice President for Merck Research Laboratories | ||||||||
John L. Higgins | 52 | 2007 | Chief Executive Officer of Ligand Pharmaceuticals Incorporated | ||||||||
Jason M. Aryeh (HC)(N) | 53 | 2006 | Founder and Managing General Partner of JALAA Equities, LP | ||||||||
Sarah Boyce(HC) | 50 | 2019 | President and CEO of Avidity Biosciences, Inc. | ||||||||
Jennifer Cochran, Ph.D | 50 | 2021 | Shriram Chair of the Department of Bioengineering at Stanford University | ||||||||
Todd C. Davis(HC) | 61 | 2007 | Founder and Managing Partner of RoyaltyRx Capital | ||||||||
Nancy R. Gray, Ph.D.(A)(N) | 62 | 2017 | President and CEO of Gordon Research Conferences | ||||||||
John L. LaMattina, Ph.D.(HC) | 72 | 2011 | Senior Partner at PureTech Ventures Former President for Pfizer Global R&D | ||||||||
Sunil Patel(A) | 50 | 2010 | Former Executive Vice President and Chief Financial Officer for OncoMed Pharmaceuticals | ||||||||
Stephen L. Sabba, M.D.(A)(N) | 62 | 2008 | Leading Health Care Analyst and Portfolio Manager for Knott Partners, L.P. |
Board Diversity Matrix (As of April 22, 2022) | ||||||||
Total Number of Directors | 10 | |||||||
Female | Male | |||||||
Part I: Gender Identity | ||||||||
Directors | 3 | 7 | ||||||
Part II: Demographic Background | ||||||||
Asian | 0 | 2 | ||||||
White | 3 | 5 | ||||||
Focus Areas | Description | ||||
Environmental | During 2021, we finalized our Environmental Health and Safety (EHS) policy, initiated a major analysis to fund a solar energy investment at one of our R&D sites, implemented other green initiatives that reduce our overall carbon footprint, reduce water requirements in our contractor’s manufacturing processes, minimized packaging to reduce waste and fuel for shipping, implemented employee programs to educate and provide incentives for conservation, established recycling and disposal programs for corporate and laboratory materials and electronic waste, and began a program installing low-voltage lighting. We also donated surplus equipment and materials obtained through our acquisitions to institutions of higher education and finalized safety programs. In addition, we hold regular safety meetings and inspections to minimize risks associated with our R&D work. Under the leadership of the Ligand Environmental Action Force (LEAF), a committee of employee volunteers with representatives at all of operating sites that manages corporate conservation initiatives and promotes awareness and involvement in environmental and conservation programs, we have made donations to nonprofit organizations focused on environmental protection. | ||||
Social | As a growing organization, we have active employee recruiting and our priority is to hire the best and pursue a racially and gender diverse organization built on inclusion and trust. We work with minority organizations for outreach to identify qualified candidates. Our recent efforts include: •finalizing our Global Labor and Human Rights policy; •adding three female directors to our board over the past few years; •providing our employees work equipment in a safe and ergonomic manner; •providing our laboratory workers all necessary personal protective equipment; •encouraging our employees to be charitable and to support local, national, and international 501(c)(3) organizations by providing a company match to employee charitable cash contributions; and •supporting employee involvement in local community service, conservation, and social justice programs by offering paid time off. Under the leadership of the Alliance for Social Equality (ASE), a committee of employee volunteers with representatives at all of operating sites to promote education, awareness and involvement in social equality and diversity, we have made donations to nonprofit organizations that protect underserved communities in the United States. | ||||
Governance | ESG matters are managed and monitored by senior management throughout the year and our board of directors exercise oversight over ESG matters. We have an Extended Leadership Team that periodically discusses and review workforce diversity and inclusion. We have also reviewed and provided additional employee training on cybersecurity policies, and conducted risk assessment of the COVID-19 pandemic and of the changes as a result of working remotely due to the COVID-19 pandemic. We updated the charter and mission of our board of directors’ compensation committee to meet a broader mandate to oversee human capital management. We created a new privacy incidence hotline to allow anyone to anonymously report concerns or report to the board of directors any violations of laws, the code of conduct or other company policies. We also engaged ESG consultants to assist with policy review. |
What We Do | ||||||||
Pay for Performance | a | A substantial portion of our executives’ total direct compensation is performance-based or “at risk.” | ||||||
Balanced Mix of Pay Components | a | Target compensation is not overly weighted toward annual cash compensation and balances cash and long-term equity awards to align with our short- and long-term goals. | ||||||
Annual Say-on-Pay Vote | a | We seek an annual non-binding advisory vote from our stockholders to approve our executive compensation programs. | ||||||
Independent Compensation Consultant | a | The human capital management and compensation committee retains an independent compensation consultant. | ||||||
Annual Peer Group Analysis | a | The human capital management and compensation committee reviews external market data when making compensation decisions and annually reviews our peer group with its independent compensation consultant. | ||||||
Annual Compensation Risk Assessment | a | Each year we perform an assessment of any risks that could result from our compensation plans and programs. | ||||||
Double-Trigger Change in Control Benefits | a | We require a double-trigger (or both a change in control and termination of an executive’s employment) before vesting of equity awards is accelerated. | ||||||
Limited Perquisites | a | We provide our named executive officers with perquisites on a limited basis. | ||||||
What We Do Not Do | ||||||||
No Employment Agreements | r | We do not provide our executive officers with employment agreements | ||||||
No Tax Gross-Ups | r | We do not provide tax gross ups to our executives for “excess parachute payments.” | ||||||
No Stock Option Repricing | r | We prohibit option repricing without stockholder approval. |
What is the purpose of the | At | |||||||
Plan. | ||||||||
How can I attend the | The You will be able to attend the To participate in the If you hold your shares through an intermediary, such as a bank or broker, and wish to attend the The online meeting will begin promptly at 8:30 a.m., Pacific time. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this proxy statement. |
How do I register to attend the | If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the virtual If you hold your shares through an intermediary, such as a bank or broker, commonly known as holding shares in “street name,” you must register in advance to attend the virtual You will receive a confirmation of your registration by email after Computershare receives your registration materials. |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 1
Requests for registration should be directed to our transfer agent Computershare at the following: •By email - Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com •By mail – Computershare Ligand Pharmaceuticals Incorporated Legal Proxy P.O. Box 43001 Providence, RI 02940-3001 | ||||||||
What if I have trouble accessing the Annual Meeting virtually? | The virtual meeting platform is fully supported across browsers (MS Edge, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. A link on the meeting page will provide further assistance should you need it or you may call 1-888-724-2416. | |||||||
Who can vote at the meeting? | Only stockholders of record as of the close of business on the Record Date are entitled to vote the shares of stock they held on that date. Stockholders may vote by attending the | |||||||
How many votes do I have? | Each share of our common stock that you own as of | |||||||
What is a “broker non-vote”? | A broker non-vote occurs when a broker holding shares for a beneficial owner, commonly known as holding shares in “street name,” does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that proposal and has not received instructions from the beneficial owner. |
How are | Directors will be elected by a favorable vote of a plurality of the | ||||
The proposal to ratify the
Approval of the non-binding advisory resolution on our executive compensation requires the affirmative vote of a majority of the aggregate votes present, as an attendee to the live webcast or by proxy, and entitled to vote at the annual meeting. Abstentions will have the same effect as a vote against this proposal. Absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on The proposal to approve the amendment and restatement of our 2002 Stock Incentive Plan requires the affirmative vote of a majority of the aggregate votes present, as an attendee to the live webcast or by proxy, and entitled to vote at the annual meeting. Abstentions will have the same effect as a vote against this proposal. Absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on the resolution to approve the compensation of our named executive officers. As a result, broker non votes will have no effect on the outcome of the vote. All votes will be counted by an |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 2
inspector of elections appointed for the meeting. The inspector will count separately “yes” votes, “no” votes, abstentions and broker non-votes. Shares represented by proxies that reflect abstentions or broker non-votes will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Voting results will be tabulated and certified by our mailing and tabulating agent, Computershare. |
Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? | Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to our stockholders who have not previously requested the receipt of paper proxy materials advising them that they can access this proxy statement, the 2021 annual report and voting instructions over the internet at http://www.envisionreports.com/LGND, by calling toll-free (866) 641-4276, or by sending an e-mail to investorvote@computershare.com with “Proxy Materials Ligand Pharmaceuticals Incorporated” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings. There is no charge for you requesting a copy. Please make your request for a copy on or before May 31, 2022 to facilitate timely delivery. In addition, stockholders may request to receive proxy materials electronically by email or in printed form by mail on an ongoing basis. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or request to receive a printed set of the proxy materials. Our proxy statement and related materials are first being made available to our shareholders on or about April 22, 2022. We encourage stockholders to take advantage of the availability of the proxy materials on the internet to help reduce the environmental impact of the annual meeting. |
How do I vote by proxy? | Record Holders | ||||||||||
If you are a stockholder of record on the Record Date, you may vote in one of the following four ways: | |||||||||||
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Beneficial Owners: Shares Registered in the Name of a Broker or Bank | |||||||||||
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided. To vote during the |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 3
instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form. See “How do I register to attend the |
May I revoke my proxy? | If you give us your proxy, you may revoke it at any time before it is exercised. You may revoke your proxy by sending in another signed proxy with a later date, by notifying our corporate secretary, Charles S. Berkman, in writing before the | |||||||
What is the quorum requirement? | A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if the holders of a majority in voting power of the shares of common stock issued, outstanding and entitled to vote are present via live webcast or represented by proxy at the | |||||||
I share an address with another stockholder, and we received only one paper copy of the proxy materials and | The rules of the SEC permit us, under certain circumstances, to send a single set of the Notice of Internet Availability of Proxy Materials, proxy materials, and annual reports to any household at which two or more stockholders reside. This procedure, known as householding, reduces the volume of duplicate information you receive and helps to reduce our expenses. In order to take advantage of this opportunity, we have delivered only one | |||||||
How can I find out the results of the voting at the | Preliminary voting results will be announced at the |
Service | Annual Retainer (Chair) | Annual Retainer (Member) | |||||||||
Audit Committee | $20,000 | $10,000 | |||||||||
Human Capital Management and Compensation Committee | 15,000 | 7,500 | |||||||||
Nominating and Corporate Governance Committee | 10,000 | 5,000 |
Target Value of RSU Award(1) | Target Value of Option Award(2) | Total Target Value of Award | |||||||||
Initial Grant | $145,000 | $280,000 | $425,000 | ||||||||
Annual Grant | 85,000 | 175,000 | 260,000 |
Name | Cash Fees | Stock Awards(1) | Option Awards(1) | Total | |||||||||||||||||||
Jason M. Aryeh | $60,051 | $72,696 | $190,060 | $322,807 | |||||||||||||||||||
Sarah Boyce | 57,551 | 72,696 | 190,060 | 320,307 | |||||||||||||||||||
Jennifer Cochran(2) | 45,865 | 146,704 | 267,910 | 460,479 | |||||||||||||||||||
Todd Davis | 65,051 | 72,696 | 190,060 | 327,807 | |||||||||||||||||||
Nancy Gray | 65,051 | 72,696 | 190,060 | 327,807 | |||||||||||||||||||
John W. Kozarich | 85,051 | 72,696 | 190,060 | 347,807 | |||||||||||||||||||
Sunil Patel | 60,051 | 72,696 | 190,060 | 322,807 | |||||||||||||||||||
Stephen L. Sabba | 70,051 | 72,696 | 190,060 | 332,807 | |||||||||||||||||||
John L. LaMattina | 57,051 | 72,696 | 190,060 | 319,807 |
Name | Number of Shares Underlying Outstanding Restricted Stock Units | Number of Shares Underlying Outstanding Stock Options | |||||||||
Jason M. Aryeh | 630 | 23,133 | |||||||||
Sarah Boyce | 1,107 | 11,020 | |||||||||
Jennifer Cochran | 1,161 | 4,508 | |||||||||
Todd Davis | 630 | 9,808 | |||||||||
Nancy Gray | 630 | 15,734 | |||||||||
John W. Kozarich | 630 | 37,803 | |||||||||
Sunil Patel | 630 | 23,133 | |||||||||
Stephen L. Sabba | 630 | 30,468 | |||||||||
John L. LaMattina | 630 | 23,133 |
Fee Category | Fiscal Year 2021 Fees | Fiscal Year 2020 Fees | |||||||||||||||||||||||||||
Audit Fees(1) | $ | 885,875 | $ | 795,335 | |||||||||||||||||||||||||
Audit-related fees(2) | 1,986,224 | 404,000 | |||||||||||||||||||||||||||
Tax Compliance Fees (3) | 776,155 | 1,106,886 | |||||||||||||||||||||||||||
3,648,254 | 2,306,221 | ||||||||||||||||||||||||||||
Tax Advice and Planning Services(4) | 398,219 | 568,361 | |||||||||||||||||||||||||||
Total Fees | $ | 4,046,473 | $ | 2,874,582 |
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APPROVAL OF THE AMENDED AND RESTATED LIGAND PHARMACEUTICALS INCORPORATED 2002 STOCK INCENTIVE PLAN
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
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Number of Shares(1) | As a % of Shares Outstanding(2) | Dollar Value(3) | ||||||||
Options outstanding | 2,615,172 | 16.3 | % | $262,197,145 | ||||||
Weighted average exercise price of outstanding options | $84.56 | — | — | |||||||
Weighted average remaining term (in years) of outstanding options | 6.3 | — | — | |||||||
Restricted stock units(4) | 205,512 | 1.3 | % | $20,604,633 | ||||||
Shares available for grant(5) | 14,289 | 0.1 | % | $1,432,615 | ||||||
Proposed increase in shares available for issuance under Restated Equity Plan (over existing share reserve under Existing Plan) | 1,114,500 | 6.9 | % | $111,739,770 |
Ligand Pharmaceuticals Incorporated 2020 Special
Number of Shares (1) | As a % of Shares Outstanding (2) | Dollar Value (3) | |||||||||
Options outstanding | 2,172,724 | 12.9% | $244,409,723.00 | ||||||||
Weighted average exercise price of outstanding options | $107.31 | ||||||||||
Weighted average remaining term (in years) of outstanding options | 6.2 years | ||||||||||
Restricted stock units | 100,019 | 0.6% | $11,251,137 | ||||||||
Performance stock units (4) | 62,133 | 0.4% | $6,989,341 | ||||||||
Shares available for grant (5) | 751,702 | 4.5% | $84,558,958 | ||||||||
Proposed increase in shares available for issuance under Restated Equity Plan (over existing share reserve under Existing Plan) | 1,000,000 | 5.9 | $112,490,000.00 | ||||||||
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In determining whether to approve the Restated Equity Plan, including the proposed increase to the share reserve under the Restated Equity Plan over the share reserve under the Existing Plan, our Board considered the following:
2019 | 2018 | 2017 | ||||
Stock Options/SARs granted | 338,617 | 228,362 | 273,353 | |||
Time-based RSUs granted | 83,796 | 43,812 | 43,042 | |||
Performance-based RSUs earned | 34,702 | 12,783 | 143,691 |
2021 | 2020 | 2019 | |||||||||
Stock Options/SARs granted | 393,589 | 806,300 | 338,617 | ||||||||
Time-based RSUs granted | 107,569 | 74,477 | 83,796 | ||||||||
Performance-based RSUs earned | 34,266 | 31,702 | 34,702 |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
Shares Available
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
In addition, equitable adjustments will be made to outstanding awards in the event a large non-recurring cash dividend is paid to our stockholders, which affects the common stock or share price of the common stock underlying the awards subject to the Restated Equity Plan. Such adjustments to the outstanding awards will be effected in a manner which will preclude the enlargement or dilution of rights and benefits under those awards.
$112.49.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
Termination of Service
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 12
vested, and recipients of restricted stock unit awards generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied.
shall vest or accelerate in full, whenunless such awards are not to be assumedaccelerated vesting is precluded by any successor corporation;
vest or acceleratea limitation set forth in full when such awards are to be assumed by any successor corporation; or
vest or accelerate in full when such awards are to be assumed by any successor corporation and the employee holding such options is involuntarily terminated.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
Tax Withholding
October 25, 2030;
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
•total stockholder return;
•items related to acquisitions;
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
•items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the performance period;
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
If a timely election is made under Section 83(b) with respect to unvested stock, the participant generally will recognize ordinary income on the date of the issuance equal to the excess, if any, of the fair market value of the shares at that date over the purchase price therefore, and we will be entitled to a deduction for the same amount. A participant who receives stock in lieu of a cash payment that would otherwise have been made will generally be taxed as if the cash payment has been received, and we generally will be entitled to a deduction for the same amount.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
New Plan Benefits
4.
Name and Position | Number of Shares Subject to Stock Option Awards | Number of Shares Subject to RSUs | ||||||
John L. Higgins, Chief Executive Officer | — | — | ||||||
Matthew W. Foehr, President and Chief Operating Officer | — | — | ||||||
Matthew Korenberg, Executive Vice President, Finance and Chief Financial Officer | — | — | ||||||
Charles S. Berkman, Senior Vice President and General Counsel | — | — | ||||||
Executive Officers, as a group | — | — | ||||||
Non-Employee Directors, as a group | $1,575,000(1) | $765,000(2) | ||||||
Employees other than Executive Officers, as a group | — | — |
Name and Position | Number of Shares Subject to Stock Option Awards | Number of Shares Subject to Restricted Stock Awards/RSUs(2) | ||||||
John L. Higgins, Chief Executive Officer | 756,067 | 55,072 | ||||||
Matthew W. Foehr, President and Chief Operating Officer | 310,991 | 30,480 | ||||||
Matthew Korenberg, Executive Vice President, Finance and Chief Financial Officer | 123,247 | 26,930 | ||||||
Charles S. Berkman, Senior Vice President and General Counsel | 54,092 | 14,489 | ||||||
Executive Officers, as a group | 1,244,397 | 126,971 | ||||||
Non-Employee Directors, as a group (1) | 179,850 | 8,079 | ||||||
Nominees for election as Directors | — | — | ||||||
Each associate of any of any such directors, executive officers or nominees | — | — | ||||||
Each Other Person Who Received or Is To Receive 5% of Such Options, Warrants or Rights | — | — | ||||||
Employees other than Executive Officers, as a group | 923,715 | 75,719 |
March 31, 2022:
Name and Position | Number of Shares Subject to Stock Option Awards | Number of Shares Subject to Restricted Stock Awards/RSUs(2) | ||||||
John L. Higgins, Chief Executive Officer | 511,857 | 35,113 | ||||||
Matthew W. Foehr, President and Chief Operating Officer | 254,655 | 18,619 | ||||||
Matthew Korenberg, Executive Vice President, Finance and Chief Financial Officer | 134,838 | 25,030 | ||||||
Charles S. Berkman, Senior Vice President and General Counsel | 61,047 | 9,789 | ||||||
Executive Officers, as a group | 962,397 | 88,551 | ||||||
Non-Employee Directors, as a group (1) | 171,405 | 6,678 | ||||||
Nominees for election as Directors | — | — | ||||||
Each associate of any of any such Directors, Executive Officers or Nominees | — | — | ||||||
Each other person who received or is to receive 5% of such options, warrants or rights | — | — | ||||||
Employees other than Executive Officers, as a group | 1,062,439 | 70,956 |
Our current non-employee directors are the only nominees for election as directors.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 19
special annual meeting will have no effect on the outcome of the vote for this Proposal No. 1.4. Abstentions will be counted as shares that are present and entitled to vote and, as a result, will have the same effect as a vote against Proposal No. 1.4. This proposal is considered a non-discretionary item and, as a result, there will be no broker non-votes and thus broker non-votes will have no effect on the outcome of the vote.
Ligand
The Board47, has approvedserved as our Executive Vice President, Finance and Chief Financial Officer since January 2018 and prior to that as our Vice President, Finance and Chief Financial Officer since August 2015. Prior to joining our company, commencing in September 2013, Mr. Korenberg was the submissionfounder, Chief Executive Officer and a director of NeuroCircuit Therapeutics, a company focused on developing drugs to the stockholders of a proposal to approve one or more adjournmentstreat genetic disorders of the special meetingbrain with an initial focus on Down syndrome. Prior to founding NeuroCircuit Therapeutics, Mr. Korenberg was a Managing Director and member of the healthcare investment banking team at Goldman Sachs from July 1999 through August 2013. During his 14 year tenure at Goldman Sachs, Mr. Korenberg was focused on advising and financing companies in the event that there is notbiotechnology and pharmaceutical sectors and was based in New York, London and San Francisco. Prior to Goldman Sachs, Mr. Korenberg was a sufficient number of voteshealthcare investment banker at the special meeting to approve Proposal No. 1. In order to permit proxies that have been timely received to be voted for such adjournments, we are submitting this proposal as a separate matter for your consideration. If it is necessary to adjourn the special meeting, the adjournment will be for a period of less than 30 days and the record date will remain unchanged, no notice of the time and place of the reconvened meeting will be given to stockholders, other than an announcement made at the special meeting.
Required Vote
Assuming a quorum is present, approval of an adjournment to the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve Proposal No. 1 requires the affirmative vote of a majority of the aggregate votes present, in person (including as a participantDillon, Read & Co. Inc. where he spent two years working with healthcare companies in the virtual special meeting) or by proxy,biotechnology and entitled to vote at the special meeting. A failure to submit a proxy or vote at the special meeting will have no effectpharmaceutical sectors and industrial companies. Mr. Korenberg serves on the outcomeboard, audit and compensation committees of Qualigen Therapeutics, Inc., a company which develops and manufactures oncology focused therapeutics and diagnostic products.Mr. Korenberg holds a B.B.A. in Finance and Accounting from the vote for this Proposal No. 2. Abstentions will be counted as shares that are present and entitled to vote and, as a result, will have the same effect as a vote against Proposal No. 2. All proposals will be non-discretionary items and, as a result, there will be no broker non-votes and thus broker non-votes will have no effect on the outcomeUniversity of the vote.
Recommendation of the Board of Directors
Our Board unanimously recommends that stockholders vote FOR Proposal No. 2.
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Michigan.
•each of our current directors;
•each of our named executive officers (as defined below in “Compensation Discussion and Analysis – Summary Compensation Table” included in our proxy statement filed with the Securities and Exchange Commission on April 24, 2020 related to our 2020 annual meeting of stockholders)); and
•all of our executive officers and directors as a group.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 21
The address for individuals for whom an address is not otherwise indicated is 3911 Sorrento Valley Boulevard, 5980 Horton Street,Suite 110, San Diego,405, Emeryville, CA, 92121.
Beneficial Owner | Number of Shares Beneficially Owned | Percent of Class Owned | |||||||||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 2,742,808 | 16.3% | |||||||||
The Vanguard Group(4) 100 Vanguard Blvd. Malvern, PA 19355 | 1,716,735 | 10.2% | |||||||||
Janus Henderson Group plc(3) 201 Bishopsgate EC2M 3AE United Kingdom | 1,441,085 | 8.5% | |||||||||
William Blair Investment Management, LLC(1) 150 North Riverside Plaza Chicago, IL 60606 | 1,400,341 | 8.3% | |||||||||
State Street Corporation(5) State Street Financial Center One Lincoln Street Boston, MA 02111 | 887,353 | 5.3% | |||||||||
Directors and Executive Officers | |||||||||||
Jason M. Aryeh(6) | 149,046 | * | |||||||||
Charles S. Berkman(7)(18) | 72,821 | * | |||||||||
Sarah Boyce(8)(18) | 12,304 | * | |||||||||
Jennifer Cochran | — | * | |||||||||
Todd C. Davis(9) | 61,220 | * | |||||||||
Matthew W. Foehr(10)(18) | 388,953 | 2.3% | |||||||||
Nancy Ryan Gray(11) | 20,066 | * | |||||||||
John L. Higgins(12)(18) | 785,161 | 4.5% | |||||||||
Matthew Korenberg(13)(18) | 142,977 | * | |||||||||
John W. Kozarich(14) | 72,307 | * | |||||||||
John L. LaMattina(15) | 49,161 | * | |||||||||
Sunil Patel(16) | 52,583 | * | |||||||||
Stephen L. Sabba(17) | 56,159 | * | |||||||||
Directors and executive officers as a group (13 people)(18) | 1,862,758 | 10.4% |
Less than one percent. | ||||||||||||
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Represents shares of common stock beneficially owned by William Blair Investment Management, LLC
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 22
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Represents shares of common stock owned by funds affiliated with BlackRock, Inc. at December 31, |
Represents shares of common stock owned by funds affiliated with Janus Henderson Group plc. at December 31, |
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(4) | Represents shares of common stock beneficially owned by The Vanguard Group at December 31, 2021 as indicated in the entity’s Schedule 13G/A filed with the SEC on February 10, 2022. | ||||
(5) | Represents shares of common stock owned by funds affiliated with State Street Corporation at December 31, |
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Consists of (i) 68,664 shares of common stock held directly, (ii) 51,594 shares of common stock held by certain funds (collectively, the “Funds”) managed by JALAA Equities, LP (“JALAA”), (iii) 5,025 shares of common stock held by Mr. Aryeh in a self-directed investment retirement account, and (iv) 630 shares of common stock issuable to Mr. Aryeh upon settlement of outstanding restricted stock units which will vest within 60 days of |
Consists of (i) 26,689 shares of common stock and (ii) 46,132 shares of common stock Mr. Berkman has the right to acquire pursuant to outstanding options which are exercisable within 60 days of |
Consists of (i) 2,415 shares of common stock, (ii) 630 shares of common stock issuable to Ms. Boyce upon settlement of outstanding restricted stock units which will vest within 60 days of April 11,2022, and (iii) 9,259 shares of common stock Ms. Boyce has the right to acquire pursuant to outstanding options which are exercisable within 60 days of April 11,2022. | |||||
(9) | Consists of (i) 50,782 shares of common stock, (ii) 630 shares of common stock issuable to Mr. Davis upon settlement of outstanding restricted stock units which will vest within 60 days of |
Consists of (i) 163,993 shares of common stock, and (ii) 224,960 shares of common stock Mr. Foehr has the right to acquire pursuant to outstanding options which are exercisable within 60 days of |
Consists of (i) 3,702 shares of common stock, (ii) 630 shares of common stock issuable to |
Consists of (i) 327,669 shares of common stock, and (ii) 457,492 shares of common stock Mr. Higgins has the right to acquire pursuant to outstanding options which are exercisable within 60 days of |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 23
Consists of (i) 34,812 shares of common stock, and (ii) 108,105 shares of common stock Mr. Korenberg has the right to acquire pursuant to outstanding options which are exercisable within 60 days of |
Consists of (i) 41,209 shares of common stock, (ii) 630 shares of common stock issuable to Dr. Kozarich upon settlement of outstanding restricted stock units which will vest within 60 days of |
Consists of (i) 25,398 shares of common stock, (ii) 630 shares of common stock issuable to Dr. LaMattina upon settlement of outstanding restricted stock units which will vest within 60 days after |
Consists of (i) 28,820 shares of common stock, (ii) 630 shares of common stock issuable to Mr. Patel upon settlement of outstanding restricted stock units which will vest within 60 days of |
Consists of (i) 25,061 shares of common stock, (ii) 630 shares of common stock issuable to Mr. Sabba upon settlement of outstanding restricted stock units which will vest within 60 days of |
The number and percentage of shares beneficially owned excludes the number of shares which are subject to restricted stock units and held by the applicable individual that are not scheduled to vest within 60 days of |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
This CD&A describes our compensation philosophy and programs, the compensation decisions the human capital management and compensation committee made under those programs, and the factors considered in making those decisions. This CD&A focuses on the compensation of our named executive officers, or “NEOs”, who for 2019 were:
Name | Title | |||||
John L. Higgins | Chief Executive Officer | |||||
Matthew W. Foehr | President and Chief Operating Officer | |||||
Matthew Korenberg | Executive Vice President, Finance and Chief Financial Officer | |||||
Charles S. Berkman | Senior Vice President and General Counsel |
Executive Summary
Overview
The compensation committee has designed our executive compensation programdelivered to provide compensation opportunities that:
attract, motivate and retain individuals of superior ability and managerial talent critical to its long-term success;
align executives’ interestsinvestors a more diversified company with the Company’s corporate strategies, business objectives and the long-term interests of the Company’s stockholders;
create incentives to achieve key strategic and corporate performance objectives; and
enhance the executives’ incentive to increase the Company’s stock price and maximize stockholder value.
Within this framework our compensation program has been developed with the following key principles in mind:
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 25
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base salary;
annual variable performance bonus awards payable in cash;
long-term stock-based incentive awards comprised of a significant portion of performance-based equity; and
employee benefits and perquisites, including change in control severance arrangements.
The compensation committee uses competitive compensation data from the annual total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements, including base salary. Additionally, the compensation committee uses multiple reference points when establishing targeted compensation levels. The compensation committee has adopted a philosophy that is intended to emphasize equity over cash while ensuring total compensation is competitive. The compensation committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as Company, business and individual performance, scope of responsibility, critical needs and skill sets, leadership potential and succession planning.
Each element of our executive compensation program is discussed in greater detail below.
Ligand’s Strong 2019 Corporate Performance
substantially expanded growth outlook. Our fiscal year 20192021 accomplishments, guided by our named executive officers, illustrate the success of our executive compensation program, and included, among other things, the following:
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OVERVIEW OF 2021 COMPENSATION PROGRAMS AND DECISIONS In line with our executive compensation program’s emphasis on pay for performance, compensation awarded to our named executive officers for 2021 reflected our financial results and overall compensation philosophy. | |||||
Modest Base Salary Adjustments: | During 2021, our named executive officers received modest 3-4% increases to their base salaries. | ||||
Pay-for-Performance Annual Bonuses: | Our annual bonus program rewards our named executive officers based on company achievement of pre-established financial and strategic objectives that differ from those used for purposes of our long-term incentives, as described below. For 2021, our Company focused on key corporate objectives in the following areas: financial performance, M&A activity, the Captisol business, |
Equity Emphasis on Performance-Based Equity Awards | Our Human Capital Management and Compensation Committee continued its practice of ensuring that a substantial portion of our named executive officers’ total compensation is awarded in the form of long-term equity incentive awards. •Stock Options – 40% of Total Target Equity Value: 40% of each named executive officer’s long-term equity incentive award was granted in the form of stock options, which we •Performance-Based Restricted Stock Units (“PSUs”)– 33% of Total Target Equity Value: i.33% of each named executive officer’s long-term equity incentive award was granted in the form of PSUs. The PSUs granted in 2021 will vest over multi-year performance periods (two and ii.For 2021, relative total stockholder return ("TSR") and the number of partnered OmniAb antibody programs are the two performance metrics for our iii.The Human Capital Management and •Time-Based Restricted Stock Units (“RSUs”) – 27% of Total Target Equity Value: The remainder of the long-term equity incentive awards granted to our named executive officers was granted in the form of RSUsthat are subject to our standard three year vesting schedule. |
What We | ||||||||
Pay for Performance | a | A substantial portion of our executives’ total direct compensation is | ||||||
Balanced Mix of Pay Components | a | Target compensation is not overly weighted toward annual cash compensation and balances cash and long-term equity awards to align with our | ||||||
Annual Say-on-Pay Vote | a | We | ||||||
Independent Compensation Consultant | a | The Human Capital Management and Compensation Committee retains an independent compensation consultant. | ||||||
Annual Peer Group Analysis | a | The Human Capital Management and Compensation Committee reviews external market data when making compensation decisions and annually reviews our peer group with its independent compensation consultant. | ||||||
Annual Compensation Risk Assessment | a | Each year we perform an assessment of any risks that could result from our compensation plans and programs. | ||||||
Double-Trigger Change in | a | We require a double-trigger (or both a change in | ||||||
Limited Perquisites | a | We provide our named executive officers with perquisites on a limited basis. | ||||||
What We Do Not Do | ||||||||
No Employment Agreements | r | We do not provide our executive officers with employment agreements. | ||||||
No Tax Gross-Ups | r | We do not provide tax gross ups to our executives for | ||||||
No Stock Option Repricing | r | We prohibit option repricing without stockholder approval. |
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
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Performance Graph
TOTAL STOCKHOLDER RETURN PERFORMANCE
2019
In line withCommittee has designed our executive compensation program’sprogram with the following key principles in mind:
Attract and Retain the Right Individuals | Our compensation program is designed to attract, motivate and retain individuals of superior ability and managerial talent critical to its long-term success. | ||||
Pay for Performance | The majority of our named executive officers’ total compensation ties compensation directly to the achievement of corporate objectives, increases in our stock price or both. We emphasize pay for performance in order to create incentives to achieve key strategic and corporate performance objectives, align executive compensation with our business strategy and the creation of long-term stockholder value. | ||||
Align Executive Pay with Corporate Objectives and Stockholder Interests | Our compensation program aligns executive compensation with our corporate strategies, business objectives and long-term stockholder interests by rewarding successful execution of our business plan and tying a significant portion of total compensation opportunities to performance-based compensation. As a result, our compensation program enhances the executives’ incentive to increase our stock price and maximize stockholder value. | ||||
Market Competitive Pay | The Human Capital Management and Compensation Committee uses competitive compensation data from the annual total compensation study of peer companies to inform its decisions about overall compensation opportunities and specific compensation elements, including base salary. |
Description and Purpose | Pay Positioning Philosophy | |||||||||||||
Base Salary | Competitive fixed cash compensation used to | We generally provide our named executive officers with a base salary that | ||||||||||||
Annual Performance Bonus Award | Cash incentives designed to reward executive officers for successful corporate performance against board approved annual bonus objectives. | Target total cash compensation generally below the median of executive officers performing similar job functions at companies in our peer group to ensure a greater emphasis is placed on long-term incentives while ensuring total compensation is competitive with market. | ||||||||||||
Long-Term Equity Incentive Awards | Stock options and RSU awards subject to time-based and performance-based vesting designed to align each executive officer’s incentives with stockholder value creation. | We emphasize long-term equity incentive compensation within our named executive officers' total target compensation opportunity. While we do not set target equity compensation at a specific level relative to our peer group, annual target equity opportunities may exceed the median of executive officers performing similar job junctions at companies in our peer group if the Human Capital Management and Compensation Committee believes that is appropriate based on other compensation components, retention and incentive needs and individual executive officer performance. The annual target equity opportunities for our named executive officers for 2021 generally fell between the 50th to 75th percentile for similar positions at our peer group after the Human Capital Management and | ||||||||||||
Benefits & Other Compensation Programs | Healthcare and insurance coverage, deferred compensation |
arrangements, 401(k) matching program, employee stock purchase plan offering and other fringe benefits. |
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Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 27
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In light of the Company’s overall performance during 2019, the compensation committee believes that the named executive officers’ 2019 compensation was appropriate.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
Ligand’s Executive Compensation Best Practices
We regularly review and refine our executive compensation program to ensure that it continues to reflect practices and policies that are aligned with our pay-for-performance philosophy. The following practices and policies we believe are in line with current best practices for aligning executive and shareholder interests and sound corporate governance practices:
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Response to 2019 Say on Pay Vote
In June 2019, we held a stockholder advisory vote on the compensation of our named executive officers, commonly referred to as a say-on-pay vote. Our stockholders overwhelmingly approved the compensation of our named executive officers, with approximately 98% of stockholder votes cast in favor of our 2019 say-on-pay resolution (excluding abstentions and broker non-votes). As we evaluated our compensation practices and talent needs throughout 2019, we were mindful of the strong support our stockholders expressed for our compensation philosophy. As a result, following our annual review of our executive compensation philosophy, the compensation committee decided to generally retain our existing approach to executive compensation for our continuing executives, with an emphasis on short- and long-term incentive compensation that rewards our senior executives when they deliver value for our stockholders.
Response to 2020 Say on Pay Vote
Additionally, in June 2020, we held a say-on-pay vote with respect to the compensation of our named executive officers for 2019. Similar to our 2019 Say on Pay Vote, our stockholders overwhelmingly approved the compensation of our named executive officers, with approximately 94% of stockholder votes cast in favor of our 2020 say-on-pay resolution (excluding abstentions and broker non-votes). As we evaluate our compensation practices and talent needs throughout 2020, we are mindful of the strong support our stockholders expressed for our compensation philosophy.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 29
The Role of the Compensation Committee and Executive Officers in Setting Compensation
The compensation committee has the primary authority to determine our compensation philosophy and to establish compensation for our executive officers. In determining each level of compensation and the total package, the compensation committee reviewed a variety of sources, to determine and set compensation.
The chief executive officer aids the compensation committee by providing annual recommendations regarding the compensation of all executive officers, other than himself. Each named executive officer and senior executive management team member, in turn, participates in an annual performance review with the chief executive officer to provide input about his contributions to the Company’s success for the period being assessed. The performance of our chief executive officer and senior executive management team as a group is reviewed annually by the compensation committee.
In 2019, the compensation committee retained Radford, a part of Aon plc, a national executive compensation consulting firm, to assist it in the formulation of the peer group used to determine executive equity compensation during 2018 and to advise regarding the determination of the other key elements of the executive compensation program. Radford reports to and is accountable to the compensation committee, and may not conduct any other work for us without the authorization of the compensation committee. Radford did not provide any services to us in 2019 beyond its engagement as an advisor to the compensation committee on executive compensation matters. After review and consultation with Radford, the compensation committee has determined that Radford is independent and there is no conflict of interest resulting from retaining Radford currently or during the year ended December 31, 2019. In reaching these conclusions, the compensation committee considered the factors set forth in Exchange Act Rule 10C-1 and Nasdaq listing standards.
As in prior years, the compensation committee and our management also consulted several independent compensation surveys to assist them in determining market pay practices for compensating executive officers. These surveys were reviewed to compare the Company’s compensation levels to the market compensation levels, taking into consideration the other companies’ size, the industry, the individual executive’s level of responsibility and his years of experience. For 2019, the current executive salaries were evaluated against the Radford Global Life Sciences Survey using data from comparable U.S. public biotechnology companies with revenue ranging from $100 million to $600 million and market capitalization between $1.0 billion and $12.0 billion as of November 2018 when the survey data was compiled. These surveys were used due to the competitiveness in hiring employees within the biotechnology industry as well as in our geographic location and we believe they represent the types of companies with which we compete for executive talent. With respect to the foregoing survey data, the identities of the individual companies included in the surveys were not provided to the compensation committee, and the compensation committee did not refer to individual compensation information for such companies. Instead, the compensation committee only referred to the statistical summaries of the compensation information for the companies included in such surveys.
Additionally, the compensation committee worked with Radford to confirm a peer group of companies in the United States for which compensation information can be provided to the compensation committee. This is necessary so we can offer compensation that is competitive within that group of companies. The peer group companies for 2019 compensation included ACADIA Pharmaceuticals, Acorda Therapeutics, Agios Pharmaceuticals, Exelixis, Halozyme Therapeutics, Innoviva, Intercept Pharmaceuticals, Ionis Pharmaceuticals, Ironwood Pharmaceuticals, Momenta Pharmaceuticals, Nektar Therapeutics, Neurocrine Biosciences, Pacira Pharmaceuticals, Portola Pharmaceuticals, Repligen, Sarepta Therapeutics, Supernus Pharmaceuticals and Theravance Biopharma.
The selected companies in our peer group are companies that fall within a reasonable range of comparison factors and/or that we may compete with for executive talent. In addition to the criteria related to finding
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 30
companies with similar business models and at a similar stage of development as Ligand, the other criteria used in the identification and selection of the peer group included business/labor market competitors in the biotechnology industry similar in size and complexity to us, companies with revenue ranging from $100 million to $600 million, companies with market values between $1.0 billion and $12.0 billion (based on trading values in November 2018 when the peer group was selected) and companies with products in comparable stages of development to our products. We also focused on companies with multiple product candidates, as opposed to single product companies. The peer group was not selected on the basis of executive compensation levels. The peer group revisions from the 2018 peer group were intended to ensure that the peer group more accurately reflects companies that are our peers in terms of our current business model and stage of development, including the number of programs maintained by the Company and the importance of licensing to the Company’s business model.
The peer group compensation data is limited to publicly available information and therefore does not provide precise comparisons by position as offered by more comprehensive survey data. The survey data, however, can be used to provide pooled compensation data for positions closely akin to those held by each named executive officer. In addition, the pool of senior executive talent from which we draw and against which we compare ourselves extends beyond the limited community of our immediate peer group and includes a wide range of other organizations outside of our traditional competitors, which range is represented by such surveys. As a result, the compensation committee uses peer group data to analyze the overall competitiveness of our compensation with our direct publicly traded peers in the United States and our general compensation philosophy, and to determine equity award levels for the named executive officers, but also relies on industry survey data in determining actual executive compensation. For purposes of this compensation discussion and analysis, references to our “peer group” include both the peer group of companies listed above and the survey data reviewed by our compensation committee.
The compensation committee has adopted a compensation philosophy that places a greater emphasis on long-term equity incentive compensation for our named executive officers than cash compensation. As a result, the compensation committee generally sets target total cash compensation below the median of executive officers performing similar job functions at companies in our peer group to ensure a greater emphasis is placed on long-term incentives while ensuring total compensation is competitive with market. At the same time, the compensation committee emphasizes long-term equity incentive compensation by setting target equity compensation above the median of executive officers performing similar job junctions at companies in our peer group. However, we strongly believe in retaining the best talent among our senior executive management team and while we believe that comparisons to market data are a useful tool, we do not believe that it is appropriate to establish executive compensation levels based solely on a comparison to data from these companies. Therefore, the compensation committeeHuman Capital Management and Compensation Committee may approve total compensation packages for senior executive management that vary from the foregoing positioning based on several factors, including overall experiences, accumulated years of service with us, level of
In addition, the mix of compensation paid to our named executive officers is intended to ensure that total compensation reflects our overall success or failure, including our long-term stock performance, and to motivate executive officers to meet appropriate performance measures. In determining each element of compensation for any given year, our compensation committee considers and determines each element individually and then reviews the resulting total compensation and determines whether it is reasonable and competitive. We do not have a
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 31
BaseIn the fourth quarter of each year or the first quarter of the following year, the Human Capital Management and Compensation
As discussed above, we provide Committee reviews the performance of each of our named executive officers during the year under review. Generally at this time, the Human Capital Management and Compensation Committee also reviews our performance relative to the corporate performance objectives set by the board of directors for the previous year and makes the final bonus payment determinations based on our overall corporate performance and, with respect to the named executive officers other than our Chief Executive Officer, the Human Capital Management and Compensation Committee’s evaluation of each named executive officer’s performance for the year under review. In connection with this review, the Human Capital Management and Compensation Committee also reviews and adjusts, as appropriate, annual base salaries for our named executive officers and grants, as appropriate, additional equity awards to our named executive officers and certain other eligible employees.
Peer Group Selection Criteria | ||
•U.S. based, publicly-traded, commercial biopharma companies | ||
•Revenues ranging from $100 million to $500 million | ||
•Market values between $0.6 billion and $4.0 billion (based on trading values in October 2020 when the peer group was selected). Ligand’s market capitalization in October 2020 (approximately $1.536 billion), when the peer group was selected, approximated the 32nd percentile of the selected peers. | ||
•Products in comparable stages of development to our products. We also focused on companies with multiple product candidates, as opposed to single product companies. |
Agios Pharmaceuticals | Intercept Pharmaceuticals | Repligen | ||||||
Coherus BioSciences | Ironwood Pharmaceuticals | Supernus Pharmaceuticals | ||||||
Corcept Therapeutics | Nektar Therapeutics | Theravance Biopharma | ||||||
Halozyme Therapeutics | Pacira BioSciences | Ultragenyx Pharmaceuticals | ||||||
Heron Therapeutics | PTC Therapeutics | Xencor | ||||||
Innoviva | REGENXBIO |
industry experience, knowledge and qualifications;
the salary levels in effect for comparable positions within our principal industry marketplace competitors; and
internal comparability considerations.
surveys. As a result, the Human Capital Management and Compensation Committee uses peer group data to analyze the overall competitiveness of our compensation with our direct publicly traded peers in the United States and our general matter,compensation philosophy, and to determine equity award levels for the named executive officers, but also relies on industry survey data in determining actual executive compensation. As a result, for 2021, Aon also provided the Human Capital Management and Compensation Committee with data compiled from a custom cut of companies in the Aon Global Life Sciences Survey, consisting of comparable U.S. public biotechnology companies with revenues ranging from $100 million to $500 million and market capitalization between $0.6 billion and $4.0 billion as of October 2020 when the survey data was
Performance-Based Compensation
2021 were as follows:
Name | 2021 Base Salary | % Base Salary Increase (Over 2020) | ||||||
John L. Higgins | $699,000 | 4% | ||||||
Matthew W. Foehr | 520,200 | 3% | ||||||
Matthew Korenberg | 498,500 | 3% | ||||||
Charles S. Berkman | 456,300 | 3% |
The annual performance-based bonus program consists of a cash award if certain corporate performance objectives are satisfied. We set annual incentive targets so that each executive’s total target cash compensation (inclusive of base salary) approximates the 25th percentile of target total cash opportunities offered by our peer group. Under our 2019 program, the target performance bonus for the chief executive officer is 75% of base salary, 50% of base salary for Messrs. Foehrtable below and, Korenberg, and 40% of base salaryother than for Mr. Berkman. The target incentive opportunitiesBerkman, remained flat year over year for our executives for 2019.
2021 from 2020 levels. Mr. Berkman's target incentive opportunity was increased from 40% to 45% to ensure that his target incentive opportunity continues to be generally consistent with our pay positioning philosophy, as described above. Each executive’s annual bonus is tied 100% to corporate performance.
Name | 2021 Target Bonus (as a % of Base Salary) | ||||
John L. Higgins | 75% | ||||
Matthew W. Foehr | 50% | ||||
Matthew Korenberg | 50% | ||||
Charles S. Berkman | 45% |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 32
The Company goalsIn January 2021, the Human Capital Management and Compensation Committee and our board of directors approved by the compensation committeeperformance objectives for 2019 for purposes ofthe 2021 annual bonus achievement addressed sixprogram. The metrics were established after careful consideration of key areas of focus for us during 2019.
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Objective | Actual | Performance Achievement | ||||||
Finance •Revenue of •EBITDA(1) of | •Revenue of $ 277 million – 95% of target goal •EBITDA of $134 million – 101% of goal | 98% |
Licensing | •Two Icagen new contracts and one Ligand new contract completed during 2021 met the | 100% | ||||||||
OmniAb •Build computer-aided antigen design capability and position antigen library to leverage in •Acquire or build new |
•Complete at least one | •Finalized deals with •Implemented new cell screening capabilities in |
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Captisol •Expand IP footprint and •Optimize cost structure and processing efficiencies to create a more flexible future supply network | •Allowance of new process patent in U.S., new scale-up technology patent filings in U.S., Europe and Asia •Diversified network and successfully shipped commercial material out of four fully-validated facilities •Completed new optimized supply agreement with Hovione •Successfully response to substantial consortium demand in Q2 2021 and •Executed eight new license/supply agreements | 100% | ||||||
Pipeline •Manage partners and portfolio to | •Providing support for five major partners/portfolio | 100% |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
In evaluating management’s performance against our 20192021 corporate objectives in December 2019,2021, our compensation committeeHuman Capital Management and Compensation Committee assessed performance relative to the predefined goals to be approximately 95%. In general, quantitativeequal or exceed the targeted levels of performance anticipated by the board when such objectives were not established for several offirst established. In addition, our Human Capital Management and Compensation Committee considered our outstanding business achievements in 2021 as discussed above under "2021 Business Highlights." With this strong performance against the corporate objectives during 2019. Instead these performance objectives were used as a guide by the compensation committee in determining overall corporate performance as they represented those areas in which the named executive officerspre-established goals, our Human Capital Management and our employees generally were expected to focus their efforts.
The compensation committeeCompensation Committee determined to reduce the final payoutspayout annual bonuses at 100% of the executive bonuses based on its overall evaluation of our performance during the year in relation to our peers and the industry overall. As a result of the foregoing determinations, Mr. Higgins received bonus awards equal to 60% of his target award, all of our other named executive officers received bonus awards equal to 80% of their target awards.
The actual bonus awards paid to our named executive officers for 2019 are disclosed below in the table entitled “Summary Compensation Table.”
target.
Name | Base Salary | Target Bonus (as % of base salary) | Corporate Performance Achievement % | Total 2021 Annual Bonus | ||||||||||
John L. Higgins | $699,000 | 75% | 100% | $522,438 | ||||||||||
Matthew W. Foehr | 520,200 | 50% | 100% | 259,467 | ||||||||||
Matthew Korenberg | 498,500 | 50% | 100% | 248,649 | ||||||||||
Charles S. Berkman | 456,300 | 45% | 100% | 203,257 |
In accordance with our compensation philosophy, our longer-term
All equity awards are granted under our 2002 Plan.
Given the position of executive cash compensation relative to market (which is set at approximately the 25th percentile), our compensation committee has emphasized long-term equity incentive compensation to ensure total compensation is competitive. The long-term equity incentive awards granted to the named executive officers in 2019 were set at approximately the 75th percentile level of equity awards for similar positions at our peer group companies, adjusted using the above factors and taking into consideration such equivalency factors as our number of shares outstanding and market capitalization, compared to the peer group companies.
Time-based stock options granted under our 2002 Stock Incentive Plan, as amended (the “2002 Plan”), generally have a four-year vesting schedule designed to provide an incentive for continued employment. The options generally expire ten years from the date of the grant. This providesOptions have a reasonable time frame during which executive officersten-year term and other employees who receive grants can benefit from the appreciation of the Company’s shares. Thean exercise price of options granted under our 2002 Plan is equal to 100% of the fair market value of the underlying stock on the date of grant. Accordingly, optionoptions will provide a return to the executive officer only if the market price of the shares appreciates over the option term.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ●units 34
generally vest in equal installments over three years. We also grant performance-based equity awards to our named executive officers.
Since 2015, performance-based restricted
2019officer performance.
Awards
Name | Total Stock Option Target Value (40%) | Number of Stock Options Granted(1) | Total RSU Target Value (27%) | Number of RSUs Granted(2) | Total PSU Target Value (33%) | Number of PSUs Granted (at Target)(2) | ||||||||||||||
John L. Higgins | $2,600,000 | 25,113 | $1,755,000 | 12,608 | $2,145,000 | 15,410 | ||||||||||||||
Matthew W. Foehr | 1,360,000 | 13,136 | 918,000 | 6,595 | 1,122,000 | 8,060 | ||||||||||||||
Matthew Korenberg | 1,200,000 | 11,591 | 810,000 | 10,819 | 990,000 | 12,112 | ||||||||||||||
Charles S. Berkman | 720,000 | 6,955 | 486,000 | 3,491 | 594,000 | 4,267 |
The Human Capital Management and Compensation Committee selected the foregoing performance measures because they represent the key financial and operational performance metrics for which the executives are responsible as well as align with stockholders’ interests, thereby creating the clearest link between executive actions, corporate results and our continued long-term success.
TSR PERCENTILE VS. NASDAQ BIOTECHNOLOGY INDEX | % OF TARGET PAID | ||||
95th percentile | 200% | ||||
55th percentile | 100% | ||||
30th percentile | 50% | ||||
< 30th percentile | 0% |
NUMBER OF PARTNERED OMNIAB ANTIBODY PROGRAMS INITIATED | % OF TARGET PAID | ||||
>=35 | 150% | ||||
25 | 100% | ||||
15 | 50% | ||||
<15 | 0% |
With
Objective | Weighting | (0%) | Threshold (50%) | Target (100%) | Maximum (200%) | Actual Performance | Percentage Earned | ||||||||||||||||
Adjusted EPS Growth(1) | 50% | <10% | 10% | 15% | >24% | 43% | 200%(2) |
All of the equity awards granted to our named executive officers in 2019 are disclosed below in the table entitled “Grants of Plan-Based Awards in Fiscal Year 2019.”
Vesting of 2018 Performance-Based Restricted Stock Units.
In May 2018, our named executive officers were granted performance-based restricted stock units. A named executive officer may earn up to 150% of the “target” number of performance-based restricted stock units based on performance relative to the performance objectives established for these awards. The performance-based restricted stock units will vest based on objectives related to our revenue for the two year performance period commencing January 1, 2018 and ending December 31, 2019 and the projected shots-on-goal and revenue expected to be generated from acquisitions completed during the performance period commencing January 1, 2018 and ending December 31, 2020, with each such objective equally weighted (and a possible performance multiplier of 150% for “maximum” performance relative to both objective).
In December 2019, the compensation committeeCompensation Committee certified our achievement relative to the revenue objectiveobjectives for purposes of the 2018 performance-based restricted stock units.2019 PSUs following the end of the applicable two-year or three-year performance period. The threshold, target and maximum performance levels for the incremental revenue component of thethese awards were as follows: less than $229 million, 0% payout; $229 million,(which equated to 50% payout; $274 million,, 100% payout; and $319 million or greater, 150% payout. We had $372 million in revenue for purposes of the 2018 performance-based restricted stock units for the two year performance period commencing January 1, 2018 and ending December 31, 2019, resulting in a 150% payout
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 35
levels, respectively, with respectperformance between these levels determined by linear interpolation and no payout for performance below threshold), the performance achievement relative to these units.such performance levels and the actual number of 2019 PSUs that vested are set forth in the table below:
Objective | Weighting | Threshold (0%) | Target (100%) | Maximum (150%) | Actual Performance | Percentage Earned | ||||||||||||||
Incremental Revenue(1) | 50% | $10 million | $15 million | $20 million | $109 million | 150% | ||||||||||||||
New Licenses for Internally Funded Programs(2) | 50% | 0 | 2 licenses | 3 licenses | 5 licenses | 150% |
The “target” number of performance-based restricted stock units granted to the named executive officers in 2018 that remain eligible to vest based on the projected shots on goal and revenue generated from acquisitions objective are reported in the “Outstanding Equity Awards at Fiscal 2,401.
Vesting of 2017 Performance-Based Restricted Stock Units.
In January 2017, our named executive officers were granted performance-based restricted stock units. A named executive officer may earn up to 137.5% of the “target” number of performance-based restricted stock units based on performance relative to the performance objectives established for these awards. The performance-based restricted stock units will vest based on objectives related to our cash flow for the two year performance period commencing January 1, 2017 and ending December 31, 2018 and our new licensing deals during the performance period commencing April 1, 2017 and ending December 31, 2019, with each such objective equally weighted (and a possible performance multiplier of 125% for “maximum” performance relative to the cash flow objective and a possible performance multiplier of 150% for “maximum” performance relative to the new licensing deals objective).
In January 2019, the compensation committee certified our achievement relative to the cash flow objective for purposes of the 2017 performance-based restricted stock units. The threshold, target and maximum performance levels for the cash flow component of the awards were as follows: less than $195 million, 0% payout; $195 million, 75% payout; $216.6 million, 100% payout; and equal to or greater than $238.3 million, 125% payout. The compensation committee determined that our cash flow for purposes of determining the vesting of the portion of the 2017 performance-based restricted stock units eligible to vest based on our cash flow for the two year performance period commencing January 1, 2017 and ending December 31, 2018 exceeded $300.0 million, resulting in a 125% payout with respect to these units.
In December 2019, the compensation committee certified our achievement relative to the new licensing deals objective for purposes of the 2017 performance-based restricted stock units. The threshold, target and maximum performance levels for the new licensing deals component of the awards were as follows: less than 14, 0% payout; 14, 50% payout; 21, 100% payout; and greater than 28, 150% payout. We had 33 new OmniAb shots on goal transactions for purposes of the 2017 performance-based restricted stock units for the performance period commencing April 1, 2017 and ending December 31, 2019, resulting in a 150% payout with respect to these units.
All of the equity awards granted to our named executive officers and outstanding as of December 31, 2019 are disclosed below in the table entitled “Outstanding Equity Awards At Fiscal Year End.”
Other Elements of Compensation and Perquisites
2,401.
Medical Insurance.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 36
Life and Disability Insurance.We provide each named executive officer such disability and/or life insurance as the Company in its sole discretionwe may from time to time make available to itsour other executive employees of the same level of employment. We pay the premiums for this life insurance coverage for the named executive officers.
Other.
Severance and Change in Control Arrangements
•one times (two times for Mr. Higgins) the annual rate of base salary in effect for such officer at the time of involuntary termination; plus
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement
one times (two times for Mr. Higgins) the greater of: (a) the maximum target bonus for the fiscal year in which the termination occurs; or (b) the maximum target bonus for the fiscal year in which the change in control occurs, if different; plus
•twelve (twenty-four for Mr. Higgins) multiplied by the monthly premium the executive would be required to pay for continued health coverage for himself or herself and his or her eligible dependents.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 38
Under the terms of the severance plan, a named executive officer will be eligible to receive (1) a lump sum payment in cash for his fully earned but unpaid base salary and accrued but unused vacation through the date of termination, (2) an amount equal to his base salary for the severance period, which period will be equal to (a) two months plus (b) one week for each year of service as of the date of termination and (c) continued health coverage at the same cost as was in effect for the named executive officer at the date of termination throughout such severance period, provided that such named executive officer elects continued coverage under COBRA. The foregoing cash severance benefit will be payable in a lump sum following the officer’s termination of employment, subject to the officer’s execution of a general release of claims acceptable to us.
•a merger, consolidation or reorganization of the Companyour company in which 50% or more of itsour voting securities change ownership;
•a change in control of the Companyour company effected through a successful tender offer for more than 50% of the Company’sour outstanding common stock or through a change in the majority of our board of directors as a result of one or more contested elections for board membership.
2023.
additional vesting provisions that will apply in the event of a change in control. In the event a change in control had occurred prior to December 31, 2019,2021, the number of performance-based restricted stock unitsPSUs in which a named executive would have been eligible to vest under each performance-based restricted stock unitPSU would have
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 39
been set at the “target” number of restricted stock units, which “target” restricted stock unitsPSUs would have continued to be eligible to vest based solely on the participant’s continued employment or service, with 50% of such “target” unitsPSUs vesting on December 31, 20192021 and 50% of such “target” unitsPSUs vesting on December 31, 2020.2022. In the event of a change in control after December 31, 20192021 but prior to December 31, 2020,2022, the remaining number of restricted stock unitsPSUs in which a participant will be eligible to vest under each performance-based restricted stock unitPSU will be set at 50% of the “target” number of restricted stock units,PSUs, which “target” restricted stock unitsPSUs will continue to be eligible to vest based solely on the participant’s continued employment or service through December 31, 2020.
Policies Regarding Tax Deductibility2022.
Committee. Based on these assessments, management recommended, and the Human Capital Management and Compensation Committee concluded, that none of our compensation policies or programs create risks that are reasonably likely to have a material adverse effect on us. In connection with their review, management and the Human Capital Management and Compensation Committee noted certain key attributes of our compensation policies and programs that help to reduce the likelihood of excessive risk taking, including:
Risk Assessment
In January 2020, management and Radford assessed our compensation policies and programs for all employees for purposes of determining the relationship of such policies and programs and the enterprise risks faced by the Company and presented its assessment to our compensation committee. Based on these assessments, management recommended, and the compensation committee concluded, that none of our compensation policies or programs create risks that are reasonably likely to have a material adverse effect on the Company. In connection with their review, management and the compensation committee noted certain key attributes of our compensation policies and programs that help to reduce the likelihood of excessive risk taking, including:
The program design provides a balanced mix of cash and equity compensation, fixed and variable compensation and annual and long-term incentives.
Corporate performance objectives are designed to be consistent with our overall business plan and strategy, as approved by the board of directors.
Our equity awards generally vest over multi-year periods.
The compensation committeeforegoing report has been furnished by the right to exercise negative discretion over executive annual incentive plan payments.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 40
Name and Principal Position | Year | Salary | Stock Awards(1) | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | |||||||||||||||||||||||||||||||||||||
John L. Higgins | 2021 | $696,583 | $6,016,298 | $2,344,512 | $522,438 | $7,380 | $9,587,211 | |||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2020 | 668,333 | 2,277,460 | 2,389,544 | 501,250 | 6,180 | 5,842,767 | |||||||||||||||||||||||||||||||||||||
2019 | 648,192 | 2,933,389 | 2,891,109 | 291,686 | 6,000 | 6,770,376 | ||||||||||||||||||||||||||||||||||||||
Matthew W. Foehr | 2021 | 518,933 | 3,146,844 | 1,226,357 | 259,467 | 130,603 | 5,282,204 | |||||||||||||||||||||||||||||||||||||
President and Chief Operating Officer | 2020 | 503,750 | 1,242,269 | 1,303,366 | 277,063 | 158,001(4) | 3,484,449 | |||||||||||||||||||||||||||||||||||||
2019 | 487,500 | 1,711,163 | 1,686,480 | 195,000 | 164,766(5) | 4,244,909 | ||||||||||||||||||||||||||||||||||||||
Matthew Korenberg | 2021 | 497,297 | 4,890,114 | 1,082,118 | 248,649 | 7,300 | 6,725,479 | |||||||||||||||||||||||||||||||||||||
Executive Vice President, Finance and Chief Financial Officer | 2020 | 482,833 | 1,150,224 | 1,206,821 | 265,558 | 5,700 | 3,111,136 | |||||||||||||||||||||||||||||||||||||
2019 | 466,667 | 1,466,580 | 1,445,555 | 186,667 | 5,734 | 3,571,203 | ||||||||||||||||||||||||||||||||||||||
Charles S. Berkman | 2021 | 451,682 | 1,665,811 | 649,308 | 203,257 | 10,890 | 2,980,948 | |||||||||||||||||||||||||||||||||||||
Senior Vice President and General Counsel | 2020 | 441,917 | 644,168 | 675,820 | 176,767 | 6,180 | 1,944,852 | |||||||||||||||||||||||||||||||||||||
2019 | 427,620 | 733,290 | 722,777 | 136,933 | 6,547 | 2,027,167 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total | ||||||||||||||||||||||||
John L. Higgins, | 2019 | 648,192 | - | 2,933,389 | 2,891,109 | 291,686 | 6,000 | 6,770,376 | ||||||||||||||||||||||||
Chief Executive Officer | 2018 | 627,413 | - | 2,779,081 | 2,376,729 | 517,615 | 5,965 | 6,306,803 | ||||||||||||||||||||||||
2017 | 611,656 | 30,000(2) | 2,111,154 | 2,202,412 | 550,491 | 7,494 | 5,513,207 | |||||||||||||||||||||||||
Matthew W. Foehr, | 2019 | 487,500 | - | 1,711,163 | 1,686,480 | 195,000 | 164,766(4) | 4,244,909 | ||||||||||||||||||||||||
President and Chief Operating Officer | 2018 | 458,931 | - | 1,361,147 | 1,164,133 | 252,412 | 87,517(5) | 3,324,140 | ||||||||||||||||||||||||
2017 | 442,094 | 30,000(2) | 1,387,985 | 1,280,493 | 265,256 | 52,675(6) | 3,458,503 | |||||||||||||||||||||||||
Matthew Korenberg, | 2019 | 466,667 | - | 1,466,580 | 1,445,555 | 186,667 | 5,734 | 3,571,203 | ||||||||||||||||||||||||
Executive Vice President, Finance and Chief Financial Officer | 2018 | 428,438 | - | 1,077,560 | 921,591 | 235,641 | 5,400 | 2,668,630 | ||||||||||||||||||||||||
2017 | 403,438 | 30,000(2) | 736,550 | 768,266 | 242,063 | 5,400 | 2,185,717 | |||||||||||||||||||||||||
Charles S. Berkman, | 2019 | 427,620 | - | 733,290 | 722,777 | 136,933 | 6,547 | 2,027,167 | ||||||||||||||||||||||||
Senior Vice President and General Counsel | 2018 | 402,500 | - | 623,961 | 533,547 | 177,100 | 6,471 | 1,743,579 | ||||||||||||||||||||||||
2017 | 362,812 | - | 466,461 | 486,593 | 174,150 | 8,803 | 1,498,819 |
With respect to the PSUs granted in 2020, the number of PSUs that are eligible to vest will be determined based on the measurement of two equally weighted metrics, the compound annual growth rate for our adjusted EPS over a two-year performance period and our relative TSR ranked on a percentile basis against the NASDAQ Biotechnology Index over a three-year performance period measured from January 1, 2020. The grant date fair value of the PSUs granted during 2020 included in this column that are tied to the compound annual growth rate for our adjusted EPS was calculated based on the probable achievement of the performance goals as determined at the date of grant, which was determined to be the target level of performance. The grant date fair value of the PSUs that are tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the NASDAQ Biotechnology Index. For the PSUs granted during 2020, such inputs consisted of: (a) an expected term that was based on the actual 2.81 year term of the award; (b) a risk-free interest rate of 0.4% derived from the yield on U.S. government bonds of appropriate term from the U.S. Department of Treasury; (c) a dividend yield of 0.0% based on historic and future dividend yield estimates; (d) stock price volatility of 39.75% based on an analysis of the historical stock price volatility of |
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Ligand Pharmaceuticals Incorporatedand each company in the NASDAQ Biotechnology Index over the three years prior to the date of grant to conform to the term of the awards; and (e) initial TSR performance of -11.48% based on actual historical TSR performance for Ligand and each company in the NASDAQ Biotechnology Index. Based on this methodology, the valuation of the PSUs tied to relative TSR performance granted during 2020 Special Meeting Proxy Statement ● 41
Grantswas 52.81% of Plan-Based Awardsthe closing price of our common stock on the date of grant. The highest level of performance that may be achieved for the PSUs is 200% of the target. The full grant date fair value of the PSUs awarded to our named executive officers during fiscal year 2020, assuming maximum achievement of the applicable performance objectives is as follows: Mr. Higgins $1,924,273, Mr. Foehr $1,049,603, Mr. Korenberg $971,834, and Mr. Berkman $544,291.
performance bonus awards earned in 2019 were also paid in 2019.
Name | Grant Date | Date of Board Action approving Award | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Stock Awards: Number Shares Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | ||||||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||
John L. Higgins | 1/23/19 | 1/23/19 | — | 487,500 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
5/29/19 | 5/29/19 | — | — | — | 6,405 | 12,809 | 19,214 | — | — | — | 1,422,311 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | 12,809 | — | — | 1,511,078 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | — | 58,596 | 117.97 | 2,891,109 | |||||||||||||||||||||||||||||||||||||
Matthew W. Foehr | 1/23/19 | 1/23/19 | — | 245,000 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
5/29/19 | 5/29/19 | — | — | — | 3,736 | 7,472 | 11,208 | — | — | — | 829,691 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | 7,472 | — | — | 881,472 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | — | 34,181 | 117.97 | 1,686,480 | |||||||||||||||||||||||||||||||||||||
Matthew Korenberg | 1/23/19 | 1/23/19 | — | 235,000 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
5/29/19 | 5/29/19 | — | — | — | 3,202 | 6,404 | 9,606 | — | — | — | 711,100 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | 6,404 | — | — | 755,480 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | — | 29,298 | 117.97 | 1,445,555 | |||||||||||||||||||||||||||||||||||||
Charles S. Berkman | 1/23/19 | 1/23/19 | — | 172,000 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
5/29/19 | 5/29/19 | — | — | — | 1,601 | 3,202 | 4,803 | — | — | — | 355,550 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | 3,202 | — | — | 377,740 | |||||||||||||||||||||||||||||||||||||
2/11/19 | 2/11/19 | — | — | — | — | — | — | — | 14,649 | 117.97 | 722,777 |
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(1) Represents the target cash bonus awards granted under our annual performance bonus program. Actual bonus amounts paid are reflected in the Summary Compensation Table above. 67 (2) The PSUs will vest based on objectives related to the number of OmniAb antibody programs initiated for the two year performance period commencing January 1, 2021 and ending December 31, 2022 and our relative TSR for the three year performance period commencing January 1, 2021 and ending December 31, 2023, with each such objective equally weighted. Threshold performance levels, below which no vesting will be awarded, were also established for each performance objective. For a description of the change in control provisions applicable to the foregoing equity award, see “Severance and Change in Control Arrangements” above. (3) The RSU awards granted to the named executive officers vest in equal installments over a three year period on each of February 15, 2022, 2023 and 2024. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (4) Each option grant to the named executive officers vests 12.5% on July 25, 2021 and the remainder in 42 equal monthly installments. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (5) Represents the fair value of the stock option or stock award |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 42
Outstanding Equity Awards at Fiscal the time of grant as determined in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the value of stock and option awards are set forth under Note 9 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 28, 2022. With respect to awards, the vesting of which is performance-based, the grant date fair value is based on the estimated probable outcome of the performance objectives applicable to such awards on the grant date. The grant date fair value of the PSUs that are tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the NASDAQ Biotechnology Index. See additional disclosure in footnote (1) under the “Summary Compensation Table” above.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Unit or Other Rights That Have Not Vested (#) | Equity incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | |||||||||||||||||||||||||||||||
John L. Higgins | 48,125 | — | — | 9.96 | 2/14/2020 | — | — | — | — | |||||||||||||||||||||||||||||||
94,657 | — | — | 10.05 | 2/16/2021 | — | — | — | — | ||||||||||||||||||||||||||||||||
144,666 | — | — | 14.47 | 2/8/2022 | — | — | — | — | ||||||||||||||||||||||||||||||||
95,616 | — | — | 21.92 | 2/15/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||
14,334 | — | — | 32.00 | 6/3/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||
95,000 | — | — | 74.42 | 2/11/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||
56,198 | — | — | 56.26 | 2/10/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||
53,083 | 2,308 | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||
30,916 | 12,730 | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||
18,109 | 23,283 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||
12,208 | 46,388 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 21,502 | (4) | 2,242,444 | — | — | |||||||||||||||||||||||||||||||
— | — | 3,964 | (5) | 413,406 | ||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 12,809 | (6) | 1,335,851 | |||||||||||||||||||||||||||||||
Matthew W. Foehr | 21,675 | — | — | 14.47 | 2/8/2022 | — | — | — | — | |||||||||||||||||||||||||||||||
68,827 | — | — | 21.92 | 2/15/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||
65,000 | — | — | 74.42 | 2/11/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||
42,113 | — | — | 56.26 | 2/10/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||
25,952 | 1,128 | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||
17,975 | 7,401 | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||
8,870 | 11,404 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||
7,121 | 27,060 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 12,574 | (7) | 1,311,342 | — | — | |||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 1,941 | (5) | 202,427 | |||||||||||||||||||||||||||||||
— | — | 7,472 | (6) | 779,255 | ||||||||||||||||||||||||||||||||||||
Matthew Korenberg | 25,000 | — | — | 104.59 | 8/5/2025 | — | — | — | — | |||||||||||||||||||||||||||||||
6,155 | 769 | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||
10,785 | 4,440 | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||
7,022 | 9,028 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||
6,104 | 23,194 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 9,642 | (8) | 1,005,564 | — | — | |||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 1,537 | (5) | 160,294 | |||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 6,404 | (6) | 667,873 | |||||||||||||||||||||||||||||||
Charles S. Berkman | 1,948 | — | — | 56.26 | 2/10/2025 | — | — | — | — | |||||||||||||||||||||||||||||||
3,717 | 436 | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||
4,018 | 2,812 | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||
4,066 | 5,226 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||
3,053 | 11,596 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||
— | — | — | — | — | 5,141 | (9) | 536,155 | — | — | |||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 890 | (5) | 92,818 | |||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 3,202 | (6) | 333,937 |
Ligand Pharmaceuticals Incorporated
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Unit or Other Rights That Have Not Vested (#) | Equity incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | |||||||||||||||||||||||||||||||||||||||||||||||
John L. Higgins | 65,616 | — | — | 21.92 | 2/15/2023 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
14,334 | — | — | 32.00 | 6/3/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
93,627 | — | — | 74.42 | 2/11/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
54,421 | — | — | 56.26 | 2/10/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
54,226 | — | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
43,646 | — | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
38,805 | 2,587 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
41,506 | 17,090 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
27,906 | 32,980 | — | 95.68 | 2/13/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
5,233 | 19,880 | — | 177.50 | 2/3/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 25,916(4) | 4,002 985 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 13,559(5) | 2,094,323 | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 15,410(6) | 2,380,229 | ||||||||||||||||||||||||||||||||||||||||||||||||
Matthew W. Foehr | 63,210 | — | — | 74.42 | 2/11/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
40,358 | — | — | 56.26 | 2/10/2025 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
25,938 | — | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
24,348 | — | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
19,007 | 1,267 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
24,212 | 9,969 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
15,222 | 17,988 | — | 95.68 | 2/13/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
2,737 | 10,399 | — | 177.50 | 2/3/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 14,015(7) | 2,164,757 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 7,396(5) | 1,142,386 | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 8,060(6) | 1,244,948 | ||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Korenberg | 25,000 | — | — | 104.59 | 8/5/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
6,924 | — | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
15,225 | — | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
15,047 | 1,003 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
13,429 | 8,545 | — | 117.97 | 2/11/2029 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
14,094 | 16,656 | — | 95.68 | 2/13/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
2,415 | 9,176 | — | 177.50 | 2/3/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 17,518 (8) | 2,705,830 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 6,848(5) | 1,057,742 | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 12,112(6) | 1,870,820 | ||||||||||||||||||||||||||||||||||||||||||||||||
Charles S. Berkman | 1,948 | — | — | 56.26 | 2/10/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
4,153 | — | — | 85.79 | 2/11/2026 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
6,830 | — | — | 100.38 | 2/24/2027 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
8,711 | 581 | — | 159.01 | 3/2/2028 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
10,377 | 4,272 | — | 117.97 | 2/11/2029 | — | — | — | — |
7,893 | 9,327 | — | 95.68 | 2/13/2030 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
1,450 | 5,505 | — | 177.50 | 2/3/2031 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | 7,114 (9) | 1,098,828 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 3,835(5) | 592,354 | ||||||||||||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 4,267(6) | 659,081 |
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Represents the “target” number of PSUs granted to the named executive officer in 2020. The performance-based restricted stock unitsPSUs granted in 2018 were eligible to2020 will vest based on objectives related to the Company’s revenuecompound annual growth rate of our adjusted EPS growth for the two year performance period commencing January 1, 20182020 and ending December 31, 20192021 and projected shots on goal and revenue generated from acquisitions completed duringCompany's relative TSR for the three year performance period commencing January 1, 20182020 and ending December 31, 2020,2022, with each such objective equally weighted (and a possible performance multiplier of 150%200% for “maximum” performance relative to both objectives)EPS growth objective).
Threshold performance levels, below which no vesting will be awarded, were also established for each performance objective.
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Ligand Pharmaceuticals Incorporated1,917.
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Option ExercisesThe table above reflects the remaining unvested RSUs from the following grants of RSUs to Mr. Korenberg: 2,134 unvested RSUs granted February 11, 2019, and Stock Vested During Fiscal Year4,565 unvested RSUs granted on February 13, 2020, and 10,819 unvested RSUs granted on February 3, 2021. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above.
and 2,556 unvested RSUs granted on February 13, 2020, and 3,491 unvested RSUs granted on February 3, 2021. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above.
Option Awards | Stock Awards | |||||||||||||||||||
Name | No. of Shares Acquired on Exercise (#) | Value Realized Upon Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | ||||||||||||||||
John L. Higgins | 33,790 | 4,049,056 | 37,181 | 4,165,716 | ||||||||||||||||
Matthew W. Foehr | 19,067 | — | 20,335 | 2,281,258 | ||||||||||||||||
Matthew Korenberg | — | — | 13,131 | 1,470,174 | ||||||||||||||||
Charles S. Berkman | 3,943 | — | 7,888 | 882,693 |
(1) The value realized upon exercise of stock options reflects the price at which shares acquired upon exercise of the stock options were sold |
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Potential Payments Upon Termination or Change in Control
valued for income tax purposes, net of the exercise price for acquiring the shares.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 45
price of our common stock as reported on the Nasdaq Global Market on December 31, 2019,2021, the last trading day of 2019.2021. All cash severance benefits will be paid in a lump sum.
Name |
| Benefit | Termination Without Cause; No Change of Control ($) | Change of Control; No Termination ($)(1) | Termination Without | |||||||||||
John L. Higgins | Salary | 270,833 | — | 1,300,000 | ||||||||||||
Bonus | — | — | 975,000 | |||||||||||||
Option acceleration | — | 92,472 | 92,472 | |||||||||||||
Stock Award acceleration | — | 3,991,700 | 3,991,700 | |||||||||||||
Benefits continuation | 15,976 | — | 76,686 | |||||||||||||
Total value: | 286,809 | 4,084,172 | 6,435,858 | |||||||||||||
Matthew W. Foehr | Salary | 166,474 | — | 490,000 | ||||||||||||
Bonus | — | — | 245,000 | |||||||||||||
Option acceleration | — | 49,806 | 49,806 | |||||||||||||
Stock Award acceleration | — | 2,293,024 | 2,293,024 | |||||||||||||
Benefits continuation | 12,781 | — | 38,343 | |||||||||||||
Total value: | 179,255 | 2,342,830 | 3,116,173 | |||||||||||||
Matthew Korenberg | Salary | 123,526 | — | 470,000 | ||||||||||||
Bonus | — | — | 235,000 | |||||||||||||
Option acceleration | — | 31,587 | 31,587 | |||||||||||||
Stock Award acceleration | — | 1,833,731 | 1,833,731 | |||||||||||||
Benefits continuation | 12,781 | — | 38,343 | |||||||||||||
Total value: | 136,307 | 1,865,318 | 2,608,661 | |||||||||||||
Charles S. Berkman | Salary | 220,513 | — | 430,000 | ||||||||||||
Bonus | — | — | 172,000 | |||||||||||||
Option acceleration | — | 19,061 | 19,061 | |||||||||||||
Stock Award acceleration | — | 962,910 | 962,910 | |||||||||||||
Benefits continuation | 19,171 | — | 38,343 | |||||||||||||
Total value: | 239,684 | 981,971 | 1,622,314 |
71
(1) The 2002 Plan provides that options or RSUs will vest |
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Compensation of Directors
The following table provides information related to the compensation of each of our non-employee directors for fiscal 2019.
Name | Cash Fees ($) | Stock Awards ($)(9) | Option Awards ($)(9) | Total ($) | ||||||||||||
Jason M. Aryeh(1) | 67,527 | 94,848 | 190,025 | 352,400 | ||||||||||||
Todd Davis(2) | 65,027 | 94,848 | 190,025 | 349,900 | ||||||||||||
Nancy Gray(3) | 60,027 | 94,848 | 190,025 | 344,900 | ||||||||||||
John W. Kozarich(4) | 85,027 | 94,848 | 190,025 | 369,900 | ||||||||||||
Sunil Patel(5) | 60,027 | 94,848 | 190,025 | 344,900 | ||||||||||||
Stephen L. Sabba(6) | 75,027 | 94,848 | 190,025 | 359,900 | ||||||||||||
John L. LaMattina(7) | 57,527 | 94,848 | 190,025 | 342,400 | ||||||||||||
Sarah Boyce(8) | 33,354 | 154,276 | 270,103 | 457,733 |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 46
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Narrative to Director Compensation Table
Non-employee members of our board of directors are paid fees for their service as a director and are reimbursed for expenses incurred in connection with such service.
Under our director compensation policy in effect during 2019, each director was eligible to receive an annual retainer of $50,000. No meeting fees are paid. In addition, the chairperson of the board will received an additional annual retainer of $30,000, the chairperson of the audit committee received an additional annual retainer fee of $20,000, the chairperson of the compensation committee received an additional annual retainer of $15,000 and the chairperson of the nominating and corporate governance committees received an additional annual retainer fee of $10,000. Members of the audit committee received an additional annual retainer of $10,000, members of the compensation committee received an additional annual retainer of $7,500 and members of the nominating and corporate governance committee received an additional annual retainer of $5,000. Directors may elect to receive their retainers in cash or vested shares of our common stock, which shares are issued under our 2002 Plan.
At the 2019 annual meeting, non-employee directors were automatically granted (i) that number of restricted stock units determined by dividing (a) $95,000, by (b) the average closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 30-calendar day period prior to the date of grant, and (ii) that number of stock options having a value of $190,000, calculated on the grant date in accordance with the Black-Scholes option pricing model (utilizing the same assumptions that the Company utilizes in preparation of its financial statements). In April 2020, the board revised the non-employee director compensation policy such that beginning with the 2020 annual meeting, non-employee directors will automatically be granted (i) that number of restricted stock units determined by dividing (a) $85,000, by (b) the average closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 60-calendar day period prior to the date of grant, and
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 47
(ii) that number of stock options having a value of $175,000, calculated on the grant date in accordance with the Black-Scholes option pricing model (utilizing the same assumptions that the Company utilizes in preparation of its financial statements). The foregoing awards will vest in full on the earlier of (i) the date of the annual meeting of the Company’s stockholders next following the grant date, and (ii) on the first anniversary of the date of grant.
Upon initial election to the board of directors, each non-employee director will automatically be granted (i) that number of restricted stock units determined by dividing (a) $145,000, by (b) the average closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 30-calendar day period prior to the date of grant, and (ii) that number of stock options having a value of $280,000, calculated on the grant date in accordance with the Black-Scholes option pricing model (utilizing the same assumptions that the Company utilizes in preparation of its financial statements). The foregoing awards will vest in three equal annual installments on each of the first three anniversaries following the date of grant.
All awards will vest in full in the event of a change in control and the options or RSUs are not assumed or replaced by a hostile take-over,successor. This disclosure assumes that the successor does not assume or replace the options or RSUs. For purposes of calculating the values in the table above, PSUs are included at “target” performance levels.
Non-Employee Director Ownership Guidelines. In addition,named executive officers provide that all of a named executive officer’s outstanding stock awards will vest in the director compensation policy containsevent of an ownership guideline so that membersinvoluntary termination. For purposes of calculating the boardvalues in the table above, PSUs are included at “target” performance levels.
In August 2015, pursuant to a mandateby Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act the SEC adopted a rule requiring annual disclosureand Item 402(u) of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer. WeRegulation S-K, we are providing the following information regarding the relationship of the annual total compensation of our median compensated employee to comply with Item 402(u)the annual total compensation of John L. Higgins, our CEO:
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 48
Human Capital Management and Compensation Committee |
Relationships and Independence of the Compensation Committee Members
During fiscal 2019, the compensation committee was composed of Messrs. Aryeh and Davis, Dr. LaMattina and Dr. LaMattina.Ms. Sarah Boyce. No executive officer of our company served on the board of directors or compensation committee of any entity which has one or more executive officers serving as members of our board of directors or compensation committee.
(a) Number of securities issued upon exercises of outstanding options, warrants and rights | (b) Weighted- average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) | ||||||||||||||||||
Equity compensation plans approved by security holders | 1,454,726 | (1) | 61.82 | 980,340 | (2) | |||||||||||||||
Equity compensation plans not approved by security holders(3) | — | — | — | |||||||||||||||||
1,454,726 | (1) | 61.82 | 980,340 | (2) |
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(a) Number of securities to be issued upon exercises of outstanding options, warrants and | (b) Weighted-average exercise price of outstanding |
options, warrants and rights |
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Equity compensation | 1,391,952(1) | $98.16 | 749,115(2) | ||||||||
Equity compensation plans not approved by |
— | — | — | |||||||||
$98.16 | 749,115(2) |
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 49
and proxy must also do so by December 25, 2020. All such proposals must comply with all applicable requirements of Rule 14a-8.
In addition, our amended and restated bylaws establish an advance notice procedure with regard to certain matters, including stockholder proposals and nominations of any person for election to our Board not included in our proxy statement, to be brought before an annual meeting of stockholders. In general, notice that meets the requirements set forth in our amended and restated bylaws must be received at our principal executive offices not less than 90 calendar days nor more than 120 calendar days prior to the first anniversary of the preceding year’s annual meeting. Therefore, to be presented at our 2021 annual meeting of stockholders, such a proposal must be received by us no earlier than February 10, 2021 and no later than March 12, 2021. However, if the date of the annual meeting is more than 30 days before or more than 60 calendar days after such anniversary date, notice must be received not later than the 90th calendar day prior to such annual meeting or, if later, the 10th day following the day on which public disclosure of the date of such annual meeting was first made. If the stockholder fails to give notice by these dates, then the persons named as proxies in the proxies solicited by the Board for the 2021 annual meeting may exercise discretionary voting power regarding any such proposal.
23, 2022. Stockholders are advised to review our amended and restated bylaws, which contain additional requirements with respect to the form and content of the advance notice of stockholder proposals and director nominations.
Our current amended and restated bylaws are available at the SEC’s website, www.sec.gov, or upon written request to our Corporate Secretary at the address listed below. Stockholder proposals and director nominations should be directed to Corporate Secretary, Ligand Pharmaceuticals Incorporated, 3911 Sorrento Valley Boulevard,5980 Horton Street, Suite 110, San Diego405, Emeryville, CA 92121.
94608. In addition to satisfying the foregoing requirements under our amended and restated bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 11, 2023, which is 60 days prior to the one-year anniversary of the date of the 2022 annual meeting.
Ligand Pharmaceuticals Incorporated 2020 Special Meeting Proxy Statement ● 50
of the documents was delivered and who wishes to receive a separate copy of the documents can request a copy of the documents by sending a written request to our Corporate Secretary, Ligand Pharmaceuticals Incorporated, 3911 Sorrento Valley Boulevard,5980 Horton Street, Suite 110, San Diego,405, Emeryville, CA 92121,94608, or contact our Corporate Secretary at (858) 550-7500. Also, if you no longer wish to participate in “householding” and would prefer to receive a separate proxy statement and annual report in the future, please notify your broker or direct your written request to Corporate Secretary, Ligand Pharmaceuticals Incorporated, 3911 Sorrento Valley Boulevard,5980 Horton Street, Suite 110, San Diego,405, Emeryville, CA 92121,94608, or contact our Corporate Secretary at (858) 550-7500. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request “householding” of their communications should contact their broker.
By Order of the Board of Directors, | ||
/s/ CHARLES S. BERKMAN | ||
Charles S. Berkman | ||
Senior Vice President, General Counsel & Secretary |
November , 2020
JUNE 10, 2022)
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status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times when each option is to become exercisable, the vesting schedule (if any) applicable to the option shares, the maximum term for which the option is to remain outstanding and such other terms and conditions of such option as the Plan Administrator determines are appropriate, (ii) with respect to stock issuances under the Stock Issuance Program, which eligible persons are to receive such issuances, the time or times when the issuances are to be made, the number of shares to be issued to each Participant, the vesting schedule (if any) applicable to the issued shares, the purchase price, if any, and consideration for such shares and such other terms and conditions of such issued shares as the Plan Administrator determines are appropriate, and (iii) with respect to other Awards under the Other Stock Awards Program, which eligible persons are to receive such Awards, the type of Award, the time or times when the issuances are to be made, the number of shares subject to such Award to be issued to each Participant, the vesting schedule (if any) applicable to the Awards, the consideration for such Awards and such other terms and conditions of such Awards as the Plan Administrator determines are appropriate.
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payment of the exercise price of an option; (ii) shares of Common Stock tendered by the Optionee or Participant or withheld by the Corporation to satisfy any tax withholding obligation with respect to an option or stock appreciation right; (iii) shares of Common Stock subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on exercise thereof; and (iv) shares of Common Stock purchased on the open market with the cash proceeds from the exercise of options.Shares of Common Stock tendered by the Participant or withheld by the Corporation to satisfy any tax withholding obligation with respect to a Full Value Award shall be available for future grants of Awards under the Plan in an amount corresponding to the reduction in the share reserve previously made in accordance with Section V.A. above; provided, however, that, notwithstanding the foregoing, in the event shares subject to a Full Value Award are delivered by a Participant or withheld by the Company to satisfy any Withholding Taxes at a tax withholding rate in excess of the minimum statutory withholding rates, such shares tendered or withheld to satisfy the Withholding Taxes at a rate in excess of the minimum statutory withholding rates shall not be available for future grants of Awards under the Plan and shall continue to be counted against the share reserve in an amount corresponding to the reduction in the share reserve previously made in accordance with Section V.A. above.
appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Optionee’s or Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Plan Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:
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below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options.
proprietary interest in the option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. Notwithstanding the foregoing, the Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under this Article Two, and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee’s death.
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subsequent payout of that spread in accordance with the same exercise/vesting schedule applicable to those option shares or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant.
shall immediately terminate with respect to any shares held by the Optionee at the time of such Involuntary Termination, and the shares subject to those terminated repurchase rights shall accordingly vest in full at that time.
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Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of that Hostile Take-Over.
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Award is exercised, vests or expires, as determined by the Plan Administrator.Such dividend equivalents shall be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Plan Administrator.Notwithstanding anything to the contrary, dividends or dividend equivalents with respect to an Award that is subject to vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out to the extent that the vesting conditions are subsequently satisfied and the Award vests. In addition, notwithstanding anything to the contrary, no dividend equivalents shall be payable with respect to options or stock appreciation rights.
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discretion
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effective date of that Change in Control, become vested and exercisable and/or payable with respect to all the shares of Common Stock at the time subject to such Award and may be exercised or paid for any or all of those shares as fully vested shares of Common Stock. However, an outstanding Award shall NOT become vested and exercisable and/or payable on such an accelerated basis if and to the extent: (i) such Award is to be assumed by the successor corporation (or parent thereof) or is otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction or (ii) such Award is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing at the time of the Change in Control on any shares for which the Award is not otherwise at that time vested, exercisable or payable and provides for subsequent payout of that spread in accordance with the same exercise/vesting/payment schedule applicable to those Award shares or (iii) the acceleration of such Award is subject to other limitations imposed by the Plan Administrator at the time of the Award grant.
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rights and obligations with respect to Awards at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws or regulations.Except as permitted by Article One, Section V, Article Two, Section III or Article Four, Section V in connection with a transaction specified in Article One, Section V.D or V.E (including, without limitation, any Change in Control, Hostile Take-Over, stock dividend, stock split, extraordinary cash dividend, recapitalization, combination of shares or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or stock appreciation rights or cancel, exchange, substitute, buyout or surrender outstanding Options or stock appreciation rights in exchange for cash, other Awards or Options or stock appreciation rights with an exercise price that is less than the exercise price of the original Options or stock appreciation rights without stockholder approval.
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granted to non-employee Board members, Permanent Disability or Permanently Disabled shall mean the inability of the non-employee Board member to perform his or her usual duties as a Board member by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.
June 10, 2022.
the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
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q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
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The Special Meeting of Stockholders of Ligand Pharmaceuticals Incorporated will be held on
Tuesday, December 15, 2020 at 8:30 a.m. Pacific Time, virtually via the internet at www.meetingcenter.io/290257542.
To access the virtual meeting, you must have the information that is printed in the shaded bar
located on the reverse side of this form.
The password for this meeting is – LGND2020.
Important notice regarding the Internet availability of proxy materials for the Special Meeting of Shareholders.
The material is available at: www.envisionreports.com/LGND2
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Notice of Special Meeting of Stockholders
Proxy Solicited by Board of Directors for Special Meeting – December 15, 2020
The undersigned hereby appoints John L. Higgins and Charles S. Berkman, as proxies, jointly and severally, with full power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Special Meeting of Stockholders of Ligand Pharmaceuticals Incorporated to be held on December 15, 2020 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR items 1 and 2.
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.
(Items to be voted appear on reverse side)
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