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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Arena Pharmaceuticals Inc | NASDAQ:ARNA | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 99.99 | 99.00 | 99.99 | 0 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Arena Pharmaceuticals, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notice of Annual Meeting
of Stockholders |
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Date:
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June 12, 2020
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Place:
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6154 Nancy Ridge Drive
San Diego, CA 92121 |
April 29, 2020
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By Telephone
By Internet By Mail By Scanning |
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To the Stockholders of Arena Pharmaceuticals, Inc.:
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The 2020 Annual Meeting of Stockholders of Arena Pharmaceuticals, Inc., a Delaware corporation, will be held on Friday, June 12, 2020, at 9:00 a.m. (Pacific Time), at our offices located at 6154 Nancy Ridge Drive, San Diego, California 92121, for the following purposes, which are more fully described in the proxy statement accompanying this notice:
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1.
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To elect the eight nominees for director named herein to our Board of Directors to serve until the next annual meeting of stockholders and until their respective successors are elected and qualified or until their earlier resignation or removal (Proposal 1);
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2.
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To approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the proxy statement accompanying this notice (Proposal 2);
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3.
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To approve an amendment to our Amended and Restated Certificate of Incorporation to effect an increase in the total number of authorized shares of our common stock (Proposal 3);
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4.
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To approve the Arena Pharmaceuticals, Inc. 2020 Long-Term Incentive Plan (Proposal 4);
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5.
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To ratify the appointment of KPMG LLP, an independent registered public accounting firm, as our independent auditors for the fiscal year ending December 31, 2020 (Proposal 5); and
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6.
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To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
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The record date for the 2020 Annual Meeting is April 20, 2020. Only stockholders of record at the close of business on April 20, 2020, are entitled to notice of and to vote at the Annual Meeting and at any adjournment or postponement thereof.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Stockholders to Be Held on June 12, 2020, at 9:00 a.m. (Pacific Time) at 6154 Nancy Ridge Drive, San Diego, California 92121. The proxy statement and annual report to stockholders are available on our investor relations home page of our website at http://invest.arenapharm.com/. |
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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Proposals
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Required
Approval |
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Board
Recommendation |
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Page
Reference |
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1.
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Election of Directors
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Majority of votes cast
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For each nominee
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Page 2
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2.
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Advisory Approval of Executive Compensation
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Majority of votes cast
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For
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Page 16
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3.
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Increase in Number of Authorized Shares of Common Stock
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Majority of shares outstanding
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For
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Page 42
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4.
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Approval of the 2020 Long-Term Incentive Plan
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Majority of votes cast
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For
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Page 44
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5.
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Ratification of Independent Auditors
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Majority of votes cast
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For
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Page 55
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2020 PROXY STATEMENT
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1
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Name
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Positions and
Offices Held |
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Year First
Elected or Appointed Director |
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Age
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Tina S. Nova, Ph.D.
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Director, Chair of the Board
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2004
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66
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Jayson Dallas, M.D.
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Director
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2017
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52
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Oliver Fetzer, Ph.D.
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Director
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2017
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55
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Kieran T. Gallahue
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Director
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2018
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56
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Jennifer Jarrett
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Director
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2017
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49
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Amit D. Munshi
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Director, President and Chief Executive Officer
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2016
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52
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Garry A. Neil, M.D.
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Director
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2017
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66
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Manmeet S. Soni
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Director
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2018
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42
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2
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2020 PROXY STATEMENT
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Tina S. Nova, Ph.D.
DIRECTOR SINCE: 2004 AGE: 66 |
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BIOGRAPHICAL INFORMATION
Tina S. Nova, Ph.D.has served as a member of our Board of Directors since September 2004 and as its Chair since June 2016. Dr. Nova previously served as the Board’s lead independent director from June 2015 to June 2016. Dr. Nova has served as President and Chief Executive Officer of Decipher Biosciences, Inc., a molecular diagnostics company focused in prostate cancer, since August 2018. Dr. Nova served as President and Chief Executive Officer of Molecular Stethoscope, Inc, a molecular diagnostics company, from September 2015 to August 2018. Dr. Nova served as Senior Vice President and General Manager of Illumina Inc.’s oncology business unit from July 2014 to August 2015. Dr. Nova was a co-founder of Genoptix, Inc., a medical laboratory diagnostics company, and served as its President from 2000 to April 2014. Dr. Nova also served as the Chief Executive Officer of Genoptix and as a member of its board of directors from 2000 until Novartis AG acquired Genoptix in March 2011. Dr. Nova was a co-founder of Nanogen, Inc., a provider of molecular diagnostic tests, and she served as its Chief Operating Officer and President from 1994 to 2000. Dr. Nova served as Chief Operating Officer of Selective Genetics, a biotechnology company, from 1992 to 1994, and in various director-level positions with Ligand Pharmaceuticals Incorporated, a drug discovery and development company, from 1988 to 1992, most recently as Executive Director of New Leads Discovery. Dr. Nova has also held various research and management positions with Hybritech, Inc., a former subsidiary of Eli Lilly & Company, a pharmaceutical company. Dr. Nova serves as a member of the board of directors of Veracyte, Inc., a diagnostics company. Dr. Nova holds a B.S. in Biological Sciences from the University of California, Irvine and a Ph.D. in Biochemistry from the University of California, Riverside. |
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KEY QUALIFICATIONS AND EXPERIENCE Dr. Nova’s extensive leadership, business and scientific expertise, including her background of founding, financing, developing and operating companies in the healthcare industry, including her background as the President and Chief Executive Officer of a publicly held company in the healthcare industry, her experience in successfully developing, launching and commercializing medical products, and her service on other boards give her the qualifications, attributes and skills to serve as one of our directors. |
Jayson Dallas, M.D.
DIRECTOR SINCE: 2017 AGE: 52 |
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BIOGRAPHICAL INFORMATION
Jayson Dallas, M.D.has served on our Board of Directors since February 2017. Dr. Dallas has served as President and Chief Executive Officer of Aimmune Therapeutics, Inc., a biopharmaceutical company developing treatments for potentially life-threatening food allergies, since June 2018. Prior to joining Aimmune, he served as the first Chief Commercial Officer and Executive Vice President of Ultragenyx Pharmaceutical, Inc., a publicly held biopharmaceutical company focused on the development of novel products for rare and ultra-rare diseases, since August 2015. Prior to Ultragenyx, Dr. Dallas served as General Manager of Roche, a healthcare company, in the United Kingdom from January 2013 to July 2015. Before joining Roche, he held two positions at Genentech, a pharmaceutical company in South San Francisco, as Head of Global Oncology Launch Excellence and Biosimilar Strategy and Head of Global Product Strategy for Immunology and Ophthalmology, from May 2010 to December 2012. Earlier in his career, Dr. Dallas worked at Novartis and Pfizer / Pharmacia in the United States and previously at Roche in Switzerland. Dr. Dallas holds an M.D. from the University of the Witwatersrand, Johannesburg, South Africa and an M.B.A. from Ashridge Business School in the United Kingdom. |
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KEY QUALIFICATIONS AND EXPERIENCE Dr. Dallas’s years of global experience at the intersection of drug development, medical and commercial planning, and business operations for leading biopharmaceutical and healthcare companies give him the qualifications, attributes and skills to serve as one of our directors. |
2020 PROXY STATEMENT
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3
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Oliver Fetzer, Ph.D.
DIRECTOR SINCE: 2017 AGE: 55 |
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BIOGRAPHICAL INFORMATION
Oliver Fetzer, Ph.D.has served on our Board of Directors since February 2017. Dr. Fetzer has served as the Chief Executive Officer of Synthetic Genomics, Inc., a private synthetic biology company commercializing genomic technologies, since November 2014. Prior to Synthetic Genomics, Dr. Fetzer was President and Chief Executive Officer of Cerulean Pharma Inc., a pharmaceutical company that developed nanoparticle drug conjugate oncology therapeutics, from April 2009 to October 2014. Prior to Cerulean Pharma, Dr. Fetzer served in a variety of positions at Cubist Pharmaceuticals, Inc., including Senior Vice President, Corporate Development and Research & Development; Senior Vice President, Corporate Development and Chief Business Officer; and Senior Vice President, Business Development. Dr. Fetzer began his career in 1993 in various positions of increasing responsibility at the Boston Consulting Group, Inc. (BCG), a global leading management consulting firm, including Consultant, Project Leader, Principal, Partner and Managing Director. Dr. Fetzer served on the boards of Auxilium Pharmaceuticals, Inc. from 2005 to 2015 and of Cerulean Pharma, Inc. from 2009 to 2014, and has served on the board of Tecan Group AG, a publicly traded provider of laboratory instruments and solutions in biopharmaceuticals, forensics and clinical diagnostics, since 2011. Dr. Fetzer received a B.S. in Biochemistry from the College of Charleston, a Ph.D. in Pharmaceutical Sciences from the Medical University of South Carolina, and an M.B.A. from Carnegie Mellon University. |
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KEY QUALIFICATIONS AND EXPERIENCE Dr. Fetzer’s experience with transactions, operations and leadership from pre-clinical to late stage development in the biopharmaceutical industry, in addition to his management consulting and prior publicly held company board service, give him the qualifications, attributes and skills to serve as one of our directors. |
Kieran T. Gallahue
DIRECTOR SINCE: 2018 AGE: 56 |
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BIOGRAPHICAL INFORMATION
Kieran T. Gallahue has served as a member of our Board of Directors since July 2018. Mr. Gallahue served as Chairman and Chief Executive Officer of CareFusion Corporation, a medical products company, from 2011 until its acquisition by Becton, Dickinson and Company in 2015 for over $12 billion. He previously served as President, CEO and a director of ResMed Inc., a medical device firm serving the sleep disordered breathing and respiratory markets, and also held a variety of senior-level positions at Nanogen, Inc., Instrumentation Laboratory, Procter & Gamble Co., and General Electric Co. Mr. Gallahue is currently a member of the board of directors of three medical device companies, Edwards Lifesciences Corporation, Intersect ENT, Inc. and Envista Holdings Corporation. He previously served on the board of directors of Volcano Corporation, a developer of products for interventional cardiology and image guided therapy, from 2007 until its acquisition by Royal Philips in 2015. Mr. Gallahue also served on the Executive Committee of the Advanced Medical Technology Association, a trade association representing 80% of medical technology firms in the United States. He holds a bachelor’s degree in Economics from Rutgers University and an M.B.A. from Harvard Business School. |
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KEY QUALIFICATIONS AND EXPERIENCE Mr. Gallahue’s extensive leadership and business expertise, including his background serving as the President and Chief Executive Officer of companies in the healthcare industry and his service on other boards, give him the qualifications, attributes and skills to serve as one of our directors. |
4
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2020 PROXY STATEMENT
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Jennifer Jarrett
DIRECTOR SINCE: 2017 AGE: 49 |
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BIOGRAPHICAL INFORMATION
Jennifer Jarrett has served on our Board of Directors since June 2017. Ms. Jarrett currently serves as Vice President of Corporate Development and Capital Markets of Uber Technologies, Inc., a transportation and technology company, a position she has held since January 2019. Prior to joining Uber, Ms. Jarrett was Chief Operating Officer and Chief Financial Officer of Arcus Biosciences, Inc., a biotechnology company developing next generation cancer immunotherapies, from June 2018 to January 2019, and before that served as Chief Business Officer and Chief Financial Officer of Arcus from March 2017 to June 2018. Prior to Arcus, Ms. Jarrett was Chief Financial Officer of Medivation, Inc. from April 2016 until its acquisition by Pfizer Inc. in September 2016. Before Medivation, Ms. Jarrett spent 20 years in investment banking, most recently at Citigroup Inc., where she ran the firm’s west coast life sciences investment banking practice from July 2010 to April 2016, and prior to that at Credit Suisse AG and Donaldson, Lufkin & Jenrette Inc. In 2014, she was named one of the Most Influential Women in Bay Area Business by the San Francisco Business Times. Ms. Jarrett currently serves on the boards of Arcus Biosciences, Inc. and Syndax Pharmaceuticals, Inc. and previously served on the board of Audentes Therapeutics, Inc. until its acquisition by Astellas Pharma Inc. in January 2020. Ms. Jarrett received a B.A. in economics from Dartmouth College and an M.B.A. from Stanford Graduate School of Business. |
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KEY QUALIFICATIONS AND EXPERIENCE Ms. Jarrett’s extensive experience and leadership, including in investment banking and in serving as a chief financial officer and chief business officer in the biopharmaceutical industry, give her the qualifications, attributes and skills to serve as one of our directors. |
Amit D. Munshi
DIRECTOR SINCE: 2016 AGE: 52 |
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BIOGRAPHICAL INFORMATION
Amit D. Munshi has served as a member of our Board of Directors since June 2016 and as our President and Chief Executive Officer since May 2016. Previously, Mr. Munshi served as President and Chief Executive Officer and as a director of Epirus Biopharmaceuticals, Inc. from July 2014 to May 2016, and before that served as President and Chief Executive Officer and as a director of Percivia LLC, a biotechnology company (sold to Johnson & Johnson). Prior to Epirus and Percivia, Mr. Munshi was a co-founder and served as Chief Business Officer of Kythera Biopharmaceuticals, Inc., from 2005 to 2010 (sold $2.1B to Allergan plc) and held multiple leadership positions at Amgen Inc. from 1997 to 2005, including General Manager, Nephrology Europe. In July 2016, Epirus filed a voluntary Chapter 7 petition in the United States Bankruptcy Court for the District of Massachusetts. Mr. Munshi holds a B.S. in Economics and a B.A. in History from the University of California, Riverside, and an M.B.A. from the Peter F. Drucker School of Management at Claremont Graduate University. Mr. Munshi has more than 28 years of global biopharmaceutical industry experience in executive management, business development, product development and portfolio management. Mr. Munshi currently serves on the boards of OneBioPharma, Inc., Pulmatrix, Inc. and Enterprise Therapeutics Ltd, and also serves as an advisor and lecturer at the Peter F. Drucker School of Management at the Claremont Graduate School. |
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KEY QUALIFICATIONS AND EXPERIENCE The Board believes that it is important to have the Company’s Chief Executive Officer serve on the Board as he is closest to our company’s day-to-day operations. Mr. Munshi’s vast executive management and business experience in the global biopharmaceutical industry and in-depth knowledge of product development gives him the qualifications, attributes and skills to serve as one of our directors. |
2020 PROXY STATEMENT
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5
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Garry Neil, M.D.
DIRECTOR SINCE: 2017 AGE: 66 |
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BIOGRAPHICAL INFORMATION
Garry Neil, M.D.has served on our Board of Directors since February 2017. Dr. Neil serves as the Chief Scientific Officer of Aevi Genomic Medicine, Inc., a publicly held biotechnology company focused on translating genetic discoveries into novel therapies to improve the lives of children and adults with pediatric onset life altering diseases, a position he has held since September 2013. Prior to joining Aevi Genomic Medicine, Dr. Neil was a Partner at Apple Tree Partners, a life science private equity firm, from September 2012 to September 2013, and held a number of senior positions in the pharmaceutical industry, including most recently Corporate VP of Science & Technology at Johnson & Johnson from November 2007 to August 2012. Prior to these roles, Dr. Neil served as Group President at Johnson & Johnson Pharmaceutical Research and Development, VP of R&D at Merck KGaA/EMD Pharmaceuticals, and VP of Clinical Research at AstraZeneca plc and Astra Merck Incorporated. Dr. Neil holds a B.S. from the University of Saskatchewan and an M.D. from the University of Saskatchewan College of Medicine. He completed postdoctoral clinical training in internal medicine and gastroenterology at the University of Toronto. Dr. Neil also completed a postdoctoral research fellowship at the Research Institute of Scripps Clinic. He has previously served on the board of GTx, Inc., a publicly traded biopharmaceutical company focused on cancer and other serious medical conditions. He is the Founding Chairman of TransCelerate Biopharma, Inc., a non-profit pharmaceuticals industry R&D consortium, and is a past member of the TransCelerate board. He also serves on the board of Reagan Udall Foundation and previously served on the board of Foundation for the National Institutes of Health (NIH) and on the Science Management Review Board of the NIH. Dr. Neil is also the past Chairman of the Pharmaceutical Research and Manufacturers Association (PhRMA) Science and Regulatory Executive Committee and the PhRMA Foundation Board. |
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KEY QUALIFICATIONS AND EXPERIENCE Dr. Neil’s years of biopharmaceutical experience with emphasis on unique insight into gastrointestinal, or GI, drug development with vast network of global key opinion leaders, or KOLs, his medical degree and specialty training, as well as his global executive positions in research and development, clinical, and regulatory affairs, gives him the qualifications, attributes and skills to serve as one of our directors. |
6
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2020 PROXY STATEMENT
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Manmeet S. Soni
DIRECTOR SINCE: 2018 AGE: 42 |
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BIOGRAPHICAL INFORMATION
Manmeet S. Soni has served as a member of our Board of Directors since December 2018. Mr. Soni has served as Chief Financial Officer and Executive Vice President of Reata Pharmaceuticals, Inc., a clinical-stage biopharmaceutical company developing novel therapeutics for patients with serious or life-threatening diseases by targeting molecular pathways involved in the regulation of cellular metabolism and inflammation, since August 2019. From May 2017 to August 2019, Mr. Soni served as Senior Vice President, Chief Financial Officer of Alnylam Pharmaceuticals, Inc. From March 2016 to February 2017, he was Executive Vice President, Chief Financial Officer and Treasurer of ARIAD Pharmaceuticals, Inc., a publicly held biopharmaceutical company, when ARIAD was acquired by Takeda Pharmaceutical Company Limited. Previously, Mr. Soni served as Chief Financial Officer of Pharmacyclics, Inc., a publicly held biopharmaceutical company, until its acquisition by AbbVie, Inc. in May 2015. He first joined Pharmacyclics in September 2012 as corporate controller and served in various increasingly senior roles prior to being appointed Chief Financial Officer and Treasurer in February 2014. Prior to joining Pharmacyclics, Mr. Soni worked at ZELTIQ Aesthetics Inc., a publicly held medical technology company, as well as PricewaterhouseCoopers, in the Life Science and Venture Capital Group and PricewaterhouseCoopers India, providing audit and assurance services. Mr. Soni currently serves as director of Pulse Biosciences, Inc. and Summit Therapeutics, Plc. He is a certified public accountant and completed his Chartered Accountancy from the Institute of Chartered Accountants of India. |
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KEY QUALIFICATIONS AND EXPERIENCE Mr. Soni’s extensive leadership, business, financial and accounting expertise, including his background as the Chief Financial Officer of multiple publicly held biopharmaceutical companies, his experience at a large financial and accounting firm, and his service on other boards in our industry give him an important financial and accounting perspective and the qualifications, attributes and skills to serve as one of our directors. |
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THE BOARD OF DIRECTORS RECOMMENDS THAT
STOCKHOLDERS VOTE “FOR” EACH NAMED NOMINEE. |
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✔
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2020 PROXY STATEMENT
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7
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•
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Serving as the chair of Board meetings, including during executive sessions of independent directors;
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•
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Establishing the schedule and agenda for Board meetings and approving information to be sent to our Board;
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8
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2020 PROXY STATEMENT
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•
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Presiding over any portion of Board meetings at which the performance of our Board is presented or discussed;
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•
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Establishing the agenda for meetings of the independent directors and presiding over such meetings;
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Coordinating with the committee chairs, as needed, regarding meeting agendas, informational requirements and other matters, as appropriate;
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•
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Serving as the liaison between the Chief Executive Officer and the independent directors;
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•
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Being available for communications with stockholders, as appropriate and in accordance with our policy on stockholder communications with our Board; and
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•
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Performing such other duties as our Board may establish or delegate.
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2020 PROXY STATEMENT
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9
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10
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2020 PROXY STATEMENT
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Member
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Audit
Committee |
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Compensation
Committee |
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Corporate
Governance and Nominating Committee |
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Tina S. Nova, Ph.D.
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Jayson Dallas, M.D.
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•
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C
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Oliver Fetzer, Ph.D.
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•
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•
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Kieran T. Gallahue
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•
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Jennifer Jarrett
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•
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Garry Neil, M.D.
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•
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Manmeet S. Soni
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C
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Randall E. Woods
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C
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Total meetings in 2019
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5
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6
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3
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2020 PROXY STATEMENT
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11
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•
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selecting and evaluating the performance of our independent auditors;
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•
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reviewing the scope of the audit to be conducted by our independent auditors, as well as the results of their audit, and approving audit and non-audit services to be provided by them;
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•
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reviewing and assessing our financial reporting activities and disclosure, including our financial results press releases and periodic reports, and the accounting standards and principles followed;
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•
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reviewing the scope, adequacy and effectiveness of our internal control over financial reporting;
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•
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reviewing management’s assessment of our compliance with our disclosure controls and procedures;
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•
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reviewing our public disclosure policies and procedures;
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•
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reviewing our guidelines and policies with respect to risk assessment and management, our tax strategy and our investment policy;
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•
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reviewing and approving related-party transactions;
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•
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overseeing our Code of Business Conduct and Ethics and our Policy on Filing, Receipt and Treatment of Complaints; and
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•
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reviewing threatened or pending litigation matters and investigating matters brought to the committee’s attention that are within the scope of its duties.
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•
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reviewing, modifying and approving our overall compensation strategy and policies;
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•
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assessing risk created by current and proposed compensation policies and practices for all of our employees;
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•
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reviewing and approving performance goals relevant to the compensation of our executive officers;
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•
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evaluating and recommending to our Board of Directors compensation plans and programs for us, as well as modifying or terminating existing plans and programs;
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•
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reviewing and approving compensation and benefits for our non-employee directors and executive officers, and making recommendations to our Board of Directors regarding these matters;
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•
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authorizing and approving equity grants under our equity compensation plans; and
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•
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overseeing preparation and review of the committee’s report and the compensation discussion and analysis included in our proxy statement.
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12
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2020 PROXY STATEMENT
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•
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recommending guidelines to our Board of Directors for our corporate governance;
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•
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overseeing director orientation and continuing education;
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•
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establishing criteria for membership on our Board of Directors;
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•
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identifying, evaluating, reviewing and recommending to our Board of Directors qualified director candidates;
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•
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reviewing and assessing the performance of our Board of Directors and its standing committees;
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•
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reviewing and approving a management succession plan and related procedures;
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•
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making recommendations to our Board of Directors regarding the appointment of officers;
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•
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establishing the process for receiving and considering stockholder proposals and suggestions for director nominations;
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•
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overseeing our strategy, initiatives and policies concerning corporate social responsibility, including environmental, social and governance matters; and
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•
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overseeing compliance related policies and practices that are not within the purview of the Audit Committee or are referred by our Board of Directors.
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2020 PROXY STATEMENT
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13
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14
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| |
|
| |
2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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15
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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT. |
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✔
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16
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2020 PROXY STATEMENT
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| |
|
•
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Each person, group or entity who is the beneficial owner of more than 5% of our common stock;
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•
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Each director and nominee for director;
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•
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Our Named Executive Officers (as defined below in “Compensation Discussion and Analysis”); and
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•
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All current directors and executive officers as a group.
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Name of Beneficial Owner
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Shares Beneficially
Owned |
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Percentage
of Total |
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Greater than 5% Stockholders
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|
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BlackRock, Inc.(1)
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4,916,922
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9.78%
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Wellington Management Group, LLP(2)
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4,675,863
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9.30%
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The Vanguard Group(3)
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4,556,763
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9.06%
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Directors and Named Executive Officers
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| |
|
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|
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Amit D. Munshi(4)
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823,081
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1.61%
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Kevin R. Lind(5)
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| |
263,021
|
| |
*
|
|
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Vincent E. Aurentz(6)
|
| |
191,684
|
| |
*
|
|
|
Preston S. Klassen, M.D., M.H.S.(7)
|
| |
188,226
|
| |
*
|
|
|
Robert Lisicki(8)
|
| |
90,625
|
| |
*
|
|
|
Tina S. Nova, Ph.D.(9)
|
| |
58,159
|
| |
*
|
|
|
Randall E. Woods(10)
|
| |
54,659
|
| |
*
|
|
|
Garry Neil, M.D.(11)
|
| |
39,300
|
| |
*
|
|
|
Jayson Dallas, M.D.(12)
|
| |
37,775
|
| |
*
|
|
|
Oliver Fetzer, Ph.D.(13)
|
| |
37,775
|
| |
*
|
|
|
Jennifer Jarrett(14)
|
| |
34,924
|
| |
*
|
|
|
Kieran T. Gallahue(15)
|
| |
14,321
|
| |
*
|
|
|
Manmeet S. Soni(16)
|
| |
9,480
|
| |
*
|
|
|
All current directors and executive officers as a group (14 persons)(17)
|
| |
1,580,009
|
| |
3.05%
|
|
*
|
Less than one percent
|
(1)
|
BlackRock, Inc., had sole voting power with respect to 4,821,688 shares and sole dispositive power with respect to 4,916,922 shares. The principal business office of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.
|
(2)
|
Wellington Management Group LLP had shared voting power with respect to 4,077,608 shares and shared dispositive power with respect to 4,675,863 shares. The principal business office of Wellington Management Company LLP is 280 Congress Street, Boston, Massachusetts 02210.
|
(3)
|
The Vanguard Group had sole voting power with respect to 95,153 shares, sole dispositive power with respect to 4,461,373 shares, shared voting power with respect to 7,167 shares and shared dispositive power with respect to 95,390 shares. The principal business office of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
|
(4)
|
Includes 815,331 shares issuable to Mr. Munshi upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(5)
|
Includes 259,564 shares issuable to Mr. Lind upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(6)
|
Represents 191,684 shares issuable to Mr. Aurentz upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
2020 PROXY STATEMENT
|
| |
|
| |
17
|
(7)
|
Represents 184,235 shares issuable to Dr. Klassen upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(8)
|
Represents 90,625 shares issuable to Mr. Lisicki upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(9)
|
Includes 46,683 shares issuable to Dr. Nova upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(10)
|
Includes 43,083 shares issuable to Mr. Woods upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(11)
|
Represents 36,250 shares issuable to Dr. Neil upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(12)
|
Represents 36,250 shares issuable to Dr. Dallas upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(13)
|
Represents 36,250 shares issuable to Dr. Fetzer upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(14)
|
Represents 31,874 shares issuable to Ms. Jarrett upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(15)
|
Represents 10,693 shares issuable to Mr. Gallahue upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(16)
|
Represents 8,263 shares issuable to Mr. Soni upon the exercise of stock options that are exercisable within 60 days of March 31, 2020.
|
(17)
|
Includes 1,531,221 shares issuable upon the exercise of stock options held by our current directors and executive officers that are exercisable within 60 days of March 31, 2020.
|
|
Name
|
| |
Age
|
| |
Position
|
|
|
Current executive officers
|
| |
|
| |
|
|
|
Amit D. Munshi
|
| |
52
|
| |
President and Chief Executive Officer
|
|
|
Laurie Stelzer
|
| |
52
|
| |
Executive Vice President and Chief Financial Officer (beginning March 16, 2020)
|
|
|
Vincent E. Aurentz
|
| |
52
|
| |
Executive Vice President and Chief Business Officer
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
51
|
| |
Executive Vice President and Head of Research and Development
|
|
|
Robert Lisicki
|
| |
53
|
| |
Executive Vice President and Chief Commercial Officer
|
|
|
Joan Schmidt
|
| |
56
|
| |
Executive Vice President, General Counsel and Secretary (beginning March 2, 2020)
|
|
|
Certain former executive officers
|
| |
|
| |
|
|
|
Kevin R. Lind
|
| |
44
|
| |
Executive Vice President and Chief Financial Officer (through March 15, 2020)
|
|
Amit D. Munshi
AGE: 52 |
| |
EXPERIENCE
Amit D. Munshi – See “ELECTION OF DIRECTORS (PROPOSAL 1)” for biographical information regarding Mr. Munshi, our President and Chief Executive Officer, who is also a director nominated for reelection at the 2020 Annual Meeting. |
Laurie Stelzer
AGE: 52 |
| |
EXPERIENCE
Laurie Stelzer has served as our Executive Vice President and Chief Financial Officer since March 2020. Previously, Ms. Stelzer spent the last five years as the Chief Financial Officer at Halozyme Therapeutics, Inc., leading the Finance, Information Technology, Business Development, Project Management and Site Operations organizations. Prior to joining Halozyme, Ms. Stelzer held senior management roles at Shire Plc (acquired by Takeda), including Senior Vice President of Finance, Division CFO for the Regenerative Medicine Division, and Head of Investor Relations. Previously she held positions of increasing responsibility during her fifteen-year career at Amgen, Inc., spanning the areas of Finance, Treasury, Global Accounting and International/Emerging Markets. Ms. Stelzer received her B.S. in Accounting from Arizona State University, and her M.B.A. from University of California, Los Angeles, Anderson School of Management. She currently serves on the board of directors for Surface Oncology, Inc. |
18
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
Vincent E. Aurentz
AGE: 52 |
| |
EXPERIENCE
Vincent E. Aurentz has served as our Executive Vice President and Chief Business Officer since August 2016. Mr. Aurentz has over 30 years of experience in the biopharmaceutical industry. Previously, he was the Chief Business Officer of Epirus Biopharmaceuticals, Inc. from November 2015 to July 2016. Prior to that, Mr. Aurentz served as President and was a member of the Board of Directors of HemoShear Therapeutics, LLC from July 2013 to November 2015, where he oversaw the scientific platform, R&D activities, commercial and business development efforts including collaborations with global organizations such as Pfizer, Eli Lilly, Janssen R&D and Children’s National Health System. Prior to joining HemoShear, Mr. Aurentz was Executive Vice President and member of the Executive Management Board at Merck KGaA (Merck Serono S.A.) where he directed R&D programs, portfolio strategy and headed all deal activity and venture investments. Mr. Aurentz is a former Executive Vice President at Quintiles and a Co-founder and Managing Director of a venture capital and advisory business. He was a partner with CSC Healthcare, the life sciences strategic management consulting division of Computer Sciences Corporation, after starting his career and working for 8 years at Andersen Consulting (now Accenture). In July 2016, Epirus filed a voluntary Chapter 7 petition in the United States Bankruptcy Court for the District of Massachusetts. Mr. Aurentz received a B.S. in mathematics from Villanova University. |
Preston S. Klassen, M.D., M.H.S.
AGE: 51 |
| |
EXPERIENCE
Preston S. Klassen, M.D., M.H.S., has served as our Executive Vice President and Head of Research and Development since August 2019. From March 2017 to July 2019 he served as Executive Vice President, Research and Development and Chief Medical Officer. Dr. Klassen has more than 20 years of experience in biopharmaceutical product development. Most recently, he was Chief Medical Officer of Laboratoris Sanifit S.L., a biotechnology company, and prior to that was Executive Vice President, Head of Global Development at Orexigen Therapeutics, Inc. Previously, Dr. Klassen held several positions of increasing responsibility at Amgen Inc., including Therapeutic Area Head for Nephrology. Prior to joining Amgen, he was a faculty member in the Division of Nephrology at Duke University Medical Center. Dr. Klassen received his medical degree from the University of Nebraska College of Medicine and completed his residency in internal medicine, fellowship in nephrology, and Master of Health Sciences degree at Duke University. |
Robert Lisicki
AGE: 53 |
| |
EXPERIENCE
Robert Lisicki has served as our Executive Vice President and Chief Commercial Officer since November 2018. Prior to joining Arena, Mr. Lisicki most recently served as General Manager, Vice President Cardio-Metabolic and Inflammation at Regeneron Pharmaceuticals, Inc. Prior to joining Regeneron, he was Senior Vice President of Sales and Marketing and Chief Customer Officer at Daiichi Sankyo, Inc., a global pharmaceutical company, from August 2014 to April 2018. Prior to Daiichi Sankyo, Mr. Lisicki held several management positions at Amgen Inc., including Vice President and General Manager, responsible for a 700+ person sales force in the U.S. His U.S. leadership experiences included such market shaping products as Enbrel and Prolia. During his tenure he also covered several ex-U.S. regions, and worked as an International Franchise Lead running the development and international strategies and business plans across Amgen’s portfolio including Nephrology, Cardiology, Bone and Oncology. Prior to joining Amgen, Mr. Lisicki held various sales and marketing positions at Johnson & Johnson Corporation. Mr. Lisicki brings over 20 years of experience in biopharmaceutical management, sales and marketing to Arena. Mr. Lisicki holds a B.S. in Finance and Business Administration from the State University of New York at Albany. |
Joan Schmidt
AGE: 56 |
| |
EXPERIENCE
Joan Schmidt, J.D., has served as our Executive Vice President and General Counsel since March 2020. From June 2018 to February 2020, Ms. Schmidt served as Executive Vice President, Chief Legal Officer and Secretary at DBV Technologies SA, a French, publicly traded, clinical-stage biopharmaceuticals company. From July 2015 to May 2018, Ms. Schmidt was Executive Vice President, Legal Affairs and Human Resources, and General Counsel at Biotronik, Inc., the US subsidiary of Biotronik AG, a privately held, global commercial-stage medical device company. Ms. Schmidt’s experience includes 20 years of increasing responsibility at Novo Nordisk in both the United States and Europe from May 1995 to May 2015, most recently as Corporate Vice President, Legal Affairs of Novo Nordisk A/S, a publicly traded, Fortune 100 company. Ms. Schmidt earned a J.D. from Pace University and a B.A. from the University of Connecticut. |
2020 PROXY STATEMENT
|
| |
|
| |
19
|
Kevin R. Lind
AGE: 44 |
| |
EXPERIENCE
Kevin R. Lind serves as President and Chief Executive Officer of Arena Neuroscience, Inc. Previously, Mr. Lind served as our Executive Vice President and Chief Financial Officer from June 2016 until March 2020. Prior to joining the Company, Mr. Lind was a Principal focused on healthcare at TPG Special Situations Partners, a global investment firm, from January 2009 to June 2016. Mr. Lind was a member of the TPG Pharma Partners effort at TPG-Axon, a global investment firm, from 2006 to 2008. He served in various capacities as a healthcare investment banker at Lehman Brothers, Inc., a former global financial services firm, from 1998 to 2002 and 2004 to 2006. Mr. Lind received a B.S. from Stanford University in Biological Sciences and an M.B.A. from UCLA Anderson School of Management. |
20
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
NEO
|
| |
Position
|
|
|
Amit D. Munshi
|
| |
President and Chief Executive Officer
|
|
|
Kevin R. Lind
|
| |
Former Executive Vice President and Chief Financial Officer
|
|
|
Vincent E. Aurentz
|
| |
Executive Vice President and Chief Business Officer
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
Executive Vice President and Head of Research and Development
|
|
|
Robert Lisicki
|
| |
Executive Vice President and Chief Commercial Officer
|
|
•
|
Delivered positive results from the open-label extension of the Phase 2 OASIS trial for moderately to severely active ulcerative colitis (UC).
|
•
|
Initiated ELEVATE UC 52, a global Phase 3 trial for moderately to severely active UC.
|
•
|
Initiated ADVISE, a Phase 2 trial for moderate-to-severe atopic dermatitis (AD).
|
•
|
Planned additional programs for etrasimod in eosinophilic esophagitis (EoE) and alopecia areata (AA), expanding our franchises in both gastroenterology and dermatology.
|
•
|
Initiated CAPTIVATE, a Phase 2 trial for abdominal pain in irritable bowel syndrome (IBS).
|
2020 PROXY STATEMENT
|
| |
|
| |
21
|
•
|
Submitted Investigational New Drug (IND) application in 2019; and in January 2020 we initiated Ph 1 and were granted Fast Track status by the U.S. Food and Drug Administration (FDA).
|
•
|
Completed a global license agreement for ralinepag with United Therapeutics in January 2019. Upon close, we received an $800 million upfront license payment. We are also eligible to receive up to $400 million in regulatory milestones, and tiered royalties.
|
22
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
•
|
Compensation decisions are driven by a pay-for-performance philosophy; and
|
•
|
Compensation should reflect corporate and individual performance.
|
2020 PROXY STATEMENT
|
| |
|
| |
23
|
|
2018 Peer Group
|
| ||||||
|
Acadia Pharmaceuticals Inc.
|
| |
Acceleron Pharma, Inc.
|
| |
Acorda Therapeutics, Inc.
|
|
|
Aerie Pharmaceuticals, Inc.
|
| |
Agios Pharmaceuticals, Inc.
|
| |
Aimmune Therapeutics, Inc.
|
|
|
Array BioPharma Inc.
|
| |
FibroGen, Inc.
|
| |
Halozyme Therapeutics, Inc.
|
|
|
Immunomedics, Inc.
|
| |
Ironwood Pharmaceuticals, Inc.
|
| |
Neurocrine Biosciences, Inc.
|
|
|
Sage Therapeutics, Inc.
|
| |
Sarepta Therapeutics, Inc.
|
| |
The Medicines Company
|
|
|
Ultragenyx Pharmaceutical Inc.
|
| |
United Therapeutics Corporation
|
| |
|
|
|
2019 Peer Group
|
| ||||||
|
Acadia Pharmaceuticals Inc.
|
| |
Acceleron Pharma, Inc.
|
| |
Agios Pharmaceuticals, Inc.
|
|
|
Aimmune Therapeutics, Inc.
|
| |
Array BioPharma Inc.
|
| |
bluebird bio, Inc.
|
|
|
Blueprint Medicines Corporation
|
| |
FibroGen, Inc.
|
| |
Global Blood Therapeutics, Inc.
|
|
|
Halozyme Therapeutics, Inc.
|
| |
Immunomedics, Inc.
|
| |
Ironwood Pharmaceuticals, Inc.
|
|
|
MyoKardia, Inc.
|
| |
Neurocrine Biosciences, Inc.
|
| |
Sage Therapeutics, Inc.
|
|
|
Sarepta Therapeutics, Inc.
|
| |
Ultragenyx Pharmaceutical Inc.
|
| |
United Therapeutics Corporation
|
|
24
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
2020 PROXY STATEMENT
|
| |
|
| |
25
|
|
NEO
|
| |
2018 Base Salary
|
| |
2019 Base Salary
|
| |
Increase
(%) |
|
|
Amit D. Munshi
|
| |
$637,500
|
| |
$660,000
|
| |
3.5%
|
|
|
Kevin R. Lind
|
| |
$408,000
|
| |
$420,240
|
| |
3%
|
|
|
Vincent E. Aurentz
|
| |
$408,000
|
| |
$420,240
|
| |
3%
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
$420,000
|
| |
$485,000
|
| |
15.5%
|
|
|
Robert Lisicki
|
| |
$410,000
|
| |
$410,000
|
| |
N/A
|
|
|
|
| |
Categories of Corporate Goals and Weighting
|
| |
Goals
|
| |
Achievement
|
|
|
1
|
| |
Pipeline (70%)
|
| |
• Clinical progress on
etrasimod (APD334)
• Clinical progress on olorinab and other assets
|
| |
Overachieved:
• Initiated, ahead of schedule, etrasimod Phase 3 program in ulcerative colitis, Phase 2/3 program in Crohn’s disease, and Phase 2 program in atopic dermatitis; designed and planned Phase 2 trials for additional indications; initiated lifecycle expansion
plan which was previously not a specified goal
• Designed, planned and initiated Phase 2 trials for olorinab; executed ahead of schedule
|
|
26
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
Categories of Corporate Goals and Weighting
|
| |
Goals
|
| |
Achievement
|
|
|
2
|
| |
Business
Development (15%) |
| |
• Clinical progress on select
other pipeline compounds
• Build sustainable pipeline
• Pursue strategic partnerships
|
| |
Overachieved:
• Established resources and planned toward initiation
of clinical trials; evaluated 177 early-stage options
• Concluded expanded Beacon collaboration for
unspecified number of targets and molecules
• Crafted neuroscience strategy and aggregated internal assets
|
|
|
3
|
| |
Corporate Resource Management (15%)
|
| |
• Manage cash to efficiently
reach major milestones
• Build a high-performing culture and hire, engage and retain key employees
|
| |
Achieved:
• Effectively managed operating expenses; closed ralinepag license agreement with United
Therapeutics
• Managed human capital to positively impact corporate operational objectives.
|
|
|
NEO
|
| |
Target Award
|
| |
Actual Award
|
|
|
Amit D. Munshi
|
| |
$462,000
|
| |
$554,400
|
|
|
Kevin R. Lind
|
| |
210,120
|
| |
239,537
|
|
|
Vincent E. Aurentz
|
| |
210,120
|
| |
252,144
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
242,500
|
| |
299,730
|
|
|
Robert Lisicki
|
| |
205,000
|
| |
246,000
|
|
2020 PROXY STATEMENT
|
| |
|
| |
27
|
•
|
the 2018 Peer Group data;
|
•
|
Our high TSR for 2018, which was 15% and above the 85th percentile of our 2018 Peer Group;
|
•
|
The prior equity awards granted to our NEOs;
|
•
|
Internal equity within the executive team; and
|
•
|
Dilution to our stockholders.
|
|
NEO
|
| |
2019 Stock Options
(#) |
| |
2019 Stock Options
($) |
| |
2019 Target PRSUs
(#)(1) |
| |
2019 Target PRSUs
($) |
|
|
Amit D. Munshi
|
| |
285,000
|
| |
$6,279,747
|
| |
23,400
|
| |
$1,423,539
|
|
|
Kevin R. Lind
|
| |
75,000
|
| |
1,652,565
|
| |
12,600
|
| |
766,521
|
|
|
Vincent E. Aurentz
|
| |
75,000
|
| |
1,652,565
|
| |
18,000
|
| |
1,095,030
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
75,000
|
| |
1,652,565
|
| |
12,600
|
| |
766,521
|
|
|
Robert Lisicki
|
| |
75,000
|
| |
1,652,565
|
| |
12,600
|
| |
766,521
|
|
(1)
|
As described in more detail below, a number of shares of common stock that is equal to the target number of PRSUs are earned for achieving a closing stock price of $67.50, and the maximum number of common shares that may be earned under the PRSUs, which number equals 200% of the number of target PRSUs granted, are earned upon achieving a closing stock price of $75.00.
|
28
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
2020 PROXY STATEMENT
|
| |
|
| |
29
|
30
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
2020 PROXY STATEMENT
|
| |
|
| |
31
|
|
|
| |
THE COMPENSATION COMMITTEE
|
|
|
|
| |
Randall E. Woods, Chair
|
|
|
|
| |
Jayson Dallas, M.D.
|
|
|
|
| |
Oliver Fetzer, Ph.D.
|
|
32
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary
($)(2) |
| |
Bonus
($) |
| |
Stock
Awards ($)(3) |
| |
Option
Awards ($)(4) |
| |
Non-Equity
Incentive Plan Compensation ($)(5) |
| |
All Other
Compensation ($)(6) |
| |
Total
($) |
|
|
Amit D. Munshi
President, Chief Executive Officer and Director |
| |
2019
|
| |
$656,250
|
| |
$—
|
| |
$1,423,539
|
| |
$6,279,747
|
| |
$554,400
|
| |
$17,466
|
| |
$8,931,402
|
|
|
2018
|
| |
635,938
|
| |
—
|
| |
—
|
| |
5,752,825
|
| |
455,813
|
| |
18,869
|
| |
6,863,445
|
| |||
|
2017
|
| |
625,000
|
| |
—
|
| |
—
|
| |
1,786,435
|
| |
487,500
|
| |
17,010
|
| |
2,915,945
|
| |||
|
Kevin R. Lind
Former Executive Vice President, Chief Financial Officer and Principal Financial Officer(1) |
| |
2019
|
| |
418,200
|
| |
—
|
| |
766,521
|
| |
1,652,565
|
| |
239,537
|
| |
17,466
|
| |
3,094,289
|
|
|
2018
|
| |
407,000
|
| |
—
|
| |
—
|
| |
2,412,475
|
| |
224,400
|
| |
17,165
|
| |
3,061,040
|
| |||
|
2017
|
| |
400,000
|
| |
41,841(7)
|
| |
—
|
| |
868,083
|
| |
240,000
|
| |
16,041
|
| |
1,565,965
|
| |||
|
Vincent E. Aurentz
Executive Vice President and Chief Business Officer |
| |
2019
|
| |
418,200
|
| |
—
|
| |
1,095,030
|
| |
1,652,565
|
| |
252,144
|
| |
31,466(8)
|
| |
3,449,405
|
|
|
2018
|
| |
407,000
|
| |
—
|
| |
—
|
| |
2,412,475
|
| |
224,400
|
| |
120,055(8)
|
| |
3,163,930
|
| |||
|
2017
|
| |
400,000
|
| |
—
|
| |
—
|
| |
826,746
|
| |
240,000
|
| |
145,905(8)
|
| |
1,612,651
|
| |||
|
Preston S. Klassen, M.D., M.H.S.
Executive Vice President and Head of Research and Development |
| |
2019
|
| |
474,167
|
| |
8,730(9)
|
| |
766,521
|
| |
1,652,565
|
| |
291,000
|
| |
17,466
|
| |
3,210,449
|
|
|
2018
|
| |
417,500
|
| |
—
|
| |
—
|
| |
2,412,475
|
| |
231,000
|
| |
18,869
|
| |
3,079,844
|
| |||
|
2017
|
| |
315,384
|
| |
165,000(10)
|
| |
—
|
| |
1,101,545
|
| |
188,712
|
| |
16,641
|
| |
1,787,282
|
| |||
|
Robert Lisicki
Executive Vice President and Chief Commercial Officer |
| |
2019
|
| |
410,000
|
| |
168,308(11)
|
| |
766,521
|
| |
1,652,565
|
| |
246,000
|
| |
17,466
|
| |
3,260,860
|
|
(1)
|
In March 2020, Mr. Lind ceased serving as our Executive Vice President and Chief Financial Officer and was appointed the President and Chief Executive Officer of our wholly owned subsidiary, Arena Neuroscience, Inc.
|
(2)
|
In accordance with SEC rules, the compensation described in this table does not include various health and welfare or other benefits received by our Named Executive Officers that are available generally to all of our regular, full-time employees, except as described in footnote 5 in this table. This table also does not include any perquisites and other personal benefits received by our Named Executive Officers that, in the aggregate, were less than $10,000 for any officer. Amounts earned but deferred at the election of our Named Executive Officers pursuant to our 401(k) plan are included in the “salary” column.
|
(3)
|
Represents the aggregate grant date fair value of PRSUs granted in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718, “Compensation - Stock Compensation.” The fair value of the PRSUs granted was calculated using a Monte Carlo simulation model based on the probability of achieving the performance goals. The amounts disclosed in the table represent maximum value potential assuming the achievement of the highest level of performance goals as stipulated by the PRSUs. For the relevant assumptions used in determining these amounts, refer to Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K as filed with the SEC on February 27, 2020.
|
(4)
|
Represents the aggregate grant date fair value of option awards granted in accordance with FASB ASC Topic 718, “Compensation - Stock Compensation.” For the relevant assumptions used in determining these amounts, refer to Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K as filed with the SEC on February 27, 2020.
|
(5)
|
Represents cash awards earned pursuant to our annual incentive plans for 2019, 2018 and 2017, as further described below in the “Grants of Plan-Based Awards” table and the above “Compensation Discussion and Analysis.”
|
(6)
|
Represents matching contributions to our 401(k) plan made on behalf of our Named Executive Officers, group-term life insurance premiums paid by us for our Named Executive Officers and other compensation described below in these footnotes.
|
(7)
|
Represents the amount paid to Mr. Lind in the form of a signing bonus equal to an unused portion of the relocation allowance provided to Mr. Lind in connection with his appointment as Executive Vice President and Chief Financial Officer in May 2016.
|
(8)
|
In addition to the items noted in footnote 5 above, “all other compensation” includes $14,000, $87,249 and $109,992 provided to Mr. Aurentz in 2019, 2018 and 2017, respectively, in the form of monthly taxable housing and automobile allowances and $13,937 and $18,419 provided to Mr. Aurentz in 2018 and 2017, respectively, for commuting airfare reimbursement, on an after-tax basis, following his appointment as Executive Vice President and Chief Business Officer in August 2016.
|
(9)
|
Represents the portion of the cash incentive award approved by the Compensation Committee for Dr. Klassen that exceeded our 2019 corporate goal achievement, which was approved in consideration of the high quality of Dr. Klassen’s performance and his role in achieving our 2019 goals.
|
(10)
|
Represents the amount paid to Dr. Klassen in the form of signing bonuses following his appointment as Executive Vice President and Chief Medical Officer in March 2017.
|
(11)
|
Represents the amount paid to Mr. Lisicki in 2019 in the form of a signing bonus of $108,308 and a relocation allowance of $60,000 provided to Mr. Lisicki in connection with his appointment as Executive Vice President and Chief Commercial Officer in October 2018.
|
2020 PROXY STATEMENT
|
| |
|
| |
33
|
|
|
| |
|
| |
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards(1) |
| |
Estimated Future Payouts
Under Equity Incentive Plan Awards(2) |
| |
All Other
Option Awards: Number of Securities Underlying Options (#)(3) |
| |
Exercise or
Base Price of Option Awards ($/sh)(4) |
| |
Grant Date
Fair Value of Stock and Option Awards ($)(5) |
| |||||||||
|
Name
|
| |
Grant
Date(3) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| |||||||||
|
Amit D. Munshi
|
| |
—
|
| |
$462,000
|
| |
$693,000
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
$—
|
| |
$—
|
|
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
285,000
|
| |
40.94
|
| |
6,279,747
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
11,700
|
| |
23,400
|
| |
46,800
|
| |
—
|
| |
—
|
| |
1,423,539
|
| |||
|
Kevin R. Lind
|
| |
—
|
| |
210,120
|
| |
315,180
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1,652,565
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
6,300
|
| |
12,600
|
| |
25,200
|
| |
—
|
| |
—
|
| |
766,521
|
| |||
|
Vincent Aurentz
|
| |
—
|
| |
210,120
|
| |
315,180
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1,652,565
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
9,000
|
| |
18,000
|
| |
36,000
|
| |
—
|
| |
—
|
| |
1,095,030
|
| |||
|
Preston Klassen, M.D., M.H.S.
|
| |
—
|
| |
242,500
|
| |
363,750
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1,652,565
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
6,300
|
| |
12,600
|
| |
25,200
|
| |
—
|
| |
—
|
| |
766,521
|
| |||
|
Robert Lisicki
|
| |
—
|
| |
205,000
|
| |
307,500
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1,652,565
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
6,300
|
| |
12,600
|
| |
25,200
|
| |
—
|
| |
—
|
| |
766,521
|
|
(1)
|
The amounts shown in the “target” column reflect a percentage of such Named Executive Officer’s 2019 annual base salary as specified under the Annual Incentive Plan, the amounts shown in the “maximum” column are 150% of the respective target amounts and there is no minimum amount payable for a certain level of performance.
|
(2)
|
Amounts shown represent a contingent right to receive shares of common stock under the PRSUs granted in 2019, which shares shall vest only upon meeting certain stock price performance goals relating to the closing price of Arena’s common stock during the three-year performance period from January 4, 2019 through January 3, 2022, as described in more detail under the “2019 Performance Restricted Stock Units” Section in the Compensation Discussion & Analysis.
|
(3)
|
The stock options granted to our Named Executive Officers in 2019 are exercisable once vested for up to seven years from the date of grant. The stock options vest over four years, with 25% of the shares subject to the option vesting on the first anniversary of the grant date, and the remainder of the shares vesting monthly over the following three years in equal installments (except as otherwise necessary to avoid vesting of a fractional share).
|
(4)
|
In all cases, the exercise price of the option awards was equal to the closing market price of our common stock on the grant date as reported on the Nasdaq Global Select Market.
|
(5)
|
Represents the aggregate grant date fair value of stock awards and stock options granted in accordance with FASB ASC Topic 718. For the relevant assumptions used in determining these amounts, refer to Note 7 to our audited consolidated financial statements included in our Annual Report on Form 10-K as filed with the SEC on February 27, 2020.
|
34
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| |||||||||||||||
|
Name
|
| |
Option
Grant Date |
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable(1) |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable(1) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Equity
incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)(2) |
| |
Equity
incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(3) |
|
|
Amit D. Munshi
|
| |
5/11/2016
|
| |
332,500
|
| |
47,500
|
| |
$15.50
|
| |
5/11/2023
|
| |
—
|
| |
$—
|
|
|
2/13/2017
|
| |
152,307
|
| |
62,693
|
| |
14.60
|
| |
2/13/2024
|
| |
—
|
| |
—
|
| |||
|
1/19/2018
|
| |
148,541
|
| |
161,459
|
| |
35.60
|
| |
1/19/2025
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
285,000
|
| |
40.94
|
| |
1/4/2026
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
35,100
|
| |
1,594,242
|
| |||
|
Kevin R. Lind
|
| |
6/15/2016
|
| |
70,000
|
| |
10,000
|
| |
19.40
|
| |
6/15/2023
|
| |
—
|
| |
—
|
|
|
2/13/2017
|
| |
74,022
|
| |
30,453
|
| |
14.60
|
| |
2/13/2024
|
| |
—
|
| |
—
|
| |||
|
1/19/2018
|
| |
62,291
|
| |
67,709
|
| |
35.60
|
| |
1/19/2025
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1/4/2026
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
18,900
|
| |
858,438
|
| |||
|
Vincent E. Aurentz
|
| |
8/15/2016
|
| |
41,666
|
| |
13,334
|
| |
17.10
|
| |
8/15/2023
|
| |
—
|
| |
—
|
|
|
2/13/2017
|
| |
60,490
|
| |
29,010
|
| |
14.60
|
| |
2/13/2024
|
| |
—
|
| |
—
|
| |||
|
1/19/2018
|
| |
32,291
|
| |
67,709
|
| |
35.60
|
| |
1/19/2025
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1/4/2026
|
| |
—
|
| |
—
|
| |||
|
—
|
| |
—
|
| |
—
|
| |
—
|
| |
27,000
|
| |
1,226,340
|
| |
|
| |||
|
Preston S. Klassen, M.D., M.H.S.
|
| |
3/20/2017
|
| |
69,928
|
| |
40,422
|
| |
15.10
|
| |
3/20/2024
|
| |
—
|
| |
—
|
|
|
1/19/2018
|
| |
62,291
|
| |
67,709
|
| |
35.60
|
| |
1/19/2025
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1/4/2026
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
18,900
|
| |
858,438
|
| |||
|
Robert Lisicki
|
| |
11/26/2018
|
| |
47,395
|
| |
127,605
|
| |
40.95
|
| |
11/26/2025
|
| |
—
|
| |
—
|
|
|
1/4/2019
|
| |
—
|
| |
75,000
|
| |
40.94
|
| |
1/4/2026
|
| |
—
|
| |
—
|
| |||
|
1/4/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
18,900
|
| |
858,438
|
|
(1)
|
Stock options generally vest 25% per year over four years from the date of grant. Stock options are exercisable for up to years from the date of grant.
|
(2)
|
The outstanding stock awards are PRSUs representing a contingent right to receive shares of common stock, which shares shall vest upon the closing price of Arena’s common stock (the “Closing Price”) reaching certain thresholds during the three-year performance period from January 4, 2019 through January 3, 2022 (the “Performance Period”) and satisfaction of a continuing service requirement. The number of shares that may vest is based on the Closing Price during the Performance Period. If, on 5 consecutive or 10 non-consecutive trading days during the Performance Period, the Closing Price equals or exceeds $60, $67.50 or $75, and the reporting person thereafter satisfies a continuing service requirement, the PRSUs are deemed vested at 50%, 100% or 200%, respectively, of the target amount reported above (subject, in the event of a change of control, to additional vesting in circumstances where the per share transaction consideration falls in between the dollar values listed above), and the reporting person will receive at or following the time of vesting a number of shares equal to the achieved percentage multiplied by the total number of PRSUs. The $60 Closing Price threshold was achieved in 2019 resulting in release of the 50% of PRSUs granted to each officer. The number of PRSUs presented in this table represents the maximum number of shares that remain issuable pursuant to the PRSUs if all currently outstanding Closing Price targets are met during the remaining Performance Period and subsequent continuing service requirements are met, i.e., 200% of the target amount granted, less the 50% already vested.
|
(3)
|
Computed by multiplying the closing market price of our common stock on December 31, 2019, of $45.42 by the number of outstanding PRSUs set forth in this table.
|
2020 PROXY STATEMENT
|
| |
|
| |
35
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||
|
Name
|
| |
Number of
Shares Acquired on Exercise (#) |
| |
Value
Realized on Exercise ($)(1) |
| |
Number of
Shares Acquired on Vesting (#) |
| |
Value
Realized on Vesting ($)(2) |
|
|
Amit D. Munshi
|
| |
—
|
| |
$—
|
| |
11,700
|
| |
$553,644
|
|
|
Kevin R. Lind
|
| |
—
|
| |
—
|
| |
6,300
|
| |
298,116
|
|
|
Vincent E. Aurentz
|
| |
65,000
|
| |
1,655,202
|
| |
9,000
|
| |
425,880
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
19,000
|
| |
512,140
|
| |
6,300
|
| |
298,116
|
|
|
Robert Lisicki
|
| |
—
|
| |
—
|
| |
6,300
|
| |
298,116
|
|
(1)
|
Computed by multiplying the number of options exercised by the difference between the market price of our common stock at exercise and the exercise price of the stock options.
|
(2)
|
Computed by multiplying each of the shares vested by the closing market price of our common stock on the applicable vesting date.
|
36
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
Potential Payable Upon Termination
Without Cause or Resignation for Good Reason |
| |
Potential
Payable Upon Disability or Death |
| |||
|
Name and Benefit
|
| |
Without a Change
in Control(1) |
| |
With a Change
in Control(1) |
| |||
|
Amit D. Munshi
|
| |
|
| |
|
| |
|
|
|
Salary
|
| |
$1,320,000
|
| |
$1,320,000
|
| |
$—
|
|
|
Bonus
|
| |
924,000
|
| |
924,000
|
| |
—
|
|
|
Benefit continuation
|
| |
59,495
|
| |
59,495
|
| |
—
|
|
|
Accelerated vesting of stock options(2)
|
| |
5,806,496
|
| |
6,215,726
|
| |
4,559,582
|
|
|
Total
|
| |
$8,109,991
|
| |
$8,519,221
|
| |
$4,559,582
|
|
|
Kevin R. Lind(3)
|
| |
|
| |
|
| |
|
|
|
Salary
|
| |
$630,360
|
| |
$630,360
|
| |
$—
|
|
|
Bonus
|
| |
315,180
|
| |
315,180
|
| |
—
|
|
|
Benefit continuation
|
| |
33,734
|
| |
33,734
|
| |
—
|
|
|
Accelerated vesting of stock options(2)
|
| |
1,880,484
|
| |
2,199,664
|
| |
1,395,200
|
|
|
Total
|
| |
$2,859,758
|
| |
$3,178,938
|
| |
$1,395,200
|
|
|
Vincent E. Aurentz
|
| |
|
| |
|
| |
|
|
|
Salary
|
| |
$630,360
|
| |
$630,360
|
| |
$—
|
|
|
Bonus
|
| |
315,180
|
| |
315,180
|
| |
—
|
|
|
Benefit continuation
|
| |
34,000
|
| |
34,000
|
| |
—
|
|
|
Accelerated vesting of stock options(2)
|
| |
1,953,430
|
| |
2,272,609
|
| |
1,506,270
|
|
|
Total
|
| |
$2,932,970
|
| |
$3,252,149
|
| |
$1,506,270
|
|
|
Preston S. Klassen, M.D., M.H.S.
|
| |
|
| |
|
| |
|
|
|
Salary
|
| |
$727,500
|
| |
$727,500
|
| |
$—
|
|
|
Bonus
|
| |
363,750
|
| |
363,750
|
| |
—
|
|
|
Benefit continuation
|
| |
34,000
|
| |
34,000
|
| |
—
|
|
|
Accelerated vesting of stock options(2)
|
| |
1,907,318
|
| |
2,226,497
|
| |
1,246,009
|
|
|
Total
|
| |
$3,032,568
|
| |
$3,351,747
|
| |
$1,246,009
|
|
|
Robert Lisicki
|
| |
|
| |
|
| |
|
|
|
Salary
|
| |
$615,000
|
| |
$615,000
|
| |
$—
|
|
|
Bonus
|
| |
307,500
|
| |
307,500
|
| |
—
|
|
|
Benefit continuation
|
| |
31,595
|
| |
31,595
|
| |
—
|
|
|
Accelerated vesting of stock options(2)
|
| |
496,342
|
| |
906,394
|
| |
906,394
|
|
|
Total
|
| |
$1,450,437
|
| |
$1,860,489
|
| |
$906,394
|
|
(1)
|
For purposes of this table, “change in control” means a change in control or other corporate event that triggers payments under one or more arrangements described above.
|
(2)
|
Computed by multiplying the difference between the closing market price of our common stock of $45.42 on December 31, 2019, and the exercise price of each stock option vested as a result of employment discontinuation due to the termination by the number of accelerated stock options. In the event of qualifying disability or death, the unvested stock options granted under the 2017 Long-Term
|
2020 PROXY STATEMENT
|
| |
|
| |
37
|
(3)
|
In March 2020, Mr. Lind ceased serving as our Executive Vice President and Chief Financial Officer and was appointed as the President and Chief Executive Officer of our wholly owned subsidiary, Arena Neuroscience, Inc. Mr. Lind did not receive any severance benefits in connection with such change in position; his equity awards will continue to be eligible to vest subject to his continued service with our subsidiary and he remains eligible for the severance and change in control benefits described above.
|
•
|
To determine our total population of employees, we included all employees other than our CEO, including employees of consolidated subsidiaries, as of December 31, 2019, regardless of their FTE schedule or anticipated employment duration.
|
•
|
To identify our median employee from our employee population, we calculated the aggregate amount of each employee’s base salary (using a reasonable estimate of the hours worked and base pay rates for our hourly employees, excluding overtime, and actual base salary as of December 31, 2019 for our remaining employees), bonuses attributable to fiscal 2019 performance and the grant date fair value of equity awards granted in fiscal 2019 using the same methodology we use for estimating the value of the equity awards granted to our NEOs and reported in our Summary Compensation Table.
|
•
|
In making this determination, we annualized the base salary and target bonus compensation of employees who were employed by us for less than the entire fiscal year and not employed on a temporary or seasonal basis.
|
•
|
Compensation paid in foreign currencies was converted to U.S. dollars based on exchange rates in effect on December 31, 2019.
|
38
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
•
|
Annual Award for Continuing Directors and New Directors:
|
•
|
Options: Continuing and new directors elected at our annual stockholders’ meeting will be granted non-qualified stock options to purchase 5,000 shares of our common stock. The options are granted effective on the date of our annual stockholders’ meeting, and vest in equal monthly installments (except as necessary to avoid vesting of a fractional share) over one year beginning on the one month anniversary of the date of grant and subject to vesting conditions set forth below. New directors appointed other than at the annual stockholders’ meeting will be granted a prorated number of the 5,000 shares effective on the date of their appointment. The prorated number of options shall be determined by multiplying 5,000 by a fraction, the numerator of which is equal to the number of full months in the Prorated Period and the denominator of which is 12. These options will vest in equal monthly installments (except as necessary to avoid vesting of a fractional share) over the Prorated Period, beginning on the one month anniversary of the date of appointment, and subject to vesting conditions set forth below. As used above, “Prorated Period” means the time between the director’s appointment and the one-year anniversary of our most recent annual stockholders’ meeting.
|
•
|
RSUs: Continuing and new directors elected at our annual stockholders’ meeting will also be granted $150,000 in RSUs, with the number of RSUs determined by dividing $150,000 by the closing stock price on the date of grant. The RSUs are granted effective on the date of our annual stockholders’ meeting, and vest upon the earlier of the one-year anniversary after grant or the next annual stockholders’ meeting, subject to vesting conditions set forth below. New directors appointed other than at the annual stockholders’ meeting will be granted a prorated amount of the $150,000 RSU award effective on the date of their appointment. The prorated number of RSUs shall be determined by multiplying the equivalent of $150,000 in RSUs, determined based on the closing stock price on the date of grant, by a fraction, the numerator of which is equal to the number of full months in the Prorated Period and the denominator of which is 12. These RSUs will vest at the next annual stockholders’ meeting, subject to vesting conditions set forth below. As used above, “Prorated Period” means the time between the director’s appointment and the one-year anniversary of our most recent annual stockholders’ meeting.
|
•
|
Inducement Award for New Directors:
|
•
|
Options: New directors will be granted non-qualified stock options to purchase 2,500 shares of our common stock effective on the date of their election or appointment, vesting over three years in equal monthly installments (except as otherwise necessary to avoid vesting of a fractional share) and subject to vesting conditions set forth below, with vesting beginning on the one month anniversary of the date of election or appointment.
|
•
|
RSUs: New directors will also be granted $75,000 in RSUs, determined based on the closing stock price on the date of grant, effective on the date of their election or appointment, vesting in three equal installments (except as otherwise necessary to avoid vesting of a fractional share) on the date of the next three annual stockholder meetings after grant, subject to vesting conditions set forth below.
|
•
|
Exercise Price and Vesting
|
•
|
The exercise price of options shall be the Fair Market Value on the date of grant.
|
•
|
In the event of a director’s Separation From Service due to death, Disability, or a Change in Control of Arena that occurs upon or prior to a Separation From Service, all of the director’s options and RSUs become fully vested. In the event of any other Separation From Service, (a) vesting of the options and RSUs is subject to the director’s provision of continued service to Arena through the applicable vesting date, and (b) unvested options and RSUs terminate upon the director’s Separation From Service.
|
•
|
“Change in Control” means an event that: (a) is a “Change in Control” as such term is defined in the applicable long-term incentive plan, and (b) also qualifies as either: (i) a change in the ownership of Arena, (ii) a change in the effective control of Arena, or (iii) a change in the ownership of a substantial portion of Arena’s assets (as each of these events are defined in Treas. Reg. § 1.409A-3(i)(5), or as these definitions may later be modified by other regulatory pronouncements).
|
2020 PROXY STATEMENT
|
| |
|
| |
39
|
•
|
“Director” or “director” as used herein refers only to non-employee directors.
|
•
|
“Disability” means the participant’s becoming disabled within the meaning of Section 22(e)(3) of the Code, or as otherwise determined by the Compensation Committee in its discretion.
|
•
|
“Fair Market Value” is as defined in the applicable long-term incentive plan.
|
•
|
“Separation From Service” means the director has had a separation from service with Arena for purposes of Section 409A of the Code.
|
•
|
Annual retainer for directors: $13,750 per quarter, paid in advance. New directors will receive a prorated amount of the quarterly payment for the quarter within which they are appointed or elected. The proration calculation shall be made for the number of days until the beginning of the next quarter.
|
•
|
Additional annual retainer for Chair of the Board: An additional $8,750 per quarter, paid in advance. New Chairs will receive a prorated amount of the quarterly payment for the quarter within which they are appointed to such position. The proration calculation shall be made for the number of days until the beginning of the next quarter.
|
•
|
Annual retainer for committee members (including committee chairs):
|
•
|
Audit: $10,000 for members; additional $10,000 for chair
|
•
|
Compensation: $7,500 for members; additional $10,000 for chair
|
•
|
Corporate Governance & Nominating: $5,000 for members; additional $5,000 for chair
|
40
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
Name
|
| |
Fees Earned
or Paid in Cash ($)(1) |
| |
Stock
Awards ($)(2) |
| |
Option
Awards ($)(3) |
| |
Total
($) |
|
|
Tina S. Nova, Ph.D.(4)
|
| |
$95,000
|
| |
$149,951
|
| |
$150,182
|
| |
$395,133
|
|
|
Jayson Dallas, M.D.(5)
|
| |
72,500
|
| |
149,951
|
| |
150,182
|
| |
372,633
|
|
|
Oliver Fetzer, Ph.D.(6)
|
| |
67,500
|
| |
149,951
|
| |
150,182
|
| |
367,633
|
|
|
Kieran T. Gallahue(7)
|
| |
70,000
|
| |
149,951
|
| |
150,182
|
| |
370,133
|
|
|
Jennifer Jarrett(8)
|
| |
75,000
|
| |
149,951
|
| |
150,182
|
| |
375,133
|
|
|
Garry Neil, M.D.(9)
|
| |
60,000
|
| |
149,951
|
| |
150,182
|
| |
360,133
|
|
|
Manmeet S. Soni(10)
|
| |
70,000
|
| |
149,951
|
| |
150,182
|
| |
370,133
|
|
|
Randall E. Woods(11)
|
| |
72,500
|
| |
149,951
|
| |
150,182
|
| |
372,633
|
|
(1)
|
For each director, includes cash retainer and other fees earned or paid in the fiscal year ended December 31, 2019.
|
(2)
|
Represents the aggregate grant date fair value of RSUs granted in accordance with FASB ASC Topic 718. The fair value was calculated based on the closing market price of our common stock on the grant date. All directors were awarded 2,654 RSU awards on June 13, 2019, which vest in full on the earliest of June 13, 2020, or the date of Arena’s 2020 annual meeting of stockholders.
|
(3)
|
Represents the aggregate grant date fair value of stock options granted in accordance with FASB ASC Topic 718. The fair value was calculated based on the closing market price of our common stock on the grant date. All directors were awarded 5,000 options on June 13, 2019, which vest in approximately equal monthly installments over one year, are exercisable once vested and expire on the seventh anniversary of the grant date.
|
(4)
|
Dr. Nova had a total of 48,300 options and 2,654 RSUs outstanding at December 31, 2019.
|
(5)
|
Dr. Dallas had a total of 36,667 options and 2,654 RSUs outstanding at December 31, 2019.
|
(6)
|
Dr. Fetzer had a total of 36,667 options and 2,654 RSUs outstanding at December 31, 2019.
|
(7)
|
Mr. Gallahue had a total of 12,083 options and 3,770 RSUs outstanding at December 31, 2019.
|
(8)
|
Ms. Jarrett had a total of 32,500 options and 2,654 RSUs outstanding at December 31, 2019.
|
(9)
|
Dr. Neil had a total of 36,667 options and 2,654 RSUs outstanding at December 31, 2019.
|
(10)
|
Mr. Soni had a total of 10,000 options and 3,870 RSUs outstanding at December 31, 2019.
|
(11)
|
Mr. Woods had a total of 43,500 options and 2,654 RSUs outstanding at December 31, 2019.
|
2020 PROXY STATEMENT
|
| |
|
| |
41
|
42
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| | | |
✔
|
|
2020 PROXY STATEMENT
|
| |
|
| |
43
|
|
Fiscal Year
|
| |
2017
|
| |
2018
|
| |
2019
|
|
|
Stock options granted
|
| |
2,240,853
|
| |
3,513,833
|
| |
3,069,690
|
|
|
Full value awards granted (director awards; time-based vesting)
|
| |
—
|
| |
26,694
|
| |
21,232
|
|
|
Performance Restricted Stock Units earned
|
| |
—
|
| |
32,322
|
| |
140,900
|
|
|
Weighted-average common shares outstanding(1)
|
| |
32,990,191
|
| |
47,041,054
|
| |
49,778,993
|
|
|
Gross burn rate(2)
|
| |
6.8%
|
| |
7.6%
|
| |
6.5%
|
|
(1)
|
The number of common shares outstanding as of the Record Date was not used for the annual gross burn rate calculations.
|
(2)
|
The gross burn rate is calculated as follows: (a) shares subject to options and nonperformance-based full-value shares granted and Performance Restricted Stock Unit awards earned in the fiscal year, divided by (b) weighted-average common shares outstanding for the applicable fiscal year.
|
44
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
As of
March 31, 2020 |
|
|
Shares subject to outstanding stock options(1)
|
| |
10,374,408
|
|
|
Shares subject to outstanding restricted stock units and performance restricted stock units(2)
|
| |
312,120
|
|
|
Weighted-average exercise price of outstanding stock options
|
| |
$36.46
|
|
|
Weighted-average remaining term of outstanding stock options (years)
|
| |
5.17
|
|
|
Shares available for grant under the 2017 LTIP
|
| |
1,237,250
|
|
|
Potential dilution(3)
|
| |
19.2%
|
|
(1)
|
Includes 1,045,350 shares subject to outstanding inducement stock options issued outside of the stockholder-approved share reserves of our long-term incentive plans, pursuant to Nasdaq Listing Rule 5635(c)(4), or Inducement Awards.
|
(2)
|
Includes 149,235 shares issuable pursuant to Performance Restricted Stock Units, or PRSUs, that were outstanding as of March 31, 2020, representing achievement of performance goals at target levels (100%). Of that number, 6,300 shares are issuable under PRSUs that were issued as Inducement Awards. The maximum number of shares that remain issuable pursuant to the PRSUs if all currently outstanding Closing Price targets are met during the remaining Performance Period and subsequent continuing service requirements are met is 435,105, i.e., 200% of the target amount granted, less the portion already vested, if any.
|
(3)
|
Potential dilution is calculated by dividing number of shares subject to outstanding awards (as reported on the first two rows of the table) and number of shares available for grant by the sum of common shares outstanding as of March 31, 2020, number of shares subject to outstanding awards, and number of shares available for grant.
|
•
|
Repricing is not allowed. The 2020 LTIP prohibits the repricing of stock options and stock appreciation rights without prior stockholder approval (except in the case of certain equitable adjustments as described in the plan).
|
•
|
No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights must have an exercise price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted.
|
•
|
Reasonable Limits on Maximum Terms of Options and Stock Appreciation Rights. Stock options and stock appreciation rights granted under the 2020 LTIP have a maximum permitted term of seven years.
|
•
|
Limit on non-employee director compensation. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a non-employee director with respect to any period commencing on the date of the Company’s annual meeting of stockholders for a particular year and ending on the day immediately prior to the date of our annual meeting of stockholders for the next subsequent year, including equity awards granted under the 2020 LTIP and our other equity plans and cash fees paid or payable by us to such non-employee director, will not exceed (i) $750,000 in total value or (ii) in the event such non-employee director is first appointed or elected to the Board of Directors during such period or with respect to a lead director or chairman role, $1,000,000 in total value, in each case calculating the value of any equity awards based on the grant date fair value of such awards for financial reporting purposes. For such purposes, any compensation shall be counted towards this limit for the service year in which it is earned (and not when settled or paid in the event it is deferred).
|
•
|
Awards subject to forfeiture/clawback. Awards granted under the 2020 LTIP will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose other clawback, recovery or recoupment provisions in an award agreement. As disclosed in the Compensation, Discussion & Analysis, we currently maintain a clawback policy that applies to current and former executive officers. Under the policy, following an accounting restatement that is required to be prepared due to material noncompliance with any financial reporting requirements under the securities laws, we will seek repayment from any current or former
|
2020 PROXY STATEMENT
|
| |
|
| |
45
|
•
|
No dividends are paid on unvested awards. Any dividends or dividend equivalents applicable to the shares subject to an award will be subject to the same vesting or performance conditions as the underlying award and will not be paid until and unless the underlying award vests.
|
46
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
2020 PROXY STATEMENT
|
| |
|
| |
47
|
48
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
2020 PROXY STATEMENT
|
| |
|
| |
49
|
50
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” THE APPROVAL OF THE 2020 LONG-TERM INCENTIVE PLAN. |
| |
✔
|
|
2020 PROXY STATEMENT
|
| |
|
| |
51
|
|
Plan category
|
| |
Number of securities
to be issued upon exercise of outstanding options, warrants and rights (a) |
| |
Weighted-average
exercise price of outstanding options, warrants and rights (b) |
| |
Number of securities
remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|
|
Equity compensation plans approved by security holders
|
| |
8,073,653*
|
| |
$33.85
|
| |
4,024,755***
|
|
|
Equity compensation plans not approved by security holders
|
| |
625,350**
|
| |
16.07
|
| |
—
|
|
|
Total
|
| |
8,699,003
|
| |
$32.61
|
| |
4,024,755***
|
|
*
|
Includes stock options to purchase 7,909,789 shares of our common stock with a per share weighted-average exercise price of $35.75. Also includes (i) 23,564 restricted stock unit awards with no exercise price and (ii) 140,300 shares issuable pursuant to Performance Restricted Stock Units that were outstanding as of December 31, 2019, representing achievement of performance goals at target levels (100%). The maximum number of shares that remain issuable pursuant to the PRSUs if all currently outstanding Closing Price targets are met during the remaining Performance Period and subsequent continuing service requirements are met is 420,900, i.e., 200% of the target amount granted, less the 50% already vested.
|
**
|
Represents inducement stock options to purchase 625,350 shares of our common stock reserved for inducement awards.
|
***
|
Represents stock options to purchase 3,024,755 shares of our common stock reserved for future grants under our 2017 Long-Term Incentive Plan, as amended and restated, or 2017 LTIP, and 1,000,000 shares reserved for issuance under our 2019 Employee Stock Purchase Plan, or 2019 ESPP, which became effective on June 13, 2019. Stock options and stock appreciation rights granted under our 2017 LTIP reduce the available number of shares under our 2017 LTIP by 1 share for every share issued while awards other than stock options and stock appreciation rights granted under our 2017 LTIP reduce the available number of shares by 1.75 shares for every share issued. In addition, shares that are released from awards granted under any of our prior long-term incentive plans or the 2017 LTIP because the awards expire, are forfeited or are settled for cash will increase the number of shares available under our 2017 LTIP by 1 share for each share released from a stock option or stock appreciation right and by 1.75 shares for each share released from a restricted stock award or restricted stock unit award. Shares we withhold to satisfy any tax withholding obligation with respect to an award under any of our prior long-term incentive plans or the 2017 LTIP will not increase the share reserve. As of December 31, 2019, no shares have been issued under the 2019 ESPP.
|
52
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
THE AUDIT COMMITTEE
|
|
|
|
| |
Manmeet S. Soni, Chair
|
|
|
|
| |
Kieran T. Gallahue
|
|
|
|
| |
Jennifer Jarrett
|
|
2020 PROXY STATEMENT
|
| |
|
| |
53
|
|
|
| |
Fiscal Years Ended
December 31, |
| |||
|
|
| |
2019
|
| |
2018
|
|
|
Audit Fees(1)
|
| |
$880,744
|
| |
$725,725
|
|
|
Tax Fees(2)
|
| |
—
|
| |
42,500
|
|
|
Total
|
| |
$880,744
|
| |
$768,225
|
|
(1)
|
Consisted of fees paid for professional services for the integrated audit of our annual consolidated financial statements, review of condensed consolidated financial statements included in our quarterly reports and services provided in conjunction with the statutory audits for our Swiss subsidiaries Arena Pharmaceuticals GmbH and Arena Pharmaceuticals Development GmbH. Also included are fees related to comfort letter procedures in connection with equity offerings and review of registration statements on Forms S-3 and
S-8. |
(2)
|
Fees were primarily related to services in connection with transfer pricing valuation services.
|
(3)
|
There were no fees billed in the years ended December 31, 2019 and 2018, for products or services provided by KPMG other than those disclosed in this table.
|
54
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
|
|
| |
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP TO SERVE AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020. |
| |
✔
|
|
2020 PROXY STATEMENT
|
| |
|
| |
55
|
1.
|
Why am I receiving these materials?
|
2.
|
Why did I receive a Notice Regarding the Availability of Proxy Materials?
|
3.
|
How can I attend the 2020 Annual Meeting?
|
4.
|
Who can vote at the 2020 Annual Meeting?
|
56
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
5.
|
What is a proxy?
|
6.
|
What am I voting on?
|
1.
|
Election of the eight nominees for director named herein to our Board of Directors to serve until the next annual meeting of stockholders and until their respective successors are elected and qualified or until their earlier resignation or removal (Proposal 1);
|
2.
|
Advisory approval of the compensation of our named executive officers, as disclosed in this proxy statement in accordance with rules of the SEC (Proposal 2);
|
3.
|
Approval of an amendment to our Amended and Restated Certificate of Incorporation to effect an increase in the total number of authorized shares of our common stock (Proposal 3);
|
4.
|
Approval of the Arena Pharmaceuticals, Inc. 2020 Long-Term Incentive Plan (Proposal 4);
|
5.
|
Ratification of the appointment of KPMG LLP, an independent registered public accounting firm, as our independent auditors for the fiscal year ending December 31, 2020 (Proposal 5); and
|
6.
|
Such other proposals as may properly come before the meeting or any adjournment or postponement thereof.
|
7.
|
What if another matter is properly brought before the 2020 Annual Meeting?
|
8.
|
What if I return a proxy card or otherwise vote but do not make specific choices?
|
9.
|
How do I vote?
|
2020 PROXY STATEMENT
|
| |
|
| |
57
|
10.
|
What does it mean if I receive more than one Internet Notice or proxy card?
|
11.
|
Can I change my vote after submitting my proxy?
|
12.
|
How many shares must be present to hold the 2020 Annual Meeting?
|
•
|
is present at the meeting, or
|
•
|
has properly submitted a proxy (including voting on the Internet or by telephone).
|
13.
|
What are broker non-votes?
|
58
|
| |
|
| |
2020 PROXY STATEMENT
|
| |
|
14.
|
When do brokers have discretionary voting authority to vote my shares without my instruction?
|
15.
|
How many votes must the nominees receive to be elected as directors, as described in Proposal 1?
|
16.
|
How many votes must be received to approve the compensation of our named executive officers, as described in Proposal 2?
|
17.
|
How many votes must be received to approve the amendment to our Amended and Restated Certificate of Incorporation to effect an Authorized Shares Increase, as described in Proposal 3?
|
18.
|
How many votes must be received to approve the Arena Pharmaceuticals, Inc. 2020 Long-Term Incentive Plan, as described in Proposal 4?
|
19.
|
How many votes must be received to ratify the appointment of KPMG LLP as our independent auditors for the fiscal year ending December 31, 2020, as described in Proposal 5?
|
20.
|
How are votes counted?
|
2020 PROXY STATEMENT
|
| |
|
| |
59
|
21.
|
Who will bear the cost of soliciting votes for the 2020 Annual Meeting?
|
22.
|
How can I find out the results of the voting at the 2020 Annual Meeting?
|
23.
|
Where can I find information about the company’s corporate governance?
|
60
|
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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61
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By Order of our Board of Directors
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Joan Schmidt
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Executive Vice President, General Counsel and Secretary
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62
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2020 PROXY STATEMENT
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ARENA PHARMACEUTICALS, INC.
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By:
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Amit D. Munshi
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President and Chief Executive Officer
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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2020 PROXY STATEMENT
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B-14
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2020 PROXY STATEMENT
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1 Year Arena Pharmaceuticals Chart |
1 Month Arena Pharmaceuticals Chart |
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