UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14A
Proxy Statement Pursuant
to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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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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Soliciting Material under Rule 14a-12
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Relmada Therapeutics, Inc.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant) Payment of Filing Fee
(Check the appropriate box):
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Fee computed on table below per Exchange Act
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Check box if any part of the fee is offset as
provided by Exchange Act Rule 0-1 1(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
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Letter to Stockholders
December 18, 2017
Dear Stockholders,
On behalf of all of us at Relmada Therapeutics, thank you for your
support during a pivotal year for our company that included several
important changes in our operations and clinical programs designed
to fuel our future growth and success. We look forward to sharing
additional details on our progress this year and invite you to join
us for the 2017 annual meeting for stockholders of Relmada
Therapeutics, Inc. to be held at the Hilton Hotel, 1335 Avenue of
the Americas, New York, NY on February 2, 2018 at 9:30 a.m. Eastern
Standard Time.
During 2017, Relmada Therapeutics moved forward with several
strategic initiatives that we believe have made us a stronger and
more agile company. These changes have positioned us for many
opportunities to advance our business plan in 2018. As we first
outlined in 2016, we have made significant progress in efforts to
consolidate our operations and our focus on conditions that affect
the central nervous system (CNS). In addition, following report of
encouraging safety clinical results from our lead program, REL-1017
(d-methadone, dextromethadone) as a potential rapid acting oral
agent for the treatment of depression, our research confirmed
activity signals with additional pre-clinical work in proven animal
models, showing consistent statistically significant activity
signals versus placebo and comparable to ketamine, the positive
efficacy standard control.
As we have reported progress in our strategic approach to clinical
research based on scientific data, we have also achieved important
results in our operations. We took steps to reduce non-R&D
operating expenses, including reductions in full time employees and
transitions to advisory support where advantageous. These changes
led to a realignment in our infrastructure, facilitating a
reduction in corporate office real estate expenses.
KEY RELMADA ACHIEVEMENTS
IN 2017
·
FDA acceptance of Investigational New Drug (IND) application and
authorization to commence Phase 2a clinical trial for
d-methadone.
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Received FDA Fast Track designation for d-Methadone for adjunctive
treatment of major depressive disorder.
·
Charles J. Casamento named chairman of the Board of Directors. Mr.
Casamento has been our board member since July 2015 and is chairman
of the Audit Committee. Mr. Casamento has extensive experience in
the pharmaceutical industry and has served on the boards of twelve
public companies.
·
Appointed Dr. Maurizio Fava chair of the Relmada Dextromethadone
Scientific Advisory Board. Dr. Fava is executive vice chair of the
Department of Psychiatry and executive director of the Clinical
Trials Network and Institute at Massachusetts General Hospital and
associate dean for clinical and translational research and Slater
Family Professor of Psychiatry at Harvard Medical School.
·
Named Dr. Ottavio Vitolo as executive clinical advisor to Relmada.
Dr. Vitolo is a neuropsychiatrist and researcher with extensive
pre-clinical and clinical research experience in both academic and
industry settings including Pfizer and Shire Human Genetic
Therapies.
·
Raised approximately $7.0 million in a private placement.
LEAD PROGRAM:
Dextromethadone (REL-1017)
The development program of dextromethadone continues to deliver
encouraging results and is positioned to advance to a Phase 2a
clinical trial. As an enantiomer of racemic methadone,
dextromethadone has been shown to possess N-methyl-D-aspartate
(NMDA) antagonist properties with virtually no opioid activity at
the expected therapeutic doses. Activation of NMDA receptors is
associated with depression, neuropathic pain, and several other CNS
disorders, and clinical research to date indicates that
dextromethadone could have a therapeutic role by blocking this
activity.
Results of
in vivo
and
in vitro
studies strongly support the advancement of the development program
for dextromethadone as a rapidly acting oral agent for the
treatment of depression. We filed an IND application for a Phase II
program with the FDA in December 2016, which was accepted on
January 25, 2017. In April 2017, we announced that the FDA granted
Fast Track designation for dextromethadone for the adjunctive
treatment of major depressive disorder. Fast Track designation is a
process designed to facilitate the development and expedite the
review of drugs to treat serious conditions that represent areas of
significant unmet medical need.
Relmada has also been awarded intellectual property (IP) protection
for our global rights to develop and market dextromethadone for the
treatment of psychiatric symptoms. Our IP position provides for
broad coverage to develop dextromethadone as a treatment for a
range of psychological and psychiatric disorders, including
depression, anxiety, fatigue, and mood instability that comprises
pseudo-bulbar affect.
PLANNING FOR CONTINUED
PROGRESS IN 2018
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Robust clinical and preclinical data on dextromethadone continue to
reinforce the strength of this program as our lead product
candidate, with significant potential to address a range of unmet
needs and commercial opportunities in the treatment of CNS
disorders.
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We are preparing for a Phase 2a clinical trial for dextromethadone,
with patient enrollment expected to begin in early 2018. The
multicenter, randomized, double-blind, placebo-controlled trial is
designed to assess depressive symptom changes together with safety
and tolerability of dextromethadone as adjunctive therapy in the
treatment of subjects diagnosed with treatment resistant
depression.
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We are extending our efforts to advance our research in
pre-clinical models to identify the most promising opportunities to
expand the potential indications for dextromethadone to address
other difficult to treat CNS diseases and conditions.
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Our strengthened financial position also supports our efforts to
up-list to the NASDAQ exchange, which will remain a key corporate
goal in 2018.
We kindly ask you to complete and send back your proxy form as soon
as possible as indicated in the proxy material and we look forward
to seeing many of you at the upcoming shareholder meeting.
As we have continued to make the strategic decisions necessary to
advance our development programs as rapidly as possible and
strengthen our operations at every level, we would like to thank
all of our valued shareholders for the confidence and support you
have shown. We anticipate that 2018 will be a year of important
progress on many fronts for Relmada, and we look forward to
bringing you news of these developments throughout the year.
Sincerely,
Sergio Traversa
CEO of Relmada Therapeutics
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 2, 2018
To the stockholders of Relmada Therapeutics, Inc.,
You are cordially invited to attend the 2017 annual meeting of
stockholders of Relmada Therapeutics, Inc. to be held at the New
York Hilton Midtown, 1335 Avenue of Americas, New York, New York on
February 2, 2018 at 9:30 a.m. Eastern Standard Time. At the annual
meeting you will be asked to vote on the following matters:
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Proposal 1: To elect Paul Kelly, as a Class III director,
to serve for a three-year term that expires at the 2020 annual meeting of stockholders, or until his successor is elected and
qualified or until his earlier resignation or removal;
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Proposal 2: To ratify the appointment of GBH CPAs, PC as
our independent registered public accounting firm for the fiscal year ending June 30, 2018; and
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Proposal 3: To approve an amendment to the Relmada Therapeutics,
Inc. 2014 Stock Option and Equity Incentive Plan, as amended, to increase the shares of our common stock available for issuance
thereunder by 2.5 million shares; and
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Proposal 4: To conduct a non-binding advisory vote on our
2017 executive compensation; and
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To consider and act upon any other business as may properly
come before the annual meeting or any adjournments thereof.
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The Board of Directors
recommends that you vote at the annual meeting “FOR”
all four proposals.
These items of business are more fully
described in the proxy statement that is attached to this Notice.
The Board of Directors has fixed the close of business on December
12, 2017 as the “Record Date” for determining the
stockholders that are entitled to notice of and to vote at the
annual meeting and any adjournments thereof. A list of stockholders
entitled to vote at the meeting will be available for examination
for a period of ten days before the meeting in person at our
corporate offices in New York, New York, and also at the meeting.
Stockholders may examine the list for purposes related to the
meeting.
It is important that
your shares are represented and voted at the meeting.
Y
ou can vote your shares
by completing, signing, and returning your completed proxy card or
vote by mail, internet or by fax by following the instructions
included in the proxy statement. You can revoke a proxy at any time
prior to its exercise at the meeting by following the instructions
in the proxy statement.
You may attend the annual meeting and vote in person even if you
have previously voted by proxy in one of the ways listed above.
Your proxy is revocable in accordance with the procedures set forth
in the proxy statement.
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By Order of the Board of Directors
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/s/ Charles J. Casamento
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New York, NY
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Chairman of the Board
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December 18, 2017
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
The Proxy Statement and the 2017 annual report on Form 10-K are
available at
www.relmada.com or
www.proxyvote.com
TABLE OF
CONTENTS
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General
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Questions and Answers
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Who Can Help Answer Your Questions?
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Corporate Governance
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Board Committees
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Director Compensation
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Audit Committee Report
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Compensation Committee report
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Directors and Executive Officers
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Executive Compensation
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Principal Stockholders
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Certain Relationships and Related
Transactions
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Proposal 1 – Election of
Director
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Proposal 2 – Ratification of the
Appointment of GBH CPAs, PC
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Proposal 3 – To approve an amendment to
the Relmada Therapeutics, Inc. 2014 Stock Option and Equity
Incentive Plan, as amended, to increase the shares of our common
stock available for
issuance thereunder by 2.5 million shares
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Proposal 4: To conduct a non-binding advisory
vote on our 2015 executive compensation
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Other Matters
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Annual Report on Form 10-K
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Householding of Proxy Materials
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Proposals of Stockholders
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Additional Information
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Where You Can Find More Information
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Stockholders Should Read the Entire Proxy Statement Carefully Prior
to Returning Their Proxies
PROXY
STATEMENT
FOR
ANNUAL MEETING OF
STOCKHOLDERS
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors
of Relmada Therapeutics, Inc. for use at our 2017 annual meeting of
stockholders to be held at the New York Hilton Midtown, 1335 Avenue
of Americas, New York, New York on February 2, 2018 at 9:30 a.m.
Eastern Standard Time. Voting materials, including this proxy
statement and proxy card, are expected to be first delivered to all
or our stockholders on or about December 18, 2017.
QUESTIONS AND
ANSWERS
Following are some commonly asked questions raised by our
stockholders and answers to each of those questions.
What may I vote on at the annual meeting?
At the annual meeting, stockholders will consider and vote upon the
following matters:
To elect Paul Kelly, as a Class III director, to serve for a
three-year term that expires at the 2020 Annual Meeting of
Stockholders, or until his successor is elected and qualified or
until his earlier resignation or removal; and
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To ratify the appointment of GBH CPAs, PC as our independent
registered public accounting firm for the fiscal year ending June 30, 2018; and
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To approve an amendment to the Relmada Therapeutics, Inc.
2014 Stock Option and Equity Incentive Plan, as amended, to increase the shares of our common stock available for issuance thereunder
by 2.5 million shares; and
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To conduct a non-binding advisory vote on our 2017 executive
compensation; and
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such other matters as may properly come before the annual
meeting or any adjournments or postponement thereof.
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How does the Board of Directors recommend that I vote on the
proposals?
Our Board unanimously recommends that the stockholders vote
“FOR” all proposals being put before our stockholders
at the Meeting.
How do I vote?
Whether you plan to
attend the annual meeting or not, we urge you to vote by proxy. If
you vote by proxy, the individuals named on the proxy card, or your
“proxies,” will vote your shares in the manner you
indicate. You may specify whether your shares: should be voted for
or withheld for the nominee for director; and should be voted for,
against or abstained with respect to the ratification of the
appointment of the Company’s independent registered public
accounting firm; should be voted for, against or abstained with
respect to approving an amendment to our stock plan; and should be
voted for, against or abstained with respect to approving a
non-binding advisory vote on our 2017 executive compensation.
Voting by proxy will not affect your right to attend the annual
meeting. If your shares are registered directly in your name
through our transfer agent, Empire Stock Transfer, or you have
stock certificates registered in your name, you may submit a proxy
to vote:
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By Internet or by
telephone. Follow the instructions attached to the proxy card to
submit a proxy to vote by Internet or telephone.
1
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By mail. If you received
one or more proxy cards by mail, you can vote by mail by
completing, signing, and returning the enclosed proxy card
applicable to your class of stock in the enclosed postage prepaid
envelope. Your proxy will be voted in accordance with your
instructions. If you sign the proxy card but do not specify how you
want your shares voted, they will be voted as recommended by our
Board of Directors.
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In person at the meeting. If you attend
the annual meeting, you may deliver your completed proxy card in
person or you may vote by completing a ballot, which will be
available at the annual meeting. You are required to register in
advance of the annual meeting if you plan to attend the annual
meeting in person. If you wish to register in advance of the annual
meeting, please contact our investor relations office by no later
than January 25, 2018, by e-mail to
straversa@relmada.com,
mail to Relmada Therapeutics, Inc., 750
Third Avenue, 9
th
Floor, New York, New York 10017, or
telephone at (212) 547-9591.
Telephone and Internet
voting facilities for all stockholders of record will be available
24-hours a day and will close at 11:59 p.m., E.S.T, on Thursday,
February 1, 2018.
If your shares are held
in “street name” (held in the name of a bank, broker or
other nominee who is the holder of record), you must provide the
bank, broker or other nominee with instructions on how to vote your
shares and can do so as follows:
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By Internet or by
telephone. Follow the instructions you receive from the record
holder to vote by Internet or telephone.
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By mail. You should
receive instructions from the record holder explaining how to vote
your shares.
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In person at the
meeting. Contact the broker, bank or other nominee who holds your
shares to obtain a broker’s proxy card and bring it with you
to the annual meeting. You will not be able to vote at the annual
meeting unless you have a proxy card from your broker, bank or
other nominee.
What happens if additional matters are presented at the annual
meeting?
Other than the election of our director, the ratification of the
appointment of our auditor, an increase in shares under our stock
plan, and a non-binding advisory vote on our 2017 executive
compensation we are not aware of any other business to be acted
upon at the annual meeting. If you grant a proxy, the person named
as proxy holder, Sergio Traversa, PharmD, MBA, our Chief Executive
Officer, will have the discretion to vote your shares on any
additional matters properly presented for a vote at the annual
meeting.
What happens if I do not give specific voting
instructions?
If you hold shares in your name and you sign and return a proxy
card without giving specific voting instructions, your shares will
be voted as recommended by our Board of Directors on all matters
and as the proxy holder may determine in her or his discretion with
respect to any other matters properly presented for a vote before
the annual meeting. If you hold your shares through a stockbroker,
bank or other nominee and you do not provide instructions on how to
vote, your stockbroker or other nominee may exercise their
discretionary voting power with respect to certain proposals that
are considered as “routine” matters. For example,
Proposal 2 — ratification of the appointment of GBH CPAs, PC
as our independent registered public accounting firm is commonly
considered to be a routine matter, and thus your stockbroker, bank
or other nominee may exercise their discretionary voting power with
respect to Proposal 2.
If the organization that
holds your shares does not receive instructions from you on how to
vote your shares on a non-routine matter, the organization that
holds your shares will inform us that it does not have the
authority to vote on these matters with respect to your
shares.
This is generally referred to as a “broker
non-vote.” When the vote is tabulated for any particular
matter, broker non-votes will be counted for purposes of
determining whether a quorum is present, but will not otherwise be
counted. In the absence of specific instructions from you, your
broker does not have discretionary authority to vote your shares
with respect to Proposal 1 — the election of Mr. Kelly to our
Board of Directors, Proposal 3 — Increase in authorized
shares under our stock plan, and Proposal 4 — To conduct a
non-binding advisory vote on our 2017 executive compensation.
We encourage you to
provide voting instructions to the organization that holds your
shares by carefully following the instructions provided in the
notice.
2
What is the quorum requirement for the annual meeting?
On December 12, 2017, the Record Date for determining which
stockholders are entitled to vote at the annual meeting or any
adjournments or postponements thereof, there were 12,545,120 shares
of our common stock outstanding which is our only class of voting
securities. Each share of common stock entitles the holder to one
vote on matters submitted to a vote of our stockholders. Holders of
thirty-four percent (34%) of our outstanding common shares as of
the Record Date must be present at the annual meeting (in person or
represented by proxy) in order to hold the meeting and conduct
business. This is called a quorum. Your shares will be counted for
purposes of determining if there is a quorum, even if you wish to
abstain from voting on some or all matters introduced at the annual
meeting, if you are present and vote in person at the meeting or
have properly submitted a proxy card or voted by mail, internet or
fax.
How can I change my vote after I return my proxy card?
You may revoke your proxy and change your vote at any time before
the final vote at the annual meeting. You may do this by signing a
new proxy card with a later date or by attending the annual meeting
and voting in person. However, your attendance at the annual
meeting will not automatically revoke your proxy unless you vote at
the annual meeting or specifically request in writing that your
prior proxy be revoked.
Is my vote confidential?
Proxy instructions, ballots and voting tabulations that identify
individual stockholders are handled in a manner that protects your
voting privacy. Your vote will not be disclosed either within our
Company or to third parties, except:
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as necessary to meet applicable legal requirements;
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to allow for the tabulation of votes and certification of the vote;
and
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to facilitate a successful proxy solicitation.
Any written comments that a stockholder might include on the proxy
card may be forwarded to our management.
Where can I find the voting results of the annual
meeting?
The preliminary voting results will be announced at the annual
meeting. The final voting results will be tallied by our inspector
of elections and reported in a Current Report on Form 8-K, which we
will file with the Securities and Exchange Commission, or SEC,
within four business days of the date of the annual meeting.
How can I obtain a separate set of voting materials?
To reduce the expense of delivering duplicate voting materials to
our stockholders who may have more than one Relmada Therapeutics,
Inc. stock account, we are delivering only one Notice to certain
stockholders who share an address, unless otherwise requested. If
you share an address with another stockholder and have received
only one Notice, you may write or call us to request to receive a
separate Notice. Similarly, if you share an address with another
stockholder and have received multiple copies of the Notice, you
may write or call us at the address and phone number below to
request delivery of a single copy of this Notice. For future annual
meetings, you may request separate Notices, or request that we send
only one Notice to you if you are receiving multiple copies, by
writing or calling us at:
Relmada Therapeutics, Inc.
Attention: Sergio Traversa, Chief Executive Officer
750 Third Avenue, 9
th
Floor
New York, New York 10017
Tel: (212) 547-9591
Who pays for the cost of this proxy solicitation?
We will pay the costs of the solicitation of proxies. We may also
reimburse brokerage firms and other persons representing beneficial
owners of shares for expenses incurred in forwarding the voting
materials to their customers
3
who are beneficial owners and obtaining their voting instructions.
In addition to soliciting proxies by mail, our board members,
officers and employees may solicit proxies on our behalf, without
additional compensation, personally, electronically or by
telephone.
How can I obtain a copy of Relmada Therapeutics, Inc.’s 2017
Annual Report on Form 10-K?
You may obtain a copy of our
Annual Report on Form 10-K for the fiscal year ended June 30, 2017
by sending a written request to the address listed above under
“How can I obtain a separate set of voting materials?”.
Our 2017 annual Report on Form 10-K is available by accessing our
Investor Relations page of our website at
www.relmada.com
and our Form 10-K with exhibits is available on the website of the
SEC at
www.sec.gov
.
What is the voting requirement to elect directors?
Directors are elected by a plurality of the votes cast in person or
by proxy at the annual meeting and entitled to vote on the election
of directors. “Plurality” means that the nominees
receiving the greatest number of affirmative votes will be elected
as directors, up to the number of directors to be chosen at the
meeting. Broker non-votes will not affect the outcome of the
election of directors because brokers do not have discretion to
cast votes on this proposal without instruction from the beneficial
owner of the shares.
What is the voting requirement to approve the other
proposals?
The proposal to ratify the appointment of GBH CPAs, PC as our
independent registered public accounting firm will be approved if
there is a quorum and the votes cast “FOR” the proposal
exceeds those cast against the proposal. The proposal to approve an
amendment to our 2014 stock plan to increase the shares authorized
under the plan will be approved if there is a quorum and the votes
cast “FOR” the proposal exceeds those cast against the
proposal. The advisory vote to approve the non-binding advisory
vote on our 2017 executive compensation will be approved if there
is a quorum and the votes cast “FOR” the proposal
exceeds those cast against the proposal.
Abstentions and broker non-votes will be treated as shares that are
present, or represented and entitled to vote for purposes of
determining the presence of a quorum at the annual meeting.
Abstentions will not be counted in determining the number of votes
cast in connection with any matter presented at the annual meeting.
Broker non-votes will not be counted as a vote cast on any matter
presented at the annual meeting.
How many votes are required to approve other matters that may come
before the stockholders at the meeting?
An affirmative vote of a majority of the votes cast at the meeting
is required for approval of all other items being submitted to the
stockholders for their consideration.
How can I communicate with the non-employee directors on the
Relmada Therapeutics, Inc. Board of Directors?
The Board of Directors encourages stockholders who are interested
in communicating directly with the non-employee directors as a
group to do so by writing to the non-employee directors in care of
our Chairman of the Board. Stockholders can send communications by
mail to:
Charles J. Casamento, Chairman of the Board
Relmada Therapeutics, Inc.
750 Third Avenue, 9
th
Floor
New York, New York 10017
Correspondence received that is addressed to the non-employee
directors will be reviewed by our Chairman of the Board or his
designee, who will regularly forward to the non-employee directors
a summary of all such correspondence and copies of all
correspondence that, in the opinion of our Chairman of the Board,
deals with the functions of the Board of Directors or committees
thereof or that our Chairman of the Board otherwise determines
requires their attention. Directors may at any time review a log of
all correspondence received by us that is addressed to the
non-employee members of the Board of Directors and request copies
of any such correspondence.
WHO CAN HELP ANSWER YOUR
QUESTIONS?
You may seek answers to your questions by calling Sergio Traversa,
our Chief Executive Officer at (917) 405-1305.
4
CORPORATE
GOVERNANCE
Board of
Directors
The Board of Directors oversees our business affairs and monitors
the performance of management. In accordance with our corporate
governance principles, the Board of Directors does not involve
itself in day-to-day operations of the Company. The directors keep
themselves informed through discussions with the Chief Executive
Officer, other key executives and by reading the reports and other
materials that we send them and by participating in Board of
Directors and committee meetings. Our directors hold office until
their successors have been elected and duly qualified unless the
director resigns or by reason of death or other cause is unable to
serve in the capacity of director. Biographical information about
our directors is provided in “Election of Director —
Proposal No. 1” on page 25.
Director
Independence
We use the definition of “independence” of The NASDAQ
Stock Market to make this determination. NASDAQ Listing Rule
5605(a)(2) provides that an “independent director” is a
person other than an officer or employee of the Company or any
other individual having a relationship which, in the opinion of the
Company’s Board, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a
director. The NASDAQ listing rules provide that a director cannot
be considered independent if:
•
the director is, or at any time during the past three years was, an
employee of the Company;
•
the director or a family member of the director accepted any
compensation from the Company in excess of $120,000 during any
period of 12 consecutive months within the three years preceding
the independence determination (subject to certain exclusions,
including, among other things, compensation for board or board
committee service);
•
a family member of the director is, or at any time during the past
three years was, an executive officer of the Company;
•
the director or a family member of the director is a partner in,
controlling stockholder of, or an executive officer of an entity to
which the Company made, or from which the Company received,
payments in the current or any of the past three fiscal years that
exceed 5% of the recipient’s consolidated gross revenue for
that year or $200,000, whichever is greater (subject to certain
exclusions);
•
the director or a family member of the director is employed as an
executive officer of an entity where, at any time during the past
three years, any of the executive officers of the Company served on
the compensation committee of such other entity; or
•
the director or a family member of the director is a current
partner of the Company’s outside auditor, or at any time
during the past three years was a partner or employee of the
Company’s outside auditor, and who worked on the
Company’s audit.
Our common stock is not currently quoted or listed on any national
exchange or interdealer quotation system with a requirement that a
majority of our Board of Directors be independent and, therefore,
the Company is not subject to any director independence
requirements. Under the above-mentioned NASDAQ Capital Market
director independence rules, Charles J. Casamento, MBA, Maged
Shenouda, R.Ph, MBA and Paul Kelly, MBA are independent directors
of the Company.
Board Leadership
Structure
Our Board of Directors has a policy that calls for the leadership
role of the Board of Directors and Company management, namely the
Chairman of the Board of Directors and the Chief Executive Officer,
to be separate as it believes that the most effective leadership
structure for us at this time is not to have these roles combined.
Sergio Traversa, PharmD, MBA serves as our Chief Executive Officer
and Charles J. Casamento, R.Ph, MBA is our Chairman of the Board.
We believe this structure of having a separate Chief Executive
Officer and Chairman of the Board provides proper oversight of the
Company and its operations.
5
Board Risk
Oversight
Risk management is primarily the responsibility of the
Company’s management; however, the Board of Directors has
responsibility for overseeing management’s identification and
management of those risks. The Board of Directors considers risks
in making significant business decisions and as part of the
Company’s overall business strategy. The Board of Directors
and its committees, as appropriate, discuss and receive periodic
updates from senior management regarding significant risks, if any,
to the Company in connection with the annual review of the
Company’s business plan and its review of budgets, strategy
and major transactions.
Board of Directors
Meetings and Attendance
During the fiscal year ended June 30, 2017, the Board of Directors
held 17 meetings and one action by unanimous written consent. All
directors attended at least 85% of the board meetings.
Code of Ethics and
Business Conduct
We adopted a Code of Ethics and Business Conduct that applies to
all of our directors, officers and employees, including our
principal executive officer and principal financial and accounting
officer. A copy of the Code of Ethics and Business Conduct is
available on the Company’s website, under About Relmada using
the tab Governance/Compliance at
www.relmada.com
.
We will post on our website any amendment to our Code of Ethics and
Business Conduct or waivers of our Code of Ethics and Business
Conduct for directors and executive officers.
Communications with
Directors
The Board of Directors has procedures for stockholders to send
communications to individual directors or the non-employee
directors as a group. Written correspondence should be addressed to
the director or directors in care of Charles J. Casamento, Chairman
of the Board of Relmada Therapeutics, Inc., 750 Third Avenue,
9
th
Floor, N
ew
York
, New York 10017. Correspondence received that is
addressed to the non-employee directors will be reviewed by our
Chairman of the Board or his designee, who will regularly forward
to the non-employee directors a summary of all such correspondence
and copies of all correspondence that, in the opinion of our
Chairman of the Board, deals with the functions of the Board of
Directors or committees thereof or that the Chairman of the Board
otherwise determines requires their attention. Directors may at any
time review a log of all correspondence received by Relmada
Therapeutics, Inc. that is addressed to the non-employee members of
the Board of Directors and request copies of any such
correspondence. You may also contact individual directors by
calling our principal executive offices at (212) 547-9591.
Legal
Proceedings
None of the Company’s current directors or executive officers
have been involved, in the past ten years and in a manner material
to an evaluation of such director’s or officer’s
ability or integrity to serve as a director or executive officer,
in any of those “Certain Legal Proceedings” more fully
detailed in Item 401(f) of Regulation S-K, which include but are
not limited to, bankruptcies, criminal convictions and an
adjudication finding that an individual violated federal or state
securities laws.
Compliance with Section
16(a) of the Exchange Act
Based solely upon a review of copies of such forms filed on Forms
3, 4 and 5, and amendments thereto furnished to us, except as noted
below, we believe that as of the date of this Report, our executive
officers, directors and greater than 10 percent beneficial owners
have complied on a timely basis with all Section 16(a) filing
requirements.
Whistle Blowing
Policy
We have adopted a Company Whistle Blowing Policy, for which a copy
will be provided to any person requesting same without charge. To
request a copy of our Whistle Blowing Policy please make written
request to our Chief Executive Officer, at Relmada Therapeutics,
Inc., 750 Third Avenue, 9
th
Floor, New York, New York 10017. We believe our Whistle Blowing
Policy is reasonably designed to provide an environment where our
employees and consultants may raise concerns about any and all
dishonest, fraudulent or unacceptable behavior, which, if
disclosed, could reasonably be expected to raise concerns regarding
the integrity, ethics or bona fides of the Company.
6
BOARD
COMMITTEES
Our Board of Directors has formed three standing committees: audit,
compensation, and nominating and corporate governance. Actions
taken by our committees are reported to the full board. Each of our
committees has a charter and each charter is posted on our
website.
|
|
|
|
Nominating/Corporate Governance
Committee
|
Charles J. Casamento*
|
|
Paul Kelly*
|
|
Maged Shenouda*
|
Paul Kelly
|
|
Charles J. Casamento
|
|
Charles J. Casamento
|
Maged Shenouda
|
|
Maged Shenouda
|
|
Paul Kelly
|
Audit Committee
Our audit committee, which currently consists of three directors,
provides assistance to our Board of Directors in fulfilling its
legal and fiduciary obligations with respect to matters involving
the accounting, financial reporting, internal control and
compliance functions of the Company. Our audit committee employs an
independent registered public accounting firm to audit the
financial statements of the Company and perform other assigned
duties. Further, our audit committee provides general oversight
with respect to the accounting principles employed in financial
reporting and the adequacy of our internal controls. In discharging
its responsibilities, our audit committee may rely on the reports,
findings and representations of the Company’s auditors, legal
counsel, and responsible officers. Our board has determined that
all members of the audit committee are financially literate within
the meaning of SEC rules and under the current listing standards of
The
Nasdaq
Stock Market. Charles J. Casamento is the chairman of the audit
committee. The Audit Committee met four times during fiscal year
2017.
Compensation Committee
Our compensation committee, which currently consists of three
directors, establishes executive compensation policies consistent
with the Company’s objectives and stockholder interests. Our
compensation committee also reviews the performance of our
executive officers and establishes, adjusts and awards
compensation, including incentive-based compensation, as more fully
discussed below. In addition, our compensation committee generally
is responsible for:
•
establishing and periodically reviewing our compensation philosophy
and the adequacy of compensation plans and programs for our
directors, executive officers and other employees;
•
overseeing our compensation plans, including the establishment of
performance goals under the Company’s incentive compensation
arrangements and the review of performance against those goals in
determining incentive award payouts;
•
overseeing our executive employment contracts, special retirement
benefits, severance, change in control arrangements and/or similar
plans;
•
acting as administrator of any Company stock option plans; and
•
overseeing the outside consultant, if any, engaged by the
compensation committee.
Our compensation committee periodically reviews the compensation
paid to our non-employee directors and the principles upon which
their compensation is determined. The compensation committee also
periodically reports to the board on how our non-employee director
compensation practices compare with those of other similarly
situated public corporations and, if the compensation committee
deems it appropriate, recommends changes to our director
compensation practices to our Board of Directors for approval.
Outside consulting firms retained by our compensation committee and
management also will, if requested, provide assistance to the
compensation committee in making its compensation-related
decisions. The Compensation Committee met three times during fiscal
year 2017.
7
Corporate Governance and Nominating Committee
Our board of directors has a
Corporate Governance and Nominating Committee composed of Maged
Shenouda, Charles J. Casamento and Paul Kelly. Mr. Shenouda serves
as the chairman of the committee. The committee is charged with the
responsibility of reviewing our corporate governance policies and
with proposing potential director nominees to the board of
directors for consideration. The committee met one time in 2017 and
has a charter which is reviewed annually. All members of the
Nominating and Corporate Governance Committee are independent
directors as defined by the rules of the NASDAQ Stock Market. The
Nominating and Corporate Governance Committee will assess all
director nominees using the same criteria. During 2017, we did not
pay any fees to any third parties to assist in the identification
of nominees. During 2017, we did not receive any director nominee
suggestions from stockholders. Our nominating and corporate
governance committee met one time during the year ended June 30,
2017.
8
DIRECTOR
COMPENSATION
Non-management Directors of the Company receive a quarterly cash
retainer of $10,000 per calendar quarter for their service on the
Board of Directors. They also receive reimbursement for
out-of-pocket expenses and certain directors have received stock
option grants for shares of Company Common Stock as described
below.
Board committee members will receive the following annual
compensation for committee participation:
|
|
|
|
|
Audit
|
|
$
|
18,000
|
|
$
|
8,000
|
Compensation
|
|
$
|
13,000
|
|
$
|
6,000
|
Corporate Governance and Nominating
|
|
$
|
13,000
|
|
$
|
6,000
|
The following table sets forth the compensation of our directors
for the years ended June 30, 2017 and 2016:
|
|
|
|
Fees
Earned
or Paid in
Cash
|
|
|
|
|
|
|
|
|
Shreeram Agharkar, Ph.D.
|
|
2017
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Shreeram Agharkar, Ph.D.
|
|
2016
|
|
|
37,229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,229
|
Sandesh Seth, MS, MBA
|
|
2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Sandesh Seth, MS, MBA
|
|
2016
|
|
|
21,690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,690
|
Nabil M. Yazgi, MD
|
|
2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Nabil M. Yazgi, MD
(3)
|
|
2016
|
|
|
12,607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,607
|
Charles J. Casamento, R.Ph, MBA
|
|
2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Charles J. Casamento, R.Ph, MBA
(4)
|
|
2016
|
|
|
36,964
|
|
|
—
|
|
|
143,986
|
|
|
—
|
|
|
180,950
|
Maged Shenouda
|
|
2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Maged Shenouda
(5)
|
|
2016
|
|
|
22,793
|
|
|
—
|
|
|
58,787
|
|
|
—
|
|
|
81,580
|
Paul Kelly, MBA
|
|
2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Paul Kelly, MBA
(5)
|
|
2016
|
|
|
22,160
|
|
|
—
|
|
|
58,787
|
|
|
—
|
|
|
80,947
|
9
AUDIT COMMITTEE
REPORT
The Audit Committee of the Board of Directors (the
“
Audit
Committee
”) was formed in July 2015. The Audit
Committee is composed of the following three directors: Charles J.
Casamento, Paul Kelly and Maged Shenouda, each of whom is
“independent” as defined by the rules of The
Nasdaq
Stock Market. Mr. Casamento serves as chairman of the Audit
Committee.
Management is responsible for the Company’s financial
statements, financial reporting process and systems of internal
accounting and financial reporting control. The Company’s
independent auditor is responsible for performing an independent
audit of the Company’s financial statements in accordance
with auditing standards generally accepted in the United States and
for issuing a report thereon. The Audit Committee’s
responsibility is to oversee all aspects of the financial reporting
process on behalf of the Board of Directors. The responsibilities
of the Audit Committee also include engaging and evaluating the
performance of the accounting firm that serves as the
Company’s independent auditor.
The Audit Committee discussed with the Company’s independent
auditor, with and without management present, such auditor’s
judgments as to the quality, not just acceptability, of the
Company’s accounting principles, along with such additional
matters required to be discussed under the Statement on Auditing
Standards No. 61, “Communication with Audit
Committees.” The Audit Committee has discussed with the
independent auditor, the auditor’s independence from the
Company and its management, including the written disclosures and
the letter submitted to the Audit Committee by the independent
auditor as required by the Independent Standards Board Standard No.
1, “Independence Discussions with Audit
Committees.”
In reliance on such discussions with management and the independent
auditor, review of the representations of management and review of
the report of the independent to the Audit Committee, the Audit
Committee recommended (and the Board approved) that the
Company’s audited financial statements be included in the
Company’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2015. The Audit Committee and the Board of Directors
have also, respectively, recommended and approved the selection of
the Company’s current independent auditor, which approval is
subject to ratification by the Company’s stockholders.
Submitted by:
Audit Committee of the Board of Directors
/s/ Charles J. Casamento, Chairman of the Audit Committee
/s/ Paul Kelly
/s/ Maged Shenouda
10
Compensation Committee Report*
Our Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis
(“
CD&A
”)
included in this proxy statement. Based on that review and
discussion, the Compensation Committee has recommended to the Board
of Directors that the CD&A be included in the proxy
statement.
Submitted by:
The Compensation Committee of the Board of Directors
/s/ Paul Kelly, Chairman of the Compensation Committee
/s/ Charles J. Casamento
/s/ Maged Shenouda
Compensation Discussion
and Analysis
The Compensation Committee of our Board of Directors has the
responsibility to review, determine and approve the compensation
for our executive officers. Further, the Compensation Committee
oversees our overall compensation strategy, including compensation
policies, plans and programs that cover all employees. Our
Compensation Committee was formed in July 2015. In 2014, our
Stockholders voted on an advisory basis with respect to our
compensation program for named executive officers. Of the votes
cast (excluding abstentions and broker non-votes), 93.3% were cast
in support of the program. In light of this, in reviewing the
executive compensation program for 2017, the Compensation Committee
decided to retain the general overall program design.
We currently employ one executive officer, whom serves as a
“Named Executive Officer” (or NEO) for purposes of SEC
reporting: Sergio Traversa, PharmD, MBA, our Chief Executive
Officer (who we refer to in this Compensation Discussion and
Analysis as our CEO) is our only NEO.
This Compensation Discussion and Analysis sets forth a discussion
of the compensation for our NEO as well as a discussion of our
philosophies underlying the compensation for our NEO and our
employees generally.
Objectives of Our
Compensation Program
The Compensation Committee’s philosophy seeks to align the
interests of our stockholders, officers and employees by tying
compensation to individual and Company performance, both directly
in the form of salary or annual cash incentive payments, and
indirectly in the form of equity awards. The objectives of our
compensation program enhance our ability to:
•
attract and retain qualified and talented individuals; and
•
provide reasonable and appropriate incentives and rewards to our team for building long-term value within our Company,
in each case in a manner comparable to companies similar to ours.
In addition, we strive to be competitive with other similarly
situated companies in our industry. The process of developing
pharmaceutical products and bringing those products to market is a
long-term proposition and outcomes may not be measurable for
several years. Therefore, in order to build long-term value for our
Company and its stockholders, and in order to achieve our business
objectives, we believe that we must compensate our officers and
employees in a competitive and fair manner that reflects current
Company activities but also reflects contributions to building
long-term value.
We have utilized the services of a compensation consultant to
review compensation programs of peer companies in order to assist
the board and the Compensation Committee in determining the
compensation levels for our NEOs, as well as for other employees of
our Company.
11
Elements of Our
Compensation Program and Why We Chose Each
Main Compensation
Components
Our Company-wide compensation program, including for our NEOs, is
broken down into three main components: base salary, performance
cash bonuses and potential long-term compensation in the form of
stock options or restricted stock awards. We believe these three
components constitute the minimum essential elements of a
competitive compensation package in our industry.
Salary
Base salary is used to recognize the experience, skills, knowledge
and responsibilities required of our NEOs as well as recognizing
the competitive nature of the biopharmaceutical industry. This is
determined partially by evaluating our peer companies as well as
the degree of responsibility and experience levels of our NEOs and
their overall contributions to our Company. Base salary is one
component of the compensation package for NEOs; the other
components being cash bonuses, annual equity grants and Company
benefit programs. Base salary is determined in advance whereas the
other components of compensation are awarded in varying degrees
following an assessment of the performance of a NEO. This approach
to compensation reflects the philosophy of our Board of Directors
and its Compensation Committee to emphasize and reward, on an
annual basis, performance levels achieved by our NEOs.
Performance Bonus
Plan
We have a performance bonus plan under which bonuses are paid to
our NEOs based on achievement of Company performance goals and
objectives established by the Compensation Committee and/or our
Board of Directors as well as on individual performance. The bonus
program is discretionary and is intended to: (i) strengthen the
connection between individual compensation and our Company’s
achievements; (ii) encourage teamwork among all disciplines within
our Company; (iii) reinforce our pay-for-performance philosophy by
awarding higher bonuses to higher performing employees; and (iv)
help ensure that our cash compensation is competitive. Depending on
the cash position of the Company, the Compensation Committee and
our Board of Directors have the discretion to not pay cash bonuses
in order that we may conserve cash and support ongoing development
programs and commercialization efforts. Regardless of our cash
position, we consistently grant annual merit-based stock options to
continue incentivizing both our senior management and our
employees.
Based on their employment agreements, each NEO is assigned a target
payout under the performance bonus plan, expressed as a percentage
of base salary for the year. Actual payouts under the performance
bonus plan are based on the achievement of corporate performance
goals and an assessment of individual performance, each of which is
separately weighted as a component of such officer’s target
payout. For the NEOs, the corporate goals receive the highest
weighting in order to ensure that the bonus system for our
management team is closely tied to our corporate performance. Each
employee also has specific individual goals and objectives as well
that are tied to the overall corporate goals. For employees,
mid-year and end-of-year progress is reviewed with the
employees’ managers.
Equity Incentive
Compensation
We view long-term compensation, currently in the form of stock
options and restricted stock generally vesting in annual increments
over four years, as a tool to align the interests of our NEOs and
employees generally with the creation of stockholder value, to
motivate our employees to achieve and exceed corporate and
individual objectives and to encourage them to remain employed by
the Company. While cash compensation is a significant component of
employees’ overall compensation, the Compensation Committee
and our Board of Directors (as well as our NEOs) believe that the
driving force of any employee working in a small biotechnology
company should be strong equity participation. We believe that this
not only creates the potential for substantial longer term
corporate value but also serves to motivate employees and retain
their loyalty and commitment with appropriate personal
compensation.
Other
Compensation
In addition to the main components of compensation outlined above,
we also provide contractual severance and/or change in control
benefits to our Chief Executive Officer and Chief Financial
Officer. The change in control benefits for all applicable persons
have a “double trigger.” A double-trigger means that
the executive officers will receive the change in control benefits
described in the agreements only if there is both (1) a Change in
Control of our Company
12
(as defined in the agreements) and (2) a termination by us of the
applicable person’s employment “without cause” or
a resignation by the applicable persons for “good
reason” (as defined in the agreements) within a specified
time period prior to or following the Change in Control. We believe
this double trigger requirement creates the potential to maximize
stockholder value because it prevents an unintended windfall to
management as no benefits are triggered solely in the event of a
Change in Control while providing appropriate incentives to act in
furtherance of a change in control that may be in the best
interests of the stockholders. We believe these severance or change
in control benefits are important elements of our compensation
program that assist us in retaining talented individuals at the
executive and senior managerial levels and that these arrangements
help to promote stability and continuity of our executives and
senior management team. Further, we believe that the interests of
our stockholders will be best served if the interests of these
members of our management are aligned with theirs. We believe that
providing change in control benefits lessens or eliminates any
potential reluctance of members of our management to pursue
potential change in control transactions that may be in the best
interests of the stockholders. We also believe that it is important
to provide severance benefits to members of our management, to
promote stability and focus on the job at hand.
We also provide benefits to the executive officers that are
generally available to all regular full-time employees of our
Company, including our medical and dental insurance, and a 401(k)
plan. At this time, we do not provide any perquisites to any of our
NEOs. Further, we do not have deferred compensation plans, pension
arrangements or post-retirement health coverage for our executive
officers or employees. All of our employees not specifically under
contract are “at-will” employees, which means that
their employment can be terminated at any time for any reason by
either us or the employee. Our Chairman and CEO have employment
agreements that provide lump sum compensation in the event of their
termination without cause or, under certain circumstances, upon a
Change in Control.
Determination of
Compensation Amounts
A number of factors impact the determination of compensation
amounts for our NEOs, including the individual’s role in the
Company and individual performance, length of service with the
Company, competition for talent, individual compensation package,
assessments of internal pay equity and industry data. Stock price
performance has generally not been a factor in determining annual
compensation because the price of our common stock is subject to a
variety of factors outside of our control.
Industry Survey
Data
We establish and maintain a list of peer companies to best assure
ourselves that we are compensating our executives on a fair and
reasonable basis, as set forth above under the heading
“Objectives of our Compensation Program.” We also
utilize data for below-executive level personnel, which data
focuses on similarly-sized bio-tech companies. The availability of
peer data is used by the Compensation Committee strictly as a guide
in determining compensation levels with regard to salaries, cash
bonuses and performance related annual equity grants to all
employees. However, the availability of this data does not imply
that the Compensation Committee is under any obligation to exactly
follow peer companies in compensation matters.
Determination of Base
Salaries
As a guideline for NEO base salary, we perform formal benchmarks
against respective comparable positions in our established peer
group. We adjust salaries based on our assessment of our
NEOs’ levels of responsibility, experience, overall
compensation structure and individual performance. The Compensation
Committee is not obliged to raise salaries purely on the
availability of data. Merit-based increases to salaries of
executive officers are based on our assessment of individual
performance and the relationship to applicable salary ranges. Cost
of living adjustments may also be a part of that assessment.
Performance Bonus
Plan
Concurrently with the beginning of each calendar year, preliminary
corporate goals that reflect our business priorities for the coming
year are prepared by the CEO with input from the other executive
officers. These goals are weighted by relative importance. The
draft goals and proposed weightings are presented to the
Compensation Committee and the Board and discussed, revised as
necessary, and then approved by our board of directors.
13
The Compensation Committee then reviews the final goals and their
weightings to determine and confirm their appropriateness for use
as performance measurements for purposes of the bonus program. The
goals and/or weightings may be re-visited during the year and
potentially restated in the event of significant changes in
corporate strategy or the occurrence of significant corporate
events. Following the agreement of our Board of Directors on the
corporate objectives, the goals are then shared with all employees
in a formal meeting(s), and are reviewed periodically throughout
the year.
Equity Grant
Practices
All stock options and/or restricted stock granted to the NEOs and
other executives are approved by the Board of Directors until July
2015 and the Compensation Committee. Exercise prices for options
are set at the closing price of our common stock on the date of
grant. Grants are generally made: (i) on the employee’s start
date and (ii) at Board of Director meetings held each February and
following annual performance reviews. However, grants have been
made at other times during the year. The size of year-end grants
for each NEO is assessed against our internal equity guidelines.
Current market conditions for grants for comparable positions and
internal equity may also be assessed. Also, grants may be made in
connection with promotions or job related changes in
responsibilities. In addition, on occasion, the Compensation
Committee may make additional special awards for extraordinary
individual or Company performance.
Compensation Setting
Process
At the February meetings of our Board of Directors and the
Compensation Committee, overall corporate performance and relative
achievement of the corporate goals for the prior year are assessed.
The relative achievement of each goal is assessed and quantified
and the summation of the individual components results in a
corporate goal rating, expressed as percentages. The Compensation
Committee then approves the final disbursement of salary increases,
cash bonuses and option or restricted stock grants.
The Compensation Committee looks to the Chief Executive
Officer’s performance assessments of the other NEOs and his
recommendations regarding a performance rating for each, as well as
input from the other members of our Board of Directors. These
recommendations may be adjusted by the Compensation Committee prior
to finalization. For the Chief Executive Officer, the Compensation
Committee evaluates his performance, taking into consideration
input from the other members of our Board of Directors, and
considers the achievement of overall corporate objectives by both
the Chief Executive Officer specifically and the Company generally.
The Chief Executive Officer is not present during the Compensation
Committee’s deliberations regarding his compensation.
The Compensation Committee has the authority to directly engage, at
our Company’s expense, any compensation consultants or other
advisors that it deems necessary to determine the amount and form
of employee, executive and director compensation. In determining
the amount and form of employee, executive and director
compensation, the Compensation Committee has reviewed and discussed
historical salary information as well as salaries for similar
positions at comparable companies. However, the availability of
this data does not imply that the Compensation Committee is under
any obligation to exactly follow peer companies’ compensation
practices.
NEOs may have indirect input in the compensation results for other
executive officers by virtue of their participation in the
performance review and feedback process for the other executive
officers.
14
DIRECTORS AND EXECUTIVE
OFFICERS
The following sets forth information about our directors and
executive officers as of December 18, 2017:
|
|
|
|
|
Sergio Traversa, PharmD, MBA
|
|
57
|
|
Chief Executive Officer, Interim CFO, and
Director
|
Charles J. Casamento, MBA
|
|
72
|
|
Chairman of the Board and Director
|
Paul Kelly, MBA
|
|
60
|
|
Director
|
Maged Shenouda, R.Ph, MBA
|
|
53
|
|
Director
|
Sergio Traversa, PharmD,
MBA
has been our Chief Executive Officer and director since
April 2012, and our Interim Chief Financial Officer since February
2017. Previously, from January 2010 to April 2012 he was the CEO of
Medeor Inc., a spinoff pharmaceutical company from Cornell
University. From January 2008 to January 2010 Dr. Traversa was a
partner at Ardana Capital. Dr. Traversa has over twenty-five years
of experience in the healthcare sector in the United States and
Europe, ranging from management positions in the pharmaceutical
industry to investing and strategic advisory roles. He has held
financial analyst, portfolio management and strategic advisory
positions at large U.S. investment firms specializing in
healthcare, including Mehta, Isaly and Mehta Partners, ING Barings,
Merlin BioMed and Rx Capital. Dr. Traversa was a founding partner
of Ardana Capital, a pharmaceutical and biotechnology investment
advisory firm. In Europe, he held the position of Area Manager for
Southern Europe of Therakos Inc., a cancer and immunology division
of Johnson & Johnson. Prior to Therakos, Dr. Traversa was at
Eli Lilly, where he served as Marketing Manager of the Hospital
Business Unit. He was also a member of the CNS (Central Nervous
System) team at Eli Lilly, where he participated in the launch of
Prozac and the early development of Zyprexa and Cymbalta. Dr.
Traversa started his career as a sales representative at Farmitalia
Carlo Erba, the largest pharmaceutical company in Italy, now part
of Pfizer. Mr. Traversa is also a board member of Actinium
Pharmaceuticals, Inc. and previously served as interim CEO and CFO
of Actinium. Dr. Traversa holds a Laurea degree in Pharmacy from
the University of Turin (Italy) and an MBA in Finance and
International Business from the New York University Leonard Stern
School of Business. As Chief Executive Officer of the Company, Dr.
Traversa is the most senior executive of the Company and as such
provides our Board of Directors with the greatest insight into the
Company’s business and the challenges and material risks it
faces. Dr. Traversa has more than 28 years of healthcare industry
experience and is especially qualified to understand the risks and
leadership challenges facing a growing pharmaceutical company from
a senior management and financial expertise perspective led us to
conclude that Dr. Traversa should serve as Chief Executive Officer
and Director of the Company.
Board of
Directors
Charles J. Casamento, MBA,
has been our Chairman of the Board since June
2017 and a director since July 2015. Mr. Casamento is also Chairman
of our Audit Committee and a member of Compensation Committee and
Corporate Governance and Nominating Committee. Since 2007 Mr.
Casamento is Executive Director and Principal of The Sage Group, a
health care advisory group specializing in business development
strategies and transactions. Prior to The Sage Group he was
President and CEO of Osteologix from October 2004 until April,
2007. Originally a private VC funded company in Copenhagen, Denmark
which had discovered a new drug for the treatment of Osteoporosis,
Mr. Casamento commenced operations and initiated clinical trials in
the US, completed a financing with Rodman & Renshaw and Roth
Capital Partners and took the company public through a merger with
a public shell company. The product was eventually acquired by
Servier a major French pharmaceutical company. Osteologix was Mr.
Casamento’s fifth startup company, all of which were
successfully taken public, during his tenure, either through IPOs
or through reverse mergers.
He was Senior Vice President & General Manager for
Pharmaceuticals and Biochemicals at Genzyme. He joined Genzyme in
1985 while it was an early stage venture backed company and was
there during the time Genzyme was taken public. In 2011 Genzyme was
acquired by Sanofi for an estimated $20 Billion. In 1989 he
co-founded and later took public, Interneuron Pharmaceuticals
(Indevus) which eventually reached a $1.6 billion market valuation
after a weight loss product that was developed during his tenure
was approved by FDA. Indevus was acquired in 2009 by Endo for
nearly $1 Billion. In 1993 Mr. Casamento joined RiboGene as
Chairman, President and CEO. He took the Company public and
completed several major corporate collaborations and R&D
collaboration agreements as well as a merger with a public
corporation in 1998 to form Questcor Pharmaceuticals, where he was
Chairman, CEO and President until August, 2004. He acquired Acthar,
a product for West Syndrome and MS, for a $100,000
15
cash payment plus a 1% royalty. Questcor was acquired by
Mallinckrodt in 2014 at a valuation of $6 Billion and Acthar has
revenue at a run rate of $1 Billion for 2014.
Prior to joining Genzyme in 1985 Mr. Casamento has held a number of
marketing, sales, finance and business development positions with
Novartis, Hoffmann-LaRoche, Johnson & Johnson and American
Hospital Supply Corporation where he was Vice President of Business
Development and Strategic Planning for the Critical Care Division
from January, 1983 until May, 1985. During his career he has
completed well over 100 major business development/M&A deals
which had the effect of enhancing and expediting the growth and
development of his businesses. He took four biotechnology companies
public and secured pubic and VC financing for five biotechnology
companies.
He is a Director and Board member at Eton Pharmaceuticals and International Stem
Cell Corporation. Mr. Casamento also currently serves as an
Independent Director for AzurRx Biopharma. During his career he has
served on the boards of twelve public companies. Mr. Casamento also
served as Chairman of the Audit Committee of Astex Pharmaceuticals
and is a SOX defined financial expert. He is a member of the
Fordham University Science Council and has been a guest lecturer at
Fordham University. He was previously Vice Chairman of the Catholic
Medical Mission Board, a large not for profit organization
providing health care services to third world countries. A graduate
of Fordham University in New York City and Iona College in New
Rochelle, New York. Mr. Casamento has a degree in Pharmacy and an
MBA.
Maged
Shenouda, R.Ph, MBA
, has been our director since November 2015. Mr. Shenouda is also a member of the Audit Committee
and Compensation Committee, and is Chairman of the Corporate Governance and Nominating Committee. Mr. Shenouda has over 25
years of biotechnology and equity research experience. Mr. Shenouda currently serves as Chief Financial Officer of AzurRx
Biopharma, Inc. Previously, Mr. Shenouda was the Head of Business Development and Licensing at Retrophin, Inc.
from January 2014 to November 2014. From January 2012 to September 2013, Mr. Shenouda was the managing Director, Head of
EastCoast Operations, at Blueprint Life Science Group. Prior to that, he spent the bulk of his career as an equity analyst.
From June 2010 to November 2011, Mr. Shenouda was the Managing Director, Senior Biotechnology Analyst, at Stifel Nicolaus. He
also held senior level positions at UBS and JP Morgan, covering a broad range of small and large capitalization biotechnology
companies. Mr. Shenouda started his sell-side equity research career at Citigroup and Bear Stearns where his coverage
universe focused on U.S and European pharmaceutical companies. Before entering Wall Street, he was a management consultant
with PricewaterhouseCoopers Pharmaceutical Consulting practice and also spent time in pharmaceutical sales, having worked as
a hospital representative and managed care specialist for Abbott Laboratories Pharmaceutical Products Division. Mr. Shenouda
also currently serves as an Independent Director for AzurRx Biopharma. He earned a B.S. in Pharmacy from St. John’s
University and is a registered pharmacist in New Jersey and California. He also received an M.B.A from Rutgers Graduate
School of Management. That Mr. Shenouda brings over 25 years of biotechnology and equity research experience to our Board of
Directors, having served in various executive-level positions over the course of his career, and that Mr. Shenouda has
developed significant management and leadership skills relating to the pharmaceutical industry, led us to conclude that Mr.
Shenouda should serve as a director.
Paul Kelly, MBA,
has been a director of the Company since November 2015. Mr. Kelly
is also Chairman of the Compensation Committee, and a member of the
Audit Committee and Corporate Governance and Nominating Committee.
Mr. Kelly has been actively involved as an analyst, consultant and
investor in the biotechnology sector for the past twenty years. He
began as an equity analyst at Mabon Securities in 1993, and served
in the same capacity at UBS Securities, Volpe, Brown, Whalen, ING
Securities and Merrill Lynch. Mr. Kelly was named to the inaugural
Fortune magazine All Star Analyst team in 2000. Subsequently, since
2007 Mr. Kelly has engaged in consulting for both private and
public biotechnology companies and for hedge funds. He currently
manages his own investments and continues his industry consulting
activities. Mr. Kelly has advised Spring Bank Pharmaceuticals, Inc.
and VisionGate, Inc. Mr. Kelly holds an A.B. in Biochemistry from
Brown University, from which he was graduated magna cum laude,
Sigma Xi and Phi Beta Kappa. He attended the University of
Rochester School of Medicine and received an MBA in Finance from
the William E. Simon School at the University of Rochester. That
Mr. Kelly brings over 25 years of biotechnology experience to our
Board of Directors, having served in various executive-level
positions over the course of his career, and that he has developed
significant management and leadership skills relating to the
pharmaceutical industry, led us to conclude that Mr. Kelly should
serve as a director.
16
EXECUTIVE
COMPENSATION
The following
discussion provides compensation information under SEC rules and
may contain statements regarding future individual and Company
performance targets and goals. These targets and goals are
disclosed in the limited context of the Company’s
compensation programs and should not be understood to be statements
of management’s expectations or estimates of results or other
guidance. We specifically caution stockholders not to apply these
statements to other contexts.
The Compensation Committee of the Board of Directors administers
the compensation program for the executive officers. The
Compensation Committee of Board of Directors is responsible for
reviewing our compensation and employee benefit policies. The
Compensation Committee reviews and approves compensation for our
Chief Executive Officer, including salaries, bonuses and grants of
awards under our equity incentive plans. The Compensation Committee
reviews and acts upon proposals by non-interested management to
determine the compensation to other executive officers. The Board
of Directors, among other things, reviews employees to whom awards
will be made under our equity incentive plans, determines the
number of options to be awarded and the time, manner of exercise
and other terms of the awards.
The intent of the compensation program is to align the
executive’s interests with that of our stockholders, while
providing incentives and competitive compensation for implementing
and accomplishing our short-term and long-term strategic and
operational goals and objectives. The compensation of the named
executive officers consists of base salary, discretionary bonus and
equity in the Company.
Summary Compensation
Table
The following table provides information regarding the compensation
earned during the years ended June 30, 2017 and 2016 for our
Executive Officers:
|
|
|
|
|
|
|
|
|
|
All other
compensation
(b)
|
|
|
Sergio
Traversa
(1)
|
|
June 30,
2017
|
|
$
|
350,000
|
|
$
|
55,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
405,000
|
Chief Executive
Officer and Director
|
|
June 30,
2016
|
|
|
343,476
|
|
|
55,000
|
|
|
—
|
|
|
—
|
|
|
383,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Becker
(2)
|
|
June 30,
2017
|
|
$
|
186,578
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
186,578
|
Former Chief Financial
Officer
|
|
June 30,
2016
|
|
|
226,750
|
|
|
30,000
|
|
|
9,710
|
|
|
32,732
|
|
|
289,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard
Mangano
(3)
|
|
June 30,
2017
|
|
$
|
303,186
|
|
$
|
40,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
343,186
|
Former Chief
Scientific Officer
|
|
June 30,
2016
|
|
|
322,500
|
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
348,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lisa Nolan
(4)
|
|
June 30,
2017
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
Former Chief Business
Officer
|
|
June 30,
2016
|
|
|
308,328
|
|
|
45,000
|
|
|
—
|
|
|
40,737
|
|
|
394,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Beck,
CPA
(5)
|
|
June 30,
2017
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
$
|
—
|
|
$
|
—
|
Former Chief Financial
Officer
|
|
June 30,
2016
|
|
|
100,000
|
|
$
|
—
|
|
$
|
—
|
|
|
118,122
|
|
|
218,122
|
17
Employment
Agreements
Compensatory Plan with Sergio Traversa (Principal Executive
Officer, and Principal Financial and Accounting Officer)
Effective August 5, 2015, the Company and Sergio Traversa entered
into an amended and restated agreement (the “Employment
Agreement”), to employ Mr. Traversa (“Employee”)
as the Company’s Chief Executive Officer. The term of the
agreement is three years provided that Mr. Traversa’s
employment with the Company will be on an “at will”
basis, meaning that either Mr. Traversa or the Company may
terminate your employment at any time for any reason or no reason,
without further obligation or liability, except as provided in the
Employment Agreement.
Salary
•
Mr. Traversa’s current base annual salary is $367,500.
Bonus
•
Mr. Traversa shall be entitled to participate in an executive bonus
program, which shall be established by the board pursuant to which
the board shall award bonuses to Mr. Traversa, based upon the
achievement of written individual and corporate objectives such as
the board shall determine. Upon the attainment of such performance
objectives, in addition to base salary, Mr. Traversa shall be
entitled to a cash bonus in an amount to be determined by the board
with a target of forty percent (40%) of the base salary.
Options
•
During the term of the agreement, Mr. Traversa may also be awarded
grants under the Company’s 2014 Stock Option and Equity
Incentive Plan, as amended, subject to board approval.
Termination
•
Termination for death or disability or cause
. In the event
that employment is terminated because of death or disability, the
Company’s only obligation to Mr. Traversa shall be to pay
earned, but unpaid, base salary (as of the date of termination) and
provide to Mr. Traversa, if eligible, with the option to elect
health coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”);
provided that upon termination of employment due to death, Mr.
Traversa’s estate also shall be entitled to receive a single
lump sum payment equal to three (3) months of base salary, payable
within 30 days of your death. Upon termination of employment for
cause (as defined in the Employment Agreement) Mr. Traversa shall
be paid any accrued and unpaid base salary and benefits through the
date of termination and shall have no further rights to any
compensation or any other benefits under the agreement or
otherwise.
•
Termination of Employment Other Than for Cause or Resignation
for Good Reason (Not in Connection with a Change in Control)
.
If the Company terminates employment other than for cause or if he
resigns for Good Reason (as defined in the Employment Agreement),
Mr. Traversa shall be entitled to (i) a single lump sum payment
equal to 24 months of compensation (at the rate in effect as of the
date of termination), (ii) continued health benefits for the
24-month period beginning on the date of termination, and (iii) all
outstanding equity awards granted under the Company’s equity
compensation plans shall become immediately vested and exercisable
(as applicable) as of the date of such termination and the
18
performance goals with respect to such outstanding performance
awards, if any, will deemed satisfied at “target”.
•
Change in Control
. If the Company terminates employment
other than for cause or if Mr. Traversa resigns for Good Reason (as
defined in the Employment Agreement), in any case during the
12-month period beginning on the date of a Change in Control (as
defined in the 2014 Equity Incentive Plan, as amended), Mr.
Traversa shall be entitled to (i) a single lump sum payment equal
to thirty (30) months of your compensation (at the rate in effect
as of the date of termination), (ii) continued health benefits for
the 24-month period beginning on the date of termination, (iii) all
outstanding equity awards granted to Mr. Traversa under the
Company’s equity compensation plans shall become immediately
vested and exercisable (as applicable) as of the date of such
termination and the performance goals with respect to such
outstanding performance awards, if any, will deemed satisfied at
“target”.
Non-Solicitation
•
Mr. Traversa agreed that during the term of employment with the
Company, and for a period of 24 months following the cessation of
employment with the Company for any reason or no reason, Mr.
Traversa shall not directly or indirectly solicit, induce, recruit
or encourage any of the Company’s employees or consultants to
terminate their relationship with the Company, or attempt any of
the foregoing, either for himself or any other person or entity.
For a period of 24 months following cessation of employment with
the Company for any reason or no reason, Mr. Traversa shall not
attempt to negatively influence any of the Company’s clients
or customers from purchasing Company products or services or to
solicit or influence or attempt to influence any client, customer
or other person either directly or indirectly, to direct his or its
purchase of products and/or services to any person, firm,
corporation, institution or other entity in competition with the
business of the Company.
Indemnification
•
Mr. Traversa entered into an Indemnification Agreement with the
Company on the effective date whereby the Company agreed to
indemnify Mr. Traversa in certain situations.
Equity Compensation Plan
Information
The Company has established the 2014 Stock and Equity Incentive
Option Plan, as amended (the “Plan”), which allows for
the granting of common stock awards, stock appreciation rights, and
incentive and nonqualified stock options to purchase shares of the
Company’s common stock to designated employees, non-employee
directors, and consultants and advisors. In August 2015, the board
approved an amendment to the Plan (the “Plan
Amendment”). Among other things, the Plan Amendment updates
the definition of “change of control” and provides for
accelerated vesting of all awards granted under the plan in the
event of a change of control of the Company. At June 30, 2017, no
stock appreciation rights have been issued. Stock options are
exercisable generally for a period of 10 years from the date of
grant and generally vest over four years. As of June 30, 2017,
3,509,172 shares were available for future grants under the
Plan. In October 2017 2,150,000 options were granted to the directors of the Company. The options vest 6.25%
per quarter from grant date and the exercise price shall be the closing of the Company’s common stock on October 20, 2017.
19
Outstanding Equity
Awards at Fiscal Year-End Table
OUTSTANDING EQUITY
AWARDS AT JUNE 30, 2017
The following table sets forth all unexercised options and unvested
restricted stock that have been awarded to our named executives by
the Company and were outstanding as of June 30, 2017.
|
|
|
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
(Exercisable)
(b)
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
(Unexercisable)
(c)
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
|
|
Option
Exercise
Price
($)
(e)
|
|
Option
Expiration
Date
(f)
|
|
Number of
Shares or
Units
of Stock That
Have Not
Vested
(#)
(g)
|
|
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested()
($)
(h)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)
(i)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)
(j)
|
Sergio
Traversa
|
|
135,592
|
|
—
|
|
—
|
|
4.00
|
|
07/10/2022
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sergio
Traversa
|
|
126,909
|
|
6,241
|
|
—
|
|
4.00
|
|
09/30/2023
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sergio
Traversa
|
|
25,313
|
|
19,688
|
|
—
|
|
13.50
|
|
02/23/2025
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
287,814
|
|
25,929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
Benefits
None of our employees participate in or have account balances in
qualified or non-qualified defined benefit plans sponsored by us.
Our Compensation Committee may elect to adopt qualified or
non-qualified benefit plans in the future if it determines that
doing so is in our Company’s best interests.
Potential Payments Under
Severance/Change in Control Arrangements
The table below sets forth potential payments payable to our
current executive officers in the event of a termination of
employment under various circumstances. For purposes of calculating
the potential payments set forth in the table below, we have
assumed that (i) the date of termination was September 30,
2017.
|
|
Termination of
Employment
Other Than for
Cause or
Resignation for
Good Reason
(Not in
Connection
with a Change
in Control).
($)
|
|
Termination
Following a
Change in
Control without
Cause or
Executive
Resigns with
Good Reason
($)
|
Sergio Traversa, PharmD, MBA
|
|
|
|
|
|
|
Cash Payment
|
|
$
|
845,000
|
|
$
|
1,056.250
|
Acceleration of Options
|
|
$
|
—
|
|
$
|
—
|
Total Cash and
Benefits
|
|
$
|
845,000
|
|
$
|
1,056,250
|
For each of our executive officers, the term “change of
control” means:
(i)
the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of
the properties or assets of the Company and its subsidiaries, taken
as a whole, to any “Person” (as that term is used in
Section 13(d)(3) of the Exchange Act) that is not an Affiliate;
20
(ii)
the “Incumbent Directors” (meaning those individuals
who, on date the Plan was adopted by the Board of Directors (the
“Effective Date”), constitute the Board of Directors,
provided that
any individual becoming a director subsequent to the Effective Date
whose election or nomination for election to the Board of Directors
was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board of Directors (either by a specific vote
or by approval of the proxy statement of the Company in which such
person is named as a nominee for director without objection to such
nomination) shall be an Incumbent Director, and
further
provided
that no individual initially elected or nominated
as a director of the Company as a result of an actual or threatened
election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf
of any person other than the Board of Directors shall be an
Incumbent Director) cease for any reason to constitute at least a
majority of the Board of Directors;
(iii)
the date which is 10 business days prior to the consummation of a
complete liquidation or dissolution of the Company;
(iv)
the acquisition by any Person of “Beneficial Ownership”
(within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the Beneficial Ownership of any
particular Person, such Person shall be deemed to have beneficial
ownership of all securities that such Person has the right to
acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only after the
passage of time) of 50% or more (on a fully diluted basis) of
either (A) the then outstanding shares of Common Stock of the
Company, taking into account as outstanding for this purpose such
Common Stock issuable upon the exercise of options or warrants, the
conversion of convertible stock or debt, and the exercise of any
similar right to acquire such Common Stock (the “Outstanding
Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding
Company Voting Securities”);
provided,
however
, that for purposes of the Plan, the following
acquisitions shall not constitute a Change of Control: (I) any
acquisition by the Company or any Affiliate, (II) any acquisition
by any employee benefit plan sponsored or maintained by the Company
or any Affiliate, (III) any acquisition which complies with
clauses, (A), (B) and (C) of subsection
(v) of t
his definition, or
(IV) in respect of an award held by a particular participant, any
acquisition by the participant or any group of persons including
the participant (or any entity controlled by the participant or any
group of persons including the participant); or
(v)
the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction
involving the Company that requires the approval of the
Company’s shareholders, whether for such transaction or the
issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business
Combination: (A) more than 50% of the total voting power of (I) the
entity resulting from such business combination (the
“Surviving Company”), or (II) if applicable, the
ultimate parent entity that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to elect a
majority of the members of the Board of Directors (or the analogous
governing body) of the Surviving Company (the “Parent
Company”), is represented by the outstanding company voting
securities that were outstanding immediately prior to such business
combination (or, if applicable, is represented by shares into which
the outstanding company voting securities were converted pursuant
to such business combination), and such voting power among the
holders thereof is in substantially the same proportion as the
voting power of the outstanding company voting securities among the
holders thereof immediately prior to the business combination; (B)
no Person (other than any employee benefit plan sponsored or
maintained by the Surviving Company or the Parent Company) is or
becomes the beneficial owner, directly or indirectly, of 50% or
more of the total voting power of the outstanding voting securities
eligible to elect members of the Board of Directors of the Parent
Company (or the analogous governing body) (or, if there is no
Parent Company, the Surviving Company); and (C) at least a majority
of the members of the Board of Directors (or the analogous
governing body) of the Parent Company (or, if there is no Parent
Company, the Surviving Company) following the consummation of the
business combination were board members at the time of the Board of
Directors’ approval of the execution of the initial agreement
providing for such business combination
The cash component (as opposed to option accelerations) of any
change of control payment would be structured as a one-time cash
severance payment.
21
PRINCIPAL
STOCKHOLDERS
The following table shows the pro forma beneficial ownership of our
common stock as of December 18, 2017. The table shows the common
stock holdings of (i) each person known to us to be the beneficial
owner of at least five percent (5%) of our common stock; (ii) each
director; (iii) each executive officer; and (iv) all directors and
executive officers as a group.
Beneficial ownership is determined in accordance with the rules of
the SEC, and generally includes voting power and/or investment
power with respect to the securities held. Shares of common stock
subject to options and warrants currently exercisable or
exercisable within 60 days as of December 18, 2017, are deemed
outstanding and beneficially owned by the person holding such
options or warrants for purposes of computing the number of shares
and percentage beneficially owned by such person, but are not
deemed outstanding for purposes of computing the percentage
beneficially owned by any other person. Except as indicated in the
footnotes to this table, the persons or entities named have sole
voting and investment power with respect to all shares of our
common stock shown as beneficially owned by them.
The
percentages in the table below are based on 12,543,870 outstanding shares of common stock. Unless otherwise indicated, the principal
mailing address of each of the persons below is c/o Relmada Therapeutics, Inc., 750 Third Avenue, 9
th
Floor, New York, New York 10017. The Company’s executive office is also located at 750 Third Avenue, 9
th
Floor, New York, New York 10016.
|
|
Number
of
Common
Shares
Beneficially
Owned
|
|
|
Bruce
C. Conway
(1)
|
|
|
|
|
|
5403
Drane Drive
Dallas, Texas 75209
|
|
1,500,000
|
|
10.7
|
%
|
|
|
|
|
|
|
John
L. Kemmerer, III
(2)
and Dennis Powers
Kemmerer Resources Corp.
323 Main
Street
Chatham, NJ 07928
|
|
1,200,000
|
|
8.7
|
%
|
|
|
|
|
|
|
Eun Sun Uh
(3)
|
|
|
|
|
|
810-1001
Ansan Purgio Apt
Wongok-dong, Danwon-Ku
Ansan-si, Kyunggi-do
Korea (15373)
|
|
1,031,319
|
|
8.2
|
%
|
|
|
|
|
|
|
Wonpung
Mulsan Co., Ltd.
(4)
|
|
|
|
|
|
539-3
Gajwa 3-dong, Seo-gu, Incheon, Korea
|
|
728,000
|
|
5.80
|
%
|
|
|
|
|
|
|
Sergio
Traversa
(5)
|
|
|
|
|
|
Director
and Chief Executive Officer
|
|
471,348
|
|
3.6
|
%
|
|
|
|
|
|
|
Charles
J. Casamento
(6)
|
|
|
|
|
|
Chairman
of the Board
|
|
46,865
|
|
*
|
|
|
|
|
|
|
|
Paul
Kelly
(7)
|
|
|
|
|
|
Director
|
|
352,617
|
|
2.7
|
%
|
|
|
|
|
|
|
Maged
Shenouda,
(8)
|
|
|
|
|
|
Director
|
|
46,054
|
|
*
|
|
|
|
|
|
|
|
All
Directors and Executive Officers
|
|
916,884
|
|
6.8
|
%
|
|
(1)
|
Based
on Schedule 13G filed October 11, 2017. Assumes
the (i) conversion of convertible promissory notes into 1,000,000 shares and (ii) the exercise of warrants to purchase 500,000
shares.
|
|
(2)
|
Based on Schedule 13G filed October 31, 2017. Assumes the (a) conversion
of convertible promissory notes into 800,000 shares and (b) the exercise of warrants to purchase 400,000 shares.
|
|
(3)
|
Based on Schedule 13G filed November 23, 2016.
|
22
|
(4)
|
Based on Schedule 13G filed June 24, 2016.
|
|
(5)
|
Includes vested options of 268,743 that have an exercise price of $4.00 per share. Excludes unvested options of 14,063 that
have an exercise price of $13.50 per share. The options vest in equal quarterly increments over four years. As of December 18,
2017, 30,937 options were vested that have an exercise price of $13.50 per share. Includes 68,782 common shares that were received
from the Medeor transaction. Includes 30,761 common shares that were granted pursuant to his employment contract. Excludes unvested
options of 796,875 that have an exercise price of $0.81 per share. The options vest in equal quarterly increments over four years.
As of December 18, 2017, 53,125 options were vested that have an exercise price of $0.81 per share. Includes 19,000 shares of common
stock.
|
|
(6)
|
Excludes unvested options to purchase 9,662 shares of common stock at an exercise price of $8.45 per share. The vesting schedule
is according to Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended, wherein 25% of the options shall vest
upon the optionee’s first anniversary of employment with the Company. The remaining 75% of the options shall thereafter vest
each quarter over the next three years. As of December 18, 2017, 16,103 options were vested that have an exercise price of $8.45
per share. Excludes unvested options of 398,438 that have an exercise price of $0.81 per share. The options vest in equal quarterly
increments over four years. As of December 18, 2017, 26,562 options were vested that have an exercise price of $0.81 per share.
Includes 4,200 shares of common stock.
|
|
(7)
|
Excludes unvested options to purchase 11,273 shares of common stock at an exercise price of $3.45 per share. The vesting schedule
is according to Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended, wherein 25% of the options shall vest
upon the optionee’s first anniversary of employment with the Company. The remaining 75% of the options shall thereafter vest
each quarter over the next three years. As of December 18, 2017, 14,492 options were vested that have an exercise price of $3.45
per share. Includes
the (a) conversion of convertible
promissory notes into 200,000 shares and (b) the exercise of warrants to purchase 100
,000
shares. Excludes unvested options of 421,875 that have an exercise price of $0.81 per share. The options vest in equal quarterly
increments over four years. As of December 18, 2017, 28,125 options were vested that have an exercise price of $0.81 per share.
Includes 10,000 shares
of common stock.
|
|
(8)
|
Excludes unvested options to purchase 11,273 shares of common stock at an exercise price of $3.45 per share. The vesting schedule
is according to Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended, wherein 25% of the options shall vest
upon the optionee’s first anniversary of employment with the Company. The remaining 75% of the options shall thereafter vest
each quarter over the next three years. As of December 18, 2017, 14,492 options were vested that have an exercise price of $3.45
per share. Excludes unvested options of 398,438 that have an exercise price of $0.81 per share. The options vest in equal quarterly
increments over four years. As of December 18, 2017, 26,562 options were vested that have an exercise price of $0.81 per share.
Includes 5,000 shares of common stock.
|
23
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
Advisory Firm
On October 17, 2012, the Company entered into an advisory agreement
with Jamess Capital Group, LLC (formerly known as Amerasia Capital
Group, LLC), a consulting firm affiliated with Mr. Seth, a Director
of the Company (“Advisory Firm”) to provide
non-investment banking services related to: a) recruiting key level
personnel of the Company and negotiating their contracts; b)
advising Relmada on prioritizing its product development programs
per strategic objectives and assisting with qualifying and
retaining key consultants to assist with product development
activities for its key pipeline drugs levorphanol and d-Methadone
and if required other products as well; c) assessing the state of
Relmada’s financial records per US GAAP requirements, and; d)
assisting with the selection and oversight of appropriate
financial, accounting and auditing professionals to prepare the
financial records and reporting of the Company to public company
standards; and advising Relmada on the structure and composition of
its Board of Directors in order to qualify for a public listing and
assisting with the recruiting and contract negotiations for at
least two Board Members. The Advisory Firm was due a monthly fee of
$12,500 and the agreement was terminated as of June 30, 2015. The
Advisory firm earned fully vested warrants to purchase common
1,731,157 shares of stock at an exercise price of $0.001 that
expires in May 2021. The Advisory Firm was also eligible to be
reimbursed upon the submission of proper documentation for ordinary
and necessary out-of-pocket expenses not to exceed $5,000 per
month. Jamess Capital Group, LLC has not requested to be reimbursed
for any expenses. This agreement was terminated effective June 30,
2015.
On August 4, 2015, the Company also entered into an Advisory and
Consulting Agreement (the “Consulting Agreement”) with
Sandesh Seth, the Company’s former Chairman of the Board. The
effective date of the Consulting Agreement is June 30, 2015. Mr.
Seth has substantial experience in, among other matters, business
development, corporate planning, corporate finance, strategic
planning, investor relations and public relations, and an expansive
network of connections spanning the biopharmaceutical industry,
accounting, legal and corporate communications professions. Mr.
Seth will provide advisory and consulting services to assist the
Company with strategic advisory services, assist in prioritizing
product development programs per strategic objectives, assist in
recruiting of key personnel and directors, corporate planning,
business development activities, corporate finance advice, and
assist in investor and public relations services. In consideration
for the services to be provided, the Company agreed to pay Mr. Seth
$12,500 per month on an ongoing basis. On June 6, 2017, Mr. Seth
resigned from the Company to focus his attention on matters
external to Relmada. The Company agreed to continue its advisory
and consulting arrangement with Mr. Seth until December 31,
2017.
Consulting
Agreement
On June 12, 2017, the Company and Maged Shenouda, a director of the
Company, entered into a Consulting Agreement (the
“Agreement”). Pursuant to the terms of the Agreement,
Mr. Shenouda will assist the Company with matters that may be
requested by the Company. Mr. Shenouda will be paid a consulting
fee of $10,000 per month. The term of the Agreement is for one
year. On November 13, 2017, Mr. Shenouda and the Company agreed to
terminate the Consulting Agreement effective December 31, 2017.
24
MATTERS TO BE CONSIDERED
AT THE ANNUAL MEETING
PROPOSAL 1
ELECTION OF
DIRECTORS
The authorized number of members of the Board of Directors consists
of four directors. Our Board of Directors recommends that Paul
Kelly be elected as a member of the Board of Directors at the
annual meeting.
Pursuant to our articles of incorporation, as amended, our Board of
Directors is divided into three classes. The members of each class
will serve for a staggered, three-year term. Upon the expiration of
the term of a class of directors, directors in that class will be
elected for three-year terms at the annual meeting of stockholders
in the year in which their term expires. Each of the nominees, if
re-elected, will serve a three-year term as a director until the
annual meeting of stockholders in 2020 or until his respective
successor is duly elected and qualified or until the earlier of his
death, resignation or removal. If a nominee becomes unable or
unwilling to accept nomination or election, the person or persons
voting the proxy will vote for such other person or persons as may
be designated by the Board of Directors, unless the Board of
Directors chooses to reduce the number of directors serving on the
Board of Directors. The Board of Directors has no reason to believe
that either of the nominees will be unable or unwilling to serve as
a director if re-elected. The table below shows the term of each
director under our amended articles of incorporation assuming the
approval of this Proposal 1:
|
|
|
|
Term
(from 2017 Annual Meeting)
|
Maged Shenouda
|
|
Class I
|
|
12 months
|
Charles J. Casamento
|
|
Class II
|
|
24 months
|
Sergio Traversa
|
|
Class II
|
|
24 months
|
Paul Kelly
|
|
Class III
|
|
36 months
|
Election
of Class III Director
The Board of Directors proposes the election of Paul Kelly as a
Class III director to serve on its Board of Directors for a term
that continues for a three-year term or until their successors are
duly elected. Mr. Kelly is a current board member. Information
regarding them is set forth above under the caption
“DIRECTORS AND EXECUTIVE OFFICERS.” In the event the
nominee is unable or unwilling to serve as a director, the
individual named as proxies on the proxy card will vote the shares
that they represent for election of such other person or persons as
the Board of Directors may recommend. The Board of Directors has no
reason to believe that the nominee will be unable or unwilling to
serve.
The Board of Directors is responsible for supervision of the
overall affairs of the Company.
There are no family relationships between any of the executive
officers and directors.
Vote Required
Directors are elected by a plurality of the votes cast in person or
by proxy at the annual meeting of stockholders and entitled to vote
on the election of directors. “Plurality” means that
the nominees receiving the greatest number of affirmative votes
will be elected as directors, up to the number of directors to be
chosen at the meeting. Broker non-votes will not affect the outcome
of the election of directors because brokers do not have discretion
to cast votes on this proposal without instruction from the
beneficial owner of the shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ELECTION
OF THE DIRECTOR NOMINEE.
25
PROPOSAL 2
RATIFICATION OF THE
APPOINTMENT OF GBH CPAs, PC
The Board of Directors has appointed GBH CPAs, PC as our
independent registered public accounting firm to audit our
consolidated financial statements and our subsidiary for the fiscal
year ending June 30, 2018. Representatives of GBH CPAs, PC will be
present at the annual meeting and will have an opportunity to make
a statement or to respond to appropriate questions from
stockholders. Although stockholder ratification of the appointment
of our independent auditor is not required by our bylaws or
otherwise, we are submitting the selection of GBH CPAs, PC to our
stockholders for ratification to permit stockholders to participate
in this important corporate decision. If not ratified, the Audit
Committee will reconsider the selection, although the Audit
Committee will not be required to select a different independent
auditor for our Company.
Vote Required
The ratification of the appointment of GBH CPAs, PC as our
independent registered public accounting firm will be approved if
there is a quorum and the votes cast “FOR” the proposal
exceeds those cast against the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”
RATIFICATION OF
GBH CPAs, PC AS OUR INDEPENDENT REGISTERED ACCOUNTING
FIRM.
26
PROPOSAL 3
APPROVAL OF AMENDMENT OF
THE 2014 STOCK OPTION AND EQUITY INCENTIVE PLAN, AS AMENDED, TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR
ISSUANCE UNDER THE PLAN By 2.5 MILLION SHARES FROM 4,111,768 TO
6,611,768
Description of Proposed
Amendment
On December 15, 2017, the Board unanimously approved an amendment
(the “
Plan
Amendment
”) to the Company’s 2014 Stock Option
and Equity Incentive Plan, as amended (the “
Plan
”),
subject to stockholder approval, to increase the number of shares
of Common Stock authorized for issuance under the Plan by 2.5
million shares from 4,111,768 to 6,611,768.
The full text of the proposed Plan Amendment is set out in
Annex
A
to this Proxy Statement. The text of the proposed Plan
Amendment is subject to modification to include such changes as the
Board deems necessary and advisable to affect the increase in the
number of shares of Common Stock reserved and available for
issuance under the Plan. Stockholders are being asked to approve
the Plan Amendment.
Vote Required and
Recommendation
The approval of the Plan Amendment will be made upon the
affirmative vote of the majority of shares cast on the proposal.
Abstentions and broker non-votes will have no direct effect on the
outcome of this proposal. If the proposal is not approved by the
stockholders, the Plan Amendment will not be effective and the
proposal will not be implemented.
Reasons for the Plan
Amendment
2014 Plan
Generally
Our 2014 Plan is currently comprised of 4,111,768 shares of Common
Stock.
The purpose of the Plan is to encourage selected employees,
directors and consultants of Relmada Therapeutics, Inc. and its
affiliates to acquire a proprietary interest in the growth and
performance of the Company, to generate an increased incentive to
contribute to the Company’s future success and prosperity,
thus enhancing the value of the Company for the benefit of its
stockholders, and to enhance the ability of the Company and its
affiliates to attract and retain exceptionally qualified
individuals upon whom, in large measure, the sustained progress,
growth and profitability of the Company depend.
Increase in Size of
Plan
Currently, awards (consisting of options to purchase shares of
Common Stock and restricted stock) issued under the Plan total
2,752,597 shares of Common Stock. As of December 18, 2017, the
Company has 1,359,172 awards available to be issued.
The Board determined to increase the number of shares of Common
Stock reserved and available for issuance under the Plan by 2.5
million shares because it believes that the current number is
insufficient for the purposes of the Plan for future issuances. The
market for quality personnel is competitive, and the ability to
obtain and retain competent personnel is of great importance to the
Company’s business operations. In addition, the Board is
seeking to satisfy grants made subject to stockholder approval as
stated above as well as the Company’s forecasted needs for
equity compensation.
Effects of the Plan
Amendment
As a result of the Plan Amendment, there will be an increase in the
total number of shares of Common Stock reserved for issuance under
the Plan. This will provide the Company with the ability to grant
more awards than are currently available under the Plan to eligible
recipients including employees, directors, consultants and
advisors. The issuance in the future of awards under the Plan
consisting of full value awards and options to purchase shares of
Common Stock may have the effect of diluting the earnings per share
and book value per share, as well as the stock ownership and voting
rights, of the holders of the currently outstanding shares of
Common Stock. The effective
27
increase in the number of authorized but unissued shares of Common
Stock which may be issued as awards under the Plan may be construed
as having an anti-takeover effect by permitting the issuance of
shares to purchasers who might oppose a hostile takeover bid or
oppose any efforts to amend or repeal certain provisions of the
Company’s Certificate of Incorporation or Bylaws. Holders of
the Common Stock have no preemptive or other subscription rights.
There are no other material differences to the Plan as a result of
the Plan Amendment.
Material Terms of the
Plan
Purpose.
The
purposes of the Plan are to encourage selected employees, directors
and consultants of the Company and its affiliates to acquire a
proprietary interest in the growth and performance of the Company,
to generate an increased incentive to contribute to the
Company’s future success and prosperity, thus enhancing the
value of the Company for the benefit of its stockholders, and to
enhance the ability of the Company and its affiliates to attract
and retain exceptionally qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the
Company depend.
Administration.
The
Plan shall be administered by the Board; provided however, that the
Board may delegate such administration to the Committee.
Shares Available for
Awards.
The maximum aggregate number of shares that may
be sold under the Plan is 6,611,768 shares of common stock.
Recipients of
Grants.
Non-Qualified Stock Options may be granted to
employees, directors and consultants. Incentive Stock Options may
be granted only to employees, provided that employees of affiliates
shall not be eligible to receive Incentive Stock Options. The Plan
shall not confer upon any participant any right with respect to
continuation of an employment or consulting relationship with the
Company, nor shall it interfere in any way with such
participant’s right or the Company’s right to terminate
his or her employment or consulting relationship at any time or any
reason.
Awards.
OPTIONS
.
EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as
is determined by the administrator and set forth in the Award
Agreement, but shall be subject to the following:
In the case of an Incentive Stock Option granted to an Employee who
at the time of grant is a Ten Percent Holder, the per Share
exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant; or granted to any other Employee,
the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
In the case of a Non-Qualified Stock Option, the per share Exercise
Price shall be such price as determined by the Administrator
provided that for any Non-Qualified Stock Option granted on any
date on which the Common Stock is a Listed Security to an eligible
person who is, at the time of the grant of such Option, a Named
Executive of the Company, the per share Exercise Price shall be no
less than 100% of the Fair Market Value on the date of grant if
such Option is intended to qualify as performance-based
compensation under Section 162(m) of the Code.
Notwithstanding the foregoing, Options may be granted with a per
Share exercise price other than as required above pursuant to a
corporate transaction.
OPTION TERM. The term of each Option shall be fixed by the
Board or the committee, provided that no Incentive Stock Option
shall have a term greater than 10 years (5 years in the case of a
“10-percent stockholder”).
So long as optionee’s full time employment or consulting
relationship with the Company continues, the shares underlying this
Option shall vest and become exercisable in accordance with the
following schedule:
Initial Grants
25% of the shares subject to the option shall vest and become
exercisable on the 12 month anniversary of the vesting commencement
date and 6.25% of the total number of shares subject to the Option
shall vest quarterly and become exercisable thereafter.
28
Subsequent Grants
6.25% of the shares subject to the option shall vest quarterly and
become exercisable each quarter after the vesting commencement
date.
Termination of
Employment or Consulting Relationship.
To the extent
that the optionee is not vested in the optioned stock on the date
of termination of his or her continuous service status, or if the
optionee (or other person entitled to exercise the option) does not
exercise the option to the extent so entitled within the time
specified in the option agreement or below (as applicable), the
option shall terminate and the optioned stock underlying the
unexercised portion of the option shall revert to the Plan.
Termination
other than Upon Disability or Death.
In the event of
termination of an optionee’s continuous service status, such
optionee may exercise an option for 90 days following such
termination to the extent the Optionee was vested in the optioned
stock as of the date of such termination.
Disability of
Optionee.
In the event of termination of an
optionee’s continuous service status as a result of his or
her disability, such optionee may exercise an Option at any time
within six months following such termination to the extent the
optionee was vested in the optioned stock as of the date of such
termination.
Death of
Optionee.
In the event of the death of an optionee
during the period of continuous service status since the date of
grant of the option, or within thirty days following termination of
optionee’s continuous service, the option may be exercised by
optionee’s estate or by a person who acquired the right to
exercise the Option by bequest or inheritance at any time within
six months following the date of death, but only to the extent the
Optionee was vested in the optioned stock as of the date of death
or, if earlier, the date the optionee’s continuous Service
status terminated.
Buyout
Provisions.
The administrator may at any time offer to
buy out for a payment in cash or shares an option previously
granted under the Plan based on such terms and conditions as the
administrator shall establish and communicate to the optionee at
the time that such offer is made.
STOCK APPRECIATION RIGHTS.
The Board and the committee are authorized to grant Stock
Appreciation Rights. A Stock Appreciation Right granted under the
Plan shall confer on the holder thereof a right to receive, upon
exercise thereof, the excess of (
1) the
fair market value of one
share on the date of exercise or, if the Board or the committee
shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a
specified period before or after the date of exercise over (2) the
grant price of the right as specified by the Board or the
committee. Subject to the terms of the Plan, the grant price, term,
methods of exercise, methods of settlement, and any other terms and
conditions of any Stock Appreciation Right shall be as determined
by the Board or the committee. The Board and the Committee may
impose such conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
.
ISSUANCE.
The
Board and the committee are authorized to grant Awards of
Restricted Stock and Restricted Stock Units.
RESTRICTIONS.
Shares
of Restricted Stock and Restricted Stock Units shall be subject to
such restrictions as the Board or the committee may impose
(including, without limitation, any limitation on the right to
receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or
times, in such installments or otherwise, as the Board or the
committee may deem appropriate.
FORFEITURE.
Except
as otherwise determined by the Board or the Committee, upon
termination of employment for any reason during the applicable
restriction period, all shares of Restricted Stock and all
Restricted Stock Units still, in either case, subject to
restriction shall be forfeited and reacquired by the Company;
provided, however, that the Board or the Committee may, when it
finds that a waiver would be in the best interests of the Company,
waive in whole or in part any or all remaining restrictions with
respect to shares of Restricted Stock or Restricted Stock Units.
Unrestricted Shares, evidenced in such manner as the Board or the
Committee shall deem appropriate, shall be delivered to the
Participant promptly after such Restricted Stock shall become
Released Securities.
29
PERFORMANCE AWARDS.
The Board and the committee are hereby authorized to grant
Performance Awards. Subject to the terms of the Plan, a Performance
Award granted under the Plan (i) may be denominated or payable in
cash, Shares (including, without limitation, Restricted Stock),
other securities, other Awards, or other property and (ii) shall
confer on the holder thereof rights valued as determined by the
Board or the Committee and payable to, or exercisable by, the
holder of the Performance Award, in whole or in part, upon the
achievement of such performance goals during such performance
periods as the Board or the Committee shall establish. Subject to
the terms of the Plan and any applicable Award Agreement, the
performance goals to be achieved during any performance period, the
length of any performance period, the amount of any Performance
Award granted, and the amount of any payment or transfer to be made
pursuant to any Performance Award shall be determined by the Board
or the committee. The goals established by the Board or the
Committee shall be based on any one, or combination of, earnings
per share, return on equity, return on assets, total stockholder
return, net operating income, cash flow, revenue, economic value
added, increase in Share price or cash flow return on investment,
or any other measure the Board or the Committee deems appropriate.
Partial achievement of the goal(s) may result in a payment or
vesting corresponding to the degree of achievement.
DIVIDEND EQUIVALENTS.
The Board and the committee are hereby authorized to grant Awards
under which the holders thereof shall be entitled to receive
payments equivalent to dividends or interest with respect to a
number of Shares determined by the Board or the committee, and the
Board and the Committee may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or
otherwise reinvested. Subject to the terms of the Plan, such Awards
may have such terms and conditions as the Board or the committee
shall determine.
OTHER STOCK-BASED AWARDS.
The Board and the Committee are hereby authorized to grant such
other Awards that are denominated or payable in, valued in whole or
in part by reference to, or otherwise based on or related to,
Shares (including, without limitation, securities convertible into
shares), as are deemed by the Board or the Committee to be
consistent with the purposes of the Plan, provided, however, that
such grants must comply with applicable law. Subject to the terms
of the Plan, the Board or the committee shall determine the terms
and conditions of such Awards.
Corporate
Transaction.
In the event of a Corporate Transaction
(as defined in the Plan), each outstanding Option or other Award
shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary
of such successor corporation (the “
Successor
Corporation
”), unless the Successor Corporation does not
agree to assume the Award or to substitute an equivalent option or
right, in which case such Option or other Award shall terminate
upon the consummation of the transaction in consideration for a
cash payment to the Participant (on the date of the Corporate
Transaction), with respect to each such Award, equal to the excess,
if any, of the Fair Market Value of the Common Stock subject to
such Award over any exercise price or other purchase price payable
by the Participant with respect to such Award.
Change of
Control.
Notwithstanding any provision of the Plan or
any award agreement to the contrary, in the event of a Change of
Control, (i) each outstanding Award shall become immediately vested
and, to the extent applicable with respect to an Option or other
Award, exercisable, and (ii) the performance goals with respect to
any outstanding Award (including any Performance Award) shall be
deemed satisfied at the “target” level, in each case
effective immediately prior to the Change of Control.
Change of Control
” means:
(i)
the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of
the properties or assets of the Company and its subsidiaries, taken
as a whole, to any “Person” (as that term is used in
Section 13(d)(3) of the Exchange Act) that is not an Affiliate;
(ii)
the “Incumbent Directors” (meaning those individuals who, on date the Plan was adopted by the Board (the “Effective
Date”), constitute the Board,
provided that
any individual becoming a Director subsequent to the Effective Date whose
election or nomination for election to the Board was approved by a vote of at least two-thirds of the Incumbent Directors then
on the Board (either by a specific vote
30
or by approval of the proxy statement of the Company in which such
person is named as a nominee for Director without objection to such
nomination) shall be an Incumbent Director, and
further
provided
that no individual initially elected or nominated
as a director of the Company as a result of an actual or threatened
election contest with respect to Directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf
of any person other than the Board shall be an Incumbent Director)
cease for any reason to constitute at least a majority of the
Board;
(iii)
the date which is 10 business days prior to the consummation of a
complete liquidation or dissolution of the Company;
(iv)
the acquisition by any Person of “Beneficial Ownership” (within the meaning of Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the Beneficial Ownership of any particular Person, such Person shall be deemed to
have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable or is exercisable only after the passage of time) of 50% or more (on a fully diluted
basis) of either (A) the then outstanding shares of Common Stock of the Company, taking into account as outstanding for this purpose
such Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise
of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”);
provided, however
, that for purposes of this Plan, the following acquisitions shall
not constitute a Change of Control: (I) any acquisition by the Company or any Affiliate, (II) any acquisition by any employee
benefit plan sponsored or maintained by the Company or any Affiliate, (III) any acquisition which complies with clauses, (A),
(B) and (C) of subsection (v) of this definition, or (IV) in respect of an Award held by a particular Participant, any acquisition
by the Participant or any group of persons including the Participant (or any entity controlled by the Participant or any group
of persons including the Participant); or
(v)
the consummation of a reorganization, merger, consolidation,
statutory share exchange or similar form of corporate transaction
involving the Company that requires the approval of the
Company’s shareholders, whether for such transaction or the
issuance of securities in the transaction (a “Business
Combination”), unless immediately following such Business
Combination: (A) more than 50% of the total voting power of (I) the
entity resulting from such Business Combination (the
“Surviving Company”), or (II) if applicable, the
ultimate parent entity that directly or indirectly has beneficial
ownership of sufficient voting securities eligible to elect a
majority of the members of the board of directors (or the analogous
governing body) of the Surviving Company (the “Parent
Company”), is represented by the Outstanding Company Voting
Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which
the Outstanding Company Voting Securities were converted pursuant
to such Business Combination), and such voting power among the
holders thereof is in substantially the same proportion as the
voting power of the Outstanding Company Voting Securities among the
holders thereof immediately prior to the Business Combination; (B)
no Person (other than any employee benefit plan sponsored or
maintained by the Surviving Company or the Parent Company) is or
becomes the Beneficial Owner, directly or indirectly, of 50% or
more of the total voting power of the outstanding voting securities
eligible to elect members of the board of directors of the Parent
Company (or the analogous governing body) (or, if there is no
Parent Company, the Surviving Company); and (C) at least a majority
of the members of the board of directors (or the analogous
governing body) of the Parent Company (or, if there is no Parent
Company, the Surviving Company) following the consummation of the
Business Combination were Board members at the time of the
Board’s approval of the execution of the initial agreement
providing for such Business Combination.”
Term of
Awards.
The term of each Award shall be for such period
as may be determined by the Board or the Committee; provided,
however, that in no event shall the term of any Non-Qualified Stock
Option or Incentive Stock Option exceed a period of ten years from
the date of its grant.
Amendment.
The
Board may amend, alter, suspend, discontinue, or terminate the
Plan, including, without limitation, any amendment, alteration,
suspension, discontinuation, or termination that would impair the
rights of
31
any participant, or any other holder or beneficiary of any Award
theretofore granted, without the consent of any share owner,
participant, other holder or beneficiary of an Award, or other
person.
Term of
Plan.
No Award shall be granted under the Plan more
than 10 years after the effective date. However, unless otherwise
expressly provided in an applicable award agreement, any Award
theretofore granted may extend beyond such date, and the authority
of the Board and the committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award, or to waive any
conditions or rights under any such Award, and the authority of the
Board to amend the Plan, shall extend beyond such date.
Securities Authorized
for Issuance Under Equity Compensation Plans
Relmada has a 2014 Option and Equity Incentive Plan, as amended
(the “Plan”) in which its directors, officers,
employees and consultants shall be eligible to participate. The
Plan allows for the granting of common stock awards, stock
appreciation rights, and incentive and nonqualified stock options
to purchase shares of the Company. As of June 30, 2017, the Company
has 3,509,172 awards available to be issued. As of December 18,
2017, the Company has 1,359,172 awards available to be issued.
The following table summarizes our equity compensation plan
information as of June 30, 2017.
Equity Compensation Plan Information
|
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options
and stock
appreciation rights
|
|
Weighted-
average exercise
price of
outstanding options,
warrants and rights
|
|
Number of securities remaining available for future
issuance under equity compensation plans (excluding securities
reflected in column (a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity compensation plans approved by security
holders
|
|
602,597
|
|
|
$
|
5.58
|
|
|
3,509,172
|
|
Equity
compensation plans not approved by security holders
|
|
—
|
|
|
|
—
|
|
|
—
|
|
Total
|
|
602,597
|
|
|
$
|
5.58
|
|
|
3,509,172
|
|
Recommendation of the
Board of Directors
THE BOARD RECOMMENDS
THAT THE STOCKHOLDERS VOTE “FOR” TO APPROVE AN
AMENDMENT TO THE COMPANY’S 2014 STOCK OPTION AND EQUITY
INCENTIVE PLAN, AS AMENDED, TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER THE PLAN FROM 4,111,768
TO 6,611,768.
32
PROPOSAL 4
ADVISORY VOTE ON OUR
2017 EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 requires public companies to provide stockholders with
periodic advisory (non-binding) votes on executive compensation,
also referred to as “say-on-pay” proposals.
Our executive compensation programs are designed to attract,
motivate and retain our executive officers, who are critical to our
success. Under these programs, our executive officers are rewarded
for the achievement of annual, long-term and strategic goals, and
corporate goals. Please read the “Executive
Compensation” section beginning on page 17 for additional
details about our executive compensation programs, including
information about the fiscal year 2017 compensation of our Chief
Executive Officer (the “Named Executive Officer”).
We are asking our stockholders to indicate their support for our
Named Executive Officers’ compensation as described in this
Proxy Statement. This proposal gives our stockholders the
opportunity to express their views on our Named Executive
Officers’ compensation. This vote is not intended to address
any specific item of compensation, but rather to address the
overall compensation of our Named Executive Officers and the
philosophy, policy and practices as described in this Proxy
Statement. Accordingly, we will ask our stockholders to vote
“FOR” the following resolution at the 2016 Annual
Meeting:
“RESOLVED, that
the compensation paid to the Company’s Named Executive
Officers for the fiscal year ended June 30, 2017, as disclosed
pursuant to Item 402 of Regulation S-K, including the Compensation
Discussion and Analysis, compensation tables and narrative
discussion, is hereby approved.”
Pursuant to the Exchange Act and the rules promulgated thereunder,
this vote will not be binding on the Board or the Compensation
Committee and may not be construed as overruling a decision by the
Board or the Compensation Committee, creating or implying any
change to the fiduciary duties of the Board or the Compensation
Committee or any additional fiduciary duty by the Board or the
Compensation Committee or restricting or limiting the ability of
stockholders to make proposals for inclusion in proxy materials
related to executive compensation. The Board and the Compensation
Committee, however, may in their discretion take into account the
outcome of the vote when considering future executive compensation
arrangements.
Required Vote
In voting to approve the above resolution, stockholders may vote
for the resolution, against the resolution or abstain from voting.
This matter will be decided by the affirmative vote of a majority
of the votes cast at the Meeting. Abstentions and broker non-votes
will have no direct effect on the outcome of this proposal.
THE BOARD RECOMMENDS A
VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE
COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY
STATEMENT.
OTHER MATTERS
As of the date hereof, there are no other matters that we intend to
present, or have reason to believe others will present, at the
annual meeting of stockholders. If, however, other matters properly
come before the annual meeting of stockholders, the accompanying
proxy authorizes the person named as proxy or his substitute to
vote on such matters as he determines appropriate.
ANNUAL REPORT ON FORM
10-K
As required, we have filed our Form 10-K for the fiscal year ended
June 30, 2017 with the SEC. Stockholders may obtain, free of
charge, a copy of the 2017 Form 10-K annual report by writing to us
at Relmada Therapeutics, Inc., 750 Third Avenue, 9
th
Floor, New York NY 10017, Attention: Sergio Traversa, Chief
Executive Officer, or from our website,
www.relmada.com
under the heading “Investor Relations” and the
subheading “Company Financial Reports,” at
www.proxyvote.com
or at
www.sec.gov
.
33
HOUSEHOLDING OF PROXY
MATERIALS
The SEC has adopted rules that permit companies and intermediaries
such as brokers to satisfy delivery requirements for proxy
statements with respect to two or more stockholders sharing the
same address by delivering a single proxy statement addressed to
those stockholders. This process, which is commonly referred to as
“house holding,” potentially provides extra convenience
for stockholders and cost savings for companies. We and some
brokers household proxy materials, delivering a single proxy
statement to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker or us
that they are or we will be house holding materials to your
address, house holding will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you no
longer wish to participate in house holding and would prefer to
receive a separate proxy statement, or if you currently receive
multiple proxy statements and would prefer to participate in house
holding, please notify your broker if your shares are held in a
brokerage account or us if you hold registered shares. You can
notify us by sending a written request to Relmada Therapeutics,
Inc., 750 Third Avenue, 9
th
Floor, New York NY 10017, Attention: Sergio Traversa, Chief
Executive Officer, or by email, straversa@relmada.com.
PROPOSALS OF
STOCKHOLDERS
Stockholders may present proposals intended for inclusion in our
proxy statement for our 2018 Annual Meeting of Stockholders
provided that such proposals are received by the Secretary of the
Company in accordance with the time schedules set forth in, and
otherwise in compliance with, applicable SEC regulations, and the
Company’s amended and restated bylaws, as applicable.
Proposals submitted not in accordance with such regulations will be
deemed untimely or otherwise deficient; however, the Company will
have discretionary authority to include such proposals in the 2016
Proxy Statement.
Additional Information
Accompanying this Proxy Statement is a copy of our Annual Report
for the year ended June 30, 2017. Such report constitutes our
Annual Report to Stockholders for purposes of Rule 14a-3 under the
Exchange Act. Such report includes our audited financial statements
for the fiscal year ended June 30, 2017 and certain other financial
information, which is incorporated by reference herein. We are
subject to the informational requirements of the Exchange Act and
in accordance therewith file reports, proxy statements and other
information with the SEC. Such reports, proxy statements and other
information are available on the SEC’s website at
www.sec.gov
.
WHERE YOU CAN FIND MORE
INFORMATION
This proxy statement refers to certain documents that are not
presented herein or delivered herewith. Such documents are
available to any person, including any beneficial owner of our
shares, to whom this proxy statement is delivered upon oral or
written request, without charge. Requests for such documents should
be directed to Chief Executive Officer, Relmada Therapeutics, Inc.,
750 Third Avenue, 9
th
Floor, New York, NY, 10017. Please note that additional information
can be obtained from our website at
www.relmada.com
.
We file annual and special reports and other information with the
SEC. Certain of our SEC filings are available over the Internet at
the SEC’s web site at
http://www.sec.gov
.
You may also read and copy any document we file with the SEC at its
public reference facilities:
Public Reference Room Office 100 F Street, N.E.
Room 1580
Washington, D.C. 20549
You may also obtain copies of the documents at prescribed rates by
writing to the Public Reference Section of the SEC at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549. Callers in the United
States can also c
all (202) 551-809
0 for further
information on the operations of the public reference
facilities.
34
Annex A
AMENDMENT NO. 3
TO
RELMADA THERAPEUTICS, INC. 2014 STOCK OPTION AND
EQUITY INCENTIVE PLAN, AS AMENDED
Pursuant to Section 9(a) of the 204 Stock Option and Equity
Incentive Plan, as amended (the “
Plan
”) of
Relmada Therapeutics, Inc. (the “
Company
”),
the Board of Directors of the Company has duly adopted a
resolution, conditioned upon approval by the stockholders of the
Company, approving this Amendment No. 3 to the Plan to increase the
total number of shares of common stock, par value $.001 per share,
of the Company (the “
Common Stoc
k
”)
reserved and available for issuance under the Plan as follows:
1.
Section 4(a)(i) of the Plan is hereby amended to read in its
entirety as follows:
“CALCULATION OF NUMBER OF SHARES AVAILABLE. Subject to the
provisions of Section 14 of the Plan, the maximum aggregate number
of Shares that may be sold under the Plan is 6,611,768 Shares of
Common Stock, and the maximum aggregate number of Shares available
for issuance as Incentive Stock Options is the same. The Shares may
be authorized, but unissued, or reacquired Common Stock. If an
award should expire or become unexercisable for any reason without
having been exercised in full, or is surrendered pursuant to an
Option Exchange Program, the unpurchased Shares that were subject
thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan. In addition, any Shares
of Common Stock which are retained by the Company upon exercise of
an award in order to satisfy the exercise or purchase price for
such award or any withholding taxes due with respect to such
exercise or purchase shall be treated as not issued and shall
continue to be available under the Plan. Shares issued under the
Plan and later repurchased by the Company pursuant to any
repurchase right which the Company may have shall not be available
for future grant under the Plan.
2.
All other terms and provisions of the Plan shall remain unchanged
and in full force and effect as written.
3.
A majority in voting interest of the stockholders present in person
or by proxy and entitled to vote at the meeting of stockholders at
which this Amendment No. 2 was considered, has duly approved this
Amendment No. 3 to the Plan.
IN WITNESS
WHEREOF
, this Amendment No. 2 to the Plan is made effective
this day of
, 2018.
|
|
RELMADA THERAPEUTICS, INC.
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
Sergio Traversa
|
|
|
Title:
|
|
Chief Executive Officer
|
A-1