CARM DEF 14A Report ended Dec. 31, 2019

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•	submitting a new proxy by following the “Vote by Internet” or “Vote by Phone” instructions in the Notice or on the enclosed proxy card up until 11:59 p.m., Eastern Daylight Time, the day before the 2020 Annual Meeting;

•	signing another proxy card and either arranging for delivery of that proxy card by mail by 11:59 p.m., Eastern Daylight Time, the day before the 2020 Annual Meeting;

•	giving our Corporate Secretary a written notice before the 2020 Annual Meeting that you want to revoke your proxy; or

•	voting online at the 2020 Annual Meeting.

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(1)	Member of the Audit Committee.

(2)	Member of the Compensation Committee.

(3)	Member of the Nominating and Corporate Governance Committee.

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•	the Class I directors are Thomas R. Cannell and Carrie L. Bourdow, and their term expires at our annual meeting of stockholders to be held in 2021;

•	the Class II directors are Jay S. Duker and Jason A. Keyes, and their term expires at the 2022 Annual Meeting; and

•	the Class III directors are Jane V. Henderson and Daniel S. Lynch, and their term expires at our annual meeting of stockholders to be held in 2020.

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•	chairing meetings of our Board and of the independent directors in executive session;

•	meeting with any director who is not adequately performing his or her duties as a member of our Board or any committees thereof;

•	facilitating communications between other members of our Board and the chief executive officer;

•	determining the frequency and length of Board meetings and recommending when special meetings of our Board should be held;

•	preparing or approving the agenda for each Board meeting; and

•	reviewing and, if appropriate, recommending action to be taken with respect to written communications from stockholders submitted to our Board.

•	increasing the independent oversight of our company and enhancing our Board’s objective evaluation of our chief executive officer;

•	freeing the chief executive officer to focus on company operations instead of board administration;

•	providing the chief executive officer with an experienced sounding board;

•	providing greater opportunities for communication between stockholders and our Board;

•	enhancing the independent and objective assessment of risk by our Board; and

•	providing an independent spokesperson for our company.

•	appointing, approving the compensation of, and assessing the independence of, our registered public accounting firm;

•	overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports and other communications from such firm;

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reviewing and discussing with management and our independent registered public accounting firm (x) our annual and quarterly financial statements and related disclosures (including any interim financial statements to be included in our periodic disclosures filed with the SEC); (y) our earnings press releases; and (z) litigation or other legal matters that could have a significant impact on our financial results;

•	monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;

•	overseeing our internal audit function;

•	overseeing our risk assessment and risk management policies;

•	establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;

•	meeting independently with our internal auditing staff, if applicable, and our independent registered public accounting firm and management;

•	reviewing and approving or ratifying any related person transactions;

•	preparing the audit committee report required by SEC rules; and

•	conducting a periodic self-assessment of the audit committee and its charter.

•	reviewing and approving, or making recommendations to our Board with respect to, the compensation of our chief executive officer and our other executive officers;

•	overseeing an evaluation of our senior executives, including the establishment of corporate goals and objectives applicable to our chief executive officer and our other executive officers;

•	reviewing and approving, or making recommendations to our Board with respect to, the terms of any binding offer letters, employment agreements, termination agreements or arrangements, change-in-control agreements, severance agreements, indemnification agreements or other material compensatory agreements with our chief executive officer or our other executive officers;

•	overseeing and administering our cash and equity incentive plans;

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•	retaining the services, following the determination of independence under applicable Nasdaq and Exchange Act rules, of our compensation consultant, as well as overseeing and considering the recommendations of our compensation consultant;

•	reviewing and making recommendations to our Board with respect to director compensation;

•	establishing, if deemed advisable by our Board, stock ownership guidelines for our chief executive officer, directors and other executive officers;

•	reviewing and discussing annually with management our compensation disclosure required by SEC rules;

•	preparing the compensation committee report required by SEC rules; and

•	conducting a periodic self-assessment of the compensation committee and its charter.

•	identifying individuals qualified to become members of our Board;

•	recommending to our Board the persons to be nominated for election as directors and to each of our Board’s committees;

•	reviewing and making recommendations to our Board with respect to our Board leadership structure;

•	reviewing and making recommendations to our Board with respect to management succession planning;

•	reviewing and making recommendations to our Board with respect to the adequacy of our certificate of incorporation and by-laws;

•	developing and recommending to our Board corporate governance principles;

•	overseeing a periodic evaluation of our Board; and

•	conducting a periodic self-assessment of the nominating and corporate governance committee and its charter.

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•	our Board’s principal responsibility is to oversee our management;

•	a majority of the members of our Board must be independent directors;

•	the independent directors meet in executive session at least twice a year;

•	directors have full and free access to management and, as necessary, independent advisors;

•	new directors participate in an orientation program and all directors are expected to participate in continuing director education on an ongoing basis; and

•	our Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively.

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•	the related person’s interest in the related person transaction;

•	the approximate dollar value of the amount involved in the related person transaction;

•	the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;

•	whether the transaction was undertaken in the ordinary course of our business;

•	whether the terms of the transaction are no less favorable to us than terms that could have been reached with an unrelated third party;

•	the purpose of, and the potential benefits to us of, the transaction; and

•	any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

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interests arising solely from the related person’s position as an executive officer of another entity, whether or not the person is also a director of the entity, that is a participant in the transaction where the related person and all other related persons own in the aggregate less than a 10% equity interest in such entity, the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction and do not receive any special benefits as a result of the transaction and the amount involved in the transaction is less than $120,000; and

•	a transaction that is specifically contemplated by provisions of our certificate of incorporation or by-laws.

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(1)	Dr. Cannell has served as our President and Chief Executive Officer since August 7, 2018.

(2)

Ms. Forbes has served as our Chief Financial Officer and Treasurer since August 26, 2019. Prior to that, she served as our Vice President, Finance from August 1, 2019 to August 26, 2019. Before joining us as an employee, Ms. Forbes served as a finance consultant to us from April 29, 2019 to July 31, 2019, pursuant to a consulting agreement dated April 29, 2019. Pursuant to such consulting agreement we paid Ms. Forbes a consulting fee at an agreed upon hourly rate of $200 per hour for such services and reimbursed Ms. Forbes for business related expenses. The consulting fees earned by Ms. Forbes in 2019 pursuant to such consulting agreement are included in the amount reported for Ms. Forbes in the “Salary” column.

(3)

Mr. Sullivan served as our Acting General Counsel from April 25, 2018 to July 31, 2019, when he was appointed our General Counsel and Corporate Secretary. During the period that Mr. Sullivan served as our Acting General Counsel, Mr. Sullivan served as a consultant to the Company pursuant to an agreement dated April 25, 2018. Pursuant to such agreement, we paid Mr. Sullivan a consulting fee at an agreed upon hourly rate of $200 per hour for such services and reimbursed Mr. Sullivan for business related expenses. The consulting fees earned by Mr. Sullivan in 2019 pursuant to such consulting agreement are included in the amount reported for Mr. Sullivan in the “Salary” column. Mr. Sullivan became an employee on August 1, 2019 when he was appointed our General Counsel and Corporate Secretary.

(4)

The amounts reported in the "Options awards" column reflect the aggregate grant date fair value of stock options awarded during the year computed in accordance with the provisions of Financial Accounting Standards Board Accounting Standard Codification, or ASC, Topic 718. See Note 12 to our financial statements appearing at the end of our Annual Report on Form 10-K for the year ended December 31, 2019 regarding assumptions underlying the valuation of equity awards.

(5)	The amounts reported in the "Non-equity incentive plan compensation" column reflect bonuses that were earned by our executive officers in fiscal year 2019 based on the achievement of pre-established performance goals that were previously communicated to our executive officers.

(6)	For Dr. Cannell, the amount reported in 2018 includes a one-time relocation payment in the amount of $280,000 in connection with his relocation to the Philadelphia, PA area. For Dr. Cannell and Mr. Sullivan, the amounts reported in 2019 reflect discretionary 401(k) matching contributions contributed to our 401(k) retirement plan for each of them as approved by the Board.

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(1)	Vests over four years, with 25% of the shares underlying the option vesting on August 7, 2019, the first anniversary of the grant date, and 6.25% of the shares underlying the option vesting quarterly thereafter until the fourth anniversary of the grant date.

(2)	Vests over four years, with 6.25% of the shares underlying the option vesting quarterly until the fourth anniversary of the grant date.

(3)	Vests over four years, with 25% of the shares underlying the option vesting on August 1, 2020, the first anniversary of the grant date, and 6.25% of the shares underlying the option vesting quarterly thereafter until the fourth anniversary of the grant date.

(4)	Vests over four years, with 6.25% of the shares underlying the option vesting quarterly until August 26, 2023, the fourth anniversary of the grant date.

(5)	Vests over four years, with 25% of the shares underlying the option vesting on February 27, 2020, the first anniversary of the grant date, and 6.25% of the shares underlying the option vesting quarterly thereafter until the fourth anniversary of the grant date.

(6)	Vests over four years, with 6.25% of the shares underlying the option vesting quarterly until August 1, 2023, the fourth anniversary of the grant date.

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•	for any breach of the director’s duty of loyalty to us or our stockholders;

•	for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

•	for voting for or assenting to unlawful payments of dividends, stock repurchases or other distributions; or

•	for any transaction from which the director derived an improper personal benefit.

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(1)

On February 13, 2020, our compensation committee, based on a Radford market analysis of public pre-commercial biopharmaceutical companies with less than 100 employees and market capitalizations between $50 million and $200 million, approved certain changes in our non-employee director compensation to align with companies in the 50th percentile of the Radford market analysis. As a result, the annual Board cash retainer for our non-executive directors was increased from $35,000 to $40,000, the additional retainer for the non-executive Chair of our Board was decreased from $47,500 to $30,000, the annual retainer for the Chair of our nominating and corporate governance committee was increased from $7,500 to $8,000, the annual retainer for our nominating and corporate governance committee members was increased from $3,750 to $4,000, the annual equity award to our non-employee directors was increased from 52,500 shares of common stock to 59,000 shares of common stock, the initial equity award to our non-employee directors was increased from 105,000 shares of common stock to 118,000 shares of common stock, and the additional annual equity award to our non-executive Chair of the Board was eliminated.

(1)	Immediately following the annual meeting of stockholders held on June 19, 2019, Dr. Dixon, Mr. Dan, Dr. Duker, Ms. Henderson and Mr. Lynch each received an option to purchase 52,500 shares of our common stock at an exercise price

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(2)	Dr. Dixon resigned from our Board on February 24, 2020.

(3)	Mr. Dan retired from our Board on July 16, 2019.

(1)	Dr. Dixon resigned from our Board on February 24, 2020.

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(1)	Audit fees consist of fees for the audit of our annual financial statements.

(2)	Audit-related fees for fiscal year 2019 were incurred in connection with our underwritten public offering in June 2019, our prospectus supplement filed with the SEC in November 2019, our registration statement on Form S-8 filed with the SEC in May 2019, and our registration statement on Form S-8 filed with the SEC in November 2019.

(3)

Audit-related fees for fiscal year 2018 were incurred in connection with our registered direct offering in March 2018, our underwritten public offering in June 2018, our registration statement on Form S-8 filed with the SEC in May 2018, our registration statement on Form S-3 filed with the SEC in March 2018, as amended in May 2018, and our registration statement on Form S-3 filed with the SEC in May 2018.

(4)	Tax fees for fiscal years 2019 and 2018 consist of fees for tax compliance services relating primarily to the preparation of our U.S. and various state tax returns. For fiscal year 2018, fees also consist of routine on-call tax advisory fees.

(5)	Other fees for fiscal year 2019 relate to services rendered related to our recovery of German VAT taxes paid in 2019 for the shipment of our drug substance from the United States to Germany. There were no other fees for fiscal year 2018.

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•	Class I: Thomas R. Cannell and Carrie L. Bourdow, and their term expires at the annual meeting of stockholders to be held in 2021.

•	Class II: Jay S. Duker and Jason A. Keyes, and their term expires at the annual meeting of stockholders to be held in 2022.

•	Class III: Jane V. Henderson and Daniel S. Lynch, and their term expires at the 2020 Annual Meeting.

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•	a limited availability of market quotations for our securities;

•	a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

•	a limited amount of news and little or no analyst coverage for us;

•	we would no longer qualify for exemptions from state securities registration requirements, which may require us to comply with applicable state securities laws; and

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•	a decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3) or obtain additional financing in the future.

•	the historical and projected performance of our common stock;

•	prevailing market conditions;

•	general economic and other related conditions prevailing in our industry and in the marketplace;

•	the projected impact of the selected reverse stock split ratio on trading liquidity in our common stock;

•	our capitalization (including the number of shares of our common stock issued and outstanding);

•	the prevailing trading price for our common stock and the volume level thereof; and

•	potential devaluation of our market capitalization as a result of a reverse stock split.

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Although we expect that the reverse stock split will result in an increase in the market price of our common stock, we cannot assure you that the reverse stock split, if implemented, will increase the market price of our common stock in proportion to the reduction in the number of shares of common stock outstanding or result in a permanent increase in the market price. The effect the reverse stock split may have upon the market price of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in similar circumstances to ours is varied. The market price of our common stock is dependent on many factors, including our business and financial performance, general market conditions, prospects for future success and other factors detailed from time to time in the reports we file with the SEC. Accordingly, the total market capitalization of our common stock after the proposed reverse stock split may be lower than the total market capitalization before the proposed reverse stock split and, in the future, the market price of our common stock following the reverse stock split may not exceed or remain higher than the market price prior to the proposed reverse stock split.

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•	The reverse stock split may result in some stockholders owning “odd lots” of less than 100 shares of our common stock on a post-split basis. These odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.

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While our Board believes that a higher stock price may help generate investor interest, there can be no assurance that the reverse stock split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.

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•	purchasing a sufficient number of shares of our common stock; or

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if you have shares of common stock in more than one account, consolidating your accounts, so that in each case you hold a number of shares of our common stock in each of your accounts prior to the reverse stock split that would entitle you to receive at least one share of our common stock on a post-reverse stock split basis. Common stock held in registered form (that is, shares held by you in your own name on the Company’s share register maintained by its transfer agent) and common stock held in “street name” (that is, shares held by you through a bank, broker or other nominee) for the same investor would be considered held in separate accounts and would not be aggregated when implementing the reverse stock split. Also, shares of common stock held in registered form but in separate accounts by the same investor would not be aggregated when implementing the reverse stock split.

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(1)	Represents the weighted-average exercise price of outstanding stock options only.

(2)	Consists of outstanding stock options issued pursuant to our 2009 Stock Incentive Plan and our 2014 Stock Incentive Plan.

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

(4)

In September 2016, we issued 650,000 inducement equity awards outside our 2014 Stock Incentive Plan in accordance with Nasdaq Listing Rule 5635(c)(4). The inducement equity awards were, upon the recommendation of the Compensation Committee of our Board, approved by our Board and were made as an inducement material to (i) Stephen A. Hurly, our former President and Chief Executive Officer, (ii) Arthur DeCillis, M.D., our former Chief Medical Officer, (iii) Dr. Glen MacDonald and (iii) Gregory P. Adams, Ph.D., our former Chief Scientific Officer, in connection with each individual's acceptance of employment with us in accordance with Nasdaq Listing Rule 5635(c)(4). Each of the inducement grants expires on the day preceding the tenth anniversary of the grant date and vests over four years, with 25% of the original number of shares subject to the option vesting on the one year anniversary of the date of grant of the option and an additional 6.25% of the shares subject to the option vesting at the end of each successive three-month period following the one-year anniversary of the date of grant of the option, subject to the recipient’s continued service with us through the applicable vesting dates. The unvested portion of Dr. DeCillis’ inducement award was forfeited as of October 3, 2017, which was the effective date of his resignation, and the remaining vested but unexercised options cancelled on January 3, 2018. The unvested portion of Mr. Hurly’s inducement award was forfeited as of August 7, 2018, which was the date of his departure from us, and the remaining vested but unexercised options cancelled on November 7, 2018. The unvested portion of Dr. Adams' inducement award was forfeited as of March 31, 2019, which was the effective date of his resignation, and the remaining vested but unexercised options cancelled on June 30, 2019.

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•	each of our directors;

•	each of our named executive officers; and

•	all of our directors and executive officers as a group.

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(1)	Consists of 132,912 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(2)	Consists of 153,974 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(3)	Includes 251,392 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(4)	Consists of 3,277 shares of our common stock, and 215,352 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(5)	Consists of 3,277 shares of our common stock, and 215,352 shares of common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(6)	Consists of 993,750 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(7)	Consists of 81,250 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(8)	Consists of 135,000 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

(9)	Includes 2,090,321 shares of our common stock issuable upon the exercise of options exercisable within 60 days after March 27, 2020 .

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