TG THERAPEUTICS, INC.
10-Ks and 10-Qs
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment No. __)
Filed by a Party
other than the Registrant ☐
Check the
appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, For Use of the Commission Only (As Permitted by Rule
14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under Rule 14a-12
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TG
THERAPEUTICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing
Fee (Check the appropriate box):
☒ No
fee required
☐ Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction
applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule
0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
☐ Fee
paid previously with preliminary materials.
☐ Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
(1) Amount
Previously Paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
TG THERAPEUTICS, INC.
2 Gansevoort Street, 9th Floor
New York, New York 10014
Dear
Stockholder:
You are
cordially invited to the Annual Meeting of Stockholders (the
“Annual Meeting”) of TG Therapeutics, Inc.
(“TG” or the “Company”), to be held at 9:30
a.m. local time, on Wednesday, June 13, 2018, at the offices of our
legal counsel, Alston & Bird, located at 90 Park Avenue, New
York, New York 10016. At the meeting, the stockholders will be
asked to (i) elect seven directors for a term of one year, (ii)
ratify the appointment of CohnReznick LLP as our independent
registered public accounting firm for the year ending December 31,
2018, and (iii) approve an amendment to our Amended and Restated
2012 Incentive Plan. You will also have the opportunity to ask
questions and make comments at the meeting.
In
accordance with the rules and regulations of the Securities and
Exchange Commission, we are furnishing our proxy statement and
annual report to stockholders for the year ended December 31, 2017
on the Internet. You may have already received our
“
Important Notice Regarding the
Availability of Proxy Materials,
”
which was mailed on or about April
30, 2018. That notice described how you can obtain our proxy
statement and annual report. You can also receive paper copies of
our proxy statement and annual report upon request.
It is
important that your stock be represented at the meeting regardless
of the number of shares you hold. You are encouraged to specify
your voting preferences by marking our proxy card and returning it
as directed. If you do attend the meeting and wish to vote in
person, you may revoke your proxy at the meeting.
If you
have any questions about the proxy statement or the accompanying
2017 Annual Report, please contact Sean A. Power, our Chief
Financial Officer at (212) 554-4484.
We look
forward to seeing you at the Annual Meeting.
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Sincerely,
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/s/ Michael S. Weiss
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Michael S. Weiss
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Executive
Chairman, Chief Executive Officer and President
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April
30, 2018
New
York, New York
TG THERAPEUTICS, INC.
2 Gansevoort Street, 9th Floor
New York, New York 10014
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The
Annual Meeting of Stockholders of TG Therapeutics, Inc. will be
held at the offices of our legal counsel, Alston & Bird,
located at 90 Park Avenue, New York, New York 10016, on Wednesday,
June 13, 2018, at 9:30 a.m., local time. At the meeting,
stockholders will consider and act on the following
items:
1.
Elect seven
directors for a term of one year;
2.
Ratify the
appointment of CohnReznick LLP as our independent registered public
accounting firm for the year ending December 31, 2018;
3.
Approve an
amendment to our Amended and Restated 2012 Incentive Plan;
and
4.
Transact any other
business that may properly come before the Annual Meeting or any
adjournment of the Annual Meeting.
Only
those stockholders of record as of the close of business on April
18, 2018, are entitled to vote at the Annual Meeting or any
postponements or adjournments thereof. A complete list of
stockholders entitled to vote at the Annual Meeting will be
available for your inspection beginning April 24, 2018, at our
offices located at 2 Gansevoort Street, New York, New York 10014,
between the hours of 10:00 a.m. and 5:00 p.m., local time, each
business day.
YOUR VOTE IS IMPORTANT!
Instructions on how
to vote your shares via the Internet are contained on the
“
Important Notice
Regarding the Availability of Proxy Materials,
”
which was mailed on or about
April 30,
2018
. Instructions on how to obtain a paper copy of our
proxy statement and annual report to stockholders for the year
ended December 31, 2017 are listed on the
“
Important Notice Regarding the
Availability of Proxy Materials.
”
These materials can also be viewed
online by following the instructions listed on the
“
Important Notice Regarding the
Availability of Proxy Materials.
”
If you
choose to receive a paper copy of our proxy statement and annual
report, you may vote your shares by completing and returning the
proxy card that will be enclosed.
Submitting your
proxy does not affect your right to vote in person if you decide to
attend the Annual Meeting. You are urged to submit your proxy as
soon as possible, regardless of whether or not you expect to attend
the Annual Meeting. You may revoke your proxy at any time before it
is voted at the Annual Meeting by (i) delivering written notice to
our Corporate Secretary, Sean A. Power, at our address above, (ii)
submitting a later dated proxy card, (iii) voting again via the
Internet as described in the
“
Important Notice Regarding the
Availability of Proxy Materials,
”
or (iv) attending the Annual
Meeting and voting in person. No revocation under (i) or (ii) will
be effective unless written notice or the proxy card is received by
our Corporate Secretary at or before the Annual
Meeting.
When
you submit your proxy, you authorize Michael S. Weiss and Sean A.
Power to vote your shares at the Annual Meeting and on any
adjournments of the Annual Meeting in accordance with your
instructions.
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By Order of the Board of
Directors,
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/s/ Sean A. Power
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Sean A. Power
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Corporate
Secretary
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April
30, 2018
New
York, New York
TG THERAPEUTICS, INC.
2 Gansevoort Street, 9th Floor
New York, New York 10014
Phone: (212) 554-4484
Fax: (212) 554-4531
PROXY STATEMENT
This proxy statement is being made available via Internet access,
beginning on or about April 30, 2018, to the owners of shares of
common stock of TG Therapeutics, Inc. (the “Company,”
“our,” “we,” or “TG”) as of
April 18, 2018, in connection with the solicitation of proxies by
our Board of Directors for our 2018 Annual Meeting of Stockholders
(the “Annual Meeting”). On or about April 30, 2018, we
sent an “Important Notice Regarding the Availability of Proxy
Materials” to our stockholders. If you received this notice
by mail, you will not automatically receive by mail our proxy
statement and annual report to stockholders for the year ended
December 31, 2017. If you would like to receive a printed copy of
our proxy statement, annual report and proxy card, please follow
the instructions for requesting such materials in the notice. Upon
request, we will promptly mail you paper copies of such materials
free of charge.
The
Annual Meeting will take place at the offices of our legal counsel,
Alston & Bird, located at 90 Park Avenue, New York, New York
10016 on Wednesday, June 13, 2018, at 9:30 a.m., local time. Our
Board of Directors encourages you to read this document thoroughly
and take this opportunity to vote, via proxy, on the matters to be
decided at the Annual Meeting. As discussed below, you may revoke
your proxy at any time before your shares are voted at the Annual
Meeting.
Table of Contents
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Proxy
Statement
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Questions
and Answers
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1
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Why did I receive an “Important Notice Regarding the
Availability of Proxy Materials”?
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1
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What is the purpose of the Annual Meeting?
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1
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Who is entitled to vote at our Annual Meeting?
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1
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How do I vote?
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1
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What is a proxy?
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1
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How will my shares be voted if I vote by proxy?
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2
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How do I revoke my proxy?
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2
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Is my vote confidential?
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2
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How are votes counted?
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2
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What constitutes a quorum at the Annual Meeting?
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2
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What vote is required to elect our directors for a one-year
term?
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3
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What vote is required to ratify CohnReznick
LLP
as our independent
registered public accounting firm for the year ending December 31,
2018?
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3
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What
vote is required to approve an amendment to our Amended and
Restated 2012 Incentive Plan?
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3
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What percentage of our outstanding stock do our directors and
executive officers own?
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3
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Who was our independent public accountant for the year ending
December 31, 2017? Will they be represented at the Annual
Meeting?
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3
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How can I obtain a copy of our annual report on Form
10-K?
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3
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Corporate
Governance
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4
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Our Board of Directors
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4
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Communicating with the Board of Directors
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7
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Audit Committee
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7
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Compensation Committee
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7
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Nominating Process
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8
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Code of Business Conduct and Ethics
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8
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Independent
Registered Public Accounting Firm Fees and Other
Matters
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9
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Audit Fees
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9
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Audit-Related Fees
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9
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Tax Fees
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9
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All Other Fees
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9
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Pre-Approval of Services
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9
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Report
of the Audit Committee
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10
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Our
Executive Officers
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11
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Executive Officers
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11
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Compensation
Discussion and Analysis
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12
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Compensation Philosophy and Objectives
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12
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Determining Executive Compensation
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12
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Elements of Compensation
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13
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Consideration of Prior Advisory Stockholder Vote on Executive
Compensation
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13
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2017 Executive Compensation
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14
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Perquisites and Other Executive Benefits
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15
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Severance
Benefits
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15
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Report of the Compensation
Committee
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15
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Executive
Compensation
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16
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Summary Compensation Table
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16
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Grants
of Plan-Based Awards for Fiscal Year 2017
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17
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Outstanding Equity Awards at 2017 Fiscal Year
End
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18
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Stock Vested in Fiscal Year 2017
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19
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Employment
Agreements
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19
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Potential
Payments upon Termination or Change in Control
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21
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CEO Pay Ratio
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22
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Director
Compensation
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23
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Compensation
Committee Interlocks and Insider Participation
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25
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Section
16(a) Beneficial Ownership Reporting Compliance
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25
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Related-Person
Transactions
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25
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Stock
Ownership of Our Directors, Executive Officers, and 5% Beneficial
Owners
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27
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Proposal
One: Election of Directors; Nominees
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28
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Proposal Two: Ratification of Appointment of
CohnReznick LLP
as our
Independent Registered Public Accounting Firm
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29
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Proposal Three: Amendment to our Amended and
Restated 2012 Incentive Plan
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30
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Additional
Information
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40
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Householding of Annual Meeting Materials
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40
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Stockholder Proposals for Our 2019 Annual
Meeting
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40
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Other Matters
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40
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Solicitation of Proxies
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40
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Incorporation of Information by Reference
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40
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Exhibit A: Amendment to Amended and Restated
2012 Incentive Plan
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41
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A.
In accordance with
Securities and Exchange Commission (
“
SEC
”
) rules, instead of mailing a
printed copy of our proxy materials, we may send an
“
Important Notice Regarding the
Availability of Proxy Materials
”
to stockholders. All stockholders
will have the ability to access the proxy materials on a website
referred to in the notice or to request a printed set of these
materials at no charge. You will not receive a printed copy of the
proxy materials unless you specifically request one from us.
Instead, the notice instructs you as to how you may access and
review all of the important information contained in the proxy
materials via the Internet and submit your vote via the
Internet.
A.
At the Annual
Meeting, our stockholders will act upon the matters outlined in the
Notice of Annual Meeting of Stockholders accompanying this proxy
statement, including (i) the election of seven directors for a term
of one year, (ii) ratifying the appointment of CohnReznick LLP as
our independent registered public accounting firm for the year
ending December 31, 2018, (iii) approving an amendment to our
Amended and Restated 2012 Incentive Plan, and (iv) transacting any
other business that may properly come before the 2018 Annual
Meeting or any adjournment thereof.
A.
The record holders
of our common stock at the close of business on the record date,
April 18, 2018, may vote at the Annual Meeting. Each share of
common stock is entitled to one vote. There were 77,666,112 shares
of common stock outstanding on the record date and entitled to vote
at the Annual Meeting. A list of stockholders entitled to vote at
the Annual Meeting, including the address of and number of shares
held by each stockholder of record, will be available for your
inspection beginning April 24, 2018, at our offices located at 2
Gansevoort Street, New York, New York 10014, between the hours of
10:00 a.m. and 5:00 p.m., local time, each business
day.
A.
You may vote in
person at the Annual Meeting, by use of a proxy card if you receive
a printed copy of our proxy materials, via Internet as directed in
our “Important Notice Regarding the Availability of Proxy
Materials,” or by telephone as indicated in the proxy
card.
A.
A proxy is a person
you appoint to vote your shares on your behalf. If you are unable
to attend the Annual Meeting, our Board of Directors is seeking
your appointment of a proxy so that your shares may be voted. If
you vote by proxy, you will be designating Michael S. Weiss, our
Executive Chairman, Chief Executive Officer and President, and Sean
A. Power, our Chief Financial Officer, Treasurer and Corporate
Secretary, as your proxies. Mr. Weiss and/or Mr. Power may act on
your behalf and have the authority to appoint a substitute to act
as your proxy.
1
A.
Your proxy will be
voted according to the instructions you provide.
If you complete and submit your proxy but do
not otherwise provide instructions on how to vote your shares, your
shares will be voted (i) “FOR” the individuals
nominated to serve as members of our Board of Directors, (ii)
“FOR” the ratification of CohnReznick LLP as our
independent registered public accounting firm for the year ending
December 31, 2018, and (iii) “FOR” the approval of an
Amendment to our Amended and Restated 2012 Incentive Plan.
Presently, our Board does not know of any other matter that may
come before the Annual Meeting. However, your proxies are
authorized to vote on your behalf, using their discretion, on any
other business that properly comes before the Annual
Meeting.
A.
You may revoke your
proxy at any time before your shares are voted at the Annual
Meeting by:
●
delivering written
notice to our Corporate Secretary, Sean A. Power, at our address
above;
●
submitting a later
dated proxy card or voting again via the Internet as described in
the
“
Important Notice
Regarding the Availability of Proxy Materials
”
; or
●
attending the
Annual Meeting and voting in person.
A.
Yes. All votes
remain confidential.
A.
Before the Annual
Meeting, our Board of Directors will appoint one or more inspectors
of election for the meeting. The inspector(s) will determine the
number of shares represented at the meeting, the existence of a
quorum and the validity and effect of proxies. The inspector(s)
will also receive, count, and tabulate ballots and votes and
determine the results of the voting on each matter that comes
before the Annual Meeting.
Abstentions and
votes withheld, and shares represented by proxies reflecting
abstentions or votes withheld, will be treated as present for
purposes of determining the existence of a quorum at the Annual
Meeting. They will not be considered as votes
“
for
”
or
“
against
”
any matter for which the
stockholder has indicated their intention to abstain or withhold
their vote. Broker or nominee non-votes, which occur when shares
held in
“
street
name
”
by brokers or
nominees who indicate that they do not have discretionary authority
to vote on a particular matter, will not be considered as votes
“
for
”
or
“
against
”
that particular matter. Broker and
nominee non-votes will be treated as present for purposes of
determining the existence of a quorum, and may be entitled to vote
on certain matters at the Annual Meeting.
A.
In accordance with
Delaware law (the law under which we are incorporated) and our
Amended and Restated Bylaws, the presence at the Annual Meeting, by
proxy or in person, of the holders of a majority of the outstanding
shares of the capital stock entitled to vote at the Annual Meeting
constitutes a quorum, thereby permitting the stockholders to
conduct business at the Annual Meeting. Abstentions, votes
withheld, and broker or nominee non-votes will be included in the
calculation of the number of shares considered present at the
Annual Meeting for purposes of determining the existence of a
quorum.
If a
quorum is not present at the Annual Meeting, a majority of the
stockholders present in person and by proxy may adjourn the meeting
to another date. If an adjournment is for more than 30 days or a
new record date is fixed for the adjourned meeting by our Board, we
will provide notice of the adjourned meeting to each stockholder of
record entitled to vote at the adjourned meeting. At any adjourned
meeting at which a quorum is present, any business may be
transacted that might have been transacted at the originally called
meeting.
2
A.
The affirmative
vote of a plurality of the votes of the shares present, in person
or by proxy, at the Annual Meeting is required for the election of
each of the nominees for director. “Plurality” means
that the nominees receiving the largest number of votes up to the
number of directors to be elected at the Annual Meeting will be
duly elected as directors. Abstentions, votes withheld, and broker
or nominee non-votes will not affect the outcome of director
elections.
A.
The affirmative
vote of a majority of the shares present, in person or by proxy,
and entitled to vote at the Annual Meeting is required to approve
the ratification of CohnReznick LLP as our independent registered
public accounting firm for the year ending December 31, 2018.
Abstentions will have the same effect as a negative vote. However,
broker or nominee non-votes, and shares represented by proxies
reflecting broker or nominee non-votes, will not have the effect of
a vote against this proposal as they are not considered to be
present and entitled to vote on this matter.
A.
The affirmative
vote of a majority of the shares present, in person or by proxy,
and entitled to vote at the Annual Meeting is required to approve
an amendment to our Amended and Restated 2012 Incentive Plan.
Abstentions will have the same effect as a negative vote. However,
broker or nominee non-votes, and shares represented by proxies
reflecting broker or nominee non-votes, will not have the effect of
a vote against this proposal as they are not considered to be
present and entitled to vote on this matter.
A.
As of April 18,
2018, our directors and executive officers owned, or have the right
to acquire, approximately 15.1% of our outstanding common stock.
See the discussion under the heading “Stock Ownership of Our
Directors, Executive Officers, and 5% Beneficial Owners” on
page 27 for more details.
A.
CohnReznick LLP is
the independent registered public accounting firm that audited our
financial statements for the year ending December 31, 2017. We
expect a representative of CohnReznick LLP to be present at the
Annual Meeting. The representative will have an opportunity to make
a statement and will be available to answer your
questions.
A.
We have filed our
annual report on Form 10-K for the year ended December 31, 2017,
with the SEC. The annual report on Form 10-K is also included in
the 2017 Annual Report to Stockholders.
You may obtain, free of charge,
a copy of our annual report on Form 10-K, including financial
statements and exhibits, by writing to our corporate secretary,
Sean A. Power, or by email at info@tgtxinc.com. Upon request, we
will also furnish any exhibits to the annual report on Form 10-K as
filed with the SEC.
3
Our
amended and restated bylaws provide that the Board shall consist of
one or more members, as determined from time to time by resolution
of the Board. Currently, our Board consists of seven members. The
following individuals are being nominated to serve on our Board
(See “Proposal 1 – Election of Directors;
Nominees”):
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Name
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Age
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Position
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Director
Since
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Michael
S. Weiss
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52
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Executive
Chairman, Chief Executive Officer and President
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2011
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Laurence N.
Charney
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71
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Director
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2012
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William
J. Kennedy
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73
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Director
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2012
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Mark
Schoenebaum, MD
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45
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Director
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2012
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Yann
Echelard
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54
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Director
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2012
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Kenneth
Hoberman
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53
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Director
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2014
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Daniel
Hume
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51
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Director
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2015
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The
Board does not have a formal policy regarding the separation of the
roles of Chief Executive Officer and Executive Chairman, as the
Board believes that it is in the best interests of the Company to
make that determination based on the direction of the Company and
the current membership of the Board. The Board has determined that
having a director who is an executive officer serve as the Chairman
is in the best interest of the Company’s stockholders at this
time.
TG has
a risk management program overseen by Michael S. Weiss, our
Executive Chairman, Chief Executive Officer and President and the
Board. Mr. Weiss and management identify material risks and
prioritize them for our Board. Our Board regularly reviews
information regarding our credit, liquidity, operations, and
compliance as well as the risks associated with each.
The
following biographies set forth the names of our directors and
director nominees, their ages, the year in which they first became
directors, their positions with us, their principal occupations and
employers for at least the past five years, any other directorships
held by them during the past five years in companies that are
subject to the reporting requirements of the Securities Exchange
Act of 1934 (the “Exchange Act”), or any company
registered as an investment company under the Investment Company
Act of 1940, as well as additional information, all of which we
believe sets forth each director nominee’s qualifications to
serve on the Board. There is no family relationship between and
among any of our executive officers or directors. There are no
arrangements or understandings between any of our executive
officers or directors and any other person pursuant to which any of
them are elected as an officer or director, except as disclosed
below.
On
December 29, 2011, Opus Point Partners, LLC, (“Opus”),
TG Biologics, Inc. (“TG Biologics”) and the Company
(and collectively with Opus and TG Biologics, the
“Parties”) entered into an Exchange Transaction
Agreement (the “Agreement”). On August 2, 2012, the
Parties executed an amendment to the Agreement (“Amendment
No. 1”) which set the number of members of the board of
directors of the Company (the “Board of Directors”) at
six, and required the consent of Opus for any increase. Opus has
consented to the increase to seven. Amendment No. 1 also
granted Opus the right to nominate three members of the Board of
Directors until the later of (x) two years from the Closing Date of
the Agreement (as defined therein), or (y) the date on which Opus
beneficially owns less than 10% of the Company’s common stock
as calculated pursuant to the rules and regulations under Section
13 of the Exchange Act. Accordingly, Opus has nominated Mr.
Charney, Dr. Kennedy, and Dr. Schoenebaum to the Company’s
Board of Directors.
TG
adheres to the corporate governance standards adopted by The Nasdaq
Stock Market (
“
Nasdaq
”
). Nasdaq rules require our Board to
make an affirmative determination as to the independence of each
director. Consistent with these rules, our Board undertook its
annual review of director independence on April 25, 2018. During
the review, our Board considered relationships and transactions
during 2017 and during the past three fiscal years between each
director or any member of his immediate family, on the one hand,
and the Company and our subsidiaries and affiliates, on the other
hand. The purpose of this review was to determine whether any such
relationships or transactions were inconsistent with a
determination that the director is independent. Based on this
review, our Board determined that Yann Echelard, Laurence Charney,
William Kennedy, Mark Schoenebaum, Kenneth Hoberman, and Daniel
Hume are independent under the criteria established by Nasdaq and
our Board.
4
Michael S.
Weiss, 52,
has served as TG’s Executive Chairman,
Chief Executive Officer and President since December 2011. Mr.
Weiss also serves as a director and Executive Vice Chairman,
Strategic Development of Fortress Biotech, Inc., as Chairman of the
Board of Directors and Executive Chairman of Mustang Bio, Inc., as
a director of Avenue Therapeutics, Inc., as Chairman of the Board
of Directors of Checkpoint Therapeutics, Inc., and as Chairman of
the Board of Directors of National Holdings Corporation. Mr.
Weiss is a co-founder of, and has been a managing partner and
principal of Opus Point Partners since 2009. Mr. Weiss earned his
J.D. from Columbia Law School and his B.S. in Finance from The
University at Albany. He began his professional career as a lawyer
with Cravath, Swaine & Moore. In 1999, Mr. Weiss founded Access
Oncology which was later acquired by Keryx Biopharmaceuticals, Inc.
in 2004. Following the merger, Mr. Weiss remained as CEO of Keryx
and grew the company to close to a $1 billion market capitalization
company at its peak. While at Keryx, he raised over $150MM in
equity capital through public and private offerings, executed a
$100MM+ strategic alliance, negotiated multiple Special Protocol
Assessments (“SPA”) agreements with the FDA and managed
multiple large clinical trials.
Laurence N.
Charney, 71,
has served on our Board since April 2012. Since
2007, Mr. Charney has served as a business strategist and financial
advisor to Boards, CEOs and investors. Previously, from 1970
through June 2007, Mr. Charney was a senior audit partner at Ernst
& Young, LLP, a registered public accounting firm, retiring as
a practice leader in the Americas Quality and Risk Management
Group. Mr. Charney currently serves as a director and audit
committee chairman of Pacific Drilling S.A. and Kenon Holdings LTD,
both NYSE listed companies. In addition, Mr. Charney previously
served as a director and audit committee member of Marvel
Entertainment, Inc., Mrs. Fields Original Cookies, XTL
Biopharmaceuticals, Ltd., Pure Biofuels, Inc., and Iconix Brand
Group, Inc. In addition to his extensive experience on the boards
of various corporate entities, Mr. Charney is also active on the
boards of several non-profit organizations. Mr. Charney graduated
with a B.B.A. degree from Hofstra University and completed the
Executive MBA in Business program at Columbia
University.
William J.
Kennedy, PhD., 73,
has served on our
Board since April 2012. Dr. Kennedy is a regulatory affairs
professional with over 38 years of domestic and international
experience. Prior to his retirement, Dr. Kennedy was Vice President
for Regulatory Affairs for Zeneca Corporation. Dr. Kennedy has
successfully managed the development, preparation, submission and
approval of dozens of NDAs and major SNDAs. Dr. Kennedy has helped
shape regulatory policy in the United States continuously since
1988, as a member and Chairman of PhRMA’s Regulatory Affairs
Coordinating Committee, as PhRMA’s Chief Negotiator with
Congress and FDA for FDAMA, and as the Co-Chairman of PhRMA’s
PDUFA III Steering Committee. Before joining the pharmaceutical
industry, Dr. Kennedy was an Associate Research Professor at Yale
Medical School. Dr. Kennedy is the author of several articles and
is an often sought after speaker for his insight into the
regulatory process. He co-founded the website PDUFADate.com which
provides regulatory opinions to the financial community. Dr.
Kennedy was the recipient of RAP’s prestigious Special
Recognition Award in 1998. Dr. Kennedy has been an independent
consultant to the pharmaceutical industry since 1999.
Mark
Schoenebaum, M.D., 45,
has served on our
Board since April 2012. Dr. Schoenebaum was a Senior Managing
Director and headed Evercore ISI’s Health Care Research Team.
He was also ISI’s Biotechnology Large and Small Cap &
Pharmaceuticals-Major analyst. He was ranked Institutional
Investor’s #1 Biotechnology analyst for 12 consecutive years
and ranked #1 in the Pharmaceuticals category as well. In 2013,
Mark was inducted into Institutional Investor’s All-America
Research Team Hall of Fame, an award given to analysts who have
earned at least ten #1 rankings. Prior to joining ISI in 2010, Dr.
Schoenebaum spent two years at Deutsche Bank as a Managing Director
and Senior Biotechnology Analyst. Prior to that, he held a similar
position at Bear Stearns. Dr. Schoenebaum graduated from Indiana
University with highest distinction in 1996 with a B.A. and
received an M.D. from the Johns Hopkins University School of
Medicine in 2000.
5
Yann
Echelard, 54,
has served on our Board since November 2012.
Dr. Echelard, President and CEO of rEVO Biologics, from 2012 to
2018, has over 25 years of research and biopharmaceutical
experience. Dr. Echelard holds a Ph.D. from Universit
é
de Montr
é
al, and has completed post-doctoral
studies at Ludwig Institute of Cancer Research in Montreal (McGill
University). As a visiting scientist at the Roche Institute and at
Harvard University (Developmental Biology), he had a key role in
the isolation and characterization of the Hedgehog genes, the first
identified vertebrate morphogens. From 1994 to 2010, he progressed
through various positions of increasing responsibility at Genzyme
Transgenics Corporation and at GTC Biotherapeutics, including Vice
President of Research and Development. In 1998, he led the
scientific team that first performed goat somatic cell nuclear
transfer (cloning). Focusing on Corporate Development, Dr. Echelard
spearheaded the creation of a collaborative Joint Venture with LFB
Biotechnologies in 2006, which was focused on the development of
recombinant plasma proteins and monoclonal antibodies. This close
collaboration led to the acquisition of GTC Biotherapeutics, Inc.
by LFB in December 2010.
Kenneth
Hoberman, 53,
has served on our Board since December 2014.
Mr. Hoberman is currently the Chief Operating Officer and Corporate
Secretary of Stemline Therapeutics, Inc. where he was a key member
of the founding team. He was instrumental in the company’s
financings from early private, including institutional, rounds
through the IPO and subsequent follow-on offerings. He has
extensive financial, accounting, investor relations, corporate
governance and business development experience including M&A,
strategic alliances and partnerships both domestic and
international. His operational expertise includes regulatory
oversight, human resources, manufacturing and clinical development.
He was previously Vice President of Corporate and Business
Development of Keryx Biopharmaceuticals, Inc., where he was
instrumental in the success of the company. He also helped secure
multiple sources of capital including over $200 million in equity
investments through public and private offerings. He also initiated
and executed a $100 million strategic alliance and originated,
negotiated and closed dozens of licensing and operational
contracts, helping to grow the company’s market
capitalization to over $1 billion. He also led the team that
originated, in-licensed, and developed Auryxia
™
which gained FDA approval in 2014.
He received a B.S.B.A. in Finance from Boston University and
completed post-baccalaureate studies at Columbia
University.
Daniel
Hume, 51,
has served on our
Board since June 2015.
Mr. Hume is currently a partner in Kirby McInerney, LLP
’
s
New York office and is a member of
the firm’s management committee. Mr. Hume’s law
practice focuses on securities, structured finance, and antitrust
litigation and regulation. He joined Kirby McInerney, LLP in 1995.
Since then, Mr. Hume has advised corporate, public, and individual
clients, including some of the largest institutional investors in
the world, and helped them recover billions of dollars in losses
throughout the course of his career. His work has earned him
assorted honors and recognition, including most recently being
named to both the National Law Journal
“
hot
”
list and law360
“
most feared
”
list for 2013. Mr. Hume is admitted
to the New York State Bar and federal courts around the country,
including the United States District Courts for the Southern and
Eastern Districts of New York, the United States Court of Appeals
for the Second, Fourth, and Fifth Circuits, the Appellate Division
of the Supreme Court of the State of New York, First Judicial
Department, and the United States Supreme Court. He graduated from
the State University of New York at Albany
magna cum laude
(B.A.
Philosophy, 1988) and from Columbia Law School, where he served as
Notes Editor for the Columbia Journal of Environmental Law (J.D.,
1991).
During
2017, our Board held six meetings. With the exception of Mr.
Schoenebaum, during 2017, each incumbent director who served their
full term and are standing for election attended at least 75% of
the meetings of the Board of Directors and the meetings of those
committees on which each incumbent director served, in each case
during the period that such person was a director. The permanent
committees established by our Board of Directors are the Audit
Committee and the Compensation Committee, descriptions of which are
set forth in more detail below. Our directors are expected to
attend each Annual Meeting of Stockholders, and it is our
expectation that all of the directors standing for election will
attend this year
’
s Annual
Meeting. Last year, all of our directors, with the exception of Mr.
Schoenebaum, attended the 2017 Annual Meeting of
Stockholders.
6
Our
Board has established a process by which stockholders can send
communications to the Board. You may communicate with the Board as
a group, or to specific directors, by writing to Sean A. Power, our
Corporate Secretary, at our offices located at 2 Gansevoort Street,
9
th
Floor,
New York, New York 10014. The Corporate Secretary will review all
such correspondence and regularly forward to the Board a summary of
all correspondence and copies of all correspondence that deals with
the functions of the Board or committees thereof or that otherwise
requires their attention. Directors may at any time review a log of
all correspondence we receive that is addressed to members of our
Board and request copies of any such correspondence. Concerns
relating to accounting, internal controls, or auditing matters may
be communicated in this manner, or may be submitted on an anonymous
basis via e-mail at info@tgtxinc.com. These concerns will be
immediately brought to the attention of our Audit Committee and
resolved in accordance with procedures established by our Audit
Committee.
The
Audit Committee currently consists of Laurence N. Charney
(Chairman), William Kennedy and Kenneth Hoberman.
The
Audit Committee held five meetings during the fiscal year ended
December 31, 2017. The duties and responsibilities of the Audit
Committee are set forth in the Charter of the Audit Committee which
was recently reviewed by our Audit Committee. Our Audit Committee
determined that no revisions needed to be made to the charter at
this time. A copy of the Charter of the Audit Committee is
available on our website, located at
www.tgtherapeutics.com.
Among other matters, the duties and responsibilities of the Audit
Committee include reviewing and monitoring our financial statements
and internal accounting procedures, the selection of our
independent registered public accounting firm and consulting with
and reviewing the services provided by our independent registered
public accounting firm. Our Audit Committee has sole discretion
over the retention, compensation, evaluation and oversight of our
independent registered public accounting firm.
The SEC
and Nasdaq have established rules and regulations regarding the
composition of audit committees and the qualifications of audit
committee members. Our Board of Directors has examined the
composition of our Audit Committee and the qualifications of our
Audit Committee members in light of the current rules and
regulations governing audit committees. Based upon this
examination, our Board of Directors has determined that each member
of our Audit Committee is independent and is otherwise qualified to
be a member of our Audit Committee in accordance with the rules of
the SEC and Nasdaq.
Additionally, the
SEC requires that at least one member of the Audit Committee have a
“
heightened
”
level of financial and accounting
sophistication. Such a person is known as the
“
audit committee financial
expert
”
under the
SEC
’
s rules. Our Board
has determined that Mr. Charney is an
“
audit committee financial
expert,
”
as the SEC
defines that term, and is an independent member of our Board of
Directors and our Audit Committee. Please see Mr.
Charney
’
s biography on
page 5 for a description of his relevant experience.
The
report of the Audit Committee can be found on page 10 of this proxy
statement.
The
Compensation Committee held two meetings during the fiscal year
ended December 31, 2017. The Compensation Committee currently
consists of all independent members of our Board of Directors, with
Mr. Hoberman as chairman. The duties and responsibilities of the
Compensation Committee are set forth in the Charter of the
Compensation Committee. A copy of the Charter of the Compensation
Committee is available on our website, located at
www.tgtherapeutics.com
.
As discussed in its charter, among other things, the duties and
responsibilities of the Compensation Committee include evaluating
the performance of the Chief Executive Officer and our Chief
Financial Officer, determining the overall compensation of the
Chief Executive Officer and our Chief Financial Officer and
administering all executive compensation programs, including, but
not limited to, our incentive and equity-based plans. The
Compensation Committee evaluates the performance of the Chief
Executive Officer and our Chief Financial Officer on an annual
basis and reviews and approves on an annual basis all compensation
programs and awards relating to such officers. The Compensation
Committee applies discretion in the determination of individual
executive compensation packages to ensure compliance with the
Company
’
s compensation
philosophy. The Chief Executive Officer makes recommendations to
the Compensation Committee with respect to the compensation
packages for officers other than himself. The Compensation
Committee may delegate its authority to grant awards to certain
employees, and within specified parameters under the
Company
’
s Amended and
Restated 2012 Incentive Plan, to a special committee consisting of
one or more directors who may but need not be officers of the
Company. As of April 25, 2018, however, the Compensation Committee
had not delegated any such authority.
Nasdaq
has established rules and regulations regarding the composition of
compensation committees and the qualifications of compensation
committee members. Our Board of Directors has examined the
composition of our Compensation Committee and the qualifications of
our Compensation Committee members in light of the current rules
and regulations governing compensation committees. Based upon this
examination, our Board of Directors has determined that each member
of our Compensation Committee is independent and is otherwise
qualified to be a member of our Compensation Committee in
accordance with such rules.
The
report of the Compensation Committee can be found on page 15 of
this proxy statement. Additional information regarding the
Compensation Committee
’
s
processes and procedures for consideration of executive
compensation can be found in the Compensation Discussion and
Analysis beginning on page 12 of this proxy statement.
7
We do
not currently have a nominating committee or any other committee
serving a similar function. Director nominations are approved by a
vote of a majority of our independent directors as required under
the Nasdaq rules and regulations. Although we do not have a written
charter in place to select director nominees, our Board of
Directors has adopted resolutions regarding the director nomination
process. Our policy describing our director nomination process is
available on our website, located at
www.tgtherapeutics.com
.
We believe that the current process in place functions effectively
to select director nominees who will be valuable members of our
Board of Directors.
We
identify potential nominees to serve as directors through a variety
of business contacts, including current executive officers,
directors, community leaders and stockholders. We may, to the
extent they deem appropriate, retain a professional search firm and
other advisors to identify potential nominees.
We will
also consider candidates recommended by stockholders for nomination
to our Board. A stockholder who wishes to recommend a candidate for
nomination to our Board must submit such recommendation to our
Corporate Secretary, Sean A. Power, at our offices located at 2
Gansevoort Street, 9
th
Floor,
New York, New York 10014. Any recommendation must be received not
less than 60 calendar days nor more than 90 calendar days before
the anniversary date of the previous year
’
s annual meeting. All stockholder
recommendations of candidates for nomination for election to our
Board must be in writing and must set forth the following: (i) the
candidate
’
s name, age,
business address, and other contact information, (ii) the number of
shares of common stock beneficially owned by the candidate, (iii) a
complete description of the candidate
’
s qualifications, experience,
background and affiliations, as would be required to be disclosed
in the proxy statement pursuant to Schedule 14A under the Exchange
Act, (iv) a sworn or certified statement by the candidate in which
he or she consents to being named in the proxy statement as a
nominee and to serve as director if elected, and (v) the name and
address of the stockholder(s) of record making such a
recommendation.
We
believe that our Board as a whole should encompass a range of
talent, skill, and expertise enabling it to provide sound guidance
with respect to our operations and interests. Our independent
directors evaluate all candidates to our Board by reviewing their
biographical information and qualifications. If the independent
directors determine that a candidate is qualified to serve on our
Board, such candidate is interviewed by at least one of the
independent directors and our Chief Executive Officer. Other
members of the Board also have an opportunity to interview
qualified candidates. The independent directors then determine,
based on the background information and the information obtained in
the interviews, whether to recommend to the Board that the
candidate be nominated for approval by the stockholders to fill a
directorship. With respect to an incumbent director whom the
independent directors are considering as a potential nominee for
re-election, the independent directors review and consider the
incumbent director
’
s
service during his or her term, including the number of meetings
attended, level of participation, and overall contribution to the
Board. The manner in which the independent directors evaluate a
potential nominee will not differ based on whether the candidate is
recommended by our directors or stockholders.
We
consider the following qualifications, among others, when making a
determination as to whether a person should be nominated to our
Board: the independence of the director nominee; the
nominee
’
s character and
integrity; financial literacy; level of education and business
experience, including experience relating to biopharmaceutical
companies; whether the nominee has sufficient time to devote to our
Board; and the nominee
’
s
commitment to represent the long-term interests of our
stockholders. We review candidates in the context of the current
composition of the Board and the evolving needs of our business. We
believe that each of the current members of our Board (who are also
our director nominees) has the requisite business,
biopharmaceutical, financial or managerial experience to serve as a
member of the Board, as described above in their biographies under
the heading
“
Our Board of
Directors.
”
We also
believe that each of the current members of our Board has other key
attributes that are important to an effective board, including
integrity, high ethical standards, sound judgment, analytical
skills, and the commitment to devote significant time and energy to
service on the Board and its committees.
We do
not have a formal policy in place with regard to diversity in
considering candidates for our Board, but the Board strives to
nominate candidates with a variety of complementary skills so that,
as a group, the Board will possess the appropriate talent, skills
and expertise to oversee our business.
We have
adopted a Code of Business Conduct and Ethics, or the Code, which
applies to all of our directors and employees, including our
principal executive officer and principal financial officer. The
Code includes guidelines dealing with the ethical handling of
conflicts of interest, compliance with federal and state laws,
financial reporting, and our proprietary information. The Code also
contains procedures for dealing with and reporting violations of
the Code. We have posted our Code of Business Conduct and Ethics on
our website, located at www.tgtherapeutics.com.
8
CohnReznick LLP,
the independent registered public accounting firm that audited our
financial statements for the years ended December 31, 2017 and 2016
has served as our independent registered public accounting firm
since 2002. We expect a representative of CohnReznick LLP to be
present at the Annual Meeting. The representative will have an
opportunity to make a statement and will be available to answer
your questions.
Our
Board has asked the stockholders to ratify the selection of
CohnReznick LLP as our independent registered public accounting
firm. See
“
Proposal Two:
Ratification of Appointment of CohnReznick LLP as Our Independent
Registered Public Accounting Firm
”
on page 29 of this proxy statement.
The Board has reviewed the fees described below and concluded that
the payment of such fees is compatible with maintaining CohnReznick
LLP
’
s independence. All
proposed engagements of CohnReznick LLP, whether for audit
services, audit-related services, tax services, or permissible
non-audit services, were pre-approved by our Audit
Committee.
For the
fiscal years ended December 31, 2017 and 2016, CohnReznick LLP
billed us an aggregate of approximately $174,000 and $166,000,
respectively, in fees for the professional services rendered in
connection with the audits of our annual financial statements
included in our Annual Reports on Form 10-K for those two fiscal
years, the audit of internal control over financial reporting for
those two fiscal years, and the review of our financial statements
included in our Quarterly Reports on Form 10-Q during those two
fiscal years.
During
the fiscal years ended December 31, 2017 and 2016, CohnReznick LLP
billed us an aggregate of approximately $69,000 and $37,000,
respectively, for audit-related services reasonably related to the
performance of the audits and reviews for those two fiscal years,
in addition to the fees described above under the heading
“
Audit Fees.
”
During
the fiscal years ended December 31, 2017 and 2016, we were not
billed by CohnReznick LLP for any fees for professional services
rendered for tax compliance, tax advice, and tax planning
services.
During
the fiscal years ended December 31, 2017 and 2016, we were not
billed by CohnReznick LLP for any fees for services, other than
those described above, rendered to us and our affiliates for those
two fiscal years.
Our
Audit Committee has established a policy setting forth the
procedures under which services provided by our independent
registered public accounting firm will be pre-approved by our Audit
Committee. The potential services that might be provided by our
independent registered public accounting firm fall into two
categories:
●
Services that are
permitted, including the audit of our annual financial statements,
the review of our quarterly financial statements, related
attestations, benefit plan audits and similar audit reports,
financial and other due diligence on acquisitions, and federal,
state, and non-US tax services; and
●
Services that may
be permitted, subject to individual pre-approval, including
compliance and internal-control reviews, indirect tax services such
as transfer pricing and customs and duties, and forensic
auditing.
Services that our
independent registered public accounting firm may not legally
provide include such services as bookkeeping, certain human
resources services, internal audit outsourcing, and investment or
investment banking advice.
All
proposed engagements of our independent registered public
accounting firm, whether for audit services or permissible
non-audit services, are pre-approved by the Audit Committee. We
jointly prepare a schedule with our independent registered public
accounting firm that outlines services which we reasonably expect
we will need from our independent registered public accounting
firm, and categorize them according to the classifications
described above. Each service identified is reviewed and approved
or rejected by the Audit Committee.
9
In
monitoring the preparation of our financial statements, the Audit
Committee met with both management and CohnReznick LLP, our
independent registered public accounting firm during the year ended
December 31, 2017, to review and discuss all financial statements
prior to their issuance and to discuss any and all significant
accounting issues. Management and our independent registered public
accounting firm advised the Audit Committee that each of the
financial statements were prepared in accordance with generally
accepted accounting principles. The Audit Committee
’
s review included a discussion of
the matters required to be discussed pursuant to Public Company
Accounting Oversight Board (United States) Auditing Standard 1301
(Communication with Audit Committees). Auditing Standard 1301
requires our independent registered public accounting firm to
discuss with the Audit Committee, among other things, the
following:
●
Methods used to
account for significant or unusual transactions;
●
The effect of any
accounting policies in controversial or emerging areas for which
there is a lack of authoritative guidance or
consensus;
●
The process used by
management to formulate sensitive accounting estimates and the
basis for the independent registered public accounting firm’s
conclusion regarding the reasonableness of any such estimates;
and
●
Any disagreements
with management over the application of accounting principles, the
basis for management’s accounting estimates and the
disclosures necessary in the financial
statements.
The
Audit Committee has discussed the independence of CohnReznick LLP,
our independent registered public accounting firm for the year
ended December 31, 2017, including the written disclosures made by
CohnReznick LLP to the Audit Committee, as required by PCAOB Rule
3526,
“
Communication with
Audit Committees Concerning Independence.
”
PCAOB Rule 3526 requires the
independent registered public accounting firm to (i) disclose in
writing all relationships that, in the independent registered
public accounting firm
’
s
professional opinion, may reasonably be thought to bear on
independence, (ii) confirm their perceived independence, and (iii)
engage in a discussion of independence with the Audit
Committee.
Finally, the Audit
Committee continues to monitor the scope and adequacy of our
internal controls and other procedures, including any and all
proposals for adequate staffing and for strengthening internal
procedures and controls where appropriate and
necessary.
On the
basis of these reviews and discussions, the Audit Committee
recommended to the Board that it approve the inclusion of our
audited financial statements in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2017, for filing with the
SEC.
By the
Audit Committee of the Board of Directors
Laurence
N. Charney, Chairman
William
Kennedy
Kenneth
Hoberman
Dated
March 12, 2018
10
Our
current executive officers are as follows:
|
Name
|
|
Age
|
|
Position
|
|
Michael
S. Weiss
|
|
52
|
|
Executive
Chairman, Chief Executive Officer and President
|
|
Sean A.
Power
|
|
36
|
|
Chief
Financial Officer, Treasurer and Corporate Secretary
|
No
executive officer is related by blood, marriage or adoption to any
other director or executive officer. The biography of Mr. Weiss is
presented in connection with
“
Corporate Governance
”
beginning on page 4 of this proxy
statement.
Sean A.
Power, 36,
has served as our Chief Financial Officer since
December 2011 and also currently serves as the CFO of Opus Point
Partners. Mr. Power joined the Company from Keryx
Biopharmaceuticals, Inc., where he served as Corporate Controller
from 2006 to 2011. During his tenure there, Mr. Power was involved
in all capital raising and licensing transactions. He was also
responsible for leading Keryx
’
s compliance with SEC rules and
regulations. Prior to joining Keryx, he was with KPMG, LLP,
independent certified public accountants. Mr. Power received a
B.B.A in accounting from Siena College and is a member of the
American Institute of Certified Public Accountants.
11
In the
paragraphs that follow, we give an overview and analysis of our
executive compensation program and philosophy for 2017, the
material compensation decisions we made under those programs with
respect to our named executive officers, and the material factors
that we considered in making those decisions. Later in this proxy
statement under the heading
“
Executive Compensation,
”
you will find a series of tables
containing specific information about the compensation earned by or
paid to the following individuals, whom we refer to as our named
executive officers, or NEOs:
●
Michael S. Weiss,
our Executive Chairman, Chief Executive Officer and President;
and
●
Sean A. Power, our
Chief Financial Officer, Treasurer and Corporate
Secretary.
Our
compensation programs are designed to motivate our employees to
work toward achievement of our corporate mission to create
long-term sustained stockholder value by acquiring, developing and
commercializing novel treatments for B-cell malignancies and
autoimmune diseases. Attaining our key business and strategic goals
depends on attracting, retaining and motivating quality employees
in an exceptionally competitive environment. Our industry is highly
scientific, regulated, scrutinized and dynamic, and as a result, we
require employees that are highly educated, dedicated and
experienced. The driving philosophy and objectives behind our
executive compensation programs are:
●
to attract, retain,
motivate and reward outstanding employees;
●
to align
employees
’
interests with
those of our stockholders by creating a strong focus on stock
ownership and appreciation and basing pay on performance measures
that drive long-term stockholder value;
●
to incentivize our
employees to achieve our business goals;
●
to recognize the
individual contributions of executives while fostering a shared
commitment among executives; and
●
to reflect our
“
pay for
performance
”
culture.
Role of the Compensation Committee
The
Compensation Committee oversees our executive compensation
programs, including approving incentive programs, granting equity
awards, and determining appropriate levels of compensation for our
NEOs. Information about the Compensation Committee and its
composition and responsibilities can be found on page 7 under the
caption
“
Compensation
Committee.
”
Role of the Executives
Our
Chief Executive Officer develops recommendations regarding the
compensation levels for our Chief Financial Officer based upon a
subjective assessment of his individual performance during the
prior year and overall trends in the marketplace. In addition, each
year, management delivers a set of proposed corporate goals and
objectives that management believes are essential to the
achievement of the Company
’
s mission and long-term goals and
objectives. The Board of Directors works with the Compensation
Committee to review these recommendations and proposals, make any
modifications deemed appropriate, and the Compensation Committee
approves the final compensation levels and goals and objectives for
the NEOs.
12
Our
executive compensation program for 2017 consisted of the following
components:
|
Compensation Element
|
|
Purpose
|
|
Base Salary
|
|
Base
salary represents the fixed portion of an executive
’
s annual compensation and is
intended to recognize the executive
’
s value to the Company based on
skills and experience relative to the responsibilities of his
position.
|
|
Annual cash incentive awards
|
|
Annual
cash incentive awards represent the portion of an
executive
’
s compensation
that is intended to vary as a direct reflection of Company and
individual performance for the year.
|
|
Long-term equity awards
|
|
Long-term
equity awards are intended to reward performance over a multi-year
period, link the interests of executives to those of the
stockholders, and encourage retention. Restricted stock awards
generally are issued based upon achievement of corporate goals and
objectives in the prior year.
|
|
Health and welfare plans and retirement plan
|
|
We
provide competitive levels of medical and disability coverage, and
retirement benefits under our 401(k) plan. Our executives
participate in the same programs offered to all of our eligible
employees.
|
|
Severance benefits
|
|
Our
named executive officers have employment agreements that provide
for severance benefits in certain circumstances.
|
No
specific formula is used in regard to the allocation of the various
elements within our executive compensation program. The
Compensation Committee retains the discretion to reduce or
eliminate the payment that otherwise might be payable to our
executives based upon unforeseen events occurring during the year
or its assessment of the Company
’
s or our executives
’
performance in
general.
In
order to maximize the incentive effect of our compensation program,
we have structured our performance-based compensation to include a
mix of value opportunities and performance measures.
●
Our annual cash
incentive awards and our annual equity awards are based principally
upon the Company
’
s
performance against pre-set corporate goals and objectives and
partially upon the Compensation Committee
’
s assessment of each individual
executive
’
s contribution
to the Company
’
s
performance.
●
The ultimate
realized value of our equity awards (stock options and restricted
stock awards) is tied to our stock price, in alignment with the
interests of our stockholders.
At the
2016 Annual Meeting of Stockholders, our stockholders voted to
approve the compensation of the Company
’
s named executive officers, as
discussed and disclosed in the 2016 Proxy Statement.
In considering the results of this
advisory vote on executive compensation, the Compensation Committee
concluded that the compensation paid to our named executive
officers and the Company’s executive pay practices enjoyed
stockholder support.
In
light of this support, the Compensation Committee decided to retain
the core design of our executive compensation program, with an
emphasis on short and long-term incentive compensation that rewards
our executives when they successfully achieve our corporate goals
and objectives and, in turn, deliver value for our shareholders.
The advisory vote on executive compensation at the Annual Meeting,
and at future meetings, will serve as an additional tool to guide
the Board of Directors and the Compensation Committee in evaluating
the alignment of the Company
’
s executive compensation program
with the interests of the Company and its
stockholders.
At the
2013 Annual Meeting of Stockholders, our stockholders expressed a
preference that advisory votes on executive compensation be held
every three years.
Consistent with this preference, the
Board of Directors determined to implement an advisory vote on
executive compensation every three years until the next required
vote on the frequency of stockholder votes on the compensation of
executive officers, which is scheduled to occur at the 2019 annual
meeting.
13
Benchmarking and Peer Group
In
December 2015, we conducted a comparative analysis of our executive
compensation program, which was utilized for 2015 incentive
compensation and 2016 base salary assessments. The review of
executive compensation included a comparison of salary, bonus and
other forms of compensation, including stock based compensation,
for a peer group of 20 publicly-traded companies in the
biotechnology industry that we identified as being comparable to
the Company in size (ranging in market capitalization from
approximately $550 million to $1 billion) and
operation.
The
peer group members included in the analysis were as
follows:
|
Array
BioPharma, Inc.
Enanta
Pharmaceuticals, Inc.
Loxo
Oncology Inc.
PDL
BioPharma Inc.
Karyopharm
Therapeutics Inc.
Geron
Corp
Aerie
Pharmaceuticals Inc.
|
Otonomy
Inc.
BioCryst
Pharmaceuticals Inc.
Synergy
Pharmaceuticals Inc.
Retrophin
Inc.
Pacific
Biosciences of California
Sucampo
Pharmaceuticals Inc.
|
Supernus
Pharmaceuticals Inc.
MannKind
Corp
Dermira
Inc.
Repligen
Corp
Insmed
Inc.
Dynavax
Technologies Corp
Heron
Therapeutics Inc.
|
This analysis was
utilized to align the NEO’s 2016 base salaries to the peer
group. We
did not conduct an additional peer group analysis
in 2016 or 2017.
Effective as of
January 1, 2017, the Company entered into an amendment (the
“Amendment”) to the employment agreement entered as of
December 15, 2011 (as amended, the “Employment
Agreement”) with Mr. Weiss. Under the Amendment, Mr. Weiss
remained as Chief Executive Officer and President of the Company,
removing the interim status. Simultaneously, the Company entered
into a Strategic Advisory Agreement (the “Advisory
Agreement”) with Caribe BioAdvisors, LLC (the
“Advisor”) owned by Mr. Weiss to provide services
related to Mr. Weiss' service as Chairman of the Board and as
Executive Chairman. Pursuant to the Amendment, Mr. Weiss' base
salary was reduced from $375,000 to $187,500. Under the Advisory
Agreement, the Advisor is paid an annual cash advisory fee which is
directly tied to the market capitalization of the Company, starting
at $100,000 and escalating up to a maximum annual fee of $1.5
million if the market capitalization of the Company exceeds $3
billion.
Based on the
prior peer group analysis and the individual performance of Mr.
Power, effective January 1, 2017 the Compensation Committee
approved an increase in Mr. Power’s base salary from $300,000
to $315,000.
Cash Incentive Awards
In
2017, Mr. Weiss was eligible to earn a target annual cash incentive
equal to 100% of his base salary, and Mr. Power was eligible to
earn a target annual cash incentive equal to 33% of his base
salary, per the terms of their respective employment agreements.
Both executives
’
annual
cash incentive awards were based upon the Company
’
s performance against
pre-established corporate goals and objectives (which at times may
exceed 100%), which included a combination of clinical and
regulatory goals related to our products as well as other corporate
goals, and each executive
’
s individual performance based upon
subjective performance reviews.
The
corporate performance goals and objectives used to determine annual
incentive awards in 2017 were as follows:
●
Various clinical
and pre-clinical goals
–
105% maximum potential weighting (73% achieved);
●
Various goals
related to manufacturing, non-clinical and regulatory
–
25% maximum potential weighting
(18% achieved);
●
Various goals
related to the financial performance of the Company
–
25% maximum potential weighting
(25% achieved).
These
goals and objectives were achieved at an aggregate level of
approximately 116%. Accordingly the executives were paid 116% of
their target bonus amounts. The actual amounts paid to the
executives pursuant to their annual cash incentive awards are
reported in the
“
Summary
Compensation Table
”
as
non-equity incentive plan compensation.
14
Long-Term Equity Incentive Awards
In
connection with the Amendment to Mr. Weiss
’
employment agreement (as discussed
above) Mr. Weiss no longer receives an annual grant of restricted
stock. Under the Advisory Agreement, the Advisor receives at each
Annual Meeting during the term, a number of restricted shares equal
to 1.25% of the shares of Common Stock outstanding on the date of
grant on a fully-diluted basis. Each of these annual grants of
restricted stock will vest and become non-forfeitable on the date
that the “market capitalization” (as defined in the
Advisory Agreement) is $100 million greater than the market
capitalization on the respective date of grant, provided that the
Advisory Agreement remains in effect and has not been terminated.
In
accordance with the Advisory Agreement, at the 2017 Annual Meeting,
the Advisor was granted an award of 834,877 shares of restricted
stock.
As part
of the Amendment, Mr. Weiss also agreed to forfeit 3,381,866
restricted shares previously granted under the Employment Agreement
that were predominantly subject to time-based vesting requirements.
Simultaneously, (i) Mr. Weiss was issued 418,371 restricted shares
under the Employment Agreement that vest in 2018 and 2019 and (ii)
the Advisor was issued 2,960,000 restricted shares under the
Advisory Agreement that vest on market capitalization thresholds
ranging from $375 million to $750 million. No additional grants of
restricted stock were made to Mr. Weiss for his services as Chief
Executive Officer.
After
consideration of our 2017 corporate goals and objectives, and a
subjective consideration of Mr. Power
’
s individual performance during
2017, on December 29, 2017 the Compensation Committee granted Mr.
Power an award of 70,000 shares of restricted stock.
For
additional information regarding our named executive
officers
’
stock grants,
see the
“
Summary
Compensation Table,
”
the
“
Grants of Plan-Based
Awards Table
”
and the
“
Outstanding Equity
Awards at 2017 Fiscal Year End
”
table.
We do
not offer our NEOs any perquisites or other executive
benefits.
We have
employment agreements with our NEOs that provide, among other
things, payment and benefits upon certain terminations of
employment. We believe the severance benefits components of these
agreements is an important component to recruiting and retaining
high quality executive officers.
For
more information on Mr. Weiss
’
and Mr. Power
’
s employment agreements see the
“
Potential Payments upon
Termination or Change-in-Control
”
section beginning on page 21 of
this proxy statement.
The
Compensation Committee of the Board of Directors has reviewed and
discussed with management the Compensation Discussion and Analysis
set forth above. Based on the review and discussions noted above,
the Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in this
proxy statement and incorporated by reference in the
Company
’
s Annual Report
on Form 10-K for the fiscal year ended December 31, 2017, for
filing with the SEC.
By the
Compensation Committee of the Board of Directors
Kenneth
Hoberman, Chairperson
Laurence
Charney
Daniel
Hume
William
Kennedy
Mark
Schoenebaum
15
Summary Compensation Table
The
following table sets forth the cash and other compensation that we
paid to our current named executive officers (
“
NEOs
”
) or that was otherwise earned by
our NEOs for their services in all capacities during 2015, 2016,
and 2017.
|
Name and Principal
Position
|
Year
|
Salary
($)
|
Stock Awards
($) (1)
|
Option Awards
($)
|
Non-Equity Incentive Plan Compensation ($)
|
All Other Compensation ($)
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
Michael S. Weiss
|
2017
|
525,000
(2)
|
9,183,647
(3)
|
--
|
217,969
|
--
|
9,926,616
|
|
Chief
Executive
|
2016
|
375,000
|
3,225,935
|
--
|
276,000
|
--
|
3,876,935
|
|
Officer and
President
|
2015
|
325,000
|
13,440,772
|
--
|
203,125
|
--
|
13,968,897
|
|
|
|
|
|
|
|
|
|
|
Sean A. Power
|
2017
|
315,000
|
574,000
|
--
|
120,842
|
--
|
1,009,842
|
|
Chief Financial Officer,
Treasurer
|
2016
|
300,000
|
465,000
|
--
|
72,864
|
--
|
837,864
|
|
and Corporate
Secretary
|
2015
|
225,000
|
596,500
|
--
|
46,406
|
--
|
867,906
|
_____________________________
(1)
Reflects the
aggregate grant date fair value of stock awards granted by the
Company as computed under FASB ASC Topic 718. The grant date fair
value of the time-based restricted stock awards is based on the
fair market value of the underlying shares on the date of grant and
does not take into account any estimated forfeitures. Because the
“
measurement
date
”
for accounting
purposes has not yet occurred for the milestone-based restricted
stock awards, the grant date for those awards has not yet occurred
and the grant date fair value is uncertain. For such awards,
stock-based compensation will be measured and recorded if and when
a milestone occurs. The grant date value for such awards reflected
in the table is based on the fair market value of the shares on the
date the milestones were established and does not take into account
any potential forfeitures.
(2)
Reflects
$187,500 in salary
paid to Mr. Weiss in connection with his employment agreement and
$337,500 in cash fees paid to the Advisor in connection with Mr.
Weiss’ service as Chairman of the Board, pursuant to the
Advisory Agreement.
(3)
Pursuant to the
Advisory Agreement, the Advisor receives at each Annual Meeting
during the term, a number of restricted shares equal to 1.25% of
the shares of Common Stock outstanding on the date of grant on a
fully-diluted basis for Mr. Weiss’ service as Chairman of the
Board. In accordance with the Advisory Agreement, at the 2017
Annual Meeting, the Advisor was granted an award of 834,877 shares
of restricted stock.
16
Grants of Plan-Based Awards For Fiscal Year 2017
The
following table below sets forth the individual grants of awards
made to each of our NEOs during 2017. For a description of the
individual amounts indicated below, please see our Compensation
Discussion and Analysis beginning on page 12 of this proxy
statement.
|
|
|
|
|
Estimated Future
Payouts Under
Non-Equity
Incentive Plan Awards
(1)
|
|
All other
Stock Awards:
|
|
Grant Date
Fair Value
|
||||
|
Name
|
|
Grant Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Number of Shares
of Stock or Units (#)
(2)
|
|
of
Awards ($)
(3)
|
|
Mr.
Weiss
|
|
|
|
|
|
187,500
|
|
290,625
|
|
|
|
|
|
|
|
6/19/17
|
|
|
|
|
|
|
|
834,877
(4)
|
|
9,183,647
|
|
Mr.
Power
|
|
|
|
|
|
103,950
|
|
161,123
|
|
|
|
|
|
|
|
12/31/17
|
|
|
|
|
|
|
|
70,000
|
|
574,000
|
_____________________________
(1)
Represents target
payout values for 2017 cash performance awards, assuming 100%
achievement of corporate goals and objectives
and a maximum
payout based on full achievement of allotment of goals and
objectives approved for 2017 (155%)
. The actual amount
earned by each NEO in 2017 is reported under the Non-Equity
Incentive Plan Compensation column in the Summary Compensation
Table on page 16 of this proxy statement.
(2)
Award of time and
milestone based vesting restricted stock under the 2012 Incentive
Plan.
(3)
Reflects the
aggregate grant date fair value of stock awards granted by the
Company during 2017 as computed under FASB ASC Topic 718. The grant
date fair value of the stock awards is based on the fair market
value of the underlying shares on the date of grant and does not
take into account any estimated forfeitures. Because the
“measurement date” for accounting purposes has not yet
occurred the grant date for those awards has not yet occurred and
the grant date fair value is uncertain. The grant date value for
such awards reflected in the tables is based on the fair market
value of the shares on the date the milestones were established and
does not take into account any potential forfeitures.
(4)
Pursuant to the
Advisory Agreement, the Advisor receives at each Annual Meeting
during the term, a number of restricted shares equal to 1.25% of
the shares of Common Stock outstanding on the date of grant on a
fully-diluted basis for Mr. Weiss’ service as Chairman of the
Board. In accordance with the Advisory Agreement, at the 2017
Annual Meeting, the Advisor was granted an award of 834,877 shares
of restricted stock
.
For a description
of the vesting schedules of the equity awards, please see the
Outstanding Equity Awards at 2017 Fiscal Year End Table
below.
17
Outstanding Equity Awards at 2017 Fiscal Year End
The
following table provides information concerning equity awards that
are outstanding as of December 31, 2017 for each of our
NEOs.
|
|
|
Stock Awards
|
||
|
Name
|
|
Number of Shares or Units of Stock That Have
Not Vested
(#)
|
|
Market Value of Shares or Units of Stock That Have Not
Vested
($)
|
|
Mr.
Weiss
(1)
|
|
418,371
(1)
|
|
3,430,642
|
|
|
|
346,875
(2)
|
|
2,844,375
|
|
|
|
834,877
(3)
|
|
6,845,991
|
|
|
|
|
|
|
|
Mr.
Power
|
|
5,000
(4)
|
|
41,000
|
|
|
|
37,500
(5)
|
|
307,500
|
|
|
|
100,000
(6)
|
|
820,000
|
|
|
|
70,000
(7)
|
|
574,000
|
____________________
(1)
As part of the
Amendment to Mr. Weiss’ employment agreement, Mr. Weiss
agreed to forfeit 3,381,866 restricted shares previously granted
under the Employment Agreement that were predominantly subject to
time-based vesting. Simultaneously under the 2012 Incentive Plan,
(i) Mr. Weiss was issued 418,371 restricted shares under the
Employment Agreement (375,000 vesting on December 1, 2018 and
43,371, vesting on December 31, 2019) and (ii) the Advisor was
issued 2,960,000 restricted shares under the Advisory Agreement
that vest on market capitalization thresholds that range from $375
million to $750 million. Collectively, Mr. Weiss and the Advisor
were granted fewer shares than Mr. Weiss forfeited.
(2)
Restricted stock
granted to the Advisor for Mr. Weiss’ services as Executive
Chairman on December 31, 2016, under the 2012 Incentive Plan. The
shares vest in equal installments on January 1, 2018 and January 1,
2019.
(3)
Restricted stock granted to the Advisor for Mr.
Weiss’ services as Executive Chairman on June 19, 2017, under
the 2012 Incentive Plan. The shares vest
on the later of: (a) the first date that the
Company's Market Capitalization is $100 million greater than the
Market Capitalization on the date of grant and (b) June 30,
2018.
(4)
Restricted stock
granted to Mr. Power on December 30, 2014, under the 2012 Incentive
Plan. The shares vest in equal installments on January 1, 2018 and
January 1, 2019.
(5)
Restricted stock
granted to Mr. Power on December 31, 2015, under the 2012 Incentive
Plan. The shares vest as follows: 33% on January 1, 2018; and 67%
on the later to occur of: (a) the first date that the issuer
achieves a market capitalization target of $100M greater than the
market capitalization on the date of grant and (b) June 30,
2018.
(6)
Restricted stock
granted to Mr. Power on December 31, 2016, under the 2012 Incentive
Plan. The shares vest as follows: 17.5% on January 1, 2018; 17.5%
on January 1, 2019; 35% on the later to occur of: (a) the date that
the Company’s Market Capitalization is $100 million greater
than the Market Capitalization on December 31, 2016 and (b) June
30, 2019; and 30% on performance based thresholds associated with
the Company’s clinical programs.
(7)
Restricted stock
granted to Mr. Power on December 31, 2017, under the 2012 Incentive
Plan. The shares vest as follows: 25% on January 1, 2019; 25% on
January 1, 2020; and 50% on the later to occur of: (a) the date
that the Company’s Market Capitalization is $100 million
greater than the Market Capitalization on December 31, 2017 and (b)
January 1, 2019.
18
Stock Vested in Fiscal Year 2017
The
following table provides information regarding the number of shares
acquired upon the vesting of restricted shares for our NEOs during
2017. The NEOs have not been granted any stock
options.
|
|
|
Stock Awards
|
||
|
Name
|
|
Number of Shares
Acquired on
Vesting
(#)
|
|
Value Realized
on Vesting
($)
(1)
|
|
Mr. Weiss
(2)
|
|
3,306,875
|
|
24,411,654
|
|
Mr. Power
|
|
73,334
|
|
714,341
|
_______________________
(1)
Represents the
aggregate value of restricted stock vesting in 2017, based upon the
fair market value of our common stock on the applicable vesting
date.
(2)
Represents shares
vested which had been granted to the Advisor under the Advisory
Agreement for Mr. Weiss’ services as Chairman of the
Board.
Michael S.
Weiss.
Mr. Weiss was
appointed Executive Chairman, Chief Executive Officer and President
of the Company, effective December 29, 2011. Under Mr.
Weiss
’
employment
agreement, Mr. Weiss is to serve as the Company
’
s Executive Chairman, Chief
Executive Officer and President until such employment is terminated
pursuant to the terms of the agreement. Mr. Weiss
’
base salary for 2017 was $187,500.
Mr. Weiss is also eligible to earn an annual cash performance
bonus, based upon achievement of annual performance goals and
objectives set by agreement between Mr. Weiss and the Board each
year, with a target bonus of 100% of his base salary.
Pursuant to his
employment agreement, if Mr. Weiss
’
employment is terminated by the
Company without Cause (as defined therein) or if Mr. Weiss resigns
for Good Reason (as defined therein), then, in addition to his
accrued obligations, if within 45 days after the date of
termination, he executes and does not revoke a general release of
claims and covenant not to sue, he will receive the following
severance benefits: (i) a lump sum severance payment equal to 1.5
times the sum of his base salary and target bonus (or 2 times the
sum of his base salary and target bonus if his employment is
terminated upon or following a change in control); (ii)
continuation of group health benefits for 18 months (or 24 months
if his employment is terminated upon or following a change in
control); (iii) a prorated target bonus; (iv) any shares of
restricted stock outstanding on the date of his termination will
become fully-vested and non-forfeitable as of his date of
termination; and (v) any stock options outstanding on the date of
his termination will become fully-vested and will remain
exercisable for a period of 24 months following the date of his
termination (or, if earlier, the normal expiration date of such
stock options).
If Mr.
Weiss
’
employment is
terminated by reason of his death or disability, he will be
entitled to his accrued obligations and a prorated target bonus. In
addition, (i) any shares of restricted stock outstanding on the
date of his termination will become fully vested and
non-forfeitable as of his date of termination; and (ii) the vested
portion of any stock options outstanding on the date of his
termination will remain exercisable for a period of 24 months
following the date of his termination (or, if earlier, the normal
expiration date of such stock options), and any unvested portion of
outstanding stock options will lapse as of the date of
termination.
If Mr.
Weiss
’
employment is
terminated by the Company for Cause or by Mr. Weiss without Good
Reason, Mr. Weiss will receive his accrued obligations but no
additional benefits. Any shares of restricted stock outstanding on
the date of his termination will be forfeited. The vested portion
of any stock options outstanding on the date of his termination
will remain exercisable for a period of thirty (30) days following
the date of his termination (or, if earlier, the normal expiration
date of such stock options), and any unvested portion of
outstanding stock options will lapse as of the date of
termination.
During
his employment and for 12 months following the termination of his
employment for any reason, Mr. Weiss is prohibited from engaging in
any business that develops anti-CD20 monoclonal antibodies within
the geographic area in which the Company does business, which is
deemed to be worldwide, and he is subject to a non-disparagement
clause. He is also subject to certain covenants related to
confidential information, trade secrets, return of property, and
invention assignment.
19
Effective as of
January 1, 2017, we entered into an amendment (the
“
Amendment
”
) to Mr. Weiss
’
employment agreement.
Under the Amendment, Mr. Weiss will
remain as Chief Executive Officer and President of the Company,
removing the interim status. Simultaneously, we entered into a
Strategic Advisory Agreement (the
“
Advisory Agreement
”
) with Caribe BioAdvisors, LLC (the
“
Advisor
”
) owned by Mr. Weiss to provide the
services of Mr. Weiss as Chairman of the Board and as Executive
Chairman. Pursuant to the Advisory Agreement, the Advisor is paid
an annual cash advisory fee starting at $100,000 and escalating up
to a maximum annual fee of $1.5 million if the market
capitalization of the Company exceeds $3 billion.
As part
of the Amendment, Mr. Weiss also agreed to forfeit 3,381,866
restricted shares previously granted under his employment agreement
that were predominantly subject to time-based vesting over three
years. Simultaneously, (i) Mr. Weiss was issued 418,371 restricted
shares under his employment agreement that vest in 2018 and 2019
and (ii) the Advisor was issued 2,960,000 restricted shares under
the Advisory Agreement that vest on market capitalization
thresholds ranging from $375 million to $750 million. Pursuant to
the Amendment, Mr. Weiss no longer receives an annual grant of
restricted stock under the employment agreement, but the Advisor
does under the Advisory Agreement. See “Long-Term Equity
Incentive Awards” on page 15.
Sean A.
Power.
Mr. Power was appointed Chief Financial Officer,
Treasurer and Secretary of the Company, effective December 29,
2011. Under Mr. Power
’
s
employment agreement, Mr. Power is to serve as the
Company
’
s Chief Financial
Officer, Treasurer and Secretary until such employment is
terminated pursuant to the terms of the agreement. Mr.
Power
’
s base salary for
2017 was $315,000. Mr. Power is also eligible to earn an annual
cash performance bonus, based upon achievement of annual
performance goals and objectives set by agreement between Mr. Power
and the board each year, with a target bonus of 33% of his base
salary.
The
Company will grant Mr. Power a number of shares of restricted
common stock of the Company as determined by the CEO and the Board.
Each of these annual grants of restricted stock will be subject to
vesting terms, which will be determined at the time of grant by the
CEO and the Board.
Pursuant to his
employment agreement, if Mr. Power
’
s employment is terminated by the
Company without Cause (as defined therein) or if Mr. Power resigns
for Good Reason (as defined therein), then, in addition to his
accrued obligations, if within 45 days after the date of
termination, he executes and does not revoke a general release of
claims and covenant not to sue, he will receive the following
severance benefits: (i) a lump sum severance payment equal to 0.5
times the sum of his base salary and target bonus (or 1 times the
sum of his base salary and target bonus if his employment is
terminated upon or following a change in control); (ii)
continuation of group health benefits for 12 months; (iii) a
prorated target bonus; (iv) any shares of restricted stock
outstanding on the date of his termination will become fully-vested
and non-forfeitable as of his date of termination; and (v) any
stock options outstanding on the date of his termination will
become fully-vested and will remain exercisable for a period of 12
months following the date of his termination (or, if earlier, the
normal expiration date of such stock options).
If Mr.
Power
’
s employment is
terminated by reason of his death or disability, he will be
entitled to his accrued obligations and a prorated target bonus. In
addition, (i) any shares of restricted stock outstanding on the
date of his termination will become fully vested and
non-forfeitable as of his date of termination; and (ii) the vested
portion of any stock options outstanding on the date of his
termination will remain exercisable for a period of 12 months
following the date of his termination (or, if earlier, the normal
expiration date of such stock options), and any unvested portion of
outstanding stock options will lapse as of the date of
termination.
If Mr.
Power
’
s employment is
terminated by the Company for Cause or by Mr. Power without Good
Reason, Mr. Power will receive his accrued obligations but no
additional benefits. Any shares of restricted stock outstanding on
the date of his termination will be forfeited. The vested portion
of any stock options outstanding on the date of his termination
will remain exercisable for a period of thirty (30) days following
the date of his termination (or, if earlier, the normal expiration
date of such stock options), and any unvested portion of
outstanding stock options will lapse as of the date of
termination.
During
his employment and for 12 months following the termination of his
employment for any reason, Mr. Power is prohibited from engaging in
any business that develops anti-CD20 monoclonal antibodies within
the geographic area in which the Company does business, which is
deemed to be worldwide, and he is subject to a non-disparagement
clause. He is also subject to certain covenants related to
confidential information, trade secrets, return of property, and
invention assignment.
20
As
detailed above, we have employment agreements with Mr. Weiss and
Mr. Power that provide certain compensation and benefits in the
event of the termination of their employment under certain
conditions. In addition, our equity plan provides certain benefits
in connection with a change in control.
Equity Plan
Pursuant to the
terms of the 2012 Incentive Plan, upon the occurrence of a change
in control, any awards outstanding under such plan will become
fully-vested.
Michael S. Weiss
The
table below summarizes the value of potential payments and benefits
that Mr. Weiss would receive if his employment was terminated on
December 31, 2017 under the circumstances shown, or if a change in
control of the Company occurred on December 31, 2017. The table
excludes amounts that would be paid in the normal course of
continued employment, such as accrued but unpaid salary. Actual
amounts to be paid can only be determined at the time of such
termination of service or change in control.
|
Type
of Payment
|
Death or Disability
($)
|
Termination for Cause or Resignation without Good
Reason
($)
|
Termination Other Than For Cause; Resignation for Good
Reason
($)
|
Termination Other Than For Cause; Resignation For Good Reason
(Following a Change in Control)
($)
|
Change in Control (Absent
Termination)
(2)
($)
|
|
Cash
Severance
|
-
|
-
|
562,500
|
750,000
|
-
|
|
Pro-Rated Target
Bonus
|
187,500
|
-
|
187,500
|
187,500
|
-
|
|
Continuation of
Health Benefits
|
-
|
-
|
38,207
|
50,943
|
-
|
|
Value of
Accelerated Equity
(1)
|
3,430,642
|
-
|
3,430,642
|
3,430,642
|
3,430,642
|
|
Total
|
3,618,142
|
-
|
4,218,849
|
4,419,085
|
3,430,642
|
_______________________
(1)
Represents the fair
market value of restricted shares that would be vested upon the
event, based on the closing price of our stock on December 29, 2017
($8.20), the last trading day of the most recently completed fiscal
year.
This does not
include 1,181,752 restricted stock held by the Advisor, which would
not be subject to accelerated vesting upon the termination of Mr.
Weiss’ employment agreement. These 1,181,752 shares would be
subject to accelerated vesting should the Company terminate the
Advisory Agreement, the fair market value of these restricted
shares as of December 31, 2017 would be
$9,690,366.
(2)
Our 2012 Incentive
Plan specifies that all outstanding unvested stock awards vest upon
a qualifying change in control.
21
Sean A. Power
The
table below summarizes the value of potential payments and benefits
that Mr. Power would receive if his employment was terminated on
December 31, 2017 under the circumstances shown, or if a change in
control of the Company occurred on December 31, 2017. The table
excludes amounts that would be paid in the normal course of
continued employment, such as accrued but unpaid salary. Actual
amounts to be paid can only be determined at the time of such
termination of service.
|
Type of Payment
|
Death or Disability
($)
|
Termination for Cause or Resignation without Good
Reason
($)
|
Termination Other Than For Cause; Resignation for Good
Reason
($)
|
Termination Other Than For Cause; Resignation For Good Reason
(Following a Change in Control)
($)
|
Change in Control (Absent Termination)
(2)
($)
|
|
Cash
Severance
|
-
|
-
|
209,475
|
418,950
|
-
|
|
Pro-Rated Target
Bonus
|
103,950
|
-
|
103,950
|
103,950
|
-
|
|
Continuation of
Health Benefits
|
-
|
-
|
25,471
|
25,471
|
-
|
|
Value of
Accelerated Equity
(1)
|
1,742,500
|
-
|
1,742,500
|
1,742,500
|
1,742,500
|
|
Total
|
1,846,450
|
-
|
2,081,396
|
2,290,871
|
1,742,500
|
_______________________
(1)
Represents the fair
market value of restricted shares that would be vested upon the
event, based on the closing price of our stock on December 31, 2017
($8.20), the last trading day of the most recently completed fiscal
year.
(2)
Our 2012 Incentive
Plan specifies that all outstanding unvested stock awards vest upon
a qualifying change in control.
CEO PAY RATIO
As
required by Section 953(b) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, we are providing the following information
about the relationship of the median of the annual total
compensation of our employees and the annual total compensation of
Michael S. Weiss, our CEO. The pay ratio included in this
information is a reasonable estimate calculated in a manner
consistent with Item 402(u) of Regulation S-K. Given the different
methodologies that various public companies will use to determine
an estimate of their pay ratio, the estimated ratio reported below
should not be used as a basis for comparison between
companies.
For
2017, our last completed fiscal year, the median of the annual
total compensation of all employees of the Company (other than our
CEO) was $85,120, and the annual total compensation of our CEO, as
reported in the Summary Compensation Table included in this Proxy
Statement, was $9,926,616. Based on this information, for 2017, the
ratio of the annual total compensation of our CEO to the median of
the annual total compensation of all employees was 117 to
1.
We
identified our median employee by examining 2017 Box 1 W-2 taxable
income amounts for all individuals, excluding our CEO, who were
employed by us on December 31, 2017, whether on a full-time or
part-time basis. We did not annualize the compensation for any
permanent (full-time or part-time) employees that were not employed
by us for all of 2017. After identifying the median employee, we
calculated annual total compensation for such employee using the
same methodology we use for our named executive officers as set
forth in the 2017 Summary Compensation Table above.
22
Cash Compensation.
Our
non-employee directors receive the following cash compensation: (i)
$60,000 annual retainer; (ii) $20,000 additional retainer for
service as Chairman of the Audit Committee; and (iii) $10,000
additional retainer for service as Chairman of the Compensation
Committee. Each non-employee director receives reimbursement for
reasonable travel expenses incurred in attending meetings of our
Board of Directors and meetings of committees of our Board of
Directors.
Equity Compensation.
Our non-employee directors receive the following equity
compensation under the 2012 Incentive Plan.
●
Initial Stock
Grant.
Non-employee directors receive 50,000 shares of
restricted common stock upon initial election or appointment to the
Board of Directors. The stock will vest in equal annual
installments over three years, beginning on the third anniversary
of the date of grant.
●
Annual Stock
Grant.
Non-employee directors receive a restricted stock
award equivalent to the greater of (i) $100,000 of restricted stock
or (ii) 15,000 shares of restricted stock annually for service on
our Board of Directors. Such restricted stock will vest on the
third anniversary of the date of grant.
2017 Director Compensation
The
following table sets forth the cash and other compensation paid by
the Company to the members of the Board for all services in all
capacities during 2017.
The compensation paid to the Advisor in
connection with Mr. Weiss’ service as Chairman of the Board
is discussed in the Compensation Discussion and Analysis and is
reflected in the applicable executive compensation tables. See
“Executive Compensation” starting on page
16.
|
Name
|
Fees Earned or Paid in Cash
($)
(1)
|
Stock Awards
($)
(2)
|
Option Awards
($)
|
Total
($)
|
|
Laurence N.
Charney
|
70,824
|
166,500
|
--
|
237,324
|
|
William J.
Kennedy
|
55,412
|
166,500
|
--
|
221,912
|
|
Mark Schoenebaum,
M.D.
|
55,412
|
166,500
|
--
|
221,912
|
|
Yann
Echelard
|
55,412
|
166,500
|
--
|
221,912
|
|
Kenneth
Hoberman
|
60,824
|
166,500
|
--
|
227,324
|
|
Daniel
Hume
|
55,412
|
166,500
|
--
|
221,912
|
_______________________
(1)
Represents cash
retainer for serving on our Board and committees of the
Board.
(2)
Reflects the
aggregate grant date fair value of stock awards granted by the
Company as computed under FASB ASC Topic 718. The grant date fair
value of the stock awards is based on the fair market value of the
underlying shares on the date of grant and does not take into
account any estimated forfeitures.
23
The
following table shows the number of stock awards granted to each
director during 2017, and the grant date fair value for each award
(determined in accordance with FASB ASC Topic 718) (during 2017 no
option awards were granted to directors):
|
Name
|
|
Grant Date
|
|
Stock Awards (#)
|
|
Grant Date Fair Value of Awards
($)
|
|
Laurence N.
Charney
|
|
6/16/17
|
|
15,000
|
|
166,500
|
|
William
J. Kennedy
|
|
6/16/17
|
|
15,000
|
|
166,500
|
|
Mark
Schoenebaum, M.D.
|
|
6/16/17
|
|
15,000
|
|
166,500
|
|
Yann
Echelard
|
|
6/16/17
|
|
15,000
|
|
166,500
|
|
Kenneth
Hoberman
|
|
6/16/17
|
|
15,000
|
|
166,500
|
|
Daniel
Hume
|
|
6/16/17
|
|
15,000
|
|
166,500
|
As of
December 31, 2017, the following aggregate number of unvested
restricted stock awards were held by each of our non-employee
directors. No stock options have been granted to our non-employee
directors.
|
Name
|
|
Stock Awards
(#)
|
|
Laurence N.
Charney
|
|
85,878
|
|
William
J. Kennedy
|
|
43,664
|
|
Mark
Schoenebaum, M.D.
|
|
110,949
|
|
Yann
Echelard
|
|
102,068
|
|
Kenneth
Hoberman
|
|
82,126
|
|
Daniel
Hume
|
|
77,459
|
24
The
current members of our Compensation Committee are Kenneth Hoberman,
Laurence Charney, William Kennedy, Mark Schoenebaum and Daniel
Hume. No member of our Compensation Committee during fiscal year
2017 or as of the date of this proxy statement, is or has been an
officer or employee of TG Therapeutics or any of our subsidiaries,
nor has any member of our Compensation Committee had any
relationship with TG Therapeutics requiring further
disclosure.
During
the last fiscal year, none of our executive officers served as a
director or member of the Compensation Committee (or other
committee serving an equivalent function) of any other entity,
whose executive officers either served as a member of our
Compensation Committee or our Board of Directors.
Section
16(a) of the Exchange Act requires our directors, executive
officers and persons who own more than 10% of the shares of our
common stock to file an initial report of ownership on Form 3 and
changes in ownership on Form 4 or Form 5 with the SEC. Such
officers, directors and 10% stockholders are also required by SEC
rules to furnish us with copies of any Forms 3, 4 or 5 that they
file. The SEC rules require us to disclose late filings of initial
reports of stock ownership and changes in stock ownership by our
directors, executive officers and 10% stockholders. Based solely on
a review of copies of the Forms 3, 4 and 5 furnished to us by
reporting persons and any written representations furnished by
certain reporting persons, we believe that during the fiscal year
ended December 31, 2017, all Section 16(a) filing requirements
applicable to our directors, executive officers and 10%
stockholders were completed in a timely manner.
In
2012, the Board of Directors of the Company adopted a formal
written policy regarding Related Person Transactions (defined
below). In order for the Company to ratify a Related Person
Transaction under this policy, the Audit Committee must first
determine that the transaction is in the best interest of the
Company and its stockholders. The policy generally defines a
“Related Person Transaction” as a transaction,
arrangement or relationship in which the Company was, is or will be
a participant and the amount involved exceeds $120,000, and in
which any related person (any executive officer or director of the
Company from the previous fiscal year, any person who owns more
than 5% of the Company’s securities, or any immediate family
member in either of these categories) had, has or will have a
direct or indirect material interest. In order to further ensure
compliance with the policy, any executive officer, director, or
nominee for director is required to submit a questionnaire to the
Company on an annual basis. Each individual is also required to
update the questionnaire following any relevant
change.
On
January 30, 2012, we entered into an exclusive license agreement
with LFB Biotechnologies, GTC Biotherapeutics and LFB/GTC LLC, all
wholly-owned subsidiaries of LFB Group, relating to the development
of ublituximab (the
“
LFB
License Agreement
”
). In
connection with the LFB License Agreement, LFB Group was issued
5,000,000 shares of common stock, and a warrant to purchase
2,500,000 shares of common stock at a purchase price of $0.001 per
share. In addition, under the terms of the LFB License Agreement,
on November 9, 2012, we nominated Dr. Yann Echelard to our Board of
Directors as LFB Group
’
s
nominee. LFB Group no longer has the right to nominate a board
member since the LFB Group owns less than 10% of our outstanding
common stock.
Under
the terms of the LFB License Agreement, we utilize LFB Group for
certain development and manufacturing services. We incurred
approximately $2.3 million, $8.1 million and $9.3 million in
expenses for such services during the years ended December 31,
2017, 2016 and 2015, respectively. As of December 31, 2017, and
2016, we had zero and approximately $0.4 million, respectively,
recorded in accounts payable related to the LFB License Agreement.
In conjunction with the development and manufacturing services
discussed above, certain agreements between us and LFB Group
require payments in advance of services performed or goods
delivered. Accordingly, as of December 31, 2017 and 2016, we
recorded zero and approximately $1.3 million, respectively, in
prepaid research and development for such advance
payments.
In
March 2014, we entered into a shared services agreement (the
“Opus Shared Services Agreement”) with Opus Point
Partners Management, LLC (“Opus”) in which the parties
agreed to share a rented facility and costs for certain other
services. Michael S. Weiss, our Executive Chairman and CEO, is a
Managing Member of Opus. During the years ended December 31, 2017
and 2016, we incurred expenses of zero and approximately $0.3
million, respectively, principally for rent, related to this Opus
Shared Services Agreement. The Opus Shared Services Agreement is no
longer in effect as we began occupying new space in April
2016.
25
In
connection with our licensing agreement with Ligand Pharmaceuticals
Incorporated, which we entered into in June 2014, Opus, who
identified the opportunity and advised us on the transaction, will
be entitled to receive a 1% royalty for annual sales of up to $1
billion. During the years ended December 31, 2017 and 2016, no
royalties were paid to Opus under this agreement.
In October
2014, we entered into an agreement (the “Office
Agreement”) with Fortress Biotech, Inc. (
“
FBIO
”
) to occupy approximately 45% of the
24,000 square feet of New York City office space leased by FBIO,
which is now our corporate headquarters. The Office Agreement
requires us to pay our respective share of the average annual rent
and other costs of the 15-year lease. We approximate an average
annual rental obligation of $1.1 million under the Office
Agreement. We began to occupy this new space in April 2016, with
rental payments beginning in the third quarter of 2016. During the
years ended December 31, 2017 and 2016, we recorded rent expense of
approximately $1.2 million and $1.4 million, and at December 31,
2017, have deferred rent of approximately $1.4 million. Mr. Weiss,
our Executive Chairman and CEO, is also Executive Vice Chairman of
FBIO.
During the
year ended December 31, 2017, we agreed to pay FBIO $2.8 million
for our portion of the build-out costs, which have been allocated
to us at the 45% rate mentioned above. After an initial commitment
period of the 45% rate for a period of three (3) years, we and FBIO
will determine actual office space utilization annually and if our
utilization differs from the amount we have been billed, we will
either receive credits or be assessed incremental utilization
charges. Also, in connection with this lease, in October 2014 we
pledged $0.6 million to secure a line of credit as a security
deposit for the Office Agreement.
In July 2015,
we entered into a Shared Services Agreement (the “Shared
Services Agreement”) with FBIO to share the cost of certain
services such as facilities use, personnel costs and other overhead
and administrative costs. This Shared Services Agreement requires
us to pay our respective share of services utilized. In connection
with the Shared Services Agreement, we incurred expenses of
approximately $1.2 million and $0.8 million for shared services for
the years ended December 31, 2017 and 2016, primarily related to
shared personnel.
In May 2016,
as part of a broader agreement with Jubilant Biosys Limited
(
“
Jubilant
”
), an India-based biotechnology
company, we entered into a sub-license agreement (
“
JBET Agreement
”
) with Checkpoint Therapeutics, Inc.
(
“
Checkpoint
”
), a subsidiary of FBIO, for the
development and commercialization of Jubilant
’
s novel BET inhibitor program in the
field of hematological malignancies. We paid Checkpoint an up-front
licensing fee of $1.0 million in July 2016 and incurred expenses of
$0.2 million in March 2017 for the first milestone achievement as
part of the JBET Agreement. As of December 31, 2017 and 2016, we
had approximately $0.3 million and $0.8 million, respectively,
recorded in accounts payable, related mostly to the JBET Agreement.
Mr. Weiss is also the Executive Chairman of
Checkpoint.
26
AND 5% BENEFICIAL OWNERS
The
following table shows information, as of April 18, 2018, concerning
the beneficial ownership of our common stock by:
●
each person we know
to be the beneficial owner of more than 5% of our common
stock;
●
each of our current
directors;
●
each of our NEOs
shown in our Summary Compensation Table; and
●
all current
directors and NEOs as a group.
As of
April 18, 2018, there were 77,666,112 shares of our common stock
outstanding. In order to calculate a stockholder
’
s percentage of beneficial
ownership, we include in the calculation those shares underlying
options or warrants beneficially owned by that stockholder that are
vested or that will vest within 60 days of April 18, 2018. Shares
of restricted stock are deemed to be outstanding. Options or
warrants held by other stockholders that are not attributed to the
named beneficial owner are disregarded in this calculation.
Beneficial ownership is determined in accordance with the rules of
the SEC and includes voting or investment power with respect to the
shares of our common stock. Unless we have indicated otherwise,
each person named in the table below has sole voting power and
investment power for the shares listed opposite such
person
’
s name, except to
the extent authority is shared by spouses under community property
laws.
|
Name and Address of Beneficial Owner(1)
|
|
Amount and Nature
of Beneficial
Ownership
|
|
Percentage of
Shares
Outstanding
|
|
Michael
S. Weiss (2)
|
|
10,630,794
|
|
13.7%
|
|
Sean A.
Power (3)
|
|
485,458
|
|
*
|
|
Laurence
Charney
|
|
103,949
|
|
*
|
|
William
Kennedy
|
|
85,401
|
|
*
|
|
Mark
Schoenebaum
|
|
110,949
|
|
*
|
|
Yann
Echelard
|
|
102,068
|
|
*
|
|
Kenneth
Hoberman
|
|
101,905
|
|
*
|
|
Daniel
Hume
|
|
77,459
|
|
*
|
|
All
current directors and named executive officers as a group (8
persons)
|
|
11,697,983
|
|
15.1%
|
|
|
|
|
|
|
|
5% Stockholders:
|
|
|
|
|
|
Opus
Point Partners, LLC (4)
|
|
10,630,794
|
|
13.7%
|
|
LFB
Biotechnologies, S.A.S. (5)
|
|
7,614,855
|
|
9.8%
|
|
FMR LLC
(6)
|
|
4,951,213
|
|
6.4%
|
|
Bridger
Management LLC (7)
|
|
4,391,634
|
|
5.7%
|
|
|
|
|
|
|
*
Less
than 1% of outstanding common stock.
_______________________
(1)
The address of each
of the directors and officers listed is c/o TG Therapeutics, Inc.,
2 Gansevoort Street, 9th Floor, New York, New York
10014.
(2)
Includes 765,246
shares of unvested restricted common stock, which vest on various
time-based milestones. Finally, also included in Mr.
Weiss
’
beneficial
ownership are 4,524,560 shares of our common stock (1,500,000 of
which contain restrictions based upon various corporate milestones)
issued to Opus Point Partners, LLC, of which Mr. Weiss is a
co-founder, managing partner, and principal and beneficially owns a
50% interest.
(3)
Includes 150,000
shares of restricted common stock which vest on various time-based
milestones.
(4)
The address of Opus
Point Partners, LLC is 2 Gansevoort Street, 9th Floor, New York,
New York 10014. Includes 4,524,560 shares of our common stock
(1,500,000 of which contain restrictions based upon various
corporate milestones) issued to Opus Point Partners, LLC. Also
includes shares beneficially owned by Mr. Weiss as outlined in
footnote 2 above. Mr. Weiss is a co-founder, managing partner, and
principal and beneficially owns a 50% interest in Opus Point
Partners, LLC.
(5)
The address of LFB
Biotechnologies, S.A.S. is 3 avenue des Tropiques, BP 40305 Les
Ulis, 91942 Courtaboeuf Cedex, France.
(6)
The address of FMR,
LLC is 245 Summer Street, Boston, Massachusetts 02210. Share
ownership reported above is based on a Form 13G/A filed by FMR, LLC
on February 13, 2018.
(7)
The address of Bridger Management, LLC is 90 Park
Avenue, 40
th
Floor, New York, NY 10016. Share ownership
reported above is based on a Form 13G/A filed by Bridger
Management, LLC on February 14, 2018.
27
Our
Amended and Restated Bylaws provide that the Board shall consist of
one or more members, as determined from time to time by resolution
of the Board. Our Board currently consists of seven members. The
nominated directors are: Michael S. Weiss, Laurence N. Charney,
William J. Kennedy, Mark Schoenebaum M.D., Yann Echelard, Kenneth
Hoberman, and Daniel Hume. For information about each of the
nominees and our Board generally, please see
“
Corporate Governance-Our Board of
Directors
”
beginning on
page 4. If elected, the nominees will hold office until the next
annual meeting and until a respective successor is elected and has
been qualified, or until such director resigns or is removed from
office. Management expects that each of the nominees will be
available for election, but if any of them is unable to serve at
the time the election occurs, your proxy will be voted for the
election of another nominee to be designated by a majority of the
independent directors serving on our Board.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE ELECTION OF ALL OF THE NOMINEES FOR DIRECTOR. IF A CHOICE IS
SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED
AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED
“FOR” ALL OF THE NOMINEES. THE AFFIRMATIVE VOTE OF THE
HOLDERS OF A PLURALITY OF THE SHARES OF COMPANY COMMON STOCK
REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A
QUORUM IS PRESENT IS REQUIRED FOR THE ELECTION OF THE
NOMINEES.
28
PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF COHNREZNICK LLP
AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Board is submitting the selection of CohnReznick LLP as our
independent registered public accounting firm to the stockholders
for ratification at our Annual Meeting. Stockholder ratification of
our independent registered public accounting firm is not required
by our Amended and Restated Bylaws or otherwise. If CohnReznick LLP
is not ratified as our independent registered public accounting
firm by a majority of the shares present or represented by proxy,
the Audit Committee will review its future selection of independent
registered public accounting firm. CohnReznick LLP will still serve
as our independent registered public accounting firm for the year
ending December 31, 2018, if it is not ratified by our
stockholders.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
RATIFICATION OF THE APPOINTMENT OF COHNREZNICK LLP AS THE
COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE YEAR ENDING DECEMBER 31, 2018. THE AFFIRMATIVE VOTE OF THE
MAJORITY OF SHARES PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE
MEETING AND ENTITLED TO VOTE ON THE SUBJECT MATTER IS REQUIRED FOR
THE RATIFICATION OF THE APPOINTMENT OF COHNREZNICK
LLP.
29
Introduction
We are
asking our stockholders to approve an amendment to the TG
Therapeutics, Inc. Amended and Restated 2012 Incentive Plan (the
“2012 Incentive Plan). See Exhibit A. Our 2012 Incentive Plan
is the only plan under which equity-based compensation may
currently be awarded to our executive officers, employees,
directors and consultants. In order to enable us to continue to
offer meaningful equity-based incentives, as well as cash-based
incentives, to our employees, officers, directors and consultants,
our board of directors believes that it is both necessary and
appropriate to increase the number of shares of our common stock
available for these purposes. As a result, on April 11, 2018, the
Board of Directors adopted, subject to stockholder approval at the
Annual Meeting, an amendment to add 6,000,000 shares to the 2012
Incentive Plan. The share increase is the only change to the 2012
Incentive Plan, a summary of which is provided below.
If the
amendment to the 2012 Incentive Plan is approved by our
stockholders at the Annual Meeting, it will become effective on the
date of the Annual Meeting. If the amendment is not approved by our
stockholders, then the 2012 Incentive Plan will remain in effect as
it presently exists.
Background and Number of Shares Requested
In
setting the number of proposed shares issuable under our amended
2012 Incentive Plan, the Board considered a number of factors,
including historical share usage and future share
needs.
The following
are several factors that you should consider in evaluating the
proposal to increase the share reserve under the 2012 Incentive
Plan:
The
2012 Incentive Plan originally included authorization for 6,000,000
shares, which was amended in 2015 to increase the shares under the
plan to 12,000,000. As of the record date, there were 40,539 shares
of our common stock remaining available for the grant of equity
awards under the 2012 Incentive Plan. The additional 6,000,000
shares requested under the 2012 Incentive Plan, together with the
remaining shares under the 2012 Incentive Plan, represent the
shares the Company anticipates needing for the next three years
under normal circumstances.
Although we must
manage our share reserve under the possibility that the performance
awards will be earned at the maximum level, this will only occur if
we achieve the maximum performance under each metric in each award,
which is not expected to be the case. Our actual share usage will
also vary from our estimate based upon changes in market grant
values, changes in the number of recipients, changes in our stock
price, changes in the structure of our long-term incentive program,
and forfeitures of outstanding awards. We believe that the proposed
share reserve reflects an appropriate balance between our desire to
allow maximum flexibility in a competitive labor market and
stockholder interests of limiting dilution.
Our
amended and restated certificate of incorporation authorizes the
issuance of 150,000,000 shares of common stock. As of our record
date, there were 77,666,112 shares of common stock issued and
outstanding, and the closing price of a share of our common stock
as of that date was $14.20.
Aside
from the increase in shares available under the 2012 Incentive
Plan, the current proposal does not amend or change any provisions
of the 2012 Incentive Plan. However, to enable you to evaluate the
proposed share increase, the following is a description of the
material terms of the 2012 Incentive Plan.
30
Summary of the 2012 Incentive Plan
Important Provisions
The
2012 Incentive Plan contains a number of provisions that we believe
are consistent with the interests of stockholders and sound
corporate governance practices, including:
●
No repricing of stock options or SARs
.
Our 2012 Incentive Plan prohibits the repricing of stock options or
stock appreciation rights, or SARs, without stockholder approval.
This prohibition includes reducing the exercise price or base price
after the date of grant or replacing, regranting or canceling a
stock option or SAR for cash or another award (including following
a participant’s voluntary surrender of underwater stock
options or SARs).
●
No discounted stock options or SARs
.
All stock options and SARs must have an exercise price or base
price equal to or greater than the fair market value of the
underlying stock on the date of grant.
●
No liberal change-in-control
definition
. The change-in-control definition contained in
our 2012 Incentive Plan is not a “liberal” definition
that would be activated on mere stockholder approval of a
transaction.
●
No award may be transferred for value
.
Our 2012 Incentive Plan prohibits the transfer of unexercised,
unvested or restricted awards to independent third parties for
value.
●
Limitation on amendments
. No material
amendments to our 2012 Incentive Plan can be made without
stockholder approval if any such amendment would materially
increase the number of shares reserved or the per-participant award
limitations under the plan, or that would diminish the prohibitions
on repricing stock options or SARs.
31
Purpose
The purpose of the 2012 Incentive Plan is to promote the
Company’s success by linking the personal interests of the
Company’s employees, officers, directors and consultants of
the Company and its affiliates, and by providing participants with
an incentive for outstanding performance. The 2012 Incentive Plan
is also intended to enhance the Company’s ability to
motivate, attract, and retain the services of employees, officers,
directors and consultants upon whose judgment, interest, and
special effort the successful conduct of the Company’s
operation is largely dependent.
Administration
The 2012 Incentive Plan is administered by our Compensation
Committee, or at the discretion of the Board from time to time, the
2012 Incentive Plan may be administered by the Board. The
Compensation Committee has the authority to designate participants;
determine the type or types of awards to be granted to each
participant and the number, terms and conditions thereof;
establish, adopt or revise any rules and regulations as it may deem
advisable to administer the 2012 Incentive Plan; and make all other
decisions and determinations that may be required under the 2012
Incentive Plan.
Eligibility
The 2012 Incentive Plan permits the grant of incentive awards to
employees, officers, directors and consultants of the Company and
its affiliates as selected by the Compensation Committee. As of the
record date, the number of eligible participants is approximately
75. The number of eligible participants may increase over time
based upon future growth of the Company and its
affiliates.
Permissible Awards
The 2012 Incentive Plan authorizes the granting of awards in any of
the following form:
➢
options to purchase
shares of the common stock, which may be designated under the Code
as nonstatutory stock options or incentive stock
options;
➢
stock appreciation
rights (SARs), which give the holder the right to receive the
difference between the fair market value per share of the common
stock on the date of exercise over the base price of the award
(which cannot be less than the fair market value of the underlying
stock as of the grant date);
➢
restricted stock,
which is subject to restrictions on transferability and subject to
forfeiture on terms set by the Compensation Committee;
➢
restricted or
deferred stock units, which represent the right to receive shares
of common stock in the future, based upon the attainment of stated
vesting or performance criteria in the case of restricted stock
units;
➢
performance awards,
which are awards payable in cash or stock upon the attainment of
specified performance goals (any award that may be granted under
the 2012 Incentive Plan may be granted in the form of a performance
award);
➢
dividend
equivalents, which entitle the holder of a “full-value”
award (such as restricted stock, stock units, or performance awards
payable in common stock) to cash payments equal to any dividends
paid on the shares of stock underlying the award;
➢
other stock-based
awards in the discretion of the Compensation Committee;
and
➢
cash-based
awards.
32
Shares Available for Awards
The
2012,
Incentive Plan
originally authorized 6,000,000 shares available for awards. In
2015
stockholders approved an amendment adding an additional
6,000,000 shares under the 2012 Incentive Plan. The current
proposal will add 6,000,000 more shares, for a total of 18,000,000
shares available under the 2012 Incentive Plan. No further awards
are being granted under any prior plans, and any prior plans
sponsored by the Company shall remain in effect only so long as
awards granted thereunder shall remain
outstanding.
Share Counting
The
share counting provisions of the
2012 Incentive Plan provide that the following shares will be added
back to the 2012 Incentive Plan share reserve and will again be
available for issuance pursuant to awards granted under the 2012
Incentive Plan: (i) unissued or forfeited shares
originally subject to an award that is canceled, terminates,
expires, is forfeited or lapses for any reason; (ii) shares subject
to awards settled in cash; (iii) shares withheld or repurchased
from an award or delivered by a participant to satisfy minimum tax
withholding requirements; (iv) shares delivered to the Company in
satisfaction of the exercise price of an option; (v) shares
originally subject to an option or SAR that are not issued upon
exercise of the option or SAR for any reason, including by reason
of net-settlement of the award; and (vi) shares subject to an award
other than an option or SAR that are not issued for any reason,
including by reason of failure to achieve maximum performance
goals. In addition, substitute awards granted in connection with a
merger will not count against the share reserve under the 2012
Incentive Plan.
Limitations on Individual Awards
The
maximum aggregate number of shares of common stock subject to
stock-based awards that may be granted under the 2012 Incentive
Plan in any 12-month period to any one participant is as
follows:
|
Type of
Award
|
Shares
|
|
Options
(time vested)
|
2,000,000
|
|
SARs
(time vested)
|
2,000,000
|
|
Performance
Awards
|
2,000,000
|
The
maximum aggregate amount awarded or credited with respect to
cash-based awards under the 2012 Incentive Plan to any one
participant in any 12-month period is $15,000,000.
33
Grants to Non-Employee Directors
Grants
of awards to non-employee directors under the 2012 Incentive Plan
will be made only in accordance with the terms, conditions and
parameters of a plan, program or policy for the compensation of
non-employee directors as in effect from time to time.
Accordingly, the Compensation Committee may not make discretionary
grants to non-employee directors under the 2012 Incentive
Plan.
Section 162(m) and Performance Goals
Code
Section 162(m) generally provides that a corporation may not deduct
compensation amounts in excess of $1,000,000 paid to any of its
named executive officers in any year. Prior to the Tax Cuts and
Jobs Act of 2017 (the “Tax Act”), this limitation did
not apply to options, SARs or awards that were conditioned on the
achievement of performance goals if certain requirements were met.
The 2012 Incentive Plan was designed to allow the Compensation
Committee to grant awards that were intended to qualify as
performance-based compensation under Section 162(m), although the
Committee reserved the discretion to grant or approve awards or
compensation that were not exempt from the deduction
limits.
The Tax
Act repealed the performance-based compensation exemption under
Section 162(m), effective for tax years beginning after December
31, 2017. Other than certain outstanding awards that meet the
“grandfather” requirements under the Tax Act, awards
granted under the 2012 Incentive Plan will be subject to the
deduction limit under Section 162(m).
Prior
to the Tax Act, the Compensation Committee could designate an
award granted under the 2012 Incentive Plan as a qualified
performance-based award in order to make the award fully deductible
without regard to the $1,000,000 deduction limit imposed by Code
Section 162(m). If an award was so designated, the
Compensation Committee establish objectively determinable
performance goals for the award based on one or more of the
following business criteria, which may be expressed in terms of
Company-wide objectives or in terms of objectives that relate to
the performance of an affiliate or a division, region, department
or function within the Company or an affiliate:
●
revenue
●
sales
●
profit (net profit,
gross profit, operating profit, economic profit, profit margins or
other corporate profit measures)
●
earnings (EBIT,
EBITDA, earnings per share, or other corporate earnings
measures)
●
net income (before
or after taxes, operating income or other income
measures)
●
cash (cash flow,
cash generation, working capital or other cash
measures)
●
stock price or
performance
●
total stockholder
return (stock price appreciation plus reinvested
dividends)
●
return on
equity
●
return on
assets
●
return on
investment
●
market
share
●
improvements in
capital structure
●
expenses (expense
management, expense ratio, expense efficiency ratios or other
expense measures)
●
business expansion
or consolidation (acquisitions, divestitures, in-licensing, or
product acquisitions)
●
market
capitalization
●
clinical and
regulatory milestones
●
corporate financing
activities
●
supply, production
and manufacturing milestones
●
corporate
partnerships or strategic alliances
The
Compensation Committee must establish such goals within 90 days
after the beginning of the period for which such performance goal
relates (or such later date as may be permitted under applicable
tax regulations), and the Compensation Committee may for any reason
reduce (but not increase) any award, notwithstanding the
achievement of a specified goal. The Compensation Committee
may provide, at the time the performance goals are established,
that any evaluation of performance will exclude or otherwise
objectively adjust for any specified circumstance or event that
occurs during a performance period, including by way of example but
without limitation the following: asset write-downs or impairment
charges, litigation or claim judgments or settlements, the effect
of changes in tax laws, accounting principles or other laws or
provisions affecting reported results, accruals for reorganization
and restructuring programs, extraordinary nonrecurring items as
described in then-current accounting principles, extraordinary
nonrecurring items as described in management’s discussion
and analysis of financial condition and results of operations
appearing in the Company’s annual report to stockholders for
the applicable year, acquisitions or divestitures and foreign
exchange gains and losses.
Certain
outstanding awards that meet the “grandfather”
requirements under the Tax Act remain subject to these requirements
under the 2012 Incentive Plan. In addition, while the
performance-based compensation exemption is no longer available for
new awards, the Compensation Committee may continue to grant awards
with performance-based vesting requirements under the 2012
Incentive Plan.
34
Limitations on Transfer; Beneficiaries
A
participant generally may not assign or transfer an award other
than by will or the laws of descent and distribution; provided,
however, that nonstatutory stock options may be transferred without
consideration to members of a participant’s immediate family,
to trusts in which such immediate family members have more than 50%
of the beneficial interest, to foundations in which such immediate
family members (or the participant) control the management of
assets, and to any other entity (including limited partnerships and
limited liability companies) in which the immediate family members
(or the participant) own more than 50% of the voting interest. In
addition, the Compensation Committee may permit other transfers
(other than transfers for value) where it concludes that such
transferability does not result in accelerated taxation, does not
cause any option intended to be an incentive stock option to fail
to qualify as such, and is otherwise appropriate and desirable,
taking into account any factors deemed relevant, including without
limitation, state or federal tax or securities laws applicable to
transferable awards.
A participant
may, in the manner determined by the Compensation Committee,
designate a beneficiary to exercise the rights of the participant
and to receive any distribution with respect to any award upon the
participant’s death.
Treatment of Awards upon a Change in Control
Except
as otherwise provided in the award certificate or any special 2012
Incentive Plan document governing an award, upon the occurrence of
a change in control, (i) all outstanding options, SARs, and other
awards in the nature of rights that may be exercised will become
fully exercisable, (ii) all time-based vesting restrictions on
outstanding awards will lapse, and (iii) the target payout
opportunities attainable under all outstanding performance-based
awards will be deemed to have been fully earned as of the effective
date of the change in control based upon an assumed achievement of
all relevant performance goals at the "target" level of performance
as of the date of the change in control and the awards will payout
on a prorata basis based upon the length of time within the
performance period that has elapsed prior to the change in
control.
Discretionary Acceleration
Regardless of
whether a change in control has occurred, the Compensation
Committee may in its sole discretion at any time determine that all
or a portion of a participant’s awards will become fully
vested. The Compensation Committee may discriminate among
participants or among awards in exercising such
discretion.
Adjustments
In the
event of a transaction between the Company and its stockholders
that causes the per-share value of the common stock to change
(including, without limitation, any stock dividend, stock split,
spin-off, rights offering, or large nonrecurring cash dividend),
the share authorization limits under the 2012 Incentive Plan will
be adjusted proportionately, and the Compensation Committee must
make such adjustments to the 2012 Incentive Plan and awards as it
deems necessary, in its sole discretion, to prevent dilution or
enlargement of rights immediately resulting from such transaction.
In the event of a stock split, a stock dividend, or a combination
or consolidation of the outstanding common stock into a lesser
number of shares, the authorization limits under the 2012 Incentive
Plan will automatically be adjusted proportionately, and the shares
then subject to each award will automatically be adjusted
proportionately without any change in the aggregate purchase
price.
Termination and Amendment
If the
increase in shares at the 2018 annual stockholders meeting is
approved, the 2012 Incentive Plan will terminate on the tenth
anniversary of the date of the 2018 annual stockholders meeting.
Otherwise, the 2012 Incentive Plan will terminate on the tenth
anniversary of the date of the 2015 annual stockholders meeting. In
either case, the Board or the Compensation Committee may, at any
time and from time to time, amend, modify or terminate the 2012
Incentive Plan without stockholder approval; provided, however,
that if an amendment to the 2012 Incentive Plan would, in the
reasonable opinion of the Board or the Compensation Committee,
constitute a material change requiring stockholder approval under
applicable laws, policies or regulations
or the applicable listing or other
requirements of an exchange, then such amendment shall be subject
to stockholder approval; and provided, further, that the Board or
Compensation Committee may condition any other amendment or
modification on the approval of stockholders of the Company for any
reason, including by reason of such approval being necessary or
deemed advisable (i) to comply with the listing or other
requirements of an exchange, or (ii) to satisfy any other tax,
securities or other applicable laws, policies or regulations. No
termination or amendment of the 2012 Incentive Plan may, without
the written consent of the participant, reduce or diminish the
value of an outstanding award.
The
Compensation Committee may amend or terminate outstanding
awards. However, such amendments may require the consent of
the participant and, unless approved by the stockholders, the
exercise price of an outstanding option may not be reduced,
directly or indirectly, and the original term of an option may not
be extended.
35
Prohibition on Repricing
Except
as described above under “Adjustments,” the exercise
price of an option may not be reduced, directly or indirectly by
cancellation and regrant or otherwise, without the prior approval
of the stockholders of the Company. In addition, the Company may
not, without the prior approval of stockholders of the Company,
repurchase an option for value from a participant if the current
fair market value of the shares underlying the option is lower than
the exercise price per share of the option
.
Certain U.S. Federal Income Tax Effects
The
following discussion is a summary of the U.S. federal income tax
provisions relating to the grant, exercise and vesting of awards
under the 2012 Incentive Plan and the subsequent sale of common
stock acquired under the 2012 Incentive Plan. The tax consequences
of awards may vary depending upon the particular circumstances, and
it should be noted that the income tax laws, regulations and
interpretations thereof change frequently. Participants should rely
upon their own tax advisors for advice concerning the specific tax
consequences applicable to them, including the applicability and
effect of state, local, and foreign tax laws.
Nonstatutory Stock Options.
There
will be no federal income tax consequences to the optionee or to
the Company upon the grant of a nonstatutory stock option under the
2012 Incentive Plan. When the optionee exercises a nonstatutory
option, however, he or she will recognize ordinary income in an
amount equal to the excess of the fair market value of the common
stock received upon exercise of the option at the time of exercise
over the exercise price, and the Company will be allowed a
corresponding federal income tax deduction. Any gain that the
optionee realizes when he or she later sells or disposes of the
option shares will be short-term or long-term capital gain,
depending on how long the shares were held.
Incentive Stock Options.
There
typically will be no federal income tax consequences to the
optionee or to the Company upon the grant or exercise of an
incentive stock option. If the optionee holds the acquired option
shares for the required holding period of at least two years after
the date the option was granted and one year after exercise, the
difference between the exercise price and the amount realized upon
sale or disposition of the option shares will be long-term capital
gain or loss, and the Company will not be entitled to a federal
income tax deduction. If the optionee disposes of the option shares
in a sale, exchange, or other disqualifying disposition before the
required holding period ends, he or she will recognize taxable
ordinary income in an amount equal to the excess of the fair market
value of the option shares at the time of exercise over the
exercise price, and the Company will be allowed a federal income
tax deduction equal to such amount. While the exercise of an
incentive stock option does not result in current taxable income,
the excess of the fair market value of the option shares at the
time of exercise over the exercise price will be an item of
adjustment for purposes of determining the optionee's alternative
minimum taxable income.
Stock Appreciation Rights.
A
participant receiving a stock appreciation right under the 2012
Incentive Plan will not recognize income, and the Company will not
be allowed a tax deduction, at the time the award is granted. When
the participant exercises the stock appreciation right, the amount
of cash and the fair market value of any shares of common stock
received will be ordinary income to the participant and the Company
will be allowed a corresponding federal income tax deduction at
that time.
36
Restricted Stock.
Unless a participant makes
an election to accelerate recognition of the income to the date of
grant as described below, a participant will not recognize income,
and the Company will not be allowed a tax deduction, at the time a
restricted stock award is granted, provided that the award is
nontransferable and is subject to a substantial risk of forfeiture.
When the restrictions lapse, the participant will recognize
ordinary income equal to the fair market value of the common stock
as of that date (less any amount he or she paid for the stock), and
the Company will be allowed a corresponding federal income tax
deduction at that time, subject to any applicable limitations under
Code Section 162(m). If the participant files an election
under Code Section 83(b) within 30 days after the date of
grant of the restricted stock, he or she will recognize ordinary
income as of the date of grant equal to the fair market value of
the stock as of that date (less any amount paid for the stock), and
the Company will be allowed a corresponding federal income tax
deduction at that time, subject to any applicable limitations under
Code Section 162(m). Any future appreciation in the stock will
be taxable to the participant at capital gains rates. However, if
the stock is later forfeited, the participant will not be able to
recover the tax previously paid pursuant to the Code
Section 83(b) election.
Restricted or Deferred Stock
Units.
A participant will not recognize income, and
the Company will not be allowed a tax deduction, at the time a
stock unit award is granted. When the participant receives or has
the right to receive shares of common stock (or the equivalent
value in cash or other property) in settlement of a stock unit
award, a participant will recognize ordinary income equal to the
fair market value of the common stock or other property as of that
date (less any amount he or she paid for the stock or property),
and the Company will be allowed a corresponding federal income tax
deduction at that time, subject to any applicable limitations under
Code Section 162(m).
Performance Awards Payable in
Cash.
A
participant will not recognize income, and the Company will not be
allowed a tax deduction, at the time a performance award payable in
cash is granted (for example, when the performance goals are
established). Upon receipt of cash in settlement of the
award, a participant will recognize ordinary income equal to the
cash received, and the Company will be allowed a corresponding
federal income tax deduction at that time, subject to any
applicable limitations under Code Section 162(m).
Dividend Equivalents.
A participant will recognize
ordinary income, and the Company will be allowed a tax deduction,
at the time the dividend equivalents are paid or
payable.
Code Section 409A.
The 2012
Incentive Plan permits the grant of various types of incentive
awards, which may or may not be exempt from Code Section 409A.
If an award is subject to Section 409A, and if the
requirements of Section 409A are not met, the taxable events
as described above could apply earlier than described, and could
result in the imposition of additional taxes and penalties.
Restricted stock awards, and stock options and SARs that comply
with the terms of the 2012 Incentive Plan are generally exempt from
the application of Code Section 409A. Stock units, other
stock-based awards and cash-based awards that are granted in one
year and payable in a later year generally are subject to
Section 409A unless they are designed to satisfy the
short-term deferral exemption from such law. If not exempt, such
awards must be specially designed to meet the requirements of
Section 409A in order to avoid early taxation and
penalties.
Tax Withholding.
The Company or any
affiliate has the right to deduct or withhold, or require a
participant to remit to the Company, an amount sufficient to
satisfy federal, state, and local taxes (including employment
taxes) required by law to be withheld with respect to any exercise,
lapse of restriction or other taxable event arising as a result of
the 2012 Incentive Plan.
37
Benefits to Named Executive Officers and Others
Awards
under the 2012 Incentive Plan are granted at the discretion of the
Compensation Committee. Accordingly, future awards under the 2012
Incentive Plan are not determinable.
As of
the record date, 11,959,461 shares of our common stock have been
issued under the 2012 Incentive Plan (or remain subject to
outstanding awards under the 2012 Incentive Plan) since its
inception in 2012. The table below shows the number of shares
issued, or subject to outstanding awards, under the Plan to the
named executive officers and the other individuals and groups
indicated.
|
Name and Position
|
Aggregate Number of Shares Subject to Options Granted under the
Plan Since Plan Inception
|
Aggregate Number of Shares Subject to Restricted Stock or Stock
Units Granted under the Plan Since Plan Inception
|
|
Michael
S. Weiss
Executive
Chairman,
Interim
Chief Executive Officer and President
|
--
|
5,281,998
|
|
Sean A.
Power
Chief
Financial Officer,
Treasurer
and Corporate Secretary
|
--
|
880,000
|
|
All
Current Executive Officers as a Group
|
--
|
6,161,998
|
|
All
Non-Employee Directors as a Group
|
--
|
673,323
|
|
All
Employees as a Group (Excluding Executive Officers)
|
--
|
4,268,245
|
38
Securities Authorized for Issuance Under Equity Compensation
Plans
The
following table provides information as of December 31, 2017,
regarding the securities authorized for issuance under our equity
compensation plans.
Equity Compensation Plan Information
|
|
|
|
|
|
Plan
Category
|
Number of securities to be issued upon exercise of outstanding
options
|
Weighted-average exercise price of outstanding options
|
Number of securities remaining available for future issuance under
equity compensation plans (excluding securities reflected in column
1)
|
|
|
|
|
|
|
Equity compensation
plans approved by security holders
|
--
|
$
--
|
504,128
|
|
Equity compensation
plans not approved by security holders
|
--
|
--
|
--
|
|
Total
|
--
|
$
--
|
504,128
|
THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF
THE
AMENDMENT
OF AMENDED AND
RESTATED 2012 INCENTIVE PLAN.
THE AFFIRMATIVE VOTE OF THE MAJORITY OF SHARES
PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE MEETING AND
ENTITLED TO VOTE ON THE SUBJECT MATTER IS REQUIRED FOR
THE ADOPTION OF THE
PROPOSED AMENDMENT.
39
Some
banks, brokers and other nominee record holders may be
participating in the practice of
“
householding
”
proxy statements and annual
reports. This means that only one copy of our proxy statement and
2017 Annual Report may have been sent to multiple stockholders in
your household. We will promptly deliver a separate copy of either
document to you if you contact us at: TG Therapeutics, Inc., 2
Gansevoort Street, 9
th
Floor, New York, New
York 10014, Attn: Sean A. Power. You may also contact us at (212)
554-4484.
If you
want to receive separate copies of the proxy statement and annual
report in the future, or if you are receiving multiple copies and
would like to receive only one copy for your household, you should
contact your bank, broker, or other nominee record holder, or you
may contact us at the above address or phone number.
Only
proper proposals under Rule 14a-8 of the Exchange Act which are
timely received will be included in the proxy materials for our
next annual meeting. In order to be considered timely, such
proposal must be received by our Corporate Secretary, Sean A.
Power, at 2 Gansevoort Street, 9
th
Floor, New York, New
York 10014, no later than December 31, 2018. We suggest that
stockholders submit any stockholder proposal by certified mail,
return receipt requested.
Our
Amended and Restated Bylaws require stockholders to provide advance
notice to the Company of any stockholder director nomination(s) and
any other matter a stockholder wishes to present for action at an
annual meeting of stockholders (other than matters to be included
in our proxy statement, which are discussed in the previous
paragraph). In order to properly bring business before an annual
meeting, our Amended and Restated Bylaws require, among other
things, that the stockholder submit written notice thereof
complying with our Amended and Restated Bylaws to Sean A. Power,
our Corporate Secretary, at the above address, not less than 60
days nor more than 90 days prior to the anniversary of the
preceding year
’
s annual
meeting. Therefore, the Company must receive notice of a
stockholder proposal submitted other than pursuant to Rule 14a-8
(as discussed above) no sooner than March 15, 2019, and no later
than April 14, 2019. If a stockholder fails to provide timely
notice of a proposal to be presented at our 2019 Annual Meeting of
Stockholders, the proxy designated by our Board will have
discretionary authority to vote on any such proposal that may come
before the meeting.
Our
Board does not know of any other matters that may come before the
meeting. However, if any other matters are properly presented to
the meeting, it is the intention of the person named in the
accompanying proxy card to vote, or otherwise act, in accordance
with their judgment on such matters.
We will
bear the cost of solicitation of proxies. In addition to the
solicitation of proxies by mail, our officers and employees may
solicit proxies in person or by telephone. We may reimburse brokers
or persons holding stock in their names, or in the names of their
nominees, for their expenses in sending proxies and proxy material
to beneficial owners.
The
Audit Committee Report contained in this proxy statement is not
deemed filed with the SEC and shall not be deemed incorporated by
reference into any prior or future filings made by us under the
Securities Act of 1933, as amended or the Exchange Act, except to
the extent that we specifically incorporate such information by
reference. Our Annual Report on Form 10-K for the year ended
December
31, 2017,
delivered to you together with this proxy statement, is hereby
incorporated by reference.
40
EXHIBIT A
AMENDMENT TO THE
TG THERAPEUTICS, INC.
AMENDED AND RESTATED 2012 INCENTIVE PLAN
This
Amendment to the TG Therapeutics, Inc. Amended and Restated
2012 Incentive Plan (the “Plan”), is hereby adopted,
effective as of the date indicated below.
W I T N E S S E T H:
WHEREAS, TG
Therapeutics, Inc. (the “Company”) maintains the Plan,
and the Plan is currently in effect; and
WHEREAS, Section
16.1 of the Plan authorizes the Board or the Committee (as defined
in the Plan) to amend the Plan, subject to certain limitations,
including stockholder approval for certain amendments;
and
WHEREAS, the Board
has approved and authorized this Amendment to the Plan and has
recommended that the stockholders of the Company approve this
Amendment;
NOW,
THEREFORE, BE IT RESOLVED, that the Plan is hereby
amended
as
follows, subject to and effective as of the date of stockholder
approval hereof:
1. Section 5.1.
of the Plan is hereby amended by increasing the share references in
such section from 12,000,000 to 18,000,000
(a 6,000,000 increase
in the overall share reserve), so that such section reads in its
entirety as follows:
“5.1. NUMBER
OF SHARES. Subject to adjustment as provided in Sections 5.2 and
Section 15.1, the aggregate number of Shares reserved and available
for issuance pursuant to Awards granted under the Plan shall be
18,000,000. The maximum number of Shares that may be issued upon
exercise of Incentive Stock Options granted under the Plan shall be
18,000,000.”
2. Except
as specifically set forth herein, the terms of the Plan shall be
and remain unchanged, and the Plan as amended shall remain in full
force and effect.
The
foregoing is hereby acknowledged as being the Amendment to the TG
Therapeutics, Inc. Amended and Restated 2012 Incentive Plan,
as adopted by the Board on April 11, 2018, and approved by the
Company’s stockholders on June 13, 2018.
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TG THERAPEUTICS,
INC.
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By:
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Its:
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41
TABLE OF CONTENTS