Item 10. Directors, Executive Officers and Corporate Governance
DIRECTORS
Set forth below is certain biographical
information regarding our current directors.
Jonathan Christodoro
(age 40) –
Mr. Christodoro was appointed as a director of our company on October 7, 2013 and as Chairman of our Board of Directors on November
20, 2013. Mr. Christodoro has served as a Managing Director of Icahn Capital LP, the entity through which Carl C. Icahn manages
investment funds, since July 2012. Mr. Christodoro is responsible for identifying, analyzing and monitoring investment opportunities
and portfolio companies for Icahn Capital. Prior to joining Icahn Capital, from 2007 to 2012, Mr. Christodoro served in various
investment and research roles at P2 Capital Partners, LLC. Prior to P2 Capital Partners, Mr. Christodoro served in various investment
and research roles at Prentice Capital Management, LP and S.A.C. Capital Advisors, LP. Mr. Christodoro began his career as an investment
banking analyst at Morgan Stanley, where he focused on merger and acquisition transactions across a variety of industries. Mr.
Christodoro has been a director of: Cheniere Energy, Inc., a developer of natural gas liquefaction and export facilities and related
pipelines, since August 2015; PayPal Holdings, Inc., a technology platform company that enables digital and mobile payments worldwide,
since June 2015; Lyft, Inc., a mobile ride-sharing application, since May 2015; and Herbalife Ltd., a nutrition company, since
April 2013. Mr. Christodoro was previously a director of eBay Inc., a global commerce and payments company, from March 2015 to
July 2015, Hologic, Inc., a supplier of diagnostic, medical imaging and surgical products, from December 2013 to March 2016, and
Talisman Energy Inc., an independent oil and gas exploration and production company, from December 2013 to May 2015. Mr. Christodoro
received an M.B.A. from the University of Pennsylvania’s Wharton School of Business with Distinction, majoring in Finance
and Entrepreneurial Management. Mr. Christodoro received a B.S. in Applied Economics and Management Magna Cum Laude with Honors
Distinction in Research from Cornell University. Mr. Christodoro also served in the United States Marine Corps.
Odysseas Kostas, M.D.
(age
41) – Dr. Kostas was appointed as a director of our company on September 25, 2013. Since January 2016, Dr. Kostas has been
a senior analyst at Sarissa Capital Management LP, an investment firm focused on the health care industry. Prior to joining Sarissa
Capital Management LP, Dr. Kostas covered the biotechnology and pharmaceutical industries, most recently as Director, at Evercore
ISI (formerly known as International Strategy & Investment), a full service broker-dealer that provides macro and fundamental
research, sales, and trading services to customers. Prior to that, Dr. Kostas was a consultant - senior associate analyst covering
the biotechnology industry at Sanford C. Bernstein and Co. from May 2011 to August 2011. Prior to that, Dr. Kostas worked at the
Greenwich Hospital/Yale New Haven Health as hospitalist from 2008 to 2011 and was member of hospital committees from 2003 to 2011.
Dr. Kostas was also a member of the board of directors at Mast Therapeutics (then known as ADVENTRX Pharmaceuticals) from February
2010 to May 2011, and a strategy consultant at Mast Therapeutics from December 2008 to January 2009. Dr. Kostas has an M.D. from
the University of Texas Southwestern Medical School, and a B.S. from Massachusetts Institute of Technology.
Jennifer I. McNealey
(age 42) –
Ms. McNealey was appointed as a director of our company on September 25, 2013. Since February 2015, Ms. McNealey has been Senior
Director Investor Relations and serves as a member of the management team at Calithera Biosciences Inc. Prior to joining Calithera
Biosciences Inc., Ms. McNealey served as an advisor to biotechnology companies. In 2005, Ms. McNealey founded Laurient LLC, a research
company focused on the biotechnology and pharmaceutical industries, where she worked until 2012. Prior to founding Laurient LLC,
Ms. McNealey served as a portfolio manager and biotechnology analyst at various firms, including Paramount Capital, Franklin Templeton,
Amerindo Investment Advisors and Morgan Stanley Dean Witter Advisors. Ms. McNealey has a B.A. and an M.H.A. from Cornell University.
There are no family relationships among
any of our directors or executive officers.
EXECUTIVE OFFICERS
Set forth below is certain biographical
information regarding our current executive officers.
Andrew Rackear
(age 62) – Mr.
Rackear has served as our Chief Executive Officer and Secretary since March 31, 2016. Prior to that, since November 2013, Mr. Rackear
provided consulting services to the Company. Mr. Rackear previously served as the Company’s Vice President and General Counsel
from April 2010 to November 2013. Prior to that, Mr. Rackear served as Senior Vice President and General Counsel for NPS Pharmaceuticals,
and Vice President and General Counsel for Chugai Pharma USA and Amersham Biosciences Corp, where he also served as President of
North American Operations. Prior to that, Mr. Rackear engaged in litigation and commercial law practice at Marks & Murase and
served as Associate General Counsel at Sharp Electronics Corp. Mr. Rackear holds a J.D. from New York University School of Law.
Richard L. Feinstein
(age 72) –
Mr. Feinstein has served as of our Vice President-Finance and Chief Financial Officer since March 31, 2016. Prior to that, Mr.
Feinstein served as our Vice President - Finance and Principal Financial Officer since December 13, 2013. Mr. Feinstein is a retired
partner of KPMG LLP and currently a private consultant providing management and financial advice to clients in a variety of industries.
From September 2010 to July 2013, as a consultant, he was the Chief Financial Officer of Ameritrans Capital Corporation. From April
2004 to December 2004, Mr. Feinstein, as a consultant, served as Chief Financial Officer for Image Technology Laboratories, Inc.,
a developer and provider of radiological imaging, archiving and communications systems. From December 1997 to October 2002, Mr.
Feinstein was a Senior Vice-President and Chief Financial Officer for The Major Automotive Companies, Inc., formerly a diversified
holding company, but now engaged solely in retail automotive dealership operations. Mr. Feinstein has served on boards of both
publicly-held and not-for-profit enterprises. Mr. Feinstein previously served as a board member and chair of the audit committee
of MKTG, Inc.; a board member and chief financial officer of the not-for-profit USA Fitness Corps.; a board member and chair of
the audit committee of EDGAR Online, Inc., a board member and chair of the finance committee of the New York Road Runners and a
member of the executive committee of the Association for a Better New York. Mr. Feinstein, a certified public accountant, received
a BBA degree from Pace University. Mr. Feinstein also served in the United States Marine Corps.
CORPORATE GOVERNANCE
Standing Committees of our Board of Directors
(our “Board”)
Finance and Audit Committee
All three current members of our Board currently
constitute the Finance and Audit Committee. Accordingly, our entire Board currently acts as the Finance and Audit Committee. When
our Board acts as the Finance and Audit Committee, Mr. Christodoro acts as the Chairman of the Finance and Audit Committee. The
Finance and Audit Committee held four meetings during the fiscal year ended December 31, 2015.
In evaluating the composition of our Board
when acting as the Finance and Audit Committee, our Board has determined that each current member of our Board is independent as
defined by the listing standards of The NASDAQ Stock Market (“NASDAQ”). Our Board has determined that Mr. Christodoro
satisfies the definition of “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K.
The primary purpose of the Finance and Audit
Committee is to monitor the integrity of our company’s financial reporting process and financial statements, the systems
of internal controls and controls over financial reporting, our company’s compliance with legal and regulatory requirements,
and the performance and independence of our company’s independent registered public accounting firm. The Finance and Audit
Committee is responsible for discussing with management to consider the adequacy of our company’s internal controls and the
financial reporting process. The Finance and Audit Committee also is responsible for discussing these matters with our company’s
independent registered public accounting firm. In addition, the Finance and Audit Committee is responsible for reviewing our financial
statements and discussing them with management and our company’s independent registered public accounting firm before those
financial statements are filed with the SEC. The charter of the Finance and Audit Committee may be found on our website at www.enzon.com.
Compensation Committee
All three current members of our Board and
currently constitute the Compensation Committee. Accordingly, our entire Board currently acts as the Compensation Committee. When
our Board acts as the Compensation Committee, Ms. McNealey acts as the Chairwoman of the Compensation Committee. Our Board acting
as the Compensation Committee held two meetings during the fiscal year ended December 31, 2015.
In evaluating the composition of our Board
when acting as the Compensation Committee, our Board has determined that each current member of our Board is independent as defined
by the listing standards of NASDAQ.
The primary duties and responsibilities
of the Compensation Committee are to oversee our overall compensation structure, policies and programs, and assess whether our
compensation structure establishes appropriate incentives for management and employees, to administer our incentive-compensation
and equity-based compensation plans, to review and approve corporate goals and objectives, if any, relevant to the compensation
of our Principal Executive Officer and set the compensation of other executive officers based upon the recommendation of our Principal
Executive Officer, and to review and recommend employment agreements and severance arrangements, if any, for senior officers, including
change of control provisions, plans or agreements, among other things.
The Compensation Committee has the authority
to retain, at our expense, such outside counsel, experts and other advisors as it determines appropriate to assist it in the performance
of its functions, including the sole authority to retain and terminate any compensation consultant and to approve the consultant’s
fees and other retention terms.
The charter of the Compensation Committee
may be found on our website at www.enzon.com.
Governance and Nominating Committee
All three current members of our Board currently
constitute the Governance and Nominating Committee. Accordingly, our entire Board currently acts as the Governance and Nominating
Committee. When our Board acts as the Governance and Nominating Committee, Dr. Kostas acts as the Chairman of the Governance and
Nominating Committee. Our Board acting as the Governance and Nominating Committee held no meetings during the fiscal year ended
December 31, 2015.
In evaluating the composition of our Board
when acting as the Governance and Nominating Committee, our Board has determined that each current member of our Board is independent
as defined by the listing standards of NASDAQ.
The Governance and Nominating Committee
is responsible for reviewing and setting corporate governance policy and is responsible for making recommendations on organization
and procedures, performance evaluation of our Board and individual directors, and nomination of directors. The Governance and Nominating
Committee’s Charter may be found on our website at www.enzon.com.
Code of Conduct
Our Board has adopted a Code of Conduct
that is applicable to all of our directors, officers and employees. Any material changes made to the Code of Conduct or any waivers
granted to any of our directors and executive officers will be publicly disclosed on our website at www.enzon.com within four business
days of such material change or waiver. A copy of our Code of Conduct is available on the Corporate Governance page of our website
at www.enzon.com or upon request, without charge, by contacting us at (732) 980-4500 or through an e-mail request to investor@enzon.com.
Section 16(a) Beneficial Ownership Reporting Compliance
Ownership of and transactions in our common
stock by our executive officers and directors and owners of 10% or more of outstanding our common stock are required to be reported
to the SEC pursuant to Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). Based solely on our
review of these reports and written representations from certain reporting persons, during the fiscal year ended December 31, 2015,
all such reports were filed in a timely manner.
Item 11. Executive Compensation
Named Executive Officers
The following individuals were our named
executive officers for fiscal year 2015, whom we refer to in this Form 10-K/A as our named executive officers:
George W. Hebard III
– During
fiscal year 2015, Mr. Hebard served as our Interim Principal Executive Officer, Interim Chief Operating Officer and Secretary on
a consulting basis at a rate of $250 per hour for each hour or portion of an hour worked, together with reimbursement for reasonable
expenses incurred by him in performing his services pursuant to the terms of a separation agreement that was entered into on December
13, 2013. Mr. Hebard resigned as our Interim Principal Executive Officer, Interim Chief Operating Officer and Secretary effective
March 31, 2016.
Richard L. Feinstein
– Mr.
Feinstein currently serves as our Vice President - Finance and Chief Financial Officer. During fiscal year 2015, Mr. Feinstein
served as our Vice President-Finance and Principal Financial Officer on a consulting basis at a rate of $225 per hour for each
hour worked, together with reimbursement for reasonable out-of-pocket expenses incurred by him in performing his services pursuant
to the terms of an independent contractor agreement that was entered into on December 13, 2013.
Historical Compensation of our Named Executive
Officers
The following table sets forth information
concerning compensation earned for services rendered to us by our named executive officers for fiscal year 2015.
Summary Compensation Table
Name and Principal
Position
|
|
Year
|
|
Salary
($)
(1)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
|
|
|
Non-Equity
Incentive Plan Compensation
($)
|
|
|
All Other Compensation
($)
(2)
|
|
|
Total
($)
|
|
George W. Hebard III
|
|
2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,250
|
|
|
|
40,250
|
|
Former Interim Principal Executive Officer, Interim Chief Operating Officer and Secretary
|
|
2014
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
64,708
|
|
|
|
64,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard L. Feinstein
|
|
2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
123,964
|
|
|
|
123,964
|
|
Vice President - Finance and Chief Financial Officer
|
|
2014
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
138,094
|
|
|
|
138,094
|
|
__________________
|
(1)
|
Neither Mr. Hebard nor Mr. Feinstein received a base salary for fiscal year 2015. See the “All Other Compensation”
column for information regarding the fees and expenses that each of them received for services rendered as an executive officer
on a consulting basis for fiscal year 2015.
|
|
(2)
|
All Other Compensation for fiscal year 2015 comprises the following:
|
|
•
|
For Mr. Hebard, $40,250 consists of fees and expenses related to his services rendered as our Interim Principal Executive Officer,
Interim Chief Operating Officer and Secretary on a consulting basis.
|
|
•
|
For Mr. Feinstein, $123,964 consists of fees and expenses related to his services rendered as our Vice President - Finance
and Principal Financial Officer pursuant to the terms of his December 13, 2013 independent contractor agreement.
|
All Other Compensation for fiscal year 2014 comprises
the following:
|
•
|
For Mr. Hebard, $28,836 consists of CTO amounts paid out following cessation of his employment and the remaining $35,872 consists
of fees and expenses related to his services rendered as our Interim Principal Executive Officer, Interim Chief Operating Officer
and Secretary on a consulting basis.
|
|
•
|
For Mr. Feinstein, $138,094 consists of fees and expenses related to his services rendered as our Vice President - Finance
and Principal Financial Officer.
|
Outstanding Equity Awards at December 31, 2015
The following table sets forth information
with respect to unexercised options, and restricted stock awards and restricted stock units that have not vested for each of our
named executive officers as of December 31, 2015. All of the information set forth in the following table reflects equitable adjustments
that were approved by the Compensation Committee and made to then outstanding stock options and restricted stock units in connection
with the special cash dividend of $1.60 per share of common stock that we paid on June 4, 2013, the special cash dividend of $0.45
per share of common stock that we paid on December 23, 2013, the special cash dividend of $0.10 per share of common stock that
we paid on January 28, 2015, the special cash dividend of $0.50 per share of common stock that we paid on August 12, 2015 and the
special cash dividend of $0.25 per share of common stock that we paid on December 29, 2015.
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
|
Option
Expiration
Date
|
|
|
Number
of
Shares or
Units of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value
of Unearned
Shares,
Units
or Other
Rights That
Have Not
Vested ($)
|
|
George W. Hebard III
(1)
|
|
|
55,125
|
|
|
|
18,375
|
|
|
|
18,375
|
|
|
|
2.13
|
|
|
|
11/7/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
3,432
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.23
|
|
|
|
2/27/2022
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Richard L. Feinstein
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
__________________
|
(1)
|
Of Mr. Hebard’s unvested
option awards, 18,375 options will vest on November 7, 2016 pursuant to his separation agreement.
|
Potential Payments Upon Termination or Change in Control
None of our named executive officers is
covered by a severance or change in control agreement and, accordingly, none of our named executive officers would have been entitled
to receive any termination or change in control-related payments as of December 31, 2015.
DIRECTOR COMPENSATION
Amended and Restated 2013 Outside Director Compensation
Plan
Under the Amended and Restated 2013 Outside
Director Compensation Plan, each non-employee director (i) receives an annual cash retainer of $30,000, (ii) for service as chair
of the Finance and Audit Committee receives an additional annual cash retainer of $10,000 and (iii) for service as a member of
the Finance and Audit Committee receives an additional annual cash retainer of $5,000. These annual cash retainers are payable
quarterly at the end of each quarter.
Total Director Compensation
A summary of compensation paid to each of
our directors during fiscal year ended December 31, 2015 is set forth below.
Name
|
|
Fees
Earned or Paid in Cash
($)
|
|
|
Stock
Awards
($)
(1)
|
|
|
Option
Awards
($)
(2)
|
|
|
Total
($)
|
|
Jonathan Christodoro
|
|
|
40,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
40,000
|
|
Odysseas Kostas
|
|
|
35,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
35,000
|
|
Jennifer I. McNealey
|
|
|
35,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
35,000
|
|
__________________
(1)
As of December 31, 2015, none of our directors held any outstanding unvested restricted stock units.
(2)
As of December 31, 2015, none of our directors held any outstanding stock options.