UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the
Registrant [ ]
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a -12
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BIOSPECIFICS TECHNOLOGIES CORP.
(Name of Registrant as Specified in its Charter)
___________________________________________________________
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]
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No fee required
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which
transaction applies:
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Aggregate number of securities to which
transaction applies:
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(3)
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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):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary
materials.
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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.
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(6)
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Amount Previously Paid:
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(7)
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR
STREET
LYNBROOK, NEW YORK 11563
516-593-7000
April 28, 2017
Dear Stockholder:
On behalf of the Board of
Directors of BioSpecifics Technologies Corp. (the Company), I invite you to
attend our 2017 Annual Meeting of Stockholders (the 2017 Annual Meeting). The
2017 Annual Meeting will be held on Thursday, June 14, 2017, at 11:00 a.m.,
Eastern Daylight Time, at the offices of Morgan, Lewis & Bockius LLP, 101
Park Avenue, New York, New York 10178.
The matters to be voted upon at
the 2017 Annual Meeting are listed in the Notice of the 2017 Annual Meeting and
more fully described in the proxy statement accompanying this letter (the Proxy
Statement).
At the 2017 Annual Meeting, you
will be provided an opportunity to ask questions regarding the matters to be
voted upon, gain an up-to-date perspective on the Company and its activities,
and meet the directors of the Company.
We know that many of our
Companys stockholders (each, a Stockholder, and collectively, the
Stockholders) will be unable to attend the 2017 Annual Meeting in person. We,
therefore, are soliciting proxies so that each Stockholder has an opportunity to
vote on the matters that are scheduled to come before the Stockholders at the
2017 Annual Meeting. Whether or not you plan to attend, please take the time now
to read the Proxy Statement and vote and submit your proxy by signing, dating
and returning your proxy card promptly in the enclosed postage-paid envelope.
You may revoke your proxy at any time prior to the time it is voted at the 2017
Annual Meeting. Regardless of the number of Company shares you own, your
presence in person or by proxy is important for quorum purposes and your vote is
important for proper corporate action.
Thank you for your continuing
interest in the Company. We look forward to seeing you at the 2017 Annual
Meeting.
If you have any questions about
the Proxy Statement, please contact me at (516) 593-7000.
Sincerely,
/s/ Thomas
Wegman
Thomas
Wegman
President
BIOSPECIFICS TECHNOLOGIES CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 14,
2017
To the Stockholders of BIOSPECIFICS TECHNOLOGIES CORP.:
Notice is hereby given that the
2017 Annual Meeting of Stockholders (the 2017 Annual Meeting) of BioSpecifics
Technologies Corp., a Delaware corporation (the Company), will be held on
Thursday, June 14, 2017, at 11:00 a.m., Eastern Daylight Time, at the offices of
Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178 for
the following purposes:
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1.
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To elect Dr. Mark Wegman, Toby Wegman and Jennifer Chao
to the third class of directors of the Board of Directors of the Company,
each to serve for a three-year term as specified in the attached Proxy
Statement;
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2.
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To approve, on an advisory basis, the executive
compensation of the named executive officer as disclosed in the attached
Proxy Statement;
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3.
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To indicate your preference, on an advisory basis, as to
whether future advisory votes on executive compensation should be held
every one, two or three years; and
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4.
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To ratify the appointment of EisnerAmper LLP as the
independent registered public accounting firm for the Company for the
fiscal year ending December 31, 2017.
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We will also consider and act
upon such other business as may properly come before the 2017 Annual Meeting or
any adjournment thereof.
Our Board of Directors recommends
that you vote
FOR
each of the nominees for the third class of directors
(Proposal No. 1),
FOR
non-binding resolution to approve the
compensation of the named executive officer (Proposal No. 2),
FOR
one-year intervals with respect to the non-binding resolution to recommend the
frequency of future non-binding votes of the Companys Stockholders regarding
the compensation of the Companys named executive officer (Proposal No. 3), and
FOR
ratification of the independent registered public accounting firm
(Proposal No. 4).
Only the Companys stockholders
of record at the close of business on April 21, 2017 are entitled to this notice
(this Notice) and to vote at the 2017 Annual Meeting and any adjournment
thereof.
A proxy statement more fully
describing the matters to be considered at the 2017 Annual Meeting (the Proxy
Statement) is attached to this Notice. Copies of our 2016 Annual Report on Form
10-K (including the financial statements and schedules thereto, as filed with
the Securities and Exchange Commission) accompany this Notice, but are not
deemed to be part of the Proxy Statement.
It is important that your
shares be represented at the meeting. We urge you to review the attached Proxy
Statement and, whether or not you plan to attend the meeting in person, please
vote your shares promptly by completing, signing and returning the accompanying
proxy card. You do not need to affix postage to the enclosed reply envelope if
you mail it within the United States. If you attend the meeting, you may
withdraw your proxy and vote your shares personally.
If your shares are not registered
in your own name and you would like to attend the 2017 Annual Meeting, please
ask the bank, broker or other institution that holds your shares to provide you
with evidence of your share ownership. This will enable you to gain admission to
the meeting.
All stockholders are extended an
invitation to attend the meeting.
By Order of the Board of Directors,
/s/ Thomas Wegman
Thomas
Wegman
President
April 28, 2017
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Important Notice Regarding the Availability of Proxy
Materials for the Stockholder Meeting To Be Held on June 14, 2017
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The Proxy Statement, Proxy Card and our 2016 Annual
Report on Form 10-K are available at
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http://www.materials.proxyvote.com/090931.
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2
BIOSPECIFICS TECHNOLOGIES CORP.
35 WILBUR STREET
LYNBROOK, NEW YORK 11563
________________
PROXY STATEMENT FOR THE 2017
ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Thursday, June 14, 2017 at
11:00 a.m., Eastern Daylight Time (EDT)
________________
This proxy statement (the Proxy
Statement) and the accompanying proxy card (the Proxy Card) are being
furnished with respect to the solicitation of proxies by the Board of Directors
(the Board) of BioSpecifics Technologies Corp., a Delaware corporation (the
Company, BioSpecifics or we), for the 2017 Annual Meeting of Stockholders
(the 2017 Annual Meeting). The 2017 Annual Meeting will be held at 11:00 a.m.,
EDT, on Thursday, June 14, 2017, and at any adjournment thereof, at the offices
of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178.
The approximate date on which the
Proxy Statement and Proxy Card are intended to be sent or given to the Companys
stockholders (each a Stockholder and collectively, the Stockholders) is
April 28, 2017.
The purposes of the 2017 Annual
Meeting are to seek Stockholder approval of the following two proposals:
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(i)
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to elect Dr. Mark Wegman, Toby Wegman and Jennifer Chao
to the third class of directors to the Board, each for a three-year
term;
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(ii)
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to approve, on an advisory basis, the executive
compensation of the named executive officer as disclosed in the attached
Proxy Statement;
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(iii)
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to indicate your preference, on an advisory basis, as to
whether future advisory votes on executive compensation should be held
every one, two or three years; and
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(iv)
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to ratify the appointment of EisnerAmper LLP as the
independent registered public accounting firm for the Company for the
fiscal year ending December 31, 2017.
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We will also consider and act
upon any other matters that properly come before the Annual Meeting or any
adjournment or postponement thereof.
Who May Vote
Stockholders of record of our
common stock (the Common Stock) as of the close of business on April 21, 2017
(the Record Date) are entitled to notice and to vote at the 2017 Annual
Meeting and any adjournment thereof. As of the Record Date, we had issued and
outstanding 7,171,510 shares of Common Stock. We have no other securities
entitled to vote at the 2017 Annual Meeting. Each share of Common Stock is
entitled to one vote on each matter. There is no cumulative voting.
A list of Stockholders entitled
to vote at the 2017 Annual Meeting will be available at the 2017 Annual Meeting
and will also be available for ten (10) days prior to the 2017 Annual Meeting,
during regular office hours, at the executive offices of the Company, located at
35 Wilbur Street, Lynbrook, New York 11563, by contacting the President of the
Company.
The presence at the 2017 Annual
Meeting of a majority of the outstanding shares of Common Stock as of the Record
Date, represented in person or by proxy, is required for a quorum. Abstentions
and broker non-votes, if any, will be counted as present and entitled to vote
for purposes of determining whether a quorum is present for the transaction of
business at such meeting.
Broker non-votes are shares
represented at the 2017 Annual Meeting held by brokers, bankers or other
nominees (i.e., in street name) and are not voted on a particular proposal
because the nominee does not have discretionary voting power with respect to
that item and has not received instructions from the beneficial owner.
Generally, brokerage firms may vote to ratify the selection of independent
auditors and on other discretionary or routine items. In contrast, brokerage
firms may not vote to elect directors, because those proposals are considered
non-discretionary items. Accordingly, if you do not instruct your broker how
to vote your shares on non-discretionary matters, your broker will not be
permitted to vote your shares on these matters. We refer to this as a broker
non-vote.
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Method of Voting
If you were a record holder of
shares of Common Stock on April 21, 2017, you may vote as follows:
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By Mail.
Complete and mail your Proxy Card in the
postage prepaid envelope you receive, and return the Proxy Card to
MacKenzie Partners, Inc., Proxy Tabulation, Madison Square Station, P.O.
Box 865, New York, NY 101160-1051. Complete instructions are included on
the Proxy Card. Your proxy will be voted in accordance with your
instructions. If you sign and return the enclosed Proxy Card, but do not
specify how you want your shares voted, they will be voted
FOR
each of the nominees for the third class of directors,
FOR
non-binding resolution to approve the compensation of the named
executive officer,
FOR
one-year intervals with respect to the
non-binding resolution to recommend the frequency of future non-binding
votes of the Companys Stockholders regarding the compensation of the
Companys named executive officer and
FOR
ratification of the
independent registered public accounting firm and will be voted according
to the discretion of the proxy holder named in the Proxy Card upon any
other business that may properly be brought before the meeting and at all
adjournments and postponements thereof.
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In Person at the Meeting.
If you attend the
meeting, be sure to bring a form of personal picture identification with
you. You may deliver your completed Proxy Card in person, or you may vote
by completing a ballot, which will be available at the meeting. Directions
to the 2017 Annual Meeting may be obtained by visiting
https://www.morganlewis.com/locations/new-york and clicking on
Directions beneath the address 101 Park Ave., New York, NY 10178-0060,
United States.
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If your shares of Common Stock
are held in street name through a bank, broker or other institution, then that
bank, broker or other institution is considered the holder of record of your
shares, and you should refer to information forwarded to you by such holder of
record for your voting options. You may vote as follows:
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By Internet or By Telephone.
You will receive
instructions from your broker or other nominee if you are permitted to
vote by internet or telephone.
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By Mail.
You will receive instructions from your
broker or other nominee explaining how to vote your shares.
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In Person at the Meeting.
If you attend the
meeting, in addition to picture identification, you should: (1) bring an
account statement or a letter from the record holder indicating that you
owned the shares as of the Record Date,
and
(2) contact the broker
or other nominee who holds your shares to obtain a brokers Proxy Card and
bring it with you to the meeting. Directions to the 2017 Annual Meeting
may be obtained by visiting
https://www.morganlewis.com/locations/new-york
and clicking on
Directions beneath the address 101 Park Ave., New York, NY 101780060,
United States.
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Boards Recommendations
The Board recommends a vote:
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Proposal 1
:
FOR
the election of Dr. Mark
Wegman, Toby Wegman and Jennifer Chao to the third class of directors to
the Board, each for a three-year term.
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Proposal 2
:
FOR
the non-binding
resolution to approve the compensation of Thomas L. Wegman.
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Proposal 3
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FOR
one-year intervals with
respect to the non-binding resolution to recommend the frequency of future
non- binding votes of the Companys Stockholders regarding the
compensation of the Companys named executive officer
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Proposal 4
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FOR
ratification of the
appointment of EisnerAmper LLP as the Companys independent registered
public accounting firm for the fiscal year ending December 31, 2017.
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4
Required Vote
The shares of Common Stock
represented by any proxy duly given will be voted at the 2017 Annual Meeting in
accordance with the instructions of the Stockholder. If no specific instructions
are given, the shares will be voted
FOR
each of the nominees for the
third class of directors,
FOR
non-binding resolution to approve the
compensation of the named executive officer,
FOR
one-year intervals
with respect to the non-binding resolution to recommend the frequency of future
non-binding votes of the Companys Stockholders regarding the compensation of
the Companys named executive officer and
FOR
ratification of the
independent registered public accounting firm. In addition, if any other matters
come before the 2017 Annual Meeting, the persons named in the accompanying Proxy
Card will vote in accordance with their best judgment with respect to such
matters. Each share of Common Stock outstanding on the Record Date will be
entitled to one vote on all matters.
Required Vote - Election of
Directors (Proposal No. 1).
Directors shall be elected by a plurality of the
votes cast by Stockholders present in person or represented by proxy at the 2017
Annual Meeting and entitled to vote on the election of directors. This means
that the three individuals receiving the highest number of
FOR
votes
will be elected as directors. Abstentions and broker non-votes will not be
treated as votes cast for this purpose and, therefore, will not affect the
outcome of the election.
Required Vote - Ratification
of the Selection of Independent Registered Public Accounting Firm (Proposal No.
4).
The affirmative vote of a majority of shares of our Common Stock,
present in person or represented by proxy at the 2017 Annual Meeting and
entitled to vote, is required to ratify the appointment of our independent
registered public accounting firm. An abstention is treated as present and
entitled to vote and therefore has the effect of a vote against ratification
of the independent registered public accounting firm. Because the ratification
of the independent registered public accounting firm is a routine matter, a
nominee holding shares in street name may vote on this proposal in the absence
of instructions from the beneficial owner.
The advisory votes on executive
compensation and the frequency of future Stockholder advisory votes on executive
compensation are non-binding; however, the Company will record the number of
votes cast in favor of and against each proposal and will report the voting
results at the 2017 Annual Meeting.
If there are insufficient votes
to approve these proposals, your proxy may be voted by the persons named in the
Proxy Card to adjourn the 2017 Annual Meeting in order to solicit additional
proxies in favor of the approval of such proposals. If the 2017 Annual Meeting
is adjourned or postponed for any purpose, at any subsequent reconvening of the
meeting, your proxy will be voted in the same manner as it would have been voted
at the original convening of the 2017 Annual Meeting unless you withdraw or
revoke your proxy.
Revoking Your Proxy
Even if you execute a proxy, you
retain the right to revoke it and to change your vote by notifying us at any
time before your proxy is voted. Such revocation may be effected in writing by
execution of a subsequently dated proxy, or by a written notice of revocation,
sent to the attention of the Companys President at the address of our principal
office set forth above, or by your attendance and voting in person at the 2017
Annual Meeting. Unless so revoked, the shares represented by proxies, if
received in time, will be voted in accordance with the directions given therein.
If the 2017 Annual Meeting is
postponed or adjourned for any reason, at any subsequent reconvening of the 2017
Annual Meeting, all proxies will be voted in the same manner as the proxies
would have been voted at the original convening of the 2017 Annual Meeting
(except for any proxies that have at that time effectively been revoked or
withdrawn).
You are requested, regardless of
the number of shares you own or your intention to attend the 2017 Annual
Meeting, to sign and return the Proxy Card in the enclosed envelope. You do not
need to affix postage to the enclosed reply envelope if you mail it within the
United States.
Solicitation of Proxies
The expenses of solicitation of
proxies will be paid by the Company. We may solicit proxies by mail or by phone
through agents of the Company. Additionally, the officers and employees of the
Company, who will receive no extra compensation therefor, may solicit proxies
personally, by telephone, facsimile or mail. The Company plans to utilize
MacKenzie Partners, Inc. to solicit proxies and the estimated cost for such
solicitation services is anticipated to be approximately $30,000. The Company
will also reimburse banks, brokers or other institutions for their expenses
incurred in sending proxies and proxy materials to the beneficial owners of
shares held by them.
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Dissenters Right of Appraisal
Under the Delaware General
Corporation Law, Stockholders are not entitled to any appraisal or similar
rights of dissenters with respect to any of the proposals to be acted upon at
the 2017 Annual Meeting.
Delivery of Proxy Materials to Households
Only one copy of the Companys
2016 Annual Report on Form 10-K (including the financial statements and
schedules thereto) as filed with the Securities and Exchange Commission (the
SEC) (the 2016 Annual Report) and the Proxy Statement will be delivered to
an address where two or more Stockholders reside unless we have received
contrary instructions from a Stockholder residing at such address. A separate
Proxy Card will be delivered to each Stockholder at the shared address.
If you are a Stockholder who
lives at a shared address and you would like additional copies of the 2016
Annual Report, the Proxy Statement, or any future annual reports or proxy
statements, please contact Thomas Wegman, President, BioSpecifics Technologies
Corp., 35 Wilbur Street, Lynbrook, New York 11563, telephone number (516)
593-7000, and we will promptly mail you copies. The Proxy Statement and the 2016
Annual Report are also available at
http://www.materials.proxyvote.com/090931.
If you are receiving multiple
copies of the Proxy Statement and 2016 Annual Report at your household and wish
to receive only one, please contact Thomas Wegman at the mailing address or
phone number listed above.
6
Directors and Executive Officers
Set forth below are the names of
our current directors and officers, their ages, all positions and offices that
they hold with us, the period during which they have served as such, and their
business experience during at least the last five years.
DR. MARK WEGMAN.
Dr. Wegman, age 67, is currently a
director on the Board and has served as a director of the Company since June
2007. He joined International Business Machines (IBM) in 1975 where Dr. Wegman
is currently Chief Scientist Computing as a Service with worldwide
responsibilities in IBMs Research laboratories. Dr. Wegman is recognized for
his significant contributions to computer algorithms and compiler optimization
that have deeply influenced many areas of computer science and practice. This
work was recognized by the Special Interest Group On Programming Languages in
2006 with its Programming Languages Achievement Award. He is an IBM Fellow,
which is IBMs highest technical honor, and a Fellow of the ACM and the IEEE. He
is also a member of the National Academy of Engineering. Dr. Wegman is the
author of over 30 publications in the field of Computer Science. Dr. Wegman
received his doctorate in Computer Science from the University of California at
Berkeley and has been named a Distinguished Alumnus. Dr. Wegman is the son of
our former CEO and Chairman, Edwin H. Wegman. Dr. Wegman is the brother of
Thomas L. Wegman, a current director and President of the Company, and the
stepson of Toby Wegman, a current director of the Company. Dr. Wegman has been
nominated for re-election at the 2017 Annual Meeting. The Company believes that
Dr. Wegman is qualified to serve as a member of our Board because of his
business and professional experience.
TOBY WEGMAN.
Ms. Wegman, age 82, is currently a director
on the Board and has served as a director of the Company since June 2007. Ms.
Wegman is the widow of our former CEO and Chairman, Edwin H. Wegman. Ms. Wegman
has had a range of business-related work experiences. For five years she owned
and operated a womens apparel business and prior to that managed a womens
retail clothing operation. She had also been actively involved in the management
of Edwin H. Wegmans business interests and finances for many years. Ms. Wegman
is the stepmother of Thomas L. Wegman and Dr. Mark Wegman, both of whom are
currently directors of the Company. Ms. Wegman is a member of the Lion of Judah,
and a lifetime member of both the National Council of Jewish Women and HADASSAH.
Ms. Wegman has been nominated for re-election at the 2017 Annual Meeting. The
Company believes that Ms. Wegman is qualified to serve as a member of our Board
because of her business and professional experience.
JENNIFER CHAO.
Ms. Chao, age 47, joined as a member of
our Board in April 2015. Ms. Chao is a biotech industry expert and Advisory
Analyst with CoreStrategies Management, LLC, a strategic consulting firm she
founded in 2008. Ms. Chao works integrally with senior managements and boards of
directors to provide transformational corporate and financial strategies for
maximizing core valuation, working as in-house investment banker and advisory
analyst. Previously, Ms. Chao was a Managing Director and Senior Lead
Biotechnology Securities Analyst with Deutsche Bank from 2004-2008 where her
research coverage spanned small, mid, and large-cap biotechnology companies. Her
research forte includes rare genetic diseases, cutting edge biotechnologies
(diagnostic and manufacturing), womens health, pulmonology, neurology,
nephrology, oncology, vaccines, cardiology, HIV/HCV, and osteoporosis. Ms. Chao
is also a former Managing Director and Senior Lead Biotechnology Analyst with
RBC Capital Markets and Vice President and Biotechnology Analyst with Leerink
Swann & Co. Ms. Chao received her B.A. majoring in Politics and Greek
Classics from New York University in 1992 and was a Research Fellow and
recipient of the 1996/1997 Massachusetts General Hospital/Harvard Medical School
Biomedical Research Career Award. Ms. Chao has extensive experience
understanding corporate finances and analyzing and evaluating financial
statements and financial and accounting issues. As a securities analyst, she has
published reports and articles on securities and financings in the biotechnology
field. As part of her duties as an analyst at CoreStrategies, Ms. Chao works
closely with senior management and boards, acting as in-house investment banker,
negotiating term-sheets and performing financial due diligence for acquisitions
and divestitures. As a former managing director and analyst at investment banks,
she vetted initial public offerings, follow-on offerings, private placements,
PIPES and private financings. She has familiarity with board and audit
functions. Ms. Chao held the following licenses, Series 7, 63, 86 and 87.
Through her work, Ms. Chao understands generally accepted accounting principles
(GAAP) and financial statements and can assess GAAP. Through her work as an
analyst and her substantial experience in completing financial due diligence,
she can interpret and forecast profit and loss statements, balance sheets, cash
flow statements, and valuations. Ms. Chao has been nominated for re-election at
the 2017 Annual Meeting. The Company believes that Ms. Chao is qualified to
serve as a member of our Board because of her business and professional
experience.
7
GEORGE GOULD.
Mr. Gould, age 79, is currently a director
on the Board and has served as a director of the Company since December 2011.
Mr. Gould is a practicing attorney and currently serves as a Principal of George
M. Gould, LLC and special counsel to Gibbons P.C., where he specializes in
biotechnology and pharmaceutical licensing and patent law. He has over 40 years
of experience in licensing with large pharmaceutical as well as start-up biotech
companies. Mr. Gould was employed at Hoffmann-La Roche Inc. from 1968 to 1996,
and at the time of his retirement from the company in 1996, he was serving as
Vice President of Licensing and Corporate Development and Chief Patent Counsel.
Prior to joining Hoffmann-La Roche Inc., he was a Senior Patent Attorney at Esso
Research & Engineering Co. for 6 years and worked as an organic chemist at
Merck & Co., Inc. for 3 years. He has also served as an adjunct professor at
Seton Hall University School of Law and as a lecturer at Rutgers University
School of Business. In addition, Mr. Gould has extensive experience acting as an
expert witness in patent cases. Mr. Gould has previously served as a member of
the Board of Tapestry Pharmaceuticals, the Board of Supratek Pharma Inc., the
Board of AngioGenex Inc., and the Board of Protein Design Labs, Inc. He earned
his bachelors degree in organic chemistry at The Johns Hopkins University in
1958 and conducted his graduate studies in chemistry at New York University from
1958 to 1960. Mr. Gould received his J.D. from Columbia University School of Law
in 1963 and his L.L.M. from New York University School of Law in 1973. The
Company believes that Mr. Gould is qualified to serve as a member of our Board
because of his business and professional experience.
MICHAEL SCHAMROTH.
Mr. Schamroth, age 77, is currently a
director on the Board and has served as a director of the Company since 2004. He
has been a partner of M. Schamroth & Sons in New York City for over 40
years. As a principal in this fourth-generation international diamond house, Mr.
Schamroth has extensive experience in dealing with all aspects of the trade,
from manufacturing to sales. He has been a member of the Diamond Manufacturers
and Importers Association since 1964, and has served on the Nominating and
Building Committees of the Diamond Dealers Club. In addition, Mr. Schamroth has
served as a member of the Board of South Nassau Communities Hospital since 1976,
the Board of the Winthrop-South Nassau University Health System since 1993 and
the Board of Sound Bank of North Carolina since 2002. He has been a member of
the Miami University Business Advisory Board since 1984 and served as its
Chairman from 1987-1988. He received his B.S. in Business from Miami University,
Oxford, Ohio. The Company believes that Mr. Schamroth is qualified to serve as a
member of our Board because of his business and professional experience.
DR. JYRKI MATTILA.
Dr. Mattila, age 62, joined as a
member of our Board in April 2015. Dr. Mattila has served as the Chief Business
Officer of Lipocine Inc. since May 2015. Previously, Dr. Mattila served as Chief
Business Officer at iCeutica Inc. Prior to joining iCeutica, from 2010 to 2013,
Dr. Mattila served as President and CEO of LZ Therapeutics, Inc. From February
2008 through March 2010, he worked at Auxilium Pharmaceuticals, Inc.
(Auxilium), serving as an Executive Vice President of Business Development,
Product Development and Technical Operations. From January 2005 to February
2008, he served as Executive Vice President of Business Development, Research
and Development and Technical Operations at Auxilium. From August 2003 to
January 2005 he served as Executive Vice President of Business Development at
Auxilium. From 1986 to July 2003, Dr. Mattila served in a series of positions at
Orion Corporation, including as President of Orion Pharma from 1996 to 2002.
During the past 5 years, he has served on the boards of Forendo Pharma Ltd.,
Hermo Pharma Ltd. and LZ Therapeutics, Inc., all privately-held pharmaceutical
companies. Dr. Mattila served as a director of Encorium Group Inc., a publicly
listed company, from November 1, 2006 to November 7, 2009. He received his M.D.
and Ph.D. in pharmacology from the University of Helsinki Medical School and his
M.B.A. from the Helsinki School of Economics. Dr. Mattila completed his
post-doctoral research fellowship at the University of Kansas Medical Center.
The Company believes that Dr. Mattila is qualified to serve as a member of our
Board because of his business and professional experience.
THOMAS WEGMAN.
Mr. Wegman, age 62, has served as an
officer of the Company for more than 20 years. He is our current President and
has served as our President since October 2005 and as a director since 1994.
Prior to such appointment as President, he served as the Executive Vice
President of the Company. He has over 30 years of experience in the
biopharmaceutical industry that encompasses managing company operations and drug
development, licensing, and registration. Mr. Wegman has had experience managing
the production, marketing and foreign registration activities related to an
avian vaccine business. Mr. Wegman has been instrumental in licensing
technologies from universities for use by the Company. He is the author of a
number of U.S. and foreign patents in the life sciences field. Mr. Wegman
received his B.A. from Boston University in 1977. Mr. Wegman is the author of
the method of use patents for Dupuytrens disease and Peyronies disease. Total
revenue received from these indications is in excess of 800 million.
Mr. Wegman is the brother of Dr. Wegman and the stepson of Ms. Wegman, both of
whom are currently directors of the Company. The Company believes that Mr.
Wegman is qualified to serve as a member of our Board because of his business
and professional experience.
8
DR. PAUL GITMAN.
Dr. Gitman, age 76, is currently a
director on the Board and has served as a director of the Company since 1990. He
is board certified by the American Board of Internal Medicine, the American
Board of Quality Assurance and Utilization Review and the American Board of
Medical Quality and is a Master in the American College of Physicians. Following
25 years in private medical practice he joined the fulltime faculty of Long
Island Jewish Medical Center where he was Medical Director and later Vice
President of Medical Affairs for the North Shore Long Island Jewish Health
System until 2009. Since that time, Dr. Gitman has been a consultant in Quality
Improvement. Dr. Gitman is currently an Associate Professor of Medicine at The
Hofstra North Shore LIJ School of Medicine. He is the immediate past Chairman of
the Medical Society of the State of New Yorks Committee for Physicians Health.
He served on the New York State Board of Medicine for 10 years and on various
New York State Committees and Task Forces. He is past President of The American
College of Medical Quality, the New York Chapter of the American College of
Physicians and the Medical Society of the County of Queens. Dr. Gitman received
his medical degree from Boston University School of Medicine. The Company
believes that Dr. Gitman is qualified to serve as a member of our Board because
of his business and professional experience.
9
PROPOSAL NO. 1-- ELECTION OF DIRECTORS
The Board is responsible for
establishing broad corporate policies and monitoring the overall performance of
the Company. It selects the Companys executive officers, delegates authority
for the conduct of the Companys day-to-day operations to those officers, and
monitors their performance. Members of the Board are kept informed of the
Companys business by, among other things, participating in Board and Committee
meetings and by reviewing analyses and reports.
The Board is divided into three
classes with only one class of directors being elected in each year. The term of
office of the third class of directors, currently consisting of Dr. Mark Wegman,
Toby Wegman and Jennifer Chao, is scheduled to expire at the 2017 Annual
Meeting; the term of office of the first class of directors, currently
consisting of Thomas L. Wegman and Dr. Paul Gitman, is scheduled to expire on
the date of the 2018 annual meeting (the 2018 Annual Meeting); and the second
class of directors, currently consisting of George Gould, Michael Schamroth and
Dr. Jyrki Mattila is scheduled to expire on the date of the 2019 annual meeting.
All directors will hold office for a term of three years, or until their earlier
death, resignation, removal or disqualification and until their respective
successors are duly elected and qualified.
The individuals who have been
nominated for election to the Board at the 2017 Annual Meeting are set forth
below. If, as a result of circumstances not now known or foreseen, any nominee
is unavailable to serve as a nominee for the office of director at the time of
the 2017 Annual Meeting, the holders of the proxies solicited by the Proxy
Statement may vote those proxies either (i) for the election of a substitute
nominee who will be designated by the proxy holders or by the present members of
the Board or (ii) for the balance of the nominees, leaving a vacancy.
Alternatively, the size of the Board may be reduced accordingly. The Board has
no reason to believe that any of the nominees will be unwilling or unable to
serve if elected as a director. The three nominees for election as directors are
uncontested.
The Board of Directors
recommends a vote FOR the election of the nominees listed below.
The names, positions with the
Company and ages as of the Record Date of the individuals who are our nominees
for election as directors are:
|
Name
|
Age
|
Position
|
Director Since
|
|
|
|
|
|
|
Dr. Mark Wegman
|
67
|
Director
|
2007
|
|
|
|
|
|
|
Toby Wegman
|
82
|
Director
|
2007
|
|
|
|
|
|
|
Jennifer Chao
|
47
|
Director
|
2015
|
For information as to the shares
of the Common Stock held by each of our nominees, see Security Ownership of
Certain Beneficial Owners and Management, below and for biographical summaries
for each of our director nominees, see Directors and Executive Officers above.
There are no arrangements or
understandings between the nominees, directors or executive officers and any
other person pursuant to which our nominees, directors or executive officers
have been selected for their respective positions.
VOTE REQUIRED
A plurality of the votes cast at
the meeting will be required for the election of the director nominees to the
third class of directors. The three nominees for director with the highest
number of affirmative votes will be elected as directors. Broker non-votes and
abstentions will not be treated as votes cast for this purpose and, therefore,
will not affect the outcome of the election.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR EACH
OF THESE NOMINEES FOR DIRECTOR FOR THE SECOND CLASS OF DIRECTORS.
(PROPOSAL NO. 1 ON YOUR PROXY CARD)
10
BOARD OF DIRECTORS AND COMMITTEES
Board Leadership Structure
The Board does not have a
chairman or a lead independent director. Additionally, the Board does not have a
formal policy as to whether the same person may serve as both the principal
executive officer of the Company and chairman and, in the event such person does
serve in such a dual capacity, whether a lead independent director should be
designated by the Board for Board leadership purposes. At the present time, the
Board does not believe that such a policy is necessary because it believes that
the current Board membership, together with the Companys management, possess
the requisite leadership and industry skills, expertise and experiences to
effectively oversee the business and affairs of the Company. Moreover, the Board
prefers to retain the flexibility to select the appropriate leadership structure
for the Company based upon the existence of various conditions, including, but
not limited to, business, financial or other market conditions affecting the
Company at any given time. Notwithstanding the foregoing, the independent
directors of the Board regularly participate in executive sessions outside of
the presence of any management directors or other members of the Companys
management.
Risk Oversight
Generally, the Board, in its
advisory capacity, and the Companys management regularly review the Companys
strategic plan which includes, among other things, the various business,
financial and other market risks confronting, and opportunities available to,
the Company at any given time. Specifically, pursuant to the Companys Corporate
Governance Guidelines, the Board is charged with assessing major risks facing
the Company and reviewing options to mitigate such risks. The Board performs
this oversight role by using several different levels of review. In connection
with its reviews of the operations and corporate functions of the Company, the
Board addresses the primary risks associated with those operations and corporate
functions. In addition, the Board reviews the risks associated with the
Companys business strategies periodically throughout the year as part of its
consideration of undertaking any such business strategies.
The Board has delegated certain
risk oversight responsibilities to its committees (the Committees). Each of
our Committees also oversees the management of the Companys risk that falls
within each Committees areas of responsibility. In performing this function,
each Committee has full access to management, as well as the ability to engage
advisors. For example, the Audit Committee is required to regularly review and
discuss with management the Companys major financial risk exposures and the
steps management has taken to monitor and control such exposures. The Nominating
and Corporate Governance Committee is required to regularly review the corporate
governance principles of the Company and recommend to the Board any proposed
changes it may deem appropriate. The Compensation Committee considers risks
related to the attraction and retention of professional talent and the
implementation and administration of compensation and benefit plans affecting
the Companys employees. The Intellectual Property Committee, an informal
committee of the Board, considers risks related to the Companys intellectual
property strategy, which includes, among other things, the Companys
intellectual property development, maintenance, licensing, litigation,
prosecution and protection strategies. The Financial Modeling Committee, an
informal committee of the Board, deals with budgeting, forecasting and valuation
and does not address financial risk oversight which is the responsibility of the
Audit Committee. All Committees are required, pursuant to their respective
charters, to report regularly to the Board. The activities of the Audit,
Nominating and Corporate Governance and Compensation Committees are more fully
described below.
Board Determination of Director Independence
Our securities are listed on the
NASDAQ Global Market (NASDAQ) and we use the standards of independence
prescribed by rules set forth by NASDAQ. Under NASDAQ rules, a majority of a
listed companys board of directors must be comprised of independent directors.
In addition, NASDAQ rules require that, subject to specified exceptions, each
member of a listed companys audit committee and compensation committee be
independent and satisfy additional independence criteria set forth in Rules
10A-3 and 10C-1, respectively, under the Securities Exchange Act of 1934, as
amended, (the Exchange Act). Under NASDAQ rules, a director will only qualify
as an independent director if, in the opinion of that companys board of
directors, that person does not have a relationship that would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director.
11
Based upon information requested
from and provided by each director concerning their background, employment and
affiliations, including family relationships, our Board has determined, upon the
recommendation of our Nominating and Corporate Governance Committee, that each
of Dr. Jyrki Mattila, Jennifer Chao, Dr. Paul Gitman, Michael Schamroth, and
George Gould, has no relationship that would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director and is
independent within the meaning of the director independence standards of the
NASDAQ rules and the SEC. Our Board, upon recommendation of the Nominating and
Corporate Governance Committee, has determined that each of Thomas Wegman, Toby
Wegman and Dr. Mark Wegman, do not qualify as independent under the NASDAQ
rules. Our Board has also determined that each of the current members of our
Audit Committee and our Compensation Committee satisfies the independence
standards for such committee established by Rules 10A-3 and 10C-1 under the
Exchange Act, the SEC rules and the NASDAQ rules, as applicable, and that the
current members of the Nominating and Corporate Governance Committee are also
independent. In making these determinations, the directors reviewed and
discussed information provided by the directors and the Company with regard to
each directors business and personal activities as they may relate to the
Company and the Companys management.
Board Meetings
The Board met 4 times during the
calendar year ended December 31, 2016. Each of the directors attended at least
75% of the meetings of the Board and the Committees on which he or she served
during the year ended December 31, 2016 (in each case, which were held during
the period for which he was a director and/or a member of the applicable
Committee). With the exception of Dr. Paul Gitman, all Board members serving on the Board at such time attended our
2016 annual meeting of stockholders held on June 2, 2016. The Company encourages
its directors to attend the annual meeting of Stockholders.
Executive sessions, or meetings
of the independent directors without management present, are held regularly. The
independent directors met in executive session during each regularly scheduled
Board meeting during the year ended December 31, 2016.
Committees and Committee Meetings
The Board has a standing Audit
Committee, a Nominating and Corporate Governance Committee, and Compensation
Committee, each of which is comprised solely of independent directors, and is
described more fully below. The members of each Committee are appointed by our
Board. From time to time, the Board may establish other committees. Below is a
description of the three principal Committees.
Audit Committee and Audit Committee Financial Expert
The Audit Committee is comprised
of Dr. Gitman, Ms. Chao, Dr. Mattila, and Mr. Schamroth. Dr. Gitman serves as
the Chair of the Audit Committee. The Audit Committee has determined that Ms.
Chao is an audit committee financial expert within the meaning of the SECs
rules and regulations and has the level of financial sophistication required by
NASDAQ Rule 5605(c)(2)(A). The Audit Committee believes that Ms. Chaos
experience, as discussed in her biography above, qualifies her as an audit
committee financial expert.
As noted above, the Audit Committee is governed by
the Audit Committee Charter. A copy of this Charter is available on our website
at
www.biospecifics.com
under Investors Corporate
Governance. In addition to the risk oversight responsibilities discussed above,
the Audit Committees other responsibilities include: selecting our independent
registered public accounting firm; reviewing with the Companys independent
registered public accounting firm the procedures for and results of their
audits; reviewing with the independent accountants and management our financial
reporting, internal controls and internal audit procedures; reviewing and
approving related party transactions; and reviewing matters relating to the
relationship between the Company and our independent registered public
accounting firm, including the selection of and engagement fee for our
independent registered public accounting firm, and assessing the independence of
the independent registered public accounting firm. The Audit Committee has the
authority to engage independent legal, accounting and other advisers, as it
determines necessary to carry out its duties.
12
The Audit Committee met 5 times
during 2016.
Compensation Committee
The Compensation Committee is
comprised of Mr. Schamroth and Drs. Gitman and Mattila. Dr. Mattila serves as
the Chair of the Compensation Committee. The Compensation Committee is governed
by the Compensation Committee Charter. A copy of this Charter is available on
our website at
www.biospecifics.com
under Investor
Relations Corporate Governance. In addition to the risk oversight
responsibilities discussed above, the Compensation Committees other
responsibilities include: reviewing and approving and recommending to the Board
for approval as appropriate, the compensation of our executive officers
following consideration of corporate goals and objectives relevant to such
executive officers; overseeing the evaluation of the Companys senior
executives; reviewing and making recommendations to the Board regarding
incentive compensation and equity-based plans; and administering our stock
option plans. The Compensation Committee has the authority to retain
compensation consultants and other outside advisors to assist in the evaluation
of executive officer compensation. The Compensation Committee did not use or
retain any compensation consultant during the year ended December 31, 2016.
The Compensation Committee met 3
times during 2016.
Nominating and Corporate Governance Committee
The Nominating and Corporate
Governance Committee is comprised of Mr. Schamroth, Dr. Gitman, and Ms. Chao.
Mr. Schamroth serves as the Chair of the Nominating and Corporate Governance
Committee. The Nominating and Corporate Governance Committee is governed by the
Nominating and Corporate Governance Committee Charter. A copy of this Charter is
available on our website at
www.biospecifics.com
under
Investors Corporate Governance. In addition to the risk oversight
responsibilities discussed above, the Nominating and Corporate Governance
Committees other responsibilities include: identifying individuals qualified to
become Board members and to recommend to the Board the nominees for director at
annual meetings of Stockholders; recommending to the Board nominees for each
Committee; developing and recommending to the Board corporate governance
principles applicable to the Company; and leading the Board in its annual review
of the Boards performance.
The Nominating and Corporate
Governance Committee met 2 times during 2016.
13
Polices Governing Director Nominations
Director Nomination
Process
Our Board is responsible for
selecting its own members. The Board delegates the selection and nomination
process to the Nominating and Corporate Governance Committee, with the
expectation that other members of the Board, and of management, will be
requested to take part in the process as appropriate. The Nominating and
Corporate Governance Committee makes recommendations to the Board regarding the
size and composition of the Board. The Nominating and Corporate Governance
Committee is responsible for ensuring that the composition of the Board
accurately reflects the needs of the Companys business and, in furtherance of
this goal, for proposing the addition of members and the necessary resignation
of members for purposes of obtaining the appropriate members and skills. The
Nominating and Corporate Governance Committee recommends, and the Board
nominates, candidates to stand for election as directors.
Generally, our Nominating and
Corporate Governance Committee identifies candidates for director nominees in
consultation with management, through the use of other advisors, through the
recommendations submitted by Stockholders or through such other methods as the
Nominating and Corporate Governance Committee deems to be helpful to identify
candidates. Once candidates have been identified, our Nominating and Corporate
Governance Committee confirms that the candidates meet all of the minimum
qualifications for director nominees established by the Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance Committee may
gather information about the candidates through interviews, detailed
questionnaires, background checks or any other means that the Nominating and
Corporate Governance Committee deems to be appropriate in the evaluation
process. The Nominating and Corporate Governance Committee then meets as a group
to discuss and evaluate the qualifications and skills of each candidate, both on
an individual basis and taking into account the overall composition and needs of
the Board. Based on the results of the evaluation process, the Nominating and
Corporate Governance Committee recommends candidates as director nominees for
election to the Board for the Boards approval.
Stockholders may also nominate
persons to be elected as directors. The Nominating and Corporate Governance
Committee will consider director candidates recommended by our Stockholders, in
accordance with the Companys bylaws. If a Stockholder wishes to nominate a
person for election as director, he or she must follow the procedures contained
in our bylaws. In evaluating candidates recommended by our Stockholders, the
Nominating and Corporate Governance Committee applies the same criteria set
forth below under Minimum Qualifications. To nominate a person to stand for
election as a director at the 2017 Annual Meeting of Stockholders, a Stockholder
must provide our Secretary with timely notice of the nomination.
The procedures for Stockholder
submission of a notice of nomination of a person or persons as directors of the
Company is set forth below in
Requirements for Stockholders to Submit
Nominees for Inclusion in our Proxy Materials and Alternative Requirements for
Stockholder Proposals to be Considered for Inclusion in our Proxy
Materials.
14
Qualifications
The Nominating and Corporate
Governance Committee may receive from Stockholders and others recommendations
for nominees for election to the Board and recommend to the Board candidates for
Board membership for consideration by the Stockholders at the annual meeting of
Stockholders and candidates for election to the Board at intervals between
annual meetings. In recommending candidates to the Board, the Committee shall
take into consideration the Boards criteria for selecting new directors,
including but not limited to, integrity, past achievements, judgment,
intelligence, relevant experience and the ability of the candidate to devote
adequate time to Board duties. The Nominating and Corporate Governance Committee
does not assign specific weights to particular criteria, and no particular
criterion, including diversity, is a prerequisite for any Board candidate. In
order for the Board to fulfill its responsibilities, our Nominating and
Corporate Governance Committee believes that the Board should include directors
possessing a blend of experience, knowledge and ability.
Family Relationships
Thomas Wegman, a current director
and our current President, and Dr. Mark Wegman, a current director, are
brothers. Each of Thomas Wegman and Dr. Mark Wegman are step sons of Toby
Wegman, a current director.
Thomas Wegman and Toby Wegman are
the co-trustees of the Edwin H. Wegman Marital Trust.
Compensation Committee Interlocks and Insider
Participation
During the year ended December
31, 2016, Dr. Jyrki Mattila, Dr. Paul Gitman and Michael Schamroth each served
as a member of the Compensation Committee. None of the members of our
Compensation Committee has, at any time during the prior fiscal year, been one
of our officers or employees. None of the members of our Compensation Committee
has formerly been one of our officers or employees. None of our executive
officers currently serves, or in the past fiscal year has served, as a member of
a board of directors or compensation committee of any entity that has one or
more executive officers serving on our Board or Compensation Committee.
Code of Business Conduct and Ethics and Corporate Governance
Guidelines
The Companys Amended and
Restated Code of Business Conduct and Ethics (the Code of Ethics) applies to,
among other persons, members of our Board, our officers, contractors,
consultants and advisors. A copy of our Code of Ethics is available on our
website at
www.biospecifics.com
under InvestorsCorporate
Governance or by requesting a copy, free of charge, in writing from our
President at BioSpecifics Technologies Corp., 35 Wilbur Street, Lynbrook, NY
11563. We intend to post on our website any amendment to, or waiver under, a
provision of the Code of Ethics that applies to certain of our executive
officers within four business days following the date of such amendment or
waiver.
A copy of the Corporate
Governance Guidelines may also be accessed free of charge by visiting the
website at
www.biospecifics.com
under InvestorsCorporate
Governance or by requesting a copy from our President at our principal
executive offices above.
15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act
requires our executive officers, directors and persons who beneficially own more
than ten percent of our shares of Common Stock to file reports of their
beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any
amendment thereto) with the SEC. Executive officers, directors, and
greater-than-ten-percent holders are required to furnish us with copies of all
Section 16(a) forms they file.
Based solely upon a review of the
Forms 3, 4, and 5, as applicable, furnished to us for the fiscal year ended
December 31, 2016, we have determined that our executive officers, directors and
greater-than-ten-percent beneficial owners filed their beneficial ownership and
change in ownership reports with the SEC in a timely manner.
16
CERTAIN RELATIONSHIPS AND RELATED PERSONS
TRANSACTIONS
Pre-Approval Policy Regarding Related Party Transactions
On December 8, 2015, the Board
adopted a related party transactions policy, pursuant to which the Audit
Committee is charged with reviewing and approving or disapproving of related
party transactions. The Related Party Transactions Policy supplements the
provisions in the Companys Code of Business Conduct and Ethics concerning
potential conflict of interest situations.
Subject to certain exceptions,
including compensation arrangements previously approved by the Companys
Compensation Committee, this written policy covers transactions or series of
transactions in which the Company or any subsidiary participates and a Related
Party has or will have a direct or indirect material interest. For purposes of
this policy, a Related Party is:
|
|
Each director and executive officer of the Company and
any person who was serving as a director and/or executive officer at any
time since the beginning of the Company's last fiscal year;
|
|
|
|
|
|
Any nominee for election as a director of the Company;
|
|
|
|
|
|
Any security holder who, at the time of the occurrence of
the transaction, owned beneficially or of record more than 5% of any class
of the Company's voting securities; and
|
|
|
|
|
|
Any immediate family member of any of the foregoing
persons. An "immediate family member" includes the spouse, parents,
stepparents, children, stepchildren, siblings, mothers- and
fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law,
and any person (other than a tenant or employee) sharing the household of
a director, executive officer, director nominee or greater than 5%
security holder of the Company.
|
Pursuant to the Related Party
Transactions Policy, each Company executive officer, director or nominee for
director or any other officer or employee who intends to cause the Company to
enter into a related party transaction must fully disclose to the Audit
Committee all material facts concerning a prospective transaction or arrangement
involving the Company in which such person may have an interest. The Audit
Committee will review all related party transactions and approve or disprove of
such transactions in which the amount exceeds $10,000 in advance of such
transaction being given effect. If a member of the Audit Committee is involved
in the transaction, that member shall not participate in determining whether the
related party transaction shall be approved or ratified by the Audit Committee;
however, such person may be counted in determining the presence of a quorum at a
meeting of the Audit Committee acting on the transaction. Annually, the Audit
Committee will review any previously approved or ratified related party
transaction that is continuing and determine based on then-existing facts and
circumstances.
Before any related party
transaction is approved, the following factors are to be considered:
|
|
The position or relationship of the Related Party at or
with the Company;
|
|
|
|
|
|
The materiality of the transaction to the Related Party
and to the Company, including the dollar value of the transaction;
|
|
|
|
|
|
The business purpose for and reasonableness of the
transaction;
|
|
|
|
|
|
Whether the transaction is comparable to a transaction
that could be available on an arms-length basis;
|
|
|
|
|
|
Whether the transaction is in the ordinary course of the
Company's business and was proposed and considered in the ordinary course
of business;
|
|
|
|
|
|
The effect of the transaction on the Company's business
and operations, including on the Company's internal control over financial
reporting and system of disclosure controls or procedures;
|
|
|
|
|
|
Whether the transaction would cause the Company to be in
violation of Nasdaq listing standards (or the listing standards of any
other exchange or market constituting the Companys primary trading
market); and
|
|
|
|
|
|
Any additional conditions or controls (including
reporting or review requirements) that should be applied to such
transaction.
|
Approval of a transaction under
the policy will be granted only if it is determined that, under all of the
circumstances, the transaction is in the best interests of the Company and only
so long as those interests outweigh any negative effects that may arise from
permitting it to occur.
Review of Related Party Transactions
Engagement of Gibbons
P.C.
The Company has engaged Gibbons
P.C. (the Gibbons Law Firm) as legal counsel for certain specific matters in
2014, 2015 and 2016. Mr. George Gould, a member of the Board and an independent
director, is Counsel at the Gibbons Law Firm. To date, the Gibbons Law Firm
has invoiced the Company less than $50,000 in the aggregate for services
rendered. As counsel to the Gibbons Law Firm, Mr. Gould has no financial
interest in any payments made by the Company to the Gibbons Law Firm.
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Based on information publicly
filed and provided to us by certain holders, the following table shows the
amount of our Common Stock beneficially owned as of the close of business on the
Record Date, April 21, 2017, by (i) each person known by us to beneficially own
more than five percent of our voting securities, (ii) each named executive
officer, (iii) each of our directors, and (iv) all of our executive officers and
directors as a group. Beneficial ownership is determined in accordance with the
rules of the SEC and generally includes voting or investment power with respect
to securities. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of Common Stock that could
be issued upon the exercise of outstanding options and warrants held by that
person that are currently exercisable or exercisable within 60 days are
considered outstanding. As of the Record Date, we had 7,171,510 shares of Common
Stock outstanding. Unless otherwise stated in a footnote, each of the beneficial
owners listed below has direct ownership of and sole voting power and investment
power with respect to the shares of our Common Stock.
Name and Address of
|
Amount and Nature of
|
Percentage
|
Beneficial Owner
|
Beneficial Ownership
|
|
|
|
|
5% or Greater Stockholders:
|
|
|
|
|
|
Edwin H. Wegman Marital Trust
|
|
|
Co-trustee Toby Wegman
|
949,973 (1)
|
12.97%
|
Co-trustee Thomas Wegman
|
|
|
35 Wilbur Street
|
|
|
Lynbrook, NY 11563
|
|
|
|
|
|
Jeffrey K. Vogel
|
508,656 (2)
|
6.95%
|
1 Meadow Drive
|
|
|
Lawrence, NY 11559
|
|
|
|
|
|
BlackRock, Inc.
|
379,686 (3)
|
5.19%
|
55 East 52nd Street
|
|
|
New York, NY 10055
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Directors and Named Executive
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Officers
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Thomas Wegman, President and Director
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1,289,950 (4)
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17.62%
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35 Wilbur Street
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Lynbrook, NY 11563
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Toby Wegman, Director
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949,973 (5)
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12.97%
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35 Wilbur Street
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Lynbrook, NY 11563
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18
Name and Address of
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Amount and Nature of
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Percentage
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Beneficial Owner
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Beneficial Ownership
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Michael Schamroth, Director
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114,000 (6)
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1.56%
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35 Wilbur Street
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Lynbrook, NY 11563
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Dr. Mark Wegman, Director
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95,272 (7)
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1.30%
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35 Wilbur Street
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Lynbrook, NY 11563
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Dr. Paul Gitman, Director
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51,825 (8)
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*0.71% (13)
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35 Wilbur Street
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Lynbrook, NY 11563
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George Gould, Director
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11,250 (9)
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*0.15%
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35 Wilbur Street
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Lynbrook, NY 11563
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Dr. Jyrki Mattila, Director
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7,876 (10)
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*0.11%
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35 Wilbur Street
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Lynbrook, NY 11563
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Jennifer Chao, Director
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7,500 (11)
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*0.10%
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35 Wilbur Street
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Lynbrook, NY 11563
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All Executive Officers and Directors as a
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1,577,673 (12)
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21.54%
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Group (8 persons)
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(1)
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The shares of Common Stock beneficially owned by the
Edwin H. Wegman Marital Trust are included in the number disclosed in this
chart for Toby Wegman and Thomas Wegman, the co-trustees of the Edwin H.
Wegman Marital Trust. As disclosed in their respective footnotes, the
shares of Common Stock owned by the Edwin H. Wegman Marital Trust are
indirectly held by each of the trustees, who disclaim beneficial ownership
of the shares in the Edwin H. Wegman Marital Trust, except to the extent
of his or her pecuniary interest therein.
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(2)
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The foregoing information is based on the reporting
persons Form 4 filed with the SEC on December 22, 2015.
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(3)
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The foregoing information is based on the reporting
persons Schedule 13G filed with the SEC on January 30, 2017.
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(4)
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Includes (i) 50,000 shares of Common Stock subject to
stock options that are currently exercisable or exercisable within 60 days
of April 21, 2017, (ii) 8,778 shares of Common Stock held by Thomas Wegman
and his wife, as joint tenants, (iii) indirect ownership of 3,650 shares
of Common Stock held by Thomas Wegmans wife, Sandra Wegman, (iv) 277,549
shares of Common Stock held directly, and (v) indirect ownership of
949,973 shares of Common Stock beneficially owned by the Edwin H. Wegman
Marital Trust, for which he disclaims beneficial ownership except to the
extent of his pecuniary interest therein.
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19
(5)
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Includes indirect ownership of 949,973 shares of Common
Stock beneficially owned by the Edwin H. Wegman Marital Trust, for which
she disclaims beneficial ownership except to the extent of her pecuniary
interest therein.
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(6)
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Includes 45,000 shares of Common Stock subject to stock
options that are currently exercisable or exercisable within 60 days of
April 21, 2017.
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(7)
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Includes 30,000 shares of Common Stock subject to stock
options that are currently exercisable or exercisable within 60 days of
April 21, 2017.
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(8)
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All shares are held directly.
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(9)
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Includes 11,250 shares of Common Stock subject to stock
options that are currently exercisable or exercisable within 60 days of
April 21, 2017.
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(10)
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Includes (i) 7,500 shares of Common Stock subject to
stock options that are currently exercisable or exercisable within 60 days
of April 21, 2017, and (ii) 376 shares of Common Stock held directly by
Dr. Mattila.
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(11)
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Includes 7,500 shares of Common Stock subject to stock
options that are currently exercisable or exercisable within 60 days of
April 21, 2017.
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(12)
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For purposes of clarification, each of the 949,973 shares
of Common Stock owned by the Edwin H. Wegman Marital Trust (and indirectly
owned by Toby Wegman and Thomas Wegman, the co-trustees of the Edwin H.
Wegman Marital Trust) have only been counted one time in calculating the
number of shares of Common Stock beneficially owned by all executive
officers and directors.
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(13)
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An asterisk indicates less than 1%
ownership.
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20
COMPENSATION COMMITTEE REPORT
The Compensation Committee has
reviewed and discussed this Compensation Discussion and Analysis required by
Item 402(b) of Regulation S-K with the Companys management, and based upon such
discussions, the Compensation Committee recommended to the Board that this
Compensation Discussion and Analysis be included in the Proxy Statement.
/s/ The Compensation Committee
Dr. Jyrki Mattila, Chair
Dr. Paul Gitman
Michael
Schamroth
21
COMPENSATION DISCUSSION AND ANALYSIS
This section discusses the
principles and policies underlying our executive compensation program for our
named executive officer, Thomas Wegman, who serves as our President, Principal
Executive Officer, Principal Financial Officer and Principal Accounting Officer.
Mr. Wegman is our sole executive officer. The Compensation Committee oversees
our executive compensation programs and approves or makes recommendations to the
Board for approval where appropriate and required by the Compensation
Committees charter. In this role, the Compensation Committee reviews and
approves all compensation decisions relating to Mr. Wegman.
Objectives of the Companys Executive Compensation Programs
As determined by the Compensation Committee, the Companys
compensation programs for its officer are designed to achieve the following
objectives:
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motivate our executive officer to achieve the
Companys annual and long-term corporate objectives and strategies;
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provide compensation opportunities that are
competitive with similarly sized biotechnology companies;
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align executive interests with those of our
Stockholders; and
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attract and retain talented executives.
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The Role of Stockholder Say-on-Pay Votes
The Compensation Committee has
reviewed the results of the Companys 2014 Annual Meeting held on June 24, 2014
(the 2014 Annual Meeting) where the Stockholders of the Company approved, on
an advisory basis, the compensation of Mr. Wegman as disclosed in the proxy
statement for the 2014 Annual Meeting. Over 87.8% of the votes cast voted in
favor of the proposal. The Compensation Committee believes this affirms our
Stockholders support of the Companys approach to executive compensation.
Although the vote is non-binding, the Compensation Committee considered the
results of the vote in its review of executive compensation and determined not
to implement substantial changes to our 2014 compensation program as a result of
the say-on-pay vote. The Compensation Committee will continue to consider the
outcome of the Companys say-on-pay vote when making future compensation
decisions for the Companys named executive officer. Previously, at the 2011
annual meeting, the Stockholders of the Company, recommended, on an advisory
basis, that future advisory votes on the compensation of the Companys named
executive officers be held with a frequency of every three years. In connection
with the 2017 Annual Meeting, the Stockholders of the Company will be afforded
the opportunity to vote, on an advisory basis, on a proposal related to the
compensation of the Companys named executive officer, as well as to vote on the
frequency of the say-on-pay vote following the 2017 Annual Meeting. The
Nominating and Corporate Governance Committee has recommended to the Company
that it move from holding future say-on-pay votes every three years to holding
an annual say-on-pay vote.
Elements of Executive Compensation
The Companys current executive
compensation package for Mr. Wegman focuses on a fixed base salary and limited
perquisites that are established pursuant to Mr. Wegmans employment agreement.
Mr. Wegman also is eligible to receive severance payments under certain
circumstances, as further described below. As more fully discussed below, Mr.
Wegman is also eligible to receive a cash bonus for fiscal year 2016 upon
achievement of certain performance-based goals. We utilize base salary to
incentivize company and individual performance in relation to competitive market
conditions. Severance and change in control benefits are used to help ensure we
retain our executive talent.
The Compensation Committee
determines, in its sole discretion, the appropriate components of Mr. Wegmans
compensation package. Mr. Wegmans overall compensation may increase or decrease
year-to-year based upon, among other things, his annual performance or changes
in his responsibilities.
22
Base Salary
As described below, Mr. Wegman
receives a base salary, the terms of which are subject to his employment
agreement. Adjustments to Mr. Wegmans base salary may be based upon a number of
factors, pursuant to the Companys standard practices, including his seniority,
scope of responsibilities, individual performance, his contributions to the
Company and the Companys overall financial and stock price performance. The
Compensation Committee annually reviews Mr. Wegmans base salary and adjustments
to his base salary after considering his responsibilities, performance and
contributions to the Company and the Companys performance.
Employment Agreement; Base
Salary; Cash Bonus; Termination Payments
On August 5, 2008, the Company
entered into an Executive Employment Agreement with Mr. Wegman (the Wegman
Employment Agreement). Following the expiration of the initial two year term,
the Wegman Employment Agreement runs for successive one year terms until
terminated by the Company or Mr. Wegman at the end of the then-current term upon
90 days prior notice of the termination to the other party. Initially, the
Wegman Employment Agreement provided that Mr. Wegman would earn a base salary
equal to $250,000 per year and receive an automobile allowance of $350 per
month, plus reimbursement of expenses incurred on the Companys behalf. On June
17, 2009, however, the Companys Compensation Committee unanimously recommended
to the Board, and the Board approved and declared effective, an increase in Mr.
Wegmans base salary from $250,000 to $300,000 per year. Effective as of August
1, 2013, the Companys Compensation Committee unanimously recommended to the
Board, and the Board approved, an increase in Mr. Wegmans base salary from
$300,000 to $350,000 per year. On January 19, 2016, the Companys Compensation
Committee approved an increase in Mr. Wegmans base salary from $350,000 to
$400,000 per year, applicable for the Companys 2016 fiscal year. On January 26,
2017, the Companys Compensation Committee determined Mr. Wegmans base salary
should remain at $400,000 per year for the Companys 2017 fiscal year.
Mr. Wegman did not receive a cash
bonus in 2015. On January 19, 2016, the Companys Compensation Committee
established a target bonus amount for 2016 for Mr. Wegman, to be 50% of his base
salary (the Target Bonus). Payment in full or in part of the Target Bonus is
dependent upon Mr. Wegmans achievement of certain performance-based goals, as
determined by the Committee. Also on January 26, 2017, the Companys
Compensation Committee determined that, based on the Committees analysis of Mr.
Wegmans achievement of certain performance-based goals, Mr. Wegman is eligible
to receive $20,000.
Under the Wegman Employment
Agreement, Mr. Wegman is also eligible to receive stock options, restricted
stock or other equity awards at the discretion of the Board or the Compensation
Committee. However, on June 17, 2010, the Board decided that, absent special
circumstances, the Company would no longer grant any new options to its
directors, officers, employees or consultants. Mr. Wegman did not receive any
equity-based awards in 2016.
A copy of the Wegman Employment
Agreement was filed as Exhibit 10.1 to a Current Report on Form 8-K filed with
the SEC on August 8, 2008. The foregoing descriptions of the Wegman Employment
Agreement do not purport to be complete and are qualified in their entirety by
reference to the full text of such agreement.
Performance-Based Stock
Incentives
Mr. Wegman did not receive any
performance-based stock incentives in 2016. The Board may, upon the occurrence
of special circumstances as determined by the Board in its sole discretion,
award qualified incentive stock options or non-qualified stock options in
accordance with the Companys 2001 Stock Option Plan, as amended and restated.
23
Other Executive Compensation Policies
Tax and Accounting
Considerations
Section 162(m) of the Internal
Revenue Code of 1986, as amended (the Internal Revenue Code), generally
disallows a tax deduction for compensation in excess of $1.0 million paid to our
named executive officer whose compensation is required to be disclosed to our
Stockholders under the Exchange Act. Qualifying performance-based compensation
is not subject to the deduction limitation if specified requirements are met.
The Company structures the performance-based portion of any executive
compensation package to comply with exemptions in Section 162(m) so that the
compensation remains tax deductible to the Company. However, the Compensation
Committee may recommend to the Board compensation payments that do not comply
with the exemptions in Section 162(m) when it believes that such payments are
appropriate to attract and retain executive talent.
Nonqualified deferred
compensation is required by Section 409A of the Internal Revenue Code to be
paid under plans or arrangements that satisfy certain statutory requirements
regarding timing of deferral elections, timing of payments and certain other
matters. Employees and service providers who receive compensation that fails to
satisfy these requirements may be subject to accelerated income tax liabilities,
a 20% excise tax, penalties and interest on their compensation under such plans.
The Company designs and administers our compensation and benefits plans and
arrangements for all of our employees and service providers, including our named
executive officer, to keep them either exempt from or in compliance with the
requirements of Section 409A. Under the Wegman Employment Agreement, any
provision which causes Mr. Wegmans payments or benefits to be paid thereunder
to fail to comply with Section 409A of the Internal Revenue Code is deemed to be
null and void.
Sections 280G and 4999 of the
Internal Revenue Code impose certain adverse tax consequences on compensation
treated as excess parachute payments. An executive is treated as having received
excess parachute payments if such executive receives compensatory payments or
benefits that are contingent on a change in control, and the aggregate amount of
such payments and benefits equal or exceeds three times the executives base
salary amount. The portion of the payments and benefits in excess of one times
base salary amount are treated as excess parachute payments and are subject to a
20% excise tax, in addition to any applicable federal income and employment
taxes. Under the Wegman Employment Agreement, however, the amount of any excess
parachute payments shall be reduced to the extent necessary so that no portion
of the total benefits to be received by Mr. Wegman is subject to the excise tax.
Deferred Compensation and
Retirement Plans
The Company maintains a 401(k)
plan, which is a broad-based plan available to all employees. Otherwise, the
Company does not have a deferred compensation program, pension benefits,
retirement plans or any post-retirement healthcare plans.
Perquisites and Other
Benefits
The perquisites received by Mr.
Wegman are limited to a car allowance, vacation and reimbursement for reasonable
out-of-pocket expenses incurred by Mr. Wegman in connection with the performance
of his duties.
Role of Executive Officer in
Determining Executive Compensation
The Compensation Committee
approves all compensation decisions related to Mr. Wegman.
24
Stock Ownership Requirements
and Hedging Policies
Currently, the Company does not
have any formal stock ownership requirements or any specific hedging policies
related to stock ownership.
Benefits
Mr. Wegman is entitled to
participate in the standard, broad-based employee benefit plans maintained by
the Company, including the Companys health and dental insurance plans and its
401(k) plan.
Risk Considerations
The Compensation Committee
annually evaluates whether there are potential risks arising from the Companys
compensation policies and practices. Based on such evaluation, the Compensation
Committee believes that the Companys compensation policies and practices do not
encourage executives to take excessive risks because the various elements of the
Companys executive compensation policies and practices diversify the risks
associated with any single element of the executives compensation. Instead, the
elements of the Companys executive compensation policy are, collectively,
designed to achieve the Companys annual and long-term corporate objectives and
strategies.
25
SUMMARY COMPENSATION TABLE
The following table summarizes
the annual compensation paid to our named executive officer for the three fiscal
years ended December 31, 2016, 2015 and 2014. The Summary Compensation Table
excludes the following columns, which were not part of Mr. Wegmans compensation
for 2016, 2015 or 2014: Bonus, Stock Awards, Option Awards, Non-Equity Incentive
Plan Compensation, and Change in Pension Value and Nonqualified Deferred
Compensation Earnings.
Name And
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Year
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Salary
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All Other
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Total
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Principal
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($) (2)
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Compensation
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($)
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Position
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($)
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Thomas Wegman
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2016
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400,000
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23,885(3)
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423,885
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President, Principal
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Executive Officer,
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Principal Financial
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Officer and
Principal
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Accounting Officer
(1)
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2015
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350,000
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3,607(4)
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353,607
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2014
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350,000
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3,325(4)
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353,325
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(1)
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Mr. Wegman also serves as the President of the Companys
wholly-owned subsidiary, Advance Biofactures Corporation, for no
additional compensation.
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(2)
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On January 19, 2016, the Companys Compensation Committee
established the annual base salary and target bonus amounts for 2016 for
Thomas L. Wegman, President of the Company. The Committee established that
Mr. Wegmans base salary amount for 2016 will be $400,000 (the Base
Salary) and that his target bonus amount for 2016 will be 50% of his Base
Salary (the Target Bonus).
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(3)
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On January 26, 2017, the Companys Compensation Committee
determined that Mr. Wegman was eligible to receive $20,000.
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(4)
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Includes the cost of the vehicle leased by the Company
for use by Mr. Wegman.
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26
GRANTS OF PLAN-BASED AWARDS
Mr. Wegman did not receive any
awards pursuant to a Company incentive plan during the fiscal year ended
December 31, 2016.
Narrative Disclosure to Summary Compensation Table and
Grants of Plan-Based Awards
Thomas Wegman
All material factors necessary to
an understanding of the information disclosed in the above Summary Compensation
Table are discussed in the Compensation Discussion and Analysis section.
27
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END (2016)
The following table contains
information concerning exercisable stock options with respect to our Common
Stock granted to Mr. Wegman that was outstanding on December 31, 2016. The below
table excludes the following columns, which are not applicable based on award
types currently outstanding: Number of Securities Underlying Unexercised Options
Unexercisable and Equity Incentive Plan Awards: Number of Securities
Underlying Unexercised Unearned Options
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Option Awards
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Name
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Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
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Option
Exercise
Price
($)
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Option
Expiration
Date (1)
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Thomas L. Wegman
President, Principal
Executive
Officer
and Principal Financial
Officer
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50,000
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21.00
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08/04/2018
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(1) Each of these reported options is fully vested as of
December 31, 2016.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The Wegman Employment Agreement
requires us to provide compensation and/or other benefits to Mr. Wegman during
his employment and in the event of that executives termination of employment
under certain circumstances. Those arrangements are described in greater detail
below.
Pursuant to the terms of the
Wegman Employment Agreement, if the Company terminates Mr. Wegmans employment
without Cause (defined below) or if Mr. Wegman resigns from his employment with
the Company for Good Reason (defined below), then Mr. Wegman is entitled to: (i)
a lump sum payment equal to the average of Mr. Wegmans annual base salary and
bonuses paid by the Company to Mr. Wegman over the five years prior to the time
of such termination, multiplied by three, payable not later than 30 days after
the date of termination; (ii) continuation of his participation in the Companys
benefit plans for 18 months following termination, at the highest level provided
to Mr. Wegman during the period immediately prior to the termination and at no
greater cost than the cost he was paying immediately prior to such termination;
(iii) 100% of any options to purchase shares of Common Stock then held by Mr.
Wegman, which options are then subject to vesting, shall be accelerated and
become fully vested and exercisable on the date immediately preceding the
effective date of such termination (excluding options that would vest, if at
all, upon the attainment of performance goals or any criteria other than the
passage of time or continued performance of services by Mr. Wegman); and (iv)
if, on the date immediately preceding the effective date of such termination,
Mr. Wegman then holds shares of Common Stock that are subject to restrictions on
transfer issued to Mr. Wegman in a transaction other than pursuant to the
exercise of a stock option, then such restrictions shall expire in their
entirety on the date immediately preceding the date of termination and all of
such shares of Common Stock shall become transferable free of restriction,
subject to the applicable provisions of federal and state securities laws.
If Mr. Wegmans employment with
the Company terminates voluntarily without Cause (as defined below) by Mr.
Wegman, for Cause by the Company or due to Mr. Wegmans death or disability,
then Mr. Wegman is not entitled to any severance.
28
Mr. Wegmans receipt of any
severance will be subject to him signing and not revoking a customary release of
claims. No severance will be paid or provided until the release becomes
effective and any period to revoke the same has expired. In addition, if Mr.
Wegman engages in Specified Conduct (defined below) during the 12-month period
following his termination (the Severance Period) or has breached any other
agreement with the Company relating to nondisclosure of confidential
information, in addition to other remedies available to the Company, the Company
may seek disgorgement from Mr. Wegman of a sum equal to (i) the sum of all
payments made by the Company to or on behalf of Mr. Wegman as severance,
multiplied by (ii) a fraction, the numerator of which is (a) the number of
calendar months that comprise Mr. Wegmans Severance Period, less (b) the number
of calendar months elapsed from the date of Mr. Wegmans termination of
employment to the date of such breach or the first date Mr. Wegman engages in
Specified Conduct, and the denominator of which is the number of calendar months
that comprise Mr. Wegmans Severance Period
Under the Wegman Employment
Agreement:
Cause means (i) a willful
failure to carry out a proper directive of the Board; (ii) a willful act of
gross misconduct that injures the Company; (iii) a material breach of the Wegman
Employment Agreement; (iv) a material breach of the Secrecy Agreement dated
January 11, 2007 by and between Mr. Wegman and the Company (the Secrecy
Agreement); (v) a willful material violation of federal or state laws which
materially injures the Company; or (vi) a conviction or plea of guilty or no
contest to a felony involving moral turpitude.
A termination by Mr. Wegman for
Good Reason, means a termination within two years or less following (i) a
material reduction in his base salary; (ii) a material reduction in his
authority, duties, or responsibilities; (iii) a material reduction in his
superiors authority, duties, or responsibilities; (iv) a material reduction in
the budget over which he has authority; (v) a material change in the geographic
location where he must perform services; or (vi) a material breach by the
Company of the Wegman Employment Agreement.
Specified Conduct means (i)
unauthorized disclosure of confidential information in violation of the Secrecy
Agreement; (ii) engagement, directly or indirectly, in any business that is
competitive with the businesses of Company at the time of Mr. Wegmans
termination (other than less than 5% ownership of a public company); (iii) Mr.
Wegmans hiring, directly or indirectly, any individual who was an employee or
consultant of the Company within the 6-month period prior to his termination of
employment, or his soliciting or inducing, directly or indirectly, any such
individual to terminate his or her employment or consultancy with the Company,
unless such person was previously terminated by the Company; or (iv) his
solicitation, directly or indirectly, of any individual who was partner,
customer, or vendor of the Company within the six-month period prior to Mr.
Wegmans termination of employment, to terminate or otherwise limit or reduce
his or her relationship with the Company.
29
The table below reflects the
amount of compensation to be paid to Mr. Wegman upon termination of his
employment following: voluntary resignation, involuntary termination without
cause or voluntary termination for Good Reason, involuntary termination for
Cause, termination on death or disability and termination following a change in
control. The amounts shown assume that such termination was effective on
December 31, 2016 and thus include amounts earned through such time and
estimates of amounts that would be paid out to the executive on his termination.
The actual amount to be paid can only be determined at the time of such
executives termination.
The payments and benefits
detailed in the table below are in addition to any payments and benefits under
our plans and arrangements that are offered or provided generally to all
salaried employees on a non-discriminatory basis and any accumulated vested
benefits for Mr. Wegman, including any stock options vested as of December 31,
2016 (which are set forth in the Outstanding Equity Awards at Fiscal Year-End
Table (2016)).
|
Termination Reason
|
Name
|
Resignation
Without Good
Reason
($)
|
Termination
Without Cause or
Resignation for
Good
Reason
($)
|
Termination for
Cause
($)
|
Death/Disability
($)
|
Following a Change
in Control
($)
|
Thomas Wegman
|
|
|
|
|
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Cash Severance
|
-
|
$1,062,000
|
-
|
-
|
-
|
Continuation of Benefits
|
-
|
$45,392
|
-
|
-
|
-
|
Value of Accelerated Options
|
-
|
-
|
-
|
-
|
-
|
Total
|
|
$1,107,392
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|
|
|
30
DIRECTOR COMPENSATION
Overview of Director Compensation Program
Current Director Compensation
Arrangements
The Companys current director
compensation policy provides that independent directors receive $45,000 annually
for their service on the Board, while non-independent, non-employee directors
receive $22,000, except in the case of Dr. Mark Wegman as set forth in the table
below. Each non-employee director also receives an additional $5,000 annually to
the extent that such non-employee director is a member of a formal or informal
Committee and an additional $5,000 annually to the extent that such non-employee
director is a chair of any such Committee. The Audit Committee Financial Expert
also receives an additional $10,000 annually for such service. The Intellectual
Property Committee IP Expert, if any, receives an additional $10,000 annually
for such service. Directors are also eligible to receive options under the
Companys 2001 Stock Option Plan. However, in an effort to increase stockholder
value, the Company announced on June 17, 2010 that, absent special
circumstances, the Company would no longer grant any new options to, among
others, its directors. On April 22, 2015, in connection with their appointments
to the Board, each of Dr. Mattila and Ms. Chao received a stock option grant of
15,000 shares of Common Stock.
Change of Control Agreements
for Certain Independent Directors
On June 18, 2007, the Company
entered into Change of Control Agreements with its directors, Paul Gitman, and
Michael Schamroth; on September 17, 2013, the Company entered into a Change of
Control Agreement with George Gould; and on April 22, 2015, the Company entered
into Change of Control Agreements with each of Jennifer Chao and Jyrki Mattila
(each agreement, a Director Change of Control Agreement). Pursuant to the
terms of the Director Change of Control Agreement, in the event that the
directors service on the Board is terminated pursuant to a transaction
resulting in a Change of Control, as defined below, then (i) 100% of any options
to purchase shares of Common Stock then held by the director, which options are
then subject to vesting, shall be accelerated and become fully vested and
exercisable on the date immediately preceding the effective date of such
termination and (ii) if, on the date immediately preceding the effective date of
such termination, the director then holds shares of Common Stock that are
subject to restrictions on transfer issued to the director in a transaction
other than pursuant to the exercise of a stock option, then, such restrictions
shall expire in their entirety on the date immediately preceding the date of
termination and all of such shares of Common Stock shall become transferable
free of restriction, subject to the applicable provisions of federal and state
securities laws.
Under the Director Change of
Control Agreements, a Change of Control means the occurrence of any one of the
following:
|
|
the acquisition by any person (as such term is defined
in Section 3(a)(9) of the Exchange Act), other than the Company or its
affiliates, from any party of an amount of the capital stock of the
Company, so that such person holds or controls 40% or more of the
Companys capital stock; or
|
|
|
a merger or similar combination between the Company and
another entity after which 40% or more of the voting stock of the
surviving corporation is held by persons other than the Company or its
affiliates; or
|
|
|
a merger or similar combination (other than with the
Company) in which the Company is not the surviving corporation; or
|
|
|
the sale of all or substantially all of the Companys
assets or business.
|
31
A copy of the form of Director
Change of Control Agreement was filed as Exhibit 10.1 to the Current Report on
Form 8-K filed with the SEC on June 22, 2007. The foregoing descriptions of the
Director Change of Control Agreements do not purport to be complete and are
qualified in their entirety by reference to the full text of the agreements.
32
DIRECTOR COMPENSATION TABLE
The following table summarizes
the annual compensation paid to our directors for the fiscal year ended December
31, 2016. Mr. Wegman serves as our President and received no additional
compensation to serve on the Board as a director during 2016.
Name
|
Fees Earned or
|
Option Awards ($) (2)
|
Total
|
|
Paid in Cash
|
|
($)
|
|
($)
(1)
|
|
|
|
|
|
|
Dr. Paul Gitman
|
65,000
|
--
|
65,000
|
Michael Schamroth
|
65,000
|
--
|
65,000
|
Dr. Mark Wegman
|
65,000
|
--
|
65,000
|
Toby Wegman
|
22,000
|
--
|
22,000
|
George Gould
|
65,000
|
--
|
65,000
|
Dr. Jyrki Mattila
|
65,000
|
--
|
65,000
|
Ms. Jennifer Chao
|
65,000
|
--
|
65,000
|
(1)
|
Reflects the aggregate dollar amount of all fees earned
or paid in cash for services as a director, including committee
fees.
|
|
|
(2)
|
No options were granted during the year ended December
31, 2016.
|
33
REPORT OF THE AUDIT COMMITTEE
The following Report of the
Audit Committee does not constitute soliciting material and should not be deemed
filed or incorporated by reference into any of our other filings under the
Securities Act of 1933, as amended, or the Exchange Act except to the extent we
specifically incorporate this Report by reference therein.
The Audit Committee of our Board
is responsible for assisting the Board in fulfilling its oversight
responsibilities regarding the Companys financial accounting and reporting
processes, system of internal control, audit process, and process for monitoring
compliance with laws and regulations.
Management of the Company has the
primary responsibility for the Companys consolidated financial statements as
well as the Companys financial reporting process, accounting principles and
internal controls. EisnerAmper LLP, the Companys independent registered public
accounting firm, is responsible for performing an audit of the Companys
consolidated financial statements and internal control over financial reporting,
and expressing an opinion as to the conformity of such financial statements with
generally accepted accounting principles and the effectiveness of the Companys
internal control over financial reporting.
In this context, the Audit
Committee reviewed and discussed the audited financial statements of the Company
as of and for the year ended December 31, 2016 with the Companys management and
the independent registered public accounting firm. To ensure independence, the
Audit Committee met separately with EisnerAmper LLP and members of the Companys
management. These reviews included discussion with the independent registered
public accounting firm of matters required to be discussed pursuant to Statement
on Auditing Standards No. 61 (Communication with Audit Committees), as amended
(AICPA,
Professional Standards
, Vol. 1, AU section 380), as adopted by
the Public Company Accounting Oversight Board in Rule 3200T. In addition, the
Audit Committee received the written disclosures and the letter from the
independent registered public accounting firm required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), as
currently in effect, and it has discussed with the independent registered
accounting firm its independence from the Company. Finally, in accordance with
the Sarbanes Oxley Act of 2002, Section 404, the Audit Committee received a
positive attestation and report from EisnerAmper LLP regarding the Companys
internal financial reporting controls.
Based on the reviews and
discussions described above, the Audit Committee recommended to the Board the
inclusion of the audited financial statements in the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2016, for filing with the
Securities and Exchange Commission.
/s/ The Audit Committee
Dr. Paul Gitman, Chair
Michael Schamroth
Dr. Jyrki
Mattila
Jennifer Chao
34
PROPOSAL 2ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY ON
PAY)
The Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act) requires that our Stockholders
have the opportunity to cast a non-binding advisory vote to approve the
compensation of our named executive officer as disclosed in the Compensation
Discussion and Analysis (CD&A), tabular disclosures, and other narrative
executive compensation disclosures in the Proxy Statement.
As previously discussed in the
CD&A, the Companys compensation policies are designed to motivate our
executive officers to achieve the Companys annual and long-term corporate
objectives and strategies, provide compensation opportunities that are
competitive with similarly sized biotechnology companies, align executive
interests with those of our stockholders, and attract and retain talented
executives. Moreover, the Board believes that the elements underlying our
compensation policies align executive pay with the long-term interest of our
Stockholders.
For the reasons stated, the Board recommends a vote FOR
the following non-binding resolution
:
RESOLVED, that the stockholders approve the current
compensation of Thomas L. Wegman, as disclosed in the Compensation Discussion
and Analysis, tabular disclosures, and other narrative executive compensation
disclosures in the Proxy Statement.
Although the vote is non-binding,
the Compensation Committee, along with the Board, will review the voting
results. To the extent that there is a significant negative vote, we will
consult directly with the Stockholders to better understand the concerns that
influenced the vote. The Compensation Committee, along with the Board, welcomes
any constructive feedback obtained through this process in making future
compensation arrangements for the Companys named executive officers.
In accordance with the Dodd-Frank
Act, this vote does not overrule any compensation decisions made by the Board,
will not create or imply any change to any fiduciary duties of the Board and
will not restrict or limit the ability of our Stockholders to make proposals for
inclusion in proxy materials related to executive compensation.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE APPROVAL, ON AN ADVISORY BASIS,
OF THE CURRENT EXECUTIVE
COMPENSATION ARRANGEMENT OF THOMAS L. WEGMAN.
(PROPOSAL NO. 2 ON YOUR PROXY CARD)
35
PROPOSAL 3ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY
VOTES
ON EXECUTIVE COMPENSATION (SAY ON FREQUENCY)
The Dodd-Frank Act also requires
that our Stockholders have the opportunity, once every six years, to cast a
non-binding advisory vote as to the frequency of future votes to approve the
compensation of our named executive officer, Thomas L. Wegman, as disclosed in
the CD&A, tabular disclosures, and other narrative executive compensation
disclosures in the Companys Proxy Statements. As the last Say-on-Frequency vote
was held at the 2011 annual meeting of the Companys Stockholders, held on June
13, 2011, this proposal gives the Companys Stockholders the opportunity to
indicate whether they would prefer that, during the next six years, the
Companys Stockholders be given a non-advisory vote on future Say-on-Pay
proposals once every one, two, or three years. If they wish, Stockholders may
also abstain from casting a vote on this proposal.
Accordingly, the following resolution will be submitted to the
Companys Stockholders for approval at the 2017 Annual Meeting:
RESOLVED, that the option of every year (annual basis), every
two years (biennial basis) or every three years (triennial basis) that receives
the highest number of votes cast for this resolution will be determined to be
the preferred frequency of the Companys Stockholders, on an advisory basis, for
holding an advisory vote on the compensation of the Companys named executive
officer as disclosed in the Companys proxy statement pursuant to the Securities
and Exchange Commissions compensation disclosure rules.
The Board recommends that
future advisory votes on executive compensation should be held each year, or on
an annual basis, so that the next advisory vote would be held at our 2018 annual
meeting
.
Although the vote is non-binding,
the Compensation Committee, along with the Board, will review the voting
results. To the extent that there is a significant negative vote, we will
consult directly with the Stockholders to better understand the concerns that
influenced the vote. The Compensation Committee, along with the Board, welcomes
any constructive feedback obtained through this process in making future
compensation arrangements for the Companys named executive officers.
In accordance with the Dodd-Frank
Act, this vote does not overrule any compensation decisions made by the Board,
will not create or imply any change to any fiduciary duties of the Board and
will not restrict or limit the ability of our Stockholders to make proposals for
inclusion in proxy materials related to executive compensation.
The proxy card allows
Stockholders to vote for one of four choices at the Annual Meeting: one year,
two years, three years, or abstain from voting on this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
ONE YEAR ON THE PROPOSAL TO RECOMMEND, ON AN ADVISORY BASIS,
THE
FREQUENCY OF EXECUTIVE COMPENSATION VOTES.
(PROPOSAL NO. 3 ON YOUR PROXY CARD)
36
PROPOSAL NO. 4RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
We are asking our Stockholders to
ratify the Audit Committees selection of EisnerAmper LLP (EisnerAmper) as our
independent registered public accounting firm for the fiscal year ending
December 31, 2016. EisnerAmper has served as our independent registered public
accounting firm since October 10, 2014. The services provided to us by
EisnerAmper during 2016 are described under Principal Accountant Fees and
Services.
Although Stockholder ratification
is not required by our bylaws or otherwise, the Board believes it is advisable
to provide Stockholders an opportunity to ratify this selection and is
submitting the selection of EisnerAmper to our Stockholders for ratification as
a matter of good corporate practice. If the selection is not ratified, the Audit
Committee will consider whether it is appropriate to select another independent
registered public accounting firm, but is not required to do so. Even if the
selection is ratified, the Audit Committee in its discretion may select a
different registered public accounting firm at any time during the year if the
Committee determines that such a change would be in the best interests of the
Company and our Stockholders.
We expect that a representative
of EisnerAmper will attend the 2017 Annual Meeting, either in person or via
telephone, and the representative will have an opportunity to make a statement
if he or she so chooses. The representative will also be available to respond to
appropriate questions from Stockholders.
The Audit Committee annually
reviews the independent registered public accounting firms independence,
including reviewing all relationships between the independent registered public
accounting firm and us and any disclosed relationships or services that may
impact the objectivity and independence of the independent registered public
accounting firm, and the independent registered public accounting firms
performance.
Principal Accountant Fees and Services
We regularly review the services
and fees of our independent registered public accountants. These services and
fees are also reviewed by the Audit Committee on an annual basis. The following
table shows the fees paid or accrued by the Company for audit and other services
provided by EisnerAmper for 2015 and 2016. The aggregate fees billed for the
fiscal years ended December 31, 2016 and 2015 for each of the following
categories of services are as follows:
38
|
|
|
2016($)
|
|
|
2015($)
|
|
|
|
|
|
|
|
|
|
|
Audit fees(1)
|
|
162,900
|
|
|
155,319
|
|
|
Audit-related fees
|
|
-
|
|
|
-
|
|
|
Tax fees
|
|
-
|
|
|
-
|
|
|
All other fees
|
|
-
|
|
|
-
|
|
___________
(1) Consists
of fees billed for the audit of our annual financial statements, review of
financial statements included in our Quarterly Reports on Form 10-Q and services
that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements.
The Audit Committee pre-approves
all auditing services, internal control related services and permitted non-audit
services (including the fees and terms thereof) to be performed by EisnerAmper,
subject to the de minimis exception for non-audit services that are approved by
the Audit Committee prior to the completion of an audit. The Audit Committee has
adopted policies and procedures relating to the approval of all audit and
non-audit services that are to be performed by the Companys independent
registered public accounting firm. This policy generally provides that the
Company will not engage its independent registered public accounting firm to
render audit or non-audit services unless the service is specifically approved
in advance by the Audit Committee or the engagement is entered into pursuant to
the pre-approval procedure described below.
From time to time, the Audit
Committee may pre-approve specified types of services that are expected to be
provided to the Company by its independent registered public accounting firm
during the next 12 months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is also generally
subject to a maximum dollar amount.
VOTE REQUIRED
The affirmative vote of a
majority of shares of our common stock, present in person or represented by
proxy at the 2017 Annual Meeting and entitled to vote, is required to ratify the
selection of our independent registered public accountants.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF EISNERAMPER LLP AS THE
COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
(PROPOSAL NO. 4 ON YOUR PROXY CARD)
39
GENERAL MATTERS
Availability of Certain Documents
A copy of our 2016 Annual Report
on Form 10-K has been posted on our website along with this Proxy Statement at
http://biospecifics.com/ under
http://investors.biospecifics.com/index.php?s=127.
We will mail, without
charge, upon written request, a copy of our 2016 Annual Report on Form 10-K
excluding exhibits. Please send a written request to our President at:
BioSpecifics Technologies Corp.
35 Wilbur Street
Lynbrook, New York 11563
Attention: President
Stockholder Communications
The Company has a process for
Stockholders who wish to communicate with the Board. Stockholders who wish to
communicate with the Board may write to the Board at the Companys address given
above. These communications will be received by Thomas Wegman, President of the
Company, and will be presented to the Board in Mr. Wegmans discretion.
Stockholder Proposals and Nominations for the 2018 Annual
Meeting
SEC Requirements for
Stockholder Proposals to be Considered for Inclusion in our Proxy Materials.
Pursuant to Rule 14a-8(e) of the
Exchange Act, a Stockholder may submit a proposal for inclusion in our Proxy
Statement for the 2018 Annual Meeting to Thomas Wegman, our President, at our
principal executive offices, at 35 Wilbur Street, Lynbrook, New York 11563 no
later than close of business on December 30, 2017.
Requirements for Stockholders
to Submit Nominees for Inclusion in our Proxy Materials and Alternative
Requirements for Stockholder Proposals to be Considered for Inclusion in our
Proxy Materials.
Pursuant to our bylaws, any
Stockholder desiring to nominate one or more persons for election as a director
or directors of the Company at the 2018 Annual Meeting or desiring to bring any
other matter before the 2018 Annual Meeting must submit a notice of the proposal
including the information required by our bylaws to us between February 14, 2018
and March 16, 2018 or else it will be considered untimely and ineligible to be
properly brought before the meeting. However, if our 2018 Annual Meeting of
Stockholders is not held on June 14, 2018, under our bylaws, this notice must be
provided (a) not earlier than the 120th day prior to the 2018 Annual Meeting,
and (b) not later than (i) the 90th day prior to the 2018 Annual Meeting and
(ii) the fifth day following the day on which notice of the date of the 2018
Annual Meeting is mailed or public disclosure of the date of the 2018 Annual
Meeting is made, whichever first occurs.
A proposal which is received
outside of the applicable time period or which otherwise fails to meet the
requirements for Stockholder proposals established by the SEC and our bylaws
will not be included. Notice of a proposal to nominate one or more persons as a
director of the Company must provide the information required by Sections 1.11
and 2.15 of our bylaws with respect to each nomination the Stockholder submits
for inclusion in our proxy materials for the 2018 Annual Meeting. Notice of all
other proposals must provide the information required by Section 1.11 of our
bylaws. The submission of a Stockholder proposal does not guarantee that it will
be included in the proxy statement. All notices should be submitted to Thomas
Wegman, our President, at our principal executive offices, at 35 Wilbur Street,
Lynbrook, New York 11563.
40
Other Matters
At the date of the Proxy
Statement, management is not aware of any matters to be presented for action at
the 2017 Annual Meeting other than those described above. However, if any other
matters should properly come before the 2017 Annual Meeting, it is the intention
of the persons named in the accompanying Proxy Card to vote such Proxy Card in
accordance with their judgment on such matters.
April 28, 2017
|
By Order of the Board of Directors,
|
|
|
|
|
|
/s/ Thomas Wegman
|
|
|
Thomas Wegman, President
|
|
41
BIOSPECIFICS TECHNOLOGIES CORP.
ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD ON JUNE 14, 2017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
It is important that your
shares be represented at the meeting. Whether or not you plan to attend the
meeting in person, please vote your shares promptly by completing, signing and
returning this Proxy Card. You do not need to affix postage to the enclosed
reply envelope if you mail it within the United States. If you attend the
meeting, you may withdraw your proxy and vote your shares personally.
The undersigned stockholder of
BioSpecifics Technologies Corp., a Delaware corporation (the Company),
acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy
Statement, dated April 28, 2017, and hereby constitutes and appoints Thomas L.
Wegman and Carl A. Valenstein, or either of them acting singly in the absence of
the other, with full power of substitution in either of them, the proxies of the
undersigned to vote with the same force and effect as the undersigned all shares
of the Companys Common Stock which the undersigned is entitled to vote at the
2017 Annual Meeting of Stockholders to be held on June 14, 2017, and at any
adjournment thereof, hereby revoking any proxy or proxies heretofore given and
ratifying and confirming all that said proxies may do or cause to be done by
virtue thereof with respect to the following matters:
The undersigned hereby instructs
said proxies or their substitutes:
|
1.
|
Elect as Directors the nominees
listed below:
|
|
|
[ ]
|
Mark Wegman
Third Class
Term expires at 2020 Annual Meeting of Stockholders
|
|
|
[ ]
|
Toby Wegman
Third Class
Term expires at 2020 Annual Meeting of Stockholders
|
|
|
[ ]
|
Jennifer Chao
Third Class
Term expires at 2020 Annual Meeting of Stockholders
|
|
|
Withhold authority for the following:
|
|
|
[ ]
|
Mark Wegman
|
|
|
[ ]
|
Toby Wegman
|
|
|
[ ]
|
Jennifer Chao
|
|
|
[ ]
|
|
|
2.
|
Approve the following non-binding resolution: RESOLVED,
that the stockholders approve the current compensation of Thomas L.
Wegman, as disclosed in the Compensation Discussion and Analysis, tabular
disclosures, and other narrative executive compensation disclosures in the
Proxy Statement.
|
|
|
For
|
Against
|
Abstain
|
|
|
[
] [
]
[ ]
|
|
|
|
|
42
|
3.
|
An advisory vote on the frequency of voting by the
stockholders on the executive compensation arrangement for the Companys
named executive officers.
|
|
|
One Year
|
Two Years
|
Three Years
|
Abstain
|
|
|
[ ]
|
[ ]
|
[ ]
|
[ ]
|
|
|
|
|
|
|
|
4.
|
To ratify the appointment of EisnerAmper LLP as the
independent registered public accounting firm for the Company for the
fiscal year ending December 31, 2017.
|
|
|
For
|
Against
|
Abstain
|
|
|
[ ]
|
[ ]
|
[
]
|
In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the 2017 Annual Meeting, and any
adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED; IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR
ALL NOMINEES,
FOR
THE NON-BINDING
RESOLUTION TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVE OFFICER,
FOR
ONE-YEAR INTERVALS WITH RESPECT TO THE NON-BINDING
RESOLUTION TO RECOMMEND THE FREQUENCY OF FUTURE NON-BINDING VOTES OF THE
COMPANYS STOCKHOLDERS REGARDING THE COMPENSATION OF THE COMPANYS NAMED
EXECUTIVE OFFICER AND
FOR
RATIFICATION OF THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM. IN THEIR DISCRETION, THE PROXIES ARE ALSO
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING, INCLUDING THE ELECTION OF ANY PERSON TO THE BOARD OF DIRECTORS WHERE A
NOMINEE NAMED IN THE PROXY STATEMENT DATED APRIL 28, 2017 IS UNABLE TO SERVE OR,
FOR GOOD CAUSE, WILL NOT SERVE.
I (we) acknowledge receipt of the Notice of 2017 Annual Meeting
of Stockholders and the Proxy Statement dated April 28, 2017, and the 2016
Annual Report to Stockholders and ratify all that the proxies, or either of
them, or their substitutes may lawfully do or cause to be done by virtue hereof
and revoke all former proxies.
Please sign, date and mail this proxy immediately in the
enclosed envelope. You do not need to affix postage to the enclosed reply
envelope if you mail it within the United States.
|
Name
|
|
Name
(if joint)
|
|
Date _____________, 2017
|
|
Please sign your name exactly as it appears hereon. When
signing as attorney, executor, administrator, trustee or guardian, please
give your full title as it appears hereon. When signing as joint tenants,
all parties in the joint tenancy must sign. When a proxy is given by a
corporation, it should be signed by an authorized officer and the
corporate seal affixed. No postage is required if returned in the enclosed
envelope.
|
Important Notice Regarding Internet Availability of Proxy
Materials for the Annual Meeting:
The Notice, Proxy Statement, Proxy Card and our 2016 Annual
Report on Form 10-K are available at
http://www.materials.proxyvote.com/090931
.
43
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