Item 11.
Executive Compensation
Compensation Discussion and Analysis
This Compensation Discussion and Analysis discusses the principles underlying our compensation policies and decisions and the principal elements of compensation paid to our executive officers during fiscal year 2018. Our named executive officers for fiscal year 2018 consist of Michael Pehl, our CEO, who began employment with us on December 12, 2017, Michael Garone, our Vice President Finance, and former Chief Financial Officer, who began employment with us on June 16, 2016; Brendan Delaney, our Chief Commercial Officer who began employment with us on November 11, 2017; Robert Iannone, MD, our Chief Medical Officer who began employment with us on April 9, 2018; Morris Rosenberg, our Chief Technology Officer, who began employment with us on January 8, 2018.
Executive Summary
Our overarching compensation goal is to motivate, recruit and retain executive officers in a manner that promotes superior executive performance and successful financial results for us while aligning the interests of the executive officers with the long-term interests of our stockholders. We believe this is accomplished through the following principles and processes that we follow in establishing executive compensation:
·
We benchmark executive officer compensation against a peer group of comparably sized public companies in the biotechnology industry.
·
We target compensation between the 25th and 75th percentiles for base salary and annual cash incentive amounts. Our compensation model is flexible to be adjusted upward or downward in the case of exceptional performance or as circumstances warrant in the discretion of the Compensation Committee.
·
We primarily structure our total compensation in the form of base salary, annual short-term cash incentive awards, long-term equity incentive awards, benefits and perquisites and change in control and other severance benefits.
·
Our compensation structure seeks to align our executives’ compensation with our long-term growth and success by rewarding the discovery and development of new product candidates, the advancement of our existing pipeline of therapeutic product candidates and the strategic partnering for further clinical development and commercialization of our product candidates.
·
We maintain severance and change in control arrangements for our executives comparable to other companies in our peer group.
Role of Stockholder Say-on-Pay Votes
We provide our stockholders with the opportunity to cast an annual, non-binding advisory vote on executive compensation (a “say-on-pay proposal”). At the Annual Meeting of Stockholders held on April 4, 2018, the say-on-pay proposal at that meeting seeking approval of the compensation of the Company’s named executive officers was approved by a non-binding advisory vote of the stockholders. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.
Compensation Objectives and Philosophy
The Compensation Committee of our Board of Directors (the “Compensation Committee”) is responsible for reviewing and approving the compensation payable to our named executive officers and other key employees. As part of such process, the Compensation Committee seeks to accomplish the following objectives with respect to our executive compensation programs:
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Motivate, recruit and retain executives capable of meeting our strategic objectives;
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Provide incentives to ensure superior executive performance and successful business results; and
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Align the interests of executives with the long-term interests of stockholders.
The Compensation Committee seeks to achieve these objectives by:
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Establishing a compensation structure that is market competitive and rewards performance;
·
Linking a substantial portion of compensation to our achievement of financial objectives and the individual’s contribution to the attainment of those objectives;
·
Providing risk for under achievement and upward leverage for over achievement of goals; and
·
Providing long-term equity-based incentives.
Setting Executive Compensation
Our compensation programs in fiscal year 2018 were the result of careful deliberation and analysis by the Compensation Committee. The Compensation Committee met 5 times to consider executive compensation matters. During these meetings, the Compensation Committee carefully considered how to enhance the alignment of our compensation programs with our objectives. In fulfilling its duties, the Compensation Committee was assisted by Arthur J. Gallagher & Co. Human Resources and Compensation Consulting Practice (“Gallagher”), a consulting firm that specializes in providing executive compensation advisory services. Gallagher is the Board and Compensation Committee’s independent compensation consultant. Gallagher was involved in all aspects of the design and implementation of our compensation programs for fiscal year 2018. The Compensation Committee retained Gallagher because of Gallagher’s independent viewpoint and its expertise, particularly with biotechnology companies. Gallagher and its affiliates do not provide any services to the Company other than compensation advisory services provided to the Board and Compensation Committee. Gallagher reports directly to the Compensation Committee, periodically participates in committee meetings and advises the Compensation Committee with respect to compensation trends and best practices, plan design, and the reasonableness of individual compensation awards.
In fiscal year 2018, the Compensation Committee engaged Gallagher to provide competitive compensation data and general advice on our compensation programs and policies for our newly hired executive officers. During fiscal year 2018, Gallagher performed a market analysis of the compensation paid by comparably sized publicly traded biotechnology companies as described below and provided it to the Compensation Committee.
For each of the named executive officers who commenced employment during fiscal 2018, the Compensation Committee also considered competitive compensation data received from Gallagher detailing the 25th percentile, median, and 75th percentile of (i) base salary; (ii) target annual cash compensation (i.e., salary plus target cash incentive); (iii) long-term equity incentive awards; and (iv) target total direct compensation (i.e., salary plus target cash incentive plus long-term equity incentives) for executive officer positions among a group of peer companies and assessed how similar compensation arrangements for the named executive officers compare to its peers. Based on Gallagher market analysis, the Compensation Committee considers base salary within the range of the 25th percentile and the 75th percentile of our peer group to be competitive and appropriate for the named executive officers. Cash incentive levels among our peer group were used to establish target cash incentive compensation for our named executive officers. The Compensation Committee did not, however, tie cash compensation to potential values realizable from equity incentive awards to measure total target direct compensation or as a means to determine the equity incentive awards it authorizes. During fiscal year 2018, there was no pre-established policy for allocation of compensation between cash and non-cash components or between short-term and long-term components. Instead, the Compensation Committee determines the mix of compensation for each executive officer based on its review of the competitive data and its subjective analysis of that individual’s performance and contribution to our strategic goals. We believe our approach to compensation assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. We believe our approach to compensation reflects sound risk management practices and does not encourage excessive risk-taking.
The peer group used for competitive comparisons in fiscal year 2018 reflects companies with which we compete for talent. Base salary, cash incentives and long-term equity incentive awards were benchmarked to these companies. Changes made to the 2018 peer group are summarized below:
The peer group used for competitive comparisons in fiscal year 2018 reflects companies with which we compete for talent. Base salary, cash incentives and long-term equity incentive awards were benchmarked to these companies. Changes made to the 2018 peer group are summarized below:
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Removed Company
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Reason
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Synta Pharmaceuticals Corp.
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Merged with Madrigal Pharmaceuticals, Inc.
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Added Company
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Reason
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Madrigal Pharmaceuticals, Inc.
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A clinical stage biopharmaceutical company that merged Synta Pharmaceuticals Corp.
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When determining compensation for the named executive officers hired during fiscal 2018 and for competitive comparison purposes, we used companies included in the peer group below as well as certain supplemental data from similar sized life sciences companies in the Russell 3000 Index. The following companies were used as part of our peer group in fiscal 2018.
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Company
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Acorda Therapeutics Inc.
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Mannkind Corp.
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Ariad Pharmaceuticals Inc.
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Merrimack Pharmaceuticals Inc.
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ArQule Inc.
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Neurocrine Biosciences Inc.
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Array BioPharma, Inc.
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PDL Biopharma, Inc.
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BioCryst Pharmaceuticals Inc.
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Progenics Pharmaceuticals Inc.
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Celldex Therapeutics Inc.
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Puma Biotechnology Inc.
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CTI BioPharma Corp.
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Rigel Pharmaceuticals Inc.
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Cytokinetics Inc.
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Spectrum Pharmaceuticals Inc.
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Exelixis Inc.
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Sunesis Pharmaceuticals, Inc.
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Immunogen Inc.
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Threshold Pharmaceuticals
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Madrigal Pharmaceuticals Inc.
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XOMA Ltd.
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Insmed Inc.
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ZIOPHARM Oncology Inc.
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Components of Compensation
For the 2018 fiscal year, our executive compensation program included the following components:
·
Base salary;
·
Annual short-term cash incentives;
·
Long-term equity incentive awards;
·
Executive benefits and perquisites; and
·
Change in control and other severance arrangements.
Base Salary
It is the Compensation Committee’s objective to set a competitive rate of annual base salary for each named executive officer for each fiscal year based on performance in the prior fiscal year. The Compensation Committee believes competitive base salaries are necessary to attract and retain top quality executives, since it is common practice for public companies to provide their executive officers with a guaranteed annual component of compensation that is not subject to performance risk. Base salary levels are designed to recognize an individual’s ongoing contribution, to be commensurate with an individual’s experience and organization level and to be competitive with market benchmarks as analyzed by Gallagher. Base salaries are not automatically increased on an annual basis if the Committee believes that a raise is not warranted by either individual or Company performance, or that other forms of compensation are more appropriate to further compensation program objectives. In addition to benchmarking base salary levels, any increase in annual salary is also based on demonstrated levels of competency in skill, effectiveness and leadership, and by comparing how an individual has performed essential job requirements against what was envisioned with the position. The
Compensation Committee does not use a specific formula based on these criteria, but instead makes an evaluation of each named executive officer’s contributions in light of all such criteria.
During fiscal year 2018, Immunomedics hired Mr. Pehl, Mr. Delaney, Mr. Rosenberg, and Mr. Iannone as named executive officers. Each was hired for their extensive industry expertise and knowledge in their functions. In determining their base salaries, the Committee took into account market-based information provided by Gallagher.
Based upon additional responsibilities and performance, for fiscal year 2018, the Compensation Committee approved a 16.7% salary increase from fiscal year 2017 levels for Mr. Garone. Other executive officers did not receive an increase as they were newly hired. The Committee believes the increase would result in salary for Mr. Garone being at or near the median base salaries for a comparable executive position at our peer group companies and reasonably consistent with the average percentage increase in salaries by our peers and to recognize Mr. Garone’s transition services as interim Chief Executive Officer during a portion of fiscal 2018.
The table below shows fiscal year 2017 and fiscal year 2018 base salary rates for each named executive officer:
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Name
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Title
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FY 2017 Salary
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FY 2018 Salary
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% Increase
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Michael Pehl
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President and Chief Executive Officer
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$
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—
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$
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640,000
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—
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%
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Dr. Robert Iannone
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Head of Research & Development and Chief Medical Officer
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$
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—
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$
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460,000
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—
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%
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Dr. Morris Rosenberg
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Chief Technology Officer
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$
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—
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$
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400,000
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—
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%
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Brendan P. Delaney
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Chief Commercial Officer
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$
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—
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$
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400,000
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—
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%
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Michael R. Garone
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Chief Financial Officer
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$
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300,000
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$
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350,000
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16.7
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%
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Annual Short-Term Cash Incentives
Our named executive officers have the opportunity to earn performance based annual cash incentive awards as part of their cash compensation. For fiscal year 2018, Immunomedics did not have a formal incentive or bonus plan for our named executive officers. In lieu of a formalized bonus plan, the Committee used a standard bonus plan calculation that includes an executives' base pay, a target bonus percentage, an individual performance modifier and a Company performance modifier that by formula calculates a performance-based cash incentive. All executives that joined the Company in 2018 received the bonuses that were prorated based on hire date. Cash incentive awards are designed to reward executive performance while reinforcing our short-term strategic operating goals.
Each year, Company goals are established (as described below) by the Company. The Compensation Committee in consultation with the executive team reviews and finalizes such goals and objectives. At the end of each fiscal year, the Compensation Committee conducts in consultation with the CEO for each named executive officer other than the CEO, a subjective review of that individual’s performance relative to our overall priorities and strategies. Individual performance modifiers from 0-150% are assigned by the Compensation Committee using their informed judgment and information provided by Gallagher in view of the Company’s achievement of its annual corporate goals, operational and financial performance, the individual executive’s responsibilities and efforts and such executive’s contribution to the Company’s overall performance and success, and the complexity or difficulty of the objectives that have been achieved.
Our strategic plan and individual performance targets include product development, operational and financial, regulatory compliance metrics, and delivery of specific programs, plans, and budgetary objectives identified by the Compensation Committee.
In fiscal year 2018, our Corporate goals focused on:
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Advance regulatory review of sacituzumab govitecan;
·
Ensure manufacturing capacity and inventory for clinical and commercial supply;
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Ensure successful GMP, GCP and GLP Pre-Approval Inspections;
· Advance clinical development of sacituzumab govitecan in additional indications;
·
Strengthen the price-per-share value of our common stock; and
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Secure financing to ensure a sufficient cash position.
For fiscal year 2018, the Compensation Committee determined that the Company, reviewing all goals in totality, achieved its corporate goals and provided the Company a 100% company modifier. In particular, the Company filed a BLA with the Food and Drug Administration in May 2018 and later received priority review status. In addition, the Company took steps to ensure manufacturing capacity for both clinical and commercial supply. Finally, the Company had significant growth in its share price and raised capital to meet corporate objectives.
In addition, at the end of the Fiscal Year 2018, the CEO provided the Compensation Committee with a detailed review of the performance of the other named executive officers and made recommendations to the Compensation Committee with respect to the annual bonuses and Long-Term Incentives for those officers based on performance during the 2018 fiscal year. The Compensation Committee weighs each of the individual performance of the named executive officers separately when evaluating each named executive officer’s performance, determining personal modifiers, and awarding actual cash incentive amounts. For performance in their perspective time within the Company, Mr. Pehl received a 100% personal modifier, Mr. Delaney received a 120% personal modifier, Mr. Rosenberg received a 135% personal modifier, Mr. Garone received a 80% personal modifier, and Dr. Iannone received a 120% personal modifier. These modifiers were provided to the executives to reflect overall contribution, contribution toward achieving corporate goals, and individual performance in FY 2018 during the time they were employed with the Company.
FY 2018 Personal Modifier Determinations
In determining the individual multiplier for our named executive officers, the Compensation Committee noted each executive officer's individual and departmental performance throughout the year, and how those performances supported the Company's achievement of its corporate goals. The specific individual factors that the Compensation Committee noted in subjectively determining each named executive officer's individual multiplier were as follows:
Michael Pehl, Chief Executive Officer (100% Individual Multiplier)
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•
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Built foundation of a high performing executive leadership team, hiring Chief Medical Officer, Chief Commercial Officer, and Chief Technology Officer
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•
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Provided leadership in the overall strategy for the development, regulatory submission and commercialization plan for Sacituzumab Govitecan
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•
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Lead key efforts to enhance and build company organization and culture to be a commercial stage biopharmaceutical company
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Robert Iannone, MD Chief Medical Officer (120% Individual Multiplier)
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•
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Oversaw clinical sections of BLA submission for Sacituzumab Govitecan which resulted in BLA acceptance with priority review
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•
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Managed FDA on-site GCP inspection and investigator / vendor site audits
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•
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Created revised and updated development plan for Sacituzumab Govitecan in alignment with strategic company goals
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Morris Rosenberg, Chief Technology Officer (135% Individual Multiplier)
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•
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Built a high performing manufacturing and quality team enabling transformation of our Morris Plains, NJ site from GCP to GMP/commercial facility
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•
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Oversaw CMC sections of BLA submission for Sacituzumab Govitecan and led preparatory efforts GMP pre-approval inspection (PAI), allowing for a timely and high quality regulatory CMC submission
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•
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Built and managed a robust supply chain with partner companies and planned for/built sufficient commercial product launch inventory
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Brendan Delaney, Chief Commercial Officer (120% Individual Multiplier)
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•
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Recruited and hired top-tier oncology commercial talent to build a team with the required experience to execute a world-class oncology launch
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•
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Built and executed a plan to prepare the market for the launch for Sacituzumab Govitecan
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•
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Played a leadership role to prepare the Company for launch, having impact on medical affairs, finance, compliance and manufacturing readiness to help the transition to a commercial company
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Michael Garone, Chief Financial Officer (80% Individual Multiplier)
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•
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Contributed to significantly strengthened balance sheet through the execution of a $300 million equity raise and $250 royalty funding deal with Royalty Pharma
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•
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Acted as primary contact in the Company for legal and contractual matters; and
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•
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Provided strategic and financial granularity and planning to the Board, the Senior Leadership Team, Business Development, and the program steering teams throughout the year.
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The table below details fiscal year 2018 annual cash incentive targets and actual payouts for each of the named executive officers.
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Name
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Title
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2018 Target
Cash
Incentive
($)
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2018 Target
Cash
Incentive
(% Salary)
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2018 Actual
Cash
Incentive
($)
(1)
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2018 Actual
Cash
Incentive
(% Salary)
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Michael Pehl
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President and Chief Executive Officer
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$
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216,723
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60
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%
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$
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216,723
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60
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%
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Dr. Robert Iannone
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Head of Research & Development and Chief Medical Officer
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$
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47,071
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45
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%
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$
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56,485
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54
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%
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Dr. Morris Rosenberg
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Chief Technology Officer
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$
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76,274
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40
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%
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$
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102,970
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54
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%
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Brendan P. Delaney
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Chief Commercial Officer
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$
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114,904
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45
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%
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$
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137,885
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54
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%
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Michael Garone
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Chief Financial Officer
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$
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140,000
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40
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%
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$
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112,000
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32
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%
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(1)
Cash incentive payouts were prorated based on hire date.
The table below details, for each named executive officer, the total target cash compensation established by the Compensation Committee for fiscal year 2018, as measured by the sum of salary and target cash incentive, and the total actual cash compensation paid for fiscal year 2018, as measured by the sum of salary and actual cash incentive.
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Name
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Title
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2018 Total Target Annualized
Cash Compensation
($)
(1)
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2018 Total Actual
Cash Compensation
($)
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Michael Pehl
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President and Chief Executive Officer
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$
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580,905
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$
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580,905
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Dr. Robert Iannone
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Head of Research & Development and Chief Medical Officer
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$
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211,895
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$
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221,310
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Dr. Morris Rosenberg
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Chief Technology Officer
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$
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269,553
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$
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296,249
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Brendan P. Delaney
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Chief Commercial Officer
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$
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371,303
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$
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394,284
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Michael Garone
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Chief Financial Officer
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$
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490,000
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$
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463,684
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(1)
Annualized for fiscal 2018.
Long-Term Equity Incentive Awards
As described above, stock-based incentives are a key component of our executive compensation program. Employee ownership is a core value of our operating culture. Management and the Compensation Committee believe that stock ownership encourages our executives to create value for our Company over the long term. We also believe that stock ownership promotes retention and affiliation with us by allowing our executives to share in our long-term success while aligning executive interests with those of our stockholders. We have used stock options, performance stock options, restricted stock units, or their combination as vehicles to deliver equity-based compensation for our named executive officers, due to their broad-based use in the biotechnology industry. We also have evaluated from time to time the benefits of providing alternative equity-based compensation in the form of restricted stock or other vehicles based on full value shares. The Compensation Committee will continue to monitor changes in the long-term compensation practices of the companies in our peer group and, if appropriate, will re-evaluate alternative equity-based compensation vehicles in future years in light of changing or evolving practices. In certain circumstances, the Compensation Committee may determine that non-equity long-term incentives are preferable to equity-based awards.
During 2018, our named executive officers received both new hire equity grants as well as a fiscal year 2018 equity performance grant based on performance. New hire grants were determined by evaluating market practices and other executives in our peer group. Performance grants were determined utilizing the performance modifier from the cash bonus plan applied to a number assigned to each executive. Each of our named executive officers has an annual long-term equity incentive award opportunity. The actual amount of the annual long-term equity incentive award, if any, for each of our named executive officers is determined using competitive market practices using value based approach. Executives are assigned a target value and the performance factor used for the short-term incentive is applied to the target value. The Compensation Committee grants the annual
long-term equity incentive awards shortly after the close of each fiscal year after evaluating the performance of the Company and the named executive officers for such prior fiscal year. In determining the amount of the awards, the Compensation Committee evaluates the executive’s performance and contribution to our annual and long-term strategic goals and factors that contribute to overall corporate growth and development and to increasing long-term stockholder value. The numbers of equity awards granted were determined by the Compensation Committee using information supplied by Gallagher on equity awards received by executives at the peer group companies. All fiscal year performance grants were prorated based on date of hire. The Compensation Committee does not assign weightings to specific factors. In addition, the Compensation Committee may, in its discretion, consider both the achievement of the annual Board-approved corporate goals and other significant corporate accomplishments during the year. For our named executive officers other than the CEO, the Compensation Committee also takes into account the recommendations of the CEO in determining the amount of the grant to each named executive officer.
The Compensation Committee granted equity incentive awards to each named executive officer under the 2014 Plan during fiscal 2018 as follows:
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Name
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Title
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Number of Shares
of Common Stock
Underlying Stock
Options
(1)
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Number of Shares
of Common Stock
Underlying RSUs
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Michael Pehl
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President and Chief Executive Officer
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439,376
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(2)(3)
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—
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Dr. Robert Iannone
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Head of Research & Development and Chief Medical Officer
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320,000
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(2)(6)
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|
—
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Dr. Morris Rosenberg
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Chief Technology Officer
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104,389
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(2)(4)
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—
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Brendan P. Delaney
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Chief Commercial Officer
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150,000
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(2)(5)
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—
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Michael Garone
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Chief Financial Officer
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8,315
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(1)
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Includes time-based and performance-based, non-qualified stock options and incentive stock options.
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(2)
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Options granted to named executive officer as part of their fiscal 2018 executive employment agreement.
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(3)
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Options granted to Michael Pehl include 119,237 time-based incentive stock options and 320,139 performance-based stock options.
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(4)
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Options granted to Dr. Morris Rosenberg include 19,695 incentive stock options, 7,332 non-qualified stock options and 77,362 performance-based stock options.
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(5)
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Options granted to Brendan P. Delaney include 32,256 incentive stock options and 117,744 non-qualified stock options.
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(6)
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Options granted to Dr. Robert Iannone include 27,660 incentive stock options, 152,340 non-qualified stock options, and 140,000 performance-based stock options.
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Unless set forth in the applicable award agreement, the stock options granted to our named executive officers have a seven-year term and vest, based on continued employment, 25% on the first anniversary of the date of grant and 2.083% on a monthly basis thereafter. The stock options were granted at an exercise price equal to the closing price of our common stock on the date of grant. Accordingly, the actual value an executive will realize is tied to future stock appreciation and is therefore aligned with corporate performance and stockholder returns. Some stock options that have been granted to executives include both a time- and performance-based vesting provision; the performance-based vesting provision is determined upon the performance of the market value of the Company's common stock over a certain period which are determined on a per-grant basis. The RSUs granted to our named executive officers vest with respect to 33% per year for three years. We issue to the executive shares of our common stock when the RSUs vest. Our standard forms of stock option and RSU agreements provide for accelerated vesting of unvested awards upon a change in control of the Company, for instance if we are acquired by another company, but only if the acquirer does not agree to assume and continue the awards or grant substitute cash retention awards of similar value, measured as of the date of the change in control transaction, to the holders of our stock options and RSUs. With a three or four-year vesting schedule for stock options and RSUs, and a seven-year term for stock options, we do not deem it necessary to impose holding period requirements on the shares that our named executive officers acquire under their long-term equity incentive awards.
Executive Benefits and Perquisites
The named executive officers also are provided with certain benefits and perquisites that are available to all employees of the Company. The Compensation Committee believes that such benefits are necessary for us to remain competitive and to attract
and retain top caliber executive officers because such benefits are typically provided by companies in the biotechnology industry and by other companies with which we compete for executive talent.
We maintain a 401(k) plan for our employees, including our executive officers, to encourage our employees to save some portion of their cash compensation for their eventual retirement. Pursuant to a discretionary employer match, in fiscal year 2018, we matched all employee contributions at 25% of the employee’s contribution up to a limit of 5% of the employee’s eligible compensation up to the IRS imposed limit. The IRS maximum allowable contribution in calendar year 2018 was $18,500, or $24,500 for employees who are 50 years old or older. We also increase our employees’ base salary, including our named executive officers’ base salary, for the cost of group long-term disability insurance coverage and provide a group life insurance benefit in a coverage amount equal to 100% of the employee’s annual base salary.
Employment and Severance Agreements
We have employment agreements with all of our Named Executive Officers. These agreements are summarized in the section below entitled “
Employment, Severance and Change in Control Agreements
” and the change in control and severance arrangements contained in those agreements are discussed in more detail in the section below entitled “
Calculation of Potential Payments upon Termination or Change in Control
.” None of the employment or severance agreements that we have with our named executive officers require us to provide tax gross-up payments to them in connection with any excise taxes for which they may become liable as a result of receiving severance benefits or other parachute payments within the meaning of Section 280G of the Internal Revenue Code.
Deductibility of Executive Compensation
Generally, Section 162(m) of the Internal Revenue Code disallows a tax deduction to any publicly-held corporation for any remuneration in excess of $1.0 million paid in any taxable year to its chief executive officer and each of its three next most highly-compensated named executive officers (other than its chief financial officer only for fiscal years prior to 2017). Remuneration in excess of $1.0 million may be deducted if, among other things, it qualifies as “performance-based compensation” within the meaning of the Internal Revenue Code. Additionally, under a Section 162(m) exception for private companies that subsequently become publicly held, any compensation paid pursuant to a compensation plan in existence before the effective date of the public offering of securities will not be subject to the $1.0 million limitation until the earliest of: (i) the expiration of the compensation plan, (ii) a material modification of the compensation plan (as determined under Section 162(m)), (iii) the issuance of all the employer stock and other compensation allocated under the compensation plan, or (iv) the first meeting of shareholders at which directors are elected after the close of the third calendar year following the year in which the public offering of securities occurred.
The 2017 tax reform legislation removed the “performance-based compensation” exception from Section 162(m), effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
Despite the Compensation Committee’s efforts to structure certain annual cash incentives and performance-based equity awards in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) in fact will. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with our business needs.
COMPENSATION COMMITTEE REPORT
The information contained in this report shall not be deemed to be “soliciting material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, the Exchange Act, except to the extent that Immunomedics, Inc. specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.
The Compensation Committee is responsible for evaluating and approving the compensation for the executive officers. Management has primary responsibility for our Company’s financial statements and reporting process, including the disclosure of executive compensation. The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis set forth above. The Compensation Committee is satisfied that the Compensation Discussion and Analysis fairly represents the objectives and actions of the Compensation Committee. The Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this annual report for filing with the Securities and Exchange Commission and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended June 30, 2018.
The Compensation Committee
Mr. Scott Canute (Chair)
Mr. Peter Barton Hutt
Dr. Khalid Islam
Compensation Committee Interlocks and Insider Participation
Mr. Canute, Mr. Hutt, and Dr. Islam joined the Compensation Committee after their election to the Board of Directors at the 2016 Annual Meeting of Stockholders. No member of the Compensation Committee was at any time during fiscal 2018, or formerly, an officer or employee of Immunomedics, or any subsidiary of Immunomedics. No executive officer of Immunomedics has served as a director or member of the Board of Directors or the Compensation Committee (or other committee serving an equivalent function) of any other entity, while an executive officer of that other entity served as a director of our Board of Directors or member of our Compensation Committee.
Summary Compensation Table
The following table shows the total compensation paid or accrued during the fiscal years ended June 30, 2018, 2017 and 2016 to our President and Chief Executive Officer, Chief Commercial Officer, Chief Technology Officer, Head of Research & Development and Chief Medical Officer, and our Vice President, Finance and former Chief Financial Officer (collectively, the “named executive officers”).
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Name and Principal
Position
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|
Year
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|
Salary
($)
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|
|
Bonus
($)
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|
Stock
Awards($)
(5)
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|
Option
Awards ($)
(5)
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|
Non- Equity
Incentive Plan
Compensation
($)
|
|
All Other
Compensation
($)
|
|
|
|
Total
($)
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Michael Pehl
President and Chief Executive
Officer
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|
2018
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|
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$
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364,182
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|
|
|
|
$
|
216,723
|
|
|
$
|
—
|
|
|
$
|
3,002,498
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|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
3,583,403
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|
Dr. Robert Iannone
Head of Research & Development
and Chief Medical Officer
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2018
|
|
|
$
|
164,824
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|
|
|
|
$
|
56,485
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|
$
|
—
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$
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2,642,718
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$
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—
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$
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60,000
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(3)
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$
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2,924,027
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Dr. Morris Rosenberg
Chief Technology Officer
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2018
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$
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193,279
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$
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102,970
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$
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—
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|
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$
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901,341
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|
|
$
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—
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|
$
|
1,238,666
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(4)
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$
|
2,436,256
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2017
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$
|
—
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|
|
|
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$
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—
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|
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$
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—
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|
|
$
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—
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|
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$
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—
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$
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279,811
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(4)
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$
|
279,811
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Brendan P. Delaney
Chief Commercial Officer
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2018
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$
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256,399
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$
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137,885
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$
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—
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$
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1,073,190
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$
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—
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$
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—
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$
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1,467,474
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Michael R. Garone
(1)
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2018
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$
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351,684
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$
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112,000
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$
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75,001
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$
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—
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|
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$
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—
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$
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3,375
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(6)
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$
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542,060
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Vice President Finance and
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2017
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$
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300,000
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$
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—
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$
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—
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|
$
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—
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|
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$
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—
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|
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$
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—
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|
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$
|
300,000
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|
former Chief Financial Officer
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2016
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|
$
|
4,615
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|
(2)
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$
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—
|
|
|
$
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—
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|
|
$
|
42,216
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|
|
$
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—
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|
|
$
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—
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|
|
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$
|
46,831
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(1)
Mr. Garone resigned as the Company's Chief Financial Officer on August 23, 2018.
(2)
Represents $4,615 paid to Mr. Garone in fiscal year 2016 subsequent to his appointment as Vice President Finance and Chief Financial Officer, effective June 27, 2016.
(3)
Represents $60,000 paid to Robert Iannone as a sign-on cash bonus.
(4)
All Other Compensation includes amounts the Company paid to MRosenberg BioPharma Consulting LLC consisting of $58,765 in fees during fiscal 2017 and $1,335,966 during fiscal 2018. The Company also granted Dr. Morris Rosenberg 45,000 non-qualified stock options with a total grant date fair value of $221,046 during fiscal 2017. Dr Morris Rosenberg forfeited 22,500 of those non-qualified stock options, totaling $110,523, during fiscal 2018 as a result of becoming a full-time employee of the Company. In addition, the Company reimbursed Dr. Morris Rosenberg $13,223 for travel expenses incurred during fiscal 2018.
(5)
Represents the aggregate grant date fair value of RSUs and options computed in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the determination of grant date fair value of equity awards in accordance with FASB ASC Topic 718, see Note 2 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.
(6)
Includes matching contribution made by us on behalf of Mr. Garone under our 401(k) plan.
CEO PAY RATIO
As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulation S-K promulgated under the Exchange Act, we are providing the following information about the relationship of the annual total compensation of our CEO and the annual total compensation of our employees for fiscal year 2018 (our “CEO pay ratio”). Our CEO pay ratio information is a reasonable good faith estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
For fiscal year 2018, the annual total compensation for the median employee of the Company (other than our CEO) was $71,282 and the annual total compensation of our CEO was $3,583,403. Based on this information, for fiscal year 2018 the ratio of the annual total compensation of our CEO to the annual total compensation of the median employee was 50 to 1.
We identified our median employee from among our employees as of June 30, 2018, the last day of our fiscal year. To identify our median employee we identified and calculated the elements of that employee’s compensation for 2017 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation in the amount of $71,282. With respect to the annual total compensation of our CEO, in accordance with SEC rules, we included the amount reported for Mr. Pehl in the “Total” column for 2018 in the Summary Compensation Table included in this Form 10-K/A. We did not make any cost-of-living adjustments in identifying the median employee. Compensation amounts were determined from our human resources and payroll systems of record.
Grants of Plan-Based Awards in Fiscal Year 2018 Table
The table below details fiscal year 2018 grants of plan-based awards received for each of the named executive officers.
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Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards
(1)
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All Other
Stock Awards:
Number of
Shares of
Stock or Units
|
|
All Other
Option
Awards:
Number of
Securities
Underlying Options
|
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Exercise
or
Base
Price
of Option Awards
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Grant Date Fair Value of Stock and Options Awards
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Grant
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Threshold
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Target
|
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Maximum
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Name
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Date
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($)
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|
($)
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|
($)
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|
(#)
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|
(#)
(2)
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($/Sh)
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(3)
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Michael Pehl
President and Chief
Executive Officer
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12/7/2017
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$
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—
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$
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—
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|
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$
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—
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—
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33,724
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$
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11.86
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$
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235,404
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12/7/2017
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|
$
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—
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$
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—
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|
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$
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—
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|
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—
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|
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85,513
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$
|
11.86
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$
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596,906
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|
|
12/7/2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
151,678
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|
|
$
|
11.86
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|
|
$
|
985,907
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|
|
|
12/7/2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
168,461
|
|
|
$
|
11.86
|
|
|
$
|
1,184,281
|
|
Dr. Robert Iannone
Head of Research &
Development
and Chief Medical
Officer
|
|
4/9/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
27,660
|
|
|
$
|
14.46
|
|
|
$
|
237,326
|
|
|
|
4/9/2018
|
|
$
|
—
|
|
|
$
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—
|
|
|
$
|
—
|
|
|
—
|
|
|
82,340
|
|
|
$
|
14.46
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|
|
$
|
706,485
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|
|
|
4/9/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
$
|
600,607
|
|
|
|
4/9/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
$
|
536,200
|
|
|
|
4/9/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
$
|
562,100
|
|
Dr. Morris Rosenberg
Chief Technology
Officer
|
|
1/8/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
19,695
|
|
|
$
|
15.68
|
|
|
$
|
182,204
|
|
|
|
1/8/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
7,332
|
|
|
$
|
15.68
|
|
|
$
|
67,831
|
|
|
|
1/8/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
38,866
|
|
|
$
|
15.68
|
|
|
$
|
318,701
|
|
|
|
1/8/2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
38,496
|
|
|
$
|
15.68
|
|
|
$
|
332,605
|
|
Brendan P. Delaney
Chief Commercial
Officer
|
|
11/10/2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
32,256
|
|
|
$
|
12.40
|
|
|
$
|
230,779
|
|
|
|
11/10/2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
117,744
|
|
|
$
|
12.40
|
|
|
$
|
842,411
|
|
Michael R. Garone
Vice President
Finance and
Former Chief
Financial Officer
|
|
7/03/2017
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
8,315
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
75,001
|
|
(1)
Represents target and maximum cash incentive award opportunities for our named executive officers. The cash incentive award is prorated if performance levels are achieved between the target and maximum levels. The methodology and performance criteria applied in determining these potential cash incentive award amounts are discussed under “
Compensation Discussion and Analysis—Annual Short-Term Cash Incentives
” elsewhere in this annual report. The actual cash incentive award which may be paid to each named executive officer for their 2018 performance is subject to satisfaction of the Company’s strategic goals, and further determination thereof, and approval by, the Compensation Committee, as discussed under “
Compensation Discussion and Analysis—Annual Short-Term Cash Incentives
” elsewhere in this annual report.
(2)
Represents shares of our common stock underlying options granted under the 2014 Plan. A description of the terms of the stock awards is disclosed under “
Compensation Discussion and Analysis—Long-Term Equity Incentive Awards
” as well as "
Outstanding Equity Awards at Fiscal Year-End 2018 Table
" elsewhere in this annual report.
(3)
Represents the grant date fair value under FASB ASC Topic 718 of equity awards granted in fiscal year 2018. For information regarding assumptions underlying the FASB ASC Topic 718 valuation of equity awards, see Note 2 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.
Outstanding Equity Awards at Fiscal Year-End 2018 Table
The following table provides certain summary information concerning outstanding equity awards held by our named executive officers as of June 30, 2018.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
Name
|
|
Grant
Date
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
|
Michael Pehl
|
|
12/7/2017
|
|
—
|
|
|
33,724
|
|
|
$
|
11.86
|
|
|
12/7/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
12/7/2017
|
|
—
|
|
|
85,513
|
|
|
$
|
11.86
|
|
|
12/7/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
12/7/2017
|
|
—
|
|
|
151,678
|
|
|
$
|
11.86
|
|
|
12/7/2024
|
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
|
|
12/7/2017
|
|
—
|
|
|
168,461
|
|
|
$
|
11.86
|
|
|
12/7/2024
|
|
|
(4)
|
|
—
|
|
|
$
|
—
|
|
Dr. Robert Iannone
|
|
4/9/2018
|
|
—
|
|
|
27,660
|
|
|
$
|
14.46
|
|
|
4/9/2025
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
4/9/2018
|
|
—
|
|
|
82,340
|
|
|
$
|
14.46
|
|
|
4/9/2025
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
4/9/2018
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
4/9/2025
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
4/9/2018
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
4/9/2025
|
|
|
(6)
|
|
—
|
|
|
$
|
—
|
|
|
|
4/9/2018
|
|
—
|
|
|
70,000
|
|
|
$
|
14.46
|
|
|
4/9/2025
|
|
|
(6)
|
|
—
|
|
|
$
|
—
|
|
Dr. Morris Rosenberg
|
|
1/8/2018
|
|
—
|
|
|
19,695
|
|
|
$
|
15.68
|
|
|
1/8/2025
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
1/8/2018
|
|
—
|
|
|
7,332
|
|
|
$
|
15.68
|
|
|
1/8/2025
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
1/8/2018
|
|
—
|
|
|
38,866
|
|
|
$
|
15.68
|
|
|
1/8/2025
|
|
|
(5)
|
|
—
|
|
|
$
|
—
|
|
|
|
1/8/2018
|
|
—
|
|
|
38,496
|
|
|
$
|
15.68
|
|
|
1/8/2025
|
|
|
(5)
|
|
—
|
|
|
$
|
—
|
|
|
|
6/29/2017
|
|
7,500
|
|
|
—
|
|
|
$
|
8.70
|
|
|
6/29/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
6/29/2017
|
|
7,500
|
|
|
—
|
|
|
$
|
8.70
|
|
|
6/29/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
6/29/2017
|
|
—
|
|
|
7,500
|
|
|
$
|
8.70
|
|
|
6/29/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
Brendan P. Delaney
|
|
11/10/2017
|
|
—
|
|
|
32,256
|
|
|
$
|
12.40
|
|
|
11/10/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
|
|
11/10/2017
|
|
—
|
|
|
117,744
|
|
|
$
|
12.40
|
|
|
11/10/2024
|
|
|
(2)
|
|
—
|
|
|
$
|
—
|
|
Michael R. Garone
|
|
7/3/2017
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
8,315
|
|
|
$
|
196,816
|
|
|
|
6/27/2016
|
|
20,000
|
|
|
20,000
|
|
|
$
|
2.00
|
|
|
6/27/2023
|
|
|
(1)
|
|
—
|
|
|
$
|
—
|
|
(1)
Each stock option granted in fiscal year 2016 were granted under the 2014 Plan. Each stock option granted under the 2014 Plan has a term of 7 years measured from the grant date and vests ratably, 25% after the first year from the date of grant and 6.25% for each subsequent three-month period, during the first 4 years of service with us measured from its grant date. Upon a change in control, unvested stock options will become fully vested and exercisable on the date on which the change in control occurs if the acquirer does not agree to assume and continue the awards or grant substitute cash retention awards of similar value, measured as of the date of the change in control transaction, to the holders of the stock options.
(2)
Stock awards granted to named executive officers have a term of four years from the date of grant and vest ratably, 25% after the first year from date of grant and 2.083% for each one month period. The stock awards granted to our named executive officers vest with respect to 33% per year for three years. Upon a change in control, all stock awards held by our named executive officers, if not assumed or continued by the acquiring company or replaced with a cash retention award of like value, will become fully vested on the date on which the change in control occurs.
(3)
Based on the $23.67 per share closing price of our common stock on June 30, 2018, as reported by the Nasdaq Global Market.
(4)
Performance Group 1 includes 151,678 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $23.72 or higher for the prior 15 consecutive trading days, has been met. Performance Group 2 includes 168,461 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $35.58 or higher for the prior 15 consecutive trading days, has been met.
(5)
Performance Group 1 includes 38,866 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $31.36 or higher for the prior 15 consecutive trading days, has been met. Performance Group 2 includes 38,496 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $47.04 or higher for the prior 15 consecutive trading days, has been met.
(6)
Performance Group 1 includes 70,000 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $28.92 or higher for the prior 15 consecutive trading days, has been met. Performance Group 2 includes 70,000 shares where twenty-five percent (25%) of the options shall vest on the first anniversary of the date of grant and 2.08333% shall vest each month thereafter through the fourth anniversary of the grant date provided that as of the vesting date a performance requirement where the fair market value of one share of Immunomedics, Inc. Common Stock, on the Nasdaq Stock Market or other US established securities exchange or market on which the average closing price is US $43.38 or higher for the prior 15 consecutive trading days, has been met.
Fiscal Year 2018 Option Exercises and Stock Vested Table
The table providing information regarding the exercise of options and the vesting of restricted stock units for each of the named executive officers during fiscal year 2018 is omitted because no options were exercised and no stock was vested.
Employment Agreements, Transition Services Agreements and Change in Control Arrangements
Michael Pehl Employment Agreement
On November 8, 2017, the Company entered into an Executive Employment Agreement (the "Pehl Agreement") with Michael Pehl, pursuant to which Mr. Pehl serves as the Company's President and Chief Executive Officer.
Mr. Pehl's appointment as President and Chief Executive Officer was effective as of December 7, 2017 (the "Pehl Effective Date"). The term of the Pehl Agreement is for two (2) years, and shall automatically renew for successive one (1) year periods thereafter, unless at least ninety (90) days prior to the end of any such period one party notifies the other in writing that they are exercising their option not to renew the Pehl Agreement. Mr. Pehl receives an annual base salary of $640,000 and is eligible for an annual bonus, to be determined by the Compensation Committee of the Board, with a target of 60% of Mr. Pehl's base salary for each applicable fiscal year.
On the Pehl Effective Date, Mr. Pehl was granted an incentive stock option (the "Pehl ISO Agreement") to purchase 119,237 shares of the Company's common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company's common stock based on the closing price of the Company's common stock on the Pehl Effective Date and will be subject to the terms of the Pehl ISO Agreement. Such option vests as to 25% of the shares underlying the option on the first anniversary of the Pehl Effective Date, and an additional 1/48th of the total number of shares underlying the option of the corresponding day of each month thereafter until the entire option has vested and become exercisable on the fourth anniversary of the Pehl Effective Date, in each case subject to Pehl's continued employment on each such vesting date.
On the Pehl Effective Date, Mr. Pehl was also granted a nonqualified stock option (the “Pehl NQSO Agreement”) to purchase 320,139 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Pehl Effective Date and will be subject to the terms of the Pehl NQSO Agreement. Such option vests on the same time-based schedule as the Pehl ISO Agreement and based on the performance of the Company’s stock price. Refer to the "Outstanding Equity Awards at Fiscal Year-End 2018 Table" above for additional information.
In the event Mr. Pehl is terminated without Cause or resigns for Good Reason before a Change of Control (each as defined in the Pehl Agreement), Mr. Pehl will receive, provided that Mr. Pehl executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Pehl’s employment by the Company and his termination thereof, severance consisting of: (i) eighteen (18) months of his then-current base salary, (ii) his annual target cash bonus prorated based on the number of days actually worked in the fiscal year of his termination and subject to the satisfaction of applicable performance conditions, and (iii) continued health coverage for eighteen (18) months, among other benefits and in each case subject to the terms and conditions of the Pehl Agreement.
In the event Mr. Pehl is terminated without Cause or resigns for Good Reason within one (1) year after a Change of Control, Mr. Pehl will receive, provided that Mr. Pehl executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Pehl’s employment by the Company and his termination thereof, severance consisting of: (i) twenty-four (24) months of his then-current base salary, (ii) his annual target cash bonus for the year in which he was terminated, (iii) continued health coverage for eighteen (18) months, and (iv) accelerated vesting of the incentive stock option described above, among other benefits and subject to the terms and conditions of the Pehl Agreement.
Dr. Robert Iannone Employment Agreement
On March 27, 2018, the Company entered into an Executive Employment Agreement (the “Iannone Agreement”) with Robert Iannone, pursuant to which Mr. Iannone serves as the Company’s Chief Medical Officer, Head of Research and Clinical Development.
Mr. Iannone’s appointment as Chief Medical Officer, Head of Research and Clinical Development was effective as of April 9, 2018 (the “Iannone Effective Date”). The term of the Iannone Agreement is for two (2) years, and shall automatically renew for successive one (1) year periods thereafter, unless at least ninety (90) days prior to the end of any such period one party notifies the other in writing that they are exercising their option not to renew the Iannone Agreement. Mr. Iannone will receive an annual base salary of $460,000 and be eligible for an annual bonus, to be determined by the Compensation Committee of the Board of Directors, with a target of 45% of Mr. Iannone’s base salary for each applicable fiscal year. Mr. Iannone received a sign-on cash bonus of $60,000. Mr. Iannone will also receive reimbursement of up to $50,000 annually for commuting and housing expenses incurred commuting from Philadelphia, PA to the Company’s executive offices in Morris Plains, New Jersey.
On the Iannone Effective Date, Mr. Iannone was granted an incentive stock option (the “Iannone ISO Agreement”) to purchase 110,000 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Iannone Effective Date and is subject to the terms of the Iannone ISO Agreement. Such option vests as to 25% of the shares underlying the option on the first anniversary of the Iannone Effective Date, and an additional 1/48th of the total number of shares underlying the option on the corresponding day of each month thereafter until the entire option has vested and become exercisable on the fourth anniversary of the Iannone Effective Date, in each case subject to Iannone’s continued employment on each such vesting date.
On the Iannone Effective Date, Mr. Iannone was also granted a nonqualified stock option (the “Iannone NQSO Agreement”) to purchase 70,000 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Iannone Effective Date and is subject to the terms of the Iannone NQSO Agreement. Such option vests as to 25% of the shares underlying the option on the first anniversary of the Iannone Effective Date, and an additional 1/48th of the total number of shares underlying the option on the corresponding day of each month thereafter until the entire option has vested and become exercisable on the fourth anniversary of the Iannone Effective Date, in each case subject to Iannone’s continued employment on each such vesting date.
On the Iannone Effective Date, Mr. Iannone was also granted a second nonqualified stock option (the “Iannone Performance NQSO Agreement”) to purchase 140,000 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Iannone Effective Date and is subject to the terms of the Iannone NQSO Agreement. Such option will vest on the same time-based schedule as the Iannone NQSO Agreement and based on the performance of the Company’s stock price (Refer to the "Outstanding Equity Awards at Fiscal Year-End 2018 Table" above).
In the event Mr. Iannone is terminated without Cause or resigns for Good Reason before a Change of Control (each as defined in the Iannone Agreement), Mr. Iannone will receive, provided that Mr. Iannone executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Iannone’s employment by the Company and his termination thereof, severance consisting of: (i) two (2) months of his then-current base salary for each completed year of service, with a minimum of six (6) months base salary and a maximum of twelve (12) months base salary, (ii) his annual target cash bonus prorated based on the number of days actually worked in the fiscal year of his termination and subject to the satisfaction of applicable performance conditions, and (iii) continued health coverage for a period of between six (6) and twelve (12) months, among other benefits and in each case subject to the terms and conditions of the Iannone Agreement.
In the event Mr. Iannone is terminated without Cause or resigns for Good Reason within one (1) year after a Change of Control, Mr. Iannone will receive, provided that Mr. Iannone executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Iannone’s employment by the Company and his termination thereof, severance consisting of: (i) four (4) months of his then-current base salary for each completed year of service, with a minimum of twelve (12) months base salary and a maximum of twenty-four (24) months base salary, (ii) his annual target cash bonus for the year in which he was terminated, (iii) continued health coverage for twelve (12) months, and (iv) accelerated vesting of the options granted pursuant to the Iannone NQSO Agreement described above, among other benefits and subject to the terms and conditions of the Iannone Agreement.
Dr. Morris Rosenberg Employment Agreement
On January 8, 2018, the Company entered into an Executive Employment Agreement (the "Rosenberg Agreement") with Morris Rosenberg, pursuant to which Mr. Rosenberg serves as the Company's Chief Technology Officer.
Mr. Rosenberg’s appointment as Chief Technology Officer was effective as of January 8, 2018 (the “Rosenberg Effective Date”). The term of the Rosenberg Agreement is for two (2) years, and shall automatically renew for successive one (1) year periods thereafter, unless at least ninety (90) days prior to the end of any such period one party notifies the other in writing that they are exercising their option not to renew the Rosenberg Agreement. Mr. Rosenberg will receive an annual base salary of $400,000 and be eligible for an annual bonus, to be determined by the Compensation Committee of the Board of Directors, with a target of 40% of Mr. Rosenberg’s base salary for each applicable fiscal year. Mr. Rosenberg will also receive an additional cash bonus of $50,000 annually for travel expenses incurred traveling from Seattle, Washington to the Company’s executive offices in Morris Plains, New Jersey.
On the Rosenberg Effective Date, Mr. Rosenberg was granted an incentive stock option (the “Rosenberg ISO Agreement”) to purchase 27,027 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Rosenberg Effective Date and is subject to the terms of the Rosenberg ISO Agreement. Such option vests as to 25% of the shares underlying the option on the first anniversary of the Rosenberg Effective Date, and an additional 1/48th of the total number of shares underlying the option on the corresponding day of each month thereafter until the entire option has vested and become exercisable on the fourth anniversary of the Rosenberg Effective Date, in each case subject to Rosenberg’s continued employment on each such vesting date.
On the Rosenberg Effective Date, Mr. Rosenberg was also granted a nonqualified stock option (the “Rosenberg NQSO Agreement”) to purchase 77,362 shares of the Company’s common stock, such option has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Rosenberg Effective Date and is subject to the terms of the Rosenberg NQSO Agreement. Such option will vest on the same time-based schedule as the Rosenberg ISO Agreement and based on the performance of the Company’s stock price. Refer to the "Outstanding Equity Awards at Fiscal Year-End 2018 Table" above for additional information.
In the event Mr. Rosenberg is terminated without Cause or resigns for Good Reason before a Change of Control (each as defined in the Rosenberg Agreement), Mr. Rosenberg will receive, provided that Mr. Rosenberg executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Rosenberg’s employment by the Company and his termination thereof, severance consisting of: (i) two (2) months of his then-current base salary for each completed year of service, with a minimum of six (6) months base salary and a maximum of twelve (12) months base salary, (ii) his annual target cash bonus prorated based on the number of days actually worked in the fiscal year of his termination and subject to the satisfaction of applicable performance conditions, and (iii) continued health coverage for a period of between six (6) and twelve (12) months, among other benefits and in each case subject to the terms and conditions of the Rosenberg Agreement.
In the event Mr. Rosenberg is terminated without Cause or resigns for Good Reason within one (1) year after a Change of Control, Mr. Rosenberg will receive, provided that Mr. Rosenberg executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Rosenberg’s employment by the Company and his termination thereof, severance consisting of: (i) four (4) months of his then-current base salary for each completed year of service, with a minimum of twelve (12) months base salary and a maximum of twenty-four (24) months base salary, (ii) his annual target cash bonus for the year in which he was terminated, (iii) continued health coverage for twelve (12) months, and (iv) accelerated vesting of the options granted pursuant to the Rosenberg NQSO Agreement described above, among other benefits and subject to the terms and conditions of the Rosenberg Agreement.
Brendan Delaney Employment Agreement
On November 8, 2017, the Company entered into an Executive Employment Agreement (the “Delaney Agreement”) with Brendan Delaney, pursuant to which Mr. Delaney serves as the Company’s Chief Commercial Officer.
Mr. Delaney’s appointment as Chief Commercial Officer was effective as of November 10, 2017 (the “Delaney Effective Date”). The term of the Delaney Agreement is for two (2) years, and shall automatically renew for successive one (1) year periods thereafter, unless at least ninety (90) days prior to the end of any such period one party notifies the other in writing that they are exercising their option not to renew the Delaney Agreement. Mr. Delaney will receive an annual base salary of $400,000 and be
eligible for an annual bonus, to be determined by the Compensation Committee of the Board, with a target of 45% of Delaney’s base salary for each applicable fiscal year.
On the Delaney Effective Date, Mr. Delaney was granted an incentive stock option (the “Delaney ISO Agreement”) to purchase 150,000 shares of the Company’s common stock, which has a seven-year term and an exercise price equal to the fair market value of the Company’s common stock based on the closing price of the Company’s common stock on the Delaney Effective Date and will be subject to the terms of the Delaney ISO Agreement. Such option vests as to 25% of the shares underlying the option on the first anniversary of the Delaney Effective Date, and an additional 1/48th of the total number of shares underlying the option on the corresponding day of each month thereafter until the entire option has vested and become exercisable on the fourth anniversary of the Delaney Effective Date, in each case subject to Delaney’s continued employment on each such vesting date.
In the event Mr. Delaney is terminated without Cause or resigns for Good Reason before a Change of Control (each as defined in the Delaney Agreement), Mr. Delaney will receive, provided that Mr. Delaney executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Delaney’s employment by the Company and his termination thereof, severance consisting of: (i) two (2) months of his then-current base salary for each completed year of service, with a minimum of six (6) months base salary and a maximum of twelve (12) months base salary, (ii) his annual target cash bonus prorated based on the number of days actually worked in the fiscal year of his termination and (iii) continued health coverage for a period of between six (6) and twelve (12) months, among other benefits and subject to the terms and conditions of the Delaney Agreement.
In the event Mr. Delaney is terminated without Cause or resigns for Good Reason within one (1) year after a Change of Control, Mr. Delaney will receive, provided that Mr. Delaney executes within twenty-one (21) days of his termination, does not revoke, and complies with the terms of, a written release that releases the Company from any and all claims with respect to all matters arising out of or related to Mr. Delaney’s employment by the Company and his termination thereof, severance consisting of: (i) four (4) months of his then-current base salary for each completed year of service, with a minimum of twelve (12) months base salary and a maximum of twenty-four (24) months base salary, (ii) his annual target cash bonus prorated based on the number of days actually worked in the fiscal year of his termination (iii) continued health coverage for a period of twelve (12) months, and (iv) accelerated vesting of the incentive stock option described above, among other benefits and subject to the terms and conditions of the Delaney Agreement.
Michael R. Garone Transition Services Agreement; Change in Control and Severance Agreement
On August 23, 2018 (the “Garone Effective Date”), the Company entered into a Transition Agreement (the “Transition Agreement”) with Michael Garone, the Company’s Vice President, Finance and Chief Financial Officer. Pursuant to the Transition Agreement, Mr. Garone resigned as the Company’s Chief Financial Officer, effective August 23, 2018. Mr. Garone shall remain the Company’s Vice President, Finance, and will provide transition services as needed, until May 18, 2019, which represents one (1) year from the date that the Company filed a Biologics License Application for sacituzumab govtitecan with the U.S. Food and Drug Administration (the “Anniversary Date”), subject to earlier termination by the Company or by Mr. Garone for any reason upon 60 days’ prior written notice (the earliest such date, the “Termination Date”). For the period of time commencing on the Garone Effective Date and ending on the Termination Date, Mr. Garone will continue to receive his base salary, continue to participate in Company employee benefit plans in accordance with their terms and continue to vest into outstanding equity awards.
Subject to Mr. Garone’s continued employment through the Anniversary Date (except if earlier terminated as described below), in exchange for providing a general release of claims that becomes effective after the Termination Date, Mr. Garone will receive: (i) a lump sum payment equal to two times the sum of his base salary and target annual bonus; (ii) full acceleration of the vesting of his outstanding time-based equity awards; (iii) lump sum payments for pro-rated bonus amounts and unused vacation days; and (iv) payment or reimbursement of COBRA premiums for Mr. Garone and his covered dependents for up to 12 months following his Termination Date (the “Severance”). Additionally, Mr. Garone will also be entitled to the Severance to the extent Mr. Garone’s employment with the Company ceases due to (i) the Company terminating his employment for any reason after the Effective Date or (ii) Mr. Garone’s resignation for any reason after the Garone Effective Date; provided however, such termination or resignation will require 60 days’ prior written notice (such period, the “Notice Period”). The Company is permitted to terminate Mr. Garone’s employment at any time during the Notice Period and pay continued base salary through the end of the Notice Period in lieu of notice.
On January 8, 2017, we entered into a Change in Control and Severance Agreement with Mr. Garone that provided for certain severance benefits upon Mr. Garone’s termination. Pursuant to the Transition Agreement, the Change in Control and Severance Agreement was canceled and is no longer in effect.
Calculation of Potential Payments Upon Termination or Change in Control
The following table shows potential payments to our named executive officers under their employment agreements in the form in which those agreements existed as of June 30, 2018, or change in control and severance agreement, as the case may be, for various scenarios involving a change in control or termination of employment as described above for each named executive officer. The data in the table reflects June 30, 2018 as a hypothetical termination date or change in control date and, where applicable, reflects amounts calculated using the $23.67 closing price of our common stock on June 29, 2018 (as reported on the Nasdaq Global Market). All defined terms not defined in this section have the meanings set forth in each officer’s respective employment agreement or change in control and severance agreement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Trigger
|
|
Salary
and Bonus
($)
|
|
Health and
Welfare
Benefits ($)
|
|
Stock Award
Vesting
Acceleration
($)
(1)
|
|
Office and
Secretarial
Support ($)
|
|
Total ($)
|
Michael Pehl
|
|
Termination without Cause or Resignation for Good Reason (before Change in Control)
|
|
$
|
1,208,123
|
|
|
$
|
43,155
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,251,278
|
|
|
|
Termination without Cause or Resignation for Good Reason (following a Change in Control)
|
|
$
|
2,048,000
|
|
|
$
|
43,155
|
|
|
$
|
1,408,189
|
|
|
$
|
—
|
|
|
$
|
3,499,344
|
|
|
|
Voluntary Termination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Disability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Death
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Dr. Robert Iannone
|
|
Termination without Cause or Resignation for Good Reason (before Change in Control)
|
|
$
|
284,935
|
|
|
$
|
14,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
299,320
|
|
|
|
Termination without Cause or Resignation for Good Reason (following a Change in Control)
|
|
$
|
667,000
|
|
|
$
|
28,770
|
|
|
$
|
644,700
|
|
|
$
|
—
|
|
|
$
|
1,340,470
|
|
|
|
Voluntary Termination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Disability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Death
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Dr. Morris Rosenberg
|
|
Termination without Cause or Resignation for Good Reason (before Change in Control)
|
|
$
|
316,308
|
|
|
$
|
14,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
330,693
|
|
|
|
Termination without Cause or Resignation for Good Reason (following a Change in Control)
|
|
$
|
516,308
|
|
|
$
|
28,770
|
|
|
$
|
552,771
|
|
|
$
|
—
|
|
|
$
|
1,097,849
|
|
|
|
Voluntary Termination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Disability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Death
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Brendan P. Delaney
|
|
Termination without Cause or Resignation for Good Reason (before Change in Control)
|
|
$
|
316,308
|
|
|
$
|
14,385
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
330,693
|
|
|
|
Termination without Cause or Resignation for Good Reason (following a Change in Control)
|
|
$
|
516,308
|
|
|
$
|
28,770
|
|
|
$
|
1,690,500
|
|
|
$
|
—
|
|
|
$
|
2,235,578
|
|
|
|
Voluntary Termination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Disability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Death
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael R. Garone
(2)
|
|
Termination without Cause or Resignation for Good Reason (before Change in Control during the Pre-Closing Period)
|
|
$
|
910,000
|
|
|
$
|
30,270
|
|
|
$
|
630,216
|
|
|
$
|
—
|
|
|
$
|
1,570,486
|
|
|
|
Termination without Cause or Resignation for Good Reason (following a Change in Control)
|
|
$
|
910,000
|
|
|
$
|
30,270
|
|
|
$
|
630,216
|
|
|
$
|
—
|
|
|
$
|
1,570,486
|
|
|
|
Expiration or Non-renewal of Employment Agreement by Company
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Voluntary Termination
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Disability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Death
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
The amounts reflected in this column assume that all outstanding stock options and other stock-based awards became fully vested and exercisable, as applicable, upon the occurrence of a change in control.
(2)
The amounts reflected for Mr. Garone reflect amounts payable pursuant to the Transition Agreement which was entered into on August 23, 2018. Pursuant to the Transition Agreement, the Change in Control and Severance Agreement that we entered into with Mr. Garone on January 8, 2017 was canceled and is no longer in effect.
The amounts shown in the table above and the assumptions upon which those amounts are based provide reasonable estimates of the amounts that would have been due to the named executive officers in the event that any of the circumstances described above had occurred on June 30, 2018. The actual amounts due to the named executive officers upon a triggering event will depend upon the actual circumstances and the then-applicable provisions of the employment agreements, change in control and severance agreement, stock option and restricted stock unit agreements and our stock incentive plans.
Fiscal Year 2018 Pension Benefits Table
The table disclosing pension benefits is omitted because we do not have any such pension benefit plans.
2018 Non-Qualified Deferred Compensation Table
The table disclosing contributions to and aggregate earnings under or distributions from nonqualified deferred compensation is omitted because we do not have any such nonqualified deferred compensation plans.
DIRECTOR COMPENSATION
We compensate our non-employee directors for their service as directors. We do not pay directors who are also Immunomedics employees any additional compensation for their service as directors.
Fiscal 2018 Director Compensation Table
The following table shows the compensation paid to our non-employee directors for their Board service during fiscal 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned or
Paid in
Cash
($)
(1)
|
|
Stock
Awards
($)
(2)
|
|
Option
Awards
($)
(2)
|
|
Total
($)
|
Dr. Behzad Aghazadeh
|
|
$
|
95,018
|
|
|
$
|
55,002
|
|
|
$
|
169,160
|
|
|
$
|
319,180
|
|
Scott Canute
|
|
$
|
83,646
|
|
|
$
|
55,002
|
|
|
$
|
169,160
|
|
|
$
|
307,808
|
|
Peter Barton Hutt
|
|
$
|
70,498
|
|
|
$
|
55,002
|
|
|
$
|
169,160
|
|
|
$
|
294,660
|
|
Dr. Khalid Islam
|
|
$
|
94,674
|
|
|
$
|
55,002
|
|
|
$
|
169,160
|
|
|
$
|
318,836
|
|
Brian A. Markison
|
|
$
|
—
|
|
|
$
|
55,002
|
|
|
$
|
54,998
|
|
|
$
|
110,000
|
|
Dr. David Goldenberg
(3)
|
|
$
|
30,250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,250
|
|
Cynthia Sullivan
|
|
$
|
18,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,750
|
|
(1)
Consists of amounts described below under “Cash Compensation.”
(2)
Represents the aggregate grant date fair value of RSUs and options computed in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the determination of grant date fair value of equity awards in accordance with FASB ASC Topic 718, see Note 2 of the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended June 30, 2018.
(3)
Dr. David Goldenberg is the former Chief Patent Officer and Chief Scientific Officer and former director of the Company.
Cash Compensation
For fiscal 2018, each non-employee director of Immunomedics received:
|
|
|
|
|
|
|
|
Fees*
|
|
Fiscal 2018*
|
|
For each:
|
Basic retainer:
|
|
$
|
45,000
|
|
|
Fiscal year
|
Additional retainers:
|
|
|
|
|
|
Non-executive Chairman of the Board
|
|
$
|
45,000
|
|
|
Fiscal year
|
Chairman of the Executive Committee
|
|
$
|
20,000
|
|
|
Fiscal year
|
Chairman of the Audit Committee
|
|
$
|
20,000
|
|
|
Fiscal year
|
Member of the Audit Committee
|
|
$
|
10,000
|
|
|
Fiscal year
|
Chairman of the Compensation Committee
|
|
$
|
15,000
|
|
|
Fiscal year
|
Member of the Compensation Committee
|
|
$
|
7,250
|
|
|
Fiscal year
|
Chairman of the Governance & Nominating Committee
|
|
$
|
10,000
|
|
|
Fiscal year
|
Member of the Governance & Nominating Committee
|
|
$
|
5,000
|
|
|
Fiscal year
|
*
We also reimburse non-employee directors for reasonable travel and out-of-pocket expenses in connection with their service as directors. We do not pay fees on a per meeting basis.
Stock Compensation
Pursuant to the compensation policy adopted by the Compensation Committee on July 3, 2017, each individual who is first elected or appointed as a non-employee director is automatically granted, on the date of such initial election or appointment, 22,500 nonqualified stock options. Initial option grants become fully vested on the first anniversary of the date of grant, provided such director remains a director on such date, and have an exercise price equal to the fair market value of the common stock on the date of grant, a maximum term of seven years from the date of grant and a post-termination exercise period of 12 months following the date of the non-employee director’s cessation of service on account of (i) the director’s death or (ii) upon a change in control or hostile take-over of the Company; however, in no event will the options be exercisable beyond their original term.
In addition to the foregoing initial grants, pursuant to the compensation policy adopted by the Compensation Committee, each individual who continues to serve as a non-employee director on the date of each annual stockholders meeting shall receive an annual grant of non-qualified stock options and restricted stock units (“RSUs”), each equal in value to $55,000. The Compensation Committee, as administrator of the 2014 Plan, will determine the actual number of stock options and RSUs at the time of each such annual grant. Annual option grants become fully vested on the first anniversary of the grant date, provided such director remains a director on such date, and have an exercise price equal to the fair market value of the common stock on the date of grant, a maximum term of seven years from the date of grant and a post-termination exercise period of 12 months following the date of the non-employee director’s cessation of service on account of the director’s death or total and permanent disability. Annual RSU grants vest in full upon the director’s completion of one year of service as a non-employee director from the date of grant. Notwithstanding the foregoing, annual RSU grants will immediately vest upon (i) a non-employee director’s cessation of service as a non-employee director by reason of death or permanent disability, or (ii) upon a change in control or hostile take-over of the Company (as defined in the 2014 Plan).
Option and RSU Grants to Non-Employee Directors During Fiscal Year 2018
During fiscal year 2018, the following non-employee directors were granted options to purchase shares of common stock and RSUs. All option and RSU grants listed below were made under the 2014 Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
RSUs
|
Director
|
|
Number of Shares
Underlying
Options Granted
|
|
Grant Date
|
|
Exercise Price
Per Share
|
|
Number of Shares
Underlying
Stock Awards (RSUs)
Granted
|
|
Grant Date
|
Dr. Behzad Aghazadeh
|
|
6,497
|
|
|
4/02/2018
|
|
$
|
14.29
|
|
|
3,849
|
|
|
4/02/2018
|
|
|
|
22,500
|
|
|
7/03/2017
|
|
$
|
9.02
|
|
|
—
|
|
|
—
|
|
Scott Canute
|
|
6,497
|
|
|
4/02/2018
|
|
$
|
14.29
|
|
|
3,849
|
|
|
4/02/2018
|
|
|
|
22,500
|
|
|
7/03/2017
|
|
$
|
9.02
|
|
|
—
|
|
|
—
|
|
Peter Barton Hutt
|
|
6,497
|
|
|
4/02/2018
|
|
$
|
14.29
|
|
|
3,849
|
|
|
4/02/2018
|
|
|
|
22,500
|
|
|
7/03/2017
|
|
$
|
9.02
|
|
|
—
|
|
|
—
|
|
Dr. Khalid Islam
|
|
6,497
|
|
|
4/02/2018
|
|
$
|
14.29
|
|
|
3,849
|
|
|
4/02/2018
|
|
|
|
22,500
|
|
|
7/03/2017
|
|
$
|
9.02
|
|
|
—
|
|
|
—
|
|