DIRECTORS AND EXECUTIVE OFFICERS
Directors
Our Board of Directors, or
the Board, consists of seven (7) members. The term of each director expires each year at our Annual Meeting of Stockholders. Each director also continues to serve as a director until his or her successor is duly elected and qualified, or until
he or she sooner dies, resigns, or is removed. The following table sets forth the name, age, director service period and position of each of our current directors, as of November 10, 2017:
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Name
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Age
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Position
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Director Since
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David Mazzo
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60
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Chairman of the Board of Directors
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2005
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Nancy Lurker
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59
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President and Chief Executive Officer and Director
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2016
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Michael Rogers
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57
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Director
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2005
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Douglas Godshall
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53
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Director
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2012
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James Barry
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58
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Director
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2014
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Jay Duker
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59
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Director
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2016
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Kristine Peterson
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58
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Director
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2017
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Set forth below for each current director is a list of Board Committee memberships and a description of his or
her business experience, qualifications, education and skills that led our Board to conclude that such individual should serve as a member of our Board:
David J. Mazzo, Ph.D.
Chairman of the Board, Chairman of
the Compensation Committee and member of the Governance and Nominating Committee and the Science Committee
Dr. Mazzo has been the Chief Executive
Officer and a director of Caladrius Biosciences, Inc., a Nasdaq Stock Market LLC, or NASDAQ, listed company, since January 2015. Caladrius is a clinical stage development company with a pipeline of cell therapy product candidates in autoimmune
disease (type I diabetes) and select cardiovascular indications. Prior to joining Caladrius, Dr. Mazzo served from August 2008 to October 2014 as Chief Executive Officer and as a member of the board of directors of Regado Biosciences, Inc., a
NASDAQ-listed biopharmaceutical company focused on the development of novel antithrombotic drug systems for acute
and sub-acute
cardiovascular indications. Prior to his leading Regado, from March 2007 to
April 2008, Dr. Mazzo was President, Chief Executive Officer and a director of Æterna Zentaris, Inc., a publicly held international biopharmaceutical company. From 2003 until 2007, Dr. Mazzo served as President, Chief Executive
Officer and a director of Chugai Pharma USA, LLC, a biopharmaceutical company which was the U.S. subsidiary of Chugai Pharmaceutical Co., Ltd. of Japan. Dr. Mazzo has also held senior management and executive positions in research and
development and/or directorships with the Essex Chimie European subsidiary at Schering-Plough Corporation, a publicly held pharmaceutical company that was subsequently acquired by Merck & Co., Inc.; Hoechst Marion Roussel, Inc., the U.S.
subsidiary of Hoechst AG, which was subsequently acquired by Sanofi, a multinational pharmaceuticals company; and Rhone-Poulenc Rorer, Inc., a subsidiary of Rhone-Poulene SA, a French pharmaceuticals company, which was subsequently acquired by
Hoechst AG. He also previously served on the board of directors of Avanir Pharmaceuticals, Inc., a specialty pharmaceutical company, from 2005 until Avanir was sold to Otsuka Holdings in 2015. Dr. Mazzo earned a B.A. in the Honors Program
(Interdisciplinary Humanities) and a B.S. in Chemistry from Villanova University. In addition, Dr. Mazzo received his M.S. in chemistry and his Ph.D. degree in analytical chemistry from the University of Massachusetts, Amherst. He was also a
research fellow at the Ecole Polytechnique Federale de Lausanne, Switzerland. We believe Dr. Mazzo is qualified to serve on our Board because his extensive experience as an executive officer and director in the life sciences industry, his
understanding of the strategic and regulatory
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environment in which we conduct our business, his lengthy track record in global product development, his Ph.D. in analytical chemistry and his broad scientific and managerial background provide
him expertise in the oversight of companies in this sector and the ability to guide such companies through varying operating climates.
Nancy Lurker
President and Chief Executive Officer
Ms. Lurker has been our President and Chief Executive Officer since September 2016. From 2008 to 2015, Ms. Lurker served as President and Chief
Executive Officer and a director of PDI, Inc., a NASDAQ-listed healthcare commercialization company now named Interpace Diagnostics Group, Inc. From 2006 to 2007, Ms. Lurker was Senior Vice President and Chief Marketing Officer of Novartis
Pharmaceuticals Corporation, the U.S. subsidiary of Novartis AG. From 2003 to 2006, she served as President and Chief Executive Officer of ImpactRx, Inc., a privately held healthcare information company. From 1998 to 2003, Ms. Lurker served as
Group Vice President, Global Primary Care Products and Vice President, General Therapeutics for Pharmacia Corporation (Pharmacia), now a part of Pfizer, Inc. She also served as a member of Pharmacias U.S. executive management committee.
Previously, Ms. Lurker spent 14 years at Bristol-Myers Squibb Company, rising from a sales representative to Senior Director, Worldwide Cardiovascular Franchise Management. Ms. Lurker serves as chair of the board of directors of X4
Pharmaceuticals, Inc. and as a member of the board of directors of the Cancer Treatment Centers of America, both privately held companies. Ms. Lurker previously served as a member of the boards of directors of publicly held Auxilium
Pharmaceuticals, Inc. from 2011 to 2015 and Mallinckrodt Pharmaceuticals, plc from 2013 to 2016, in addition to serving as a director of PDI, Inc. from 2008 to 2015. Ms. Lurker received a B.S. in Biology from Seattle Pacific University and an
M.B.A. from the University of Evansville. We believe Ms. Lurker is qualified to serve on our Board because of her role as our President and Chief Executive Officer, as well as her broad ranging experience in the pharmaceutical industry and her
track record of maximizing the potential of new therapies and successfully implementing innovative U.S. and global drug launches, which provide her with valuable expertise and perspective on our corporate strategy, management, operations and
governance.
Michael Rogers
Chairman of the Audit
and Compliance Committee and member of the Compensation Committee
Mr. Rogers served as the Chief Financial Officer of Acorda Therapeutics, Inc., a
biotechnology company focused on neurological disorders, from October 2013 until October 2016. From June 2009 to October 2012, Mr. Rogers served as Executive Vice President and Chief Financial Officer of BG Medicine, Inc., a company focused on
the development of novel biomarker-based diagnostics. Mr. Rogers was Executive Vice President, Chief Financial Officer and Treasurer of Indevus Pharmaceuticals Inc., a specialty pharmaceutical company, from February 1999 until April 2009.
Mr. Rogers was previously Executive Vice President and Chief Financial and Corporate Development Officer at Advanced Health Corporation, a health care information technology company, Vice President, Chief Financial Officer and Treasurer of
AutoImmune, Inc., a biopharmaceutical company, and Vice President, Investment Banking at Lehman Brothers, Inc. and at PaineWebber, Inc. Mr. Rogers is the chairman of the board of directors of Keryx Biopharmaceuticals, Inc., a biopharmaceutical
company focused on bringing innovative medicines to people with renal disease. Mr. Rogers was previously a director of Coronado Biosciences, Inc. We believe Mr. Rogers is qualified to serve on our Board because of his significant
experience as CFO of various companies and as an investment banker have provided him with expertise in strategic transactions, corporate operations, financial management, taxes, accounting, controls, finance and financial reporting in the life
sciences industry as well as valuable insight into the strategy of our company.
Douglas Godshall
Chairman of the Governance and Nominating Committee and member of the Compensation Committee
Mr. Godshall serves as President and Chief Executive Officer at Shockwave Medical, a privately held company which is creating and commercializing
interventional devices designed to better address patients with
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problematic cardiovascular calcification. Previously, he served as the Chief Executive Officer of HeartWare International, Inc., a NASDAQ-listed company, and its predecessor HeartWare Limited, a
medical device company focused on heart failure, from September 2006 until August 2016 and as director from October 2006 until August 2016. HeartWare was acquired by Medtronic PLC in August 2016. Prior to joining HeartWare Limited,
Mr. Godshall served in various executive and managerial positions at Boston Scientific Corporation, where he had been employed since 1990, including as a member of Boston Scientifics Operating Committee. From January 2005 he served
as President, Vascular Surgery, and for the prior five years as Vice President, Business Development, focused on acquisition strategies for the cardiology, electrophysiology, neuroradiology and vascular surgery divisions. Mr. Godshall has a
Bachelor of Arts in Business from Lafayette College and Masters of Business Administration from Northeastern University. Mr. Godshall has served on the board of directors of Vital Therapies, Inc., a public company traded on NASDAQ that develops
cell-based therapies for the treatment of liver disease, since May 2013, and the board of directors of the Medical Device Manufacturers Association, a national trade association, since May 2014. We believe Mr. Godshall is qualified to serve on
our Board because his managerial experience at public, life sciences companies provides him insights as a successful life sciences entrepreneur
with in-depth knowledge
of medical product strategy and
development.
James Barry, Ph.D.
Member of the Audit
and Compliance Committee and the Science Committee
Dr. Barry has been the President and Chief Executive Officer of InspireMD, a global medical
device company focused on the development and commercialization of vascular products, since June 2016 and has served on the board of directors of Inspired MD since January 2011. Prior to this, he served as the Executive Vice President and Chief
Operating Officer of InspireMD. Prior to joining InspireMD, Dr. Barry served as Executive Vice President and Chief Operating Officer of Arsenal Medical from August 2011 until September 2012, and as President and CEO and Director from September
2012 until December 2013. Dr. Barry has been the Principal Founder at Convergent Biomedical Group since September 2010. Dr. Barry served in various executive and managerial positions at Boston Scientific Corporation, where he had been
employed from 1992 until 2010, including as a member of Boston Scientifics Operating Committee. From 2007 through 2010 he served as Senior Vice President, Corporate Technology Development, responsible for the global research and development
function, and for the prior six years he served as Vice President, Corporate Research and Advanced Technology Development. Dr. Barry is also a director of AgNovos Healthcare LLC and Cardiac Implants and in the past also served as a director of
MicroChips Corporation. Dr. Barry has a Bachelor of Arts in Chemistry from St. Anselm College and a Ph.D. in Biochemistry from the University of Massachusetts. We believe Dr. Barry is qualified to serve on our Board because his significant
experience developing products, leading research and development teams and building successful businesses, coupled with his expertise in advising clients in the pharmaceutical, biotechnology and medical device industries, brings valuable technical
expertise and commercial experience to our company.
Jay Duker, M.D.
Chairman of the Science Committee and member of the Governance and Nominating Committee
Dr. Duker is the Director of the New England Eye Center, where he has served in various capacities since 1992. He is also Professor and Chairman of
Ophthalmology at Tufts Medical Center and Tufts University School of Medicine. He has published more than 200 journal articles related to ophthalmology and
is co-author of
Yanoff and Dukers
Ophthalmology, a best-selling ophthalmic text. Dr. Duker
is co-founder of
three companies, including Hemera Biosciences, Inc., a privately held company seeking to develop anti-compliment
gene-based therapies for the treatment of dry and
wet age-related macular
degeneration. Dr. Duker serves as a director of Hemera and Eleven Biotherapeutics, a publicly held biopharmaceutical
company advancing a broad pipeline of novel anti-cancer agents based on its Targeted Protein Therapeutics. Dr. Duker received an A.B. from Harvard University and an M.D. from the Jefferson Medical College of Thomas Jefferson University. We
believe Dr. Duker is qualified to serve on our Board because his extensive clinical and academic experience and
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expertise in ophthalmology coupled with his leadership
as co-founder of
other life sciences companies provide him with valuable clinical,
scientific and commercial insight to bring to our company.
Kristine Peterson
Member of the Audit and Compliance Committee and the Governance and Nominating Committee
Ms. Peterson has over 30 years of healthcare industry experience. She most recently served from 2009 to 2016 as Chief Executive Officer of Valeritas,
Inc., a medical technology company focused on innovative drug delivery systems, and as a strategic advisor to Valeritas until August 2017. Prior to that, Ms. Peterson served as Company Group Chair of Johnson & Johnsons biotech
groups from 2006 to 2009, and as Executive Vice President of Johnson & Johnsons global strategic marketing organization from 2004 to 2006. Prior to that, she served as Senior Vice President, Commercial Operations for Biovail
Corporation, a pharmaceutical company, and President of Biovail Pharmaceuticals from 2003 to 2004. Ms. Peterson began her career at Bristol-Myers Squibb, holding assignments of increasing responsibility spanning marketing, sales and general
management, including running a cardiovascular / metabolic business unit and a generics division. Ms. Peterson is also a director of Paratek Pharmaceuticals, Inc., Immunogen, Inc. and Amarin Corporation plc, and within the past five years also
served as a director of Valeritas, Inc. Ms. Peterson earned a B.S. and M.B.A. from the University of Illinois at Champaign Urbana. We believe Ms. Peterson is qualified to serve on our Board because of her extensive executive management and
sales and marketing experience in both large, multinational pharmaceutical and smaller biotechnology companies, in particular as it relates to later-stage development and commercialization, as well as her other public company board experience.
Executive Officers
Each of our executive
officers holds office until the first meeting of our Board following the next annual meeting of stockholders and until such officers respective successor is chosen and qualified, unless a shorter period shall have been specified by the terms
of such officers election or appointment. The following table sets forth information about our executive officers:
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Name
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Age
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Position
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Nancy Lurker
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59
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President and Chief Executive Officer
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Deb Jorn
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59
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Executive Vice President, Corporate and Commercial Development
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Dario Paggiarino
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60
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Vice President, Chief Medical Officer
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Leonard S. Ross
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67
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Vice President, Finance and Chief Accounting Officer and Principal Financial Officer
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Nancy Lurker
Please refer to the section entitled
Directors, Executive Officers and Corporate GovernanceDirectors
above for
Ms. Lurkers biographical information.
Deb Jorn
Ms. Jorn has served as our Executive Vice President of Corporate and Commercial Development since November 2016. From 2013 to 2016,
Ms. Jorn was EVP and Company Chair at Valeant Pharmaceuticals, and previously served from 2010 to 2013 as Chief Marketing Officer at Bausch & Lomb. From 2004 to 2010, Ms. Jorn was Group VP of Womens Healthcare and Fertility
at Schering Plough. From 2002 to 2004, she served as the Worldwide VP of Internal Medicine and Early Commercial Input at Johnson & Johnson. She began her career at Merck and for more than twenty years held roles of progressive
responsibility in a variety of functions
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including R&D, regulatory, sales, and marketing. Ms. Jorn is a member of the Board of Directors for Orexigen Therapeutics, Inc. and Viveve, Inc. Ms. Jorn holds a B.A. in
Biochemistry from Rutgers University and an MBA from New York Universitys Stern Graduate School of Business Administration.
Dario Paggiarino
Dr. Paggiarino has served as our Vice President, Chief Medical Officer since August 2016. Prior to that, Dr. Paggiarino
served since April 2013 as Senior Vice President and Chief Development Officer of Lpath, Inc., a biotechnology company focused on the discovery and development of lipidomic-based therapeutic antibodies that target bioactive signaling lipids to treat
a wide range of human diseases. Dr. Paggiarino served as Vice President and Therapeutic Unit Head for retina diseases at Alcon, a division of Novartis from 2011 to 2013. He served as Executive Director of Clinical Development and Medical
Affairs at Pfizer Global R&D, a division of Pfizer, Inc., from 2001 to 2011. Earlier in his career, he held research and development positions of increasing responsibility at Angelini Pharmaceuticals, Inc., an affiliate of Angelini S.p.A, a
privately-owned company, ultimately serving as president and later joined Pharmacia Global R&D, a division of Pharmacia Corporation, where he was clinical program director of ophthalmology.
Leonard S. Ross
Mr. Ross has served
as our Vice President, Finance and Chief Accounting Officer since July 2017, and was previously Vice President, Finance since November 2009 and before that our Corporate Controller from October 2006. Mr. Ross was designated as our
principal financial officer in March 2009. From 2001 through April 2006, Mr. Ross served as Corporate Controller for NMT Medical, Inc., a medical device company. From 1990 to 1999, Mr. Ross was employed by JetForm Corporation, a
developer of workflow software solutions, where he served in various capacities, including Vice President, Finance and Vice President, International Operations. Mr. Ross received a B.S. in Chemical Engineering from Tufts University, an M.B.A.
from the Amos Tuck School at Dartmouth College and an M.S. in Taxation from Bentley College.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Arrangements between Officers and Directors
There is no arrangement or understanding between any of our executive officers or directors and any other person, pursuant to which such person
was selected to serve as an executive officer or director, as applicable.
Board Committees
The Board has four standing committees: the Audit and Compliance Committee, the Compensation Committee, the Governance and Nominating Committee
and the Science Committee. Each standing committee has a written charter. Each of the Audit and Compliance Committee, the Compensation Committee and the Governance and Nominating Committee is comprised entirely of independent directors. The Science
Committee is currently comprised entirely of independent directors, but may in the future include members of our R&D organization and other members of executive management in accordance with its charter. While each committee has designated
responsibilities, the committees act on behalf of the entire Board and regularly report on their activities to the entire Board. Details concerning the role and structure of the Board and each Board committee are contained in the Corporate
Governance Guidelines and the committee charters, available on the Investor section of our website at www.psivida.com under Corporate Governance.
Audit and Compliance Committee
The Audit
and Compliance Committee is responsible for assisting the Board with oversight of our accounting and financial reporting processes, including but not limited to (i) our audit program; (ii) the integrity
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CORPORATE GOVERNANCE
Director Independence
The Board has
unanimously determined that Dr. Mazzo, Mr. Rogers, Mr. Godshall, Dr. Barry, Dr. Duker and Ms. Peterson are independent under applicable standards of the SEC, NASDAQ and ASX. Our other director, Ms. Lurker, serves
as our President and Chief Executive Officer. Each of the Audit Committee, the Compensation Committee, the Governance and Nominating Committee and the Science Committee is comprised entirely of independent directors.
Board Leadership Structure
The Board has
chosen to separate the roles of Chairman and Chief Executive Officer and believes that such a separation of roles is in our best interests and the best interests of our stockholders. Dr. Mazzos tenure as a member of our Board, extensive
experience in the biotechnology industry and perspective as an independent director provide effective leadership for our Board and support for our executive team. Ms. Lurkers track record of maximizing the potential of new therapies and
successfully implementing U.S. and international drug launches position her to lead us in the execution of our strategy and in the daily management of our business.
Boards Role in Risk Oversight
It
is managements responsibility to manage risk and bring to the Boards attention risks that are material to the company. The Board has oversight responsibility for the systems established to report and monitor the most significant risks
applicable to us. The Board administers its risk oversight role directly and through its committee structure. The Board reviews strategic and financial risks and exposures associated with our long-term strategy, development and commercialization of
products and product candidates and other matters that may present material risk to our operations, strategy and prospects. The Audit and Compliance Committee reviews risks associated with financial and accounting matters, including financial
reporting, accounting, disclosure and internal control over financial reporting. The Compensation Committee reviews risks related to executive compensation and the design of compensation programs, plans and arrangements. The Governance and
Nominating Committee manages risks associated with corporate governance and Board composition and procedures. The Science Committee supports the Boards oversight of risks related to our research and development, or R&D, organization.
Transactions with Related Persons
We
maintain a written Policy Regarding Related Person Transactions. Under this policy, the Audit and Compliance Committee or, in time sensitive instances, the chair of the Audit and Compliance Committee, has responsibility for reviewing and
approving or ratifying any transaction in which we and any of our directors, director nominees, executive officers or 5% stockholders and their immediate family members are participants, or in which such persons have a direct or indirect material
interest, as provided under SEC rules. In reviewing transactions, the committee or the chair considers all of the relevant facts and circumstances, and approves only those transactions that the committee or the chair in good faith determines to be
in, or not inconsistent with, the best interests of us and our stockholders. During fiscal 2017 and 2016, there were no such related-person transactions.
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Communications with Directors
Stockholders and other interested parties may communicate directly with the Board, the independent directors, the Chairman of the Board, any
other group of directors or any individual director by writing to such group or individual at the following address:
Name(s) of
Director(s), Group of Directors or Board of Directors
c/o Company Secretary
pSivida Corp.
480 Pleasant
Street
Watertown, MA 02472
United States
Our Corporate
Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.
Stockholder Nominations
for Director
The Governance and Nominating Committee will consider written stockholder recommendations for candidates for the Board,
which recommendations should be delivered or mailed, postage prepaid, to:
Company Secretary
pSivida Corp.
480 Pleasant
Street
Watertown, MA 02472
United States
Stockholder
recommendations must include certain relevant information concerning the candidate, the stockholder making the recommendation and any beneficial owner on whose behalf the recommendation is made. The required information is set forth in our
Stockholder Nomination Policy, available on the Investor section of our website at www.psivida.com under Corporate GovernanceGovernance Overview.
The Governance and Nominating Committee will evaluate candidates for director who are recommended by stockholders on the same basis as
candidates recommended by other sources. Considerations include the Governance and Nominating Committees discretionary assessment of the skills represented and required on the Board, and an evaluation of candidates against the standards and
qualifications set forth in our Corporate Governance Guidelines and criteria approved by the Board from time to time. We do not have a formal policy with respect to diversity, although we seek to have a Board that reflects a range of talents, ages,
skills, viewpoints, professional experience, educational backgrounds, expertise, genders and ethnicities. The Governance and Nominating Committee will determine whether to interview any candidate in its sole discretion.
Code of Business Conduct
We have
adopted a Code of Business Conduct applicable to each of our officers, directors and employees, and consultants and contractors to, us and our subsidiaries, including our principal executive officer and principal financial officer. The Code of
Business Conduct is a set of policies on key integrity issues that requires our representatives to act ethically and legally. It includes policies with respect to conflicts of interest, compliance with laws, insider trading, corporate opportunities,
competition and fair dealing, discrimination and harassment, health and safety, record-keeping, confidentiality, protection and proper use of assets, payments to government personnel and reports to and communications with the SEC and the public.
We intend to disclose any future amendments to, or waivers from, the Code of Business Conduct that affect our directors or senior
financial and executive officers within four business days of the amendment or waiver by posting such information on the website address and location specified above.
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performance. Of the three principal elements in our program (base salary, annual cash performance bonuses and long-term equity incentive compensation), only one, base salary, is fixed. The other
elements are variable: cash bonuses, which are earned based on the Compensation Committees assessment of annual performance, stock options, which deliver value only to the extent the value of our stock increases, restricted stock units, or
RSUs, which deliver value only to the extent certain service-based vesting conditions are met, and performance stock units, or PSUs, which deliver value only to the extent certain performance conditions are met. Our mixture of cash and equity
compensation is designed to incentivize and reward our executive officers to attain short and long-term goals and to encourage retention. Compensation takes into account Company performance, individual contributions and peer compensation.
The Board and the Compensation Committee are responsible for our executive officer compensation programs and practices and seek to provide
compensation to our executive officers that over time is competitive with compensation paid by comparable companies for comparable responsibilities and positions. Our goal is that each of total compensation, base salary, total cash compensation and
long-term equity incentives will generally, over time, achieve approximately the 50th percentile for executive officers in comparable positions at our peer group companies as well as other comparable companies, with the potential to earn total cash
compensation and long-term equity incentives as high as the 75th percentile for outstanding performance.
The Board and the Compensation
Committee seek to make compensation decisions transparent to our stockholders and executive officers and thereby to achieve our objectives by communicating openly with our stockholders and executive officers regarding our compensation process, pay
structure and performance objectives.
Compensation Consultant
The Compensation Committee retained Radford, an Aon Hewitt company, as its independent consultant to assist in evaluating our executive
compensation programs and practices and to make recommendations regarding fiscal 2017 compensation. For fiscal 2017, Radford prepared competitive market data for the compensation of our executive management team, evaluated the appropriateness of and
made recommendations regarding our peer group, analyzed our short term and long term incentive plan designs, analyzed equity retention and reviewed our equity burn rate and dilution levels relative to market, assessed our compensation practices and
levels against those of our peer group companies and other comparable companies, made recommendations regarding base salary, target bonus percentage and long-term incentive compensation for each Named Executive Officer, and updated the Compensation
Committee on compensation trends and regulatory developments. None of Radford, Aon Hewitt or their affiliates provides other services to us. The Compensation Committee assessed the independence of Radford pursuant to the SEC rules and concluded that
no conflict of interest existed that would prevent Radford from independently representing the Compensation Committee. The Compensation Committee has sole responsibility for the selection, engagement, removal and compensation of its compensation
consultant.
Compensation Benchmarking
In February 2016, the Compensation Committee engaged Radford to conduct a new benchmarking study for fiscal 2017. In June 2016, following a
review and analysis of our executive compensation program, Radford presented the Compensation Committee with a report and recommendations on executive compensation for fiscal 2017. Radfords recommendations included a market analysis of base
salaries, total cash compensation and equity compensation relative to a market consensus based on the peer group discussed below as well as peer data derived from the published Radford Global Life Sciences Survey representing public biotechnology
and pharmaceutical companies with fewer than 150 employees, weighted equally. The Compensation Committee used Radfords recommendations as a starting point to consider market competitiveness and ultimately set fiscal 2017 compensation after
also considering individual and Company performance.
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Peer Group
The peer group selected by the Compensation Committee for fiscal 2017 was composed of 19 public, biopharmaceutical companies selected based on
a comparable business and financial profile to us, including stage of development, employee size and market value. The fiscal 2017 peer group, which had an average market cap of $76.9 million and average annual revenues of $3.2 million,
included, Aerie Pharmaceuticals, Alimera Sciences, Anthera Pharmaceuticals, ArQule, BioDelivery Sciences
International, CEL-SCI, Celsion,
Cumberland Pharmaceuticals, Cytori Therapeutics, CytRx,
DURECT, Hemispherx BioPharma, Imprimis Pharmaceuticals, Ocular Therapeutix, Paratek Pharmaceuticals, Proteon Therapeutics, Sunesis Pharmaceuticals, Vermillion and Vical. Our peer group was recommended by Radford and approved by the Compensation
Committee. The fiscal 2017 peer group did not include the following five companies used in the fiscal 2016 peer group: Agenus, Curis, Heron Therapeutics and Ocothyreon, which no longer had a business or a financial profile comparable to ours, and
Pozen, which merged with another company. The fiscal 2017 peer group added the following four new comparator companies to the fiscal 2016 peer group: BioDelivery Sciences International, Imprimis Pharmaceuticals, Ocular Therapeutix and Paratek
Pharmaceuticals.
Corporate Governance
We believe the following executive compensation practices and policies promote good corporate governance:
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The Compensation Committee regularly reviews and assesses whether our compensation programs and policies create risks that are reasonably likely to have a material adverse effect on us. For fiscal 2017, the Compensation
Committee determined that the risks associated with our compensation policies and practices were not reasonably likely to result in a material adverse effect on us.
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Our insider trading policy prohibits our executive officers from engaging in short-term trades, short sales, hedging transactions, holding Company securities in a margin account or otherwise pledging our securities as
collateral for a loan.
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The Compensation Committee has engaged Radford as an independent executive compensation consultant.
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As described further below, we have adopted stock ownership guidelines for our executive officers.
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None of our Named Executive Officers are entitled to
tax gross-ups under
Sections 280G and 4999 of the Internal Revenue Code.
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Our 2008 Incentive Plan and our 2016 Long-Term Incentive Plan prohibit repricing of stock options and stock appreciation rights without stockholder approval.
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Say-on-Pay Feedback
from Stockholders
The Board and the Compensation Committee value the opinions of our stockholders, and consider the outcome of the annual advisory stockholder
vote on executive compensation when making future compensation decisions for our executive officers. At our 2016 annual meeting, 61% of the vote of stockholders present in person or represented by proxy and voting at the meeting approved our
advisory resolution regarding the compensation of Named Executive Officers. When making its fiscal 2018 compensation decisions and determining pay programs for fiscal 2018, the Compensation Committee considered this vote. The Compensation Committee
continued its regular practice of evaluating the program to reflect continued linkage between pay and Company performance and carefully considered actual compensation payouts, seeking to provide compensation that follows our compensation philosophy
and meets our compensation objectives described above. In light of all pertinent considerations, the Compensation Committee believes that our compensation programs embody
a pay-for-performance philosophy
that is well suited for these purposes.
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Overview of Compensation Program
Employment Agreements
Nancy Lurker, who became our President and Chief Executive Officer on September 15, 2016, is employed under an employment agreement with
us that provides for a minimum base salary, a discretionary annual cash bonus based on the achievement of Company performance goals, discretionary equity incentives and severance payments as described further below under
Termination-Based
Compensation
. In addition, as an inducement to her hire, Ms. Lurker was awarded restricted stock units that are eligible to vest based on our total stockholder return relative to the total stockholder returns of the companies that comprise
the NASDAQ Biotechnology Index, in each case, over a three-year performance period ending on September 14, 2019, and stock options that are eligible to vest in equal annual installments on each of the first four anniversaries of the grant date
based on Ms. Lurkers continued service with us.
Dario Paggiarino, who became our Vice President, Chief Medical Officer on
August 1, 2016, is employed under an offer letter agreement with us that provides for a base salary, a discretionary annual cash bonus and a grant of stock options. The offer letter also provides that Dr. Paggiarino will be eligible to
enter into an employment agreement with us that will provide that if Dr. Paggiarinos employment is terminated by us without cause or by him for good cause, then he will be entitled to receive a payment equal to 100% of his annual base
salary.
Deb Jorn, who became our Executive Vice President, Corporate and Commercial Development on November 2, 2016, is employed
under an employment agreement with us that provides for a minimum base salary, a discretionary annual cash bonus based on the achievement of Company and individual performance goals, discretionary equity incentives and severance payments as
described further below under
Termination-Based Compensation
. In addition, Ms. Jorn was awarded restricted stock units that are eligible to vest based on our total stockholder return relative to the total stockholder returns of the
companies that comprise the NASDAQ Biotechnology Index, in each case over a three-year performance period ending on November 1, 2019, and stock options that are eligible to vest in equal annual installments on each of the first four
anniversaries of the grant date based on Ms. Jorns continued service with us.
Leonard Ross, our Vice President, Finance,
became our principal financial officer in March 2009. As a result of his appointment, we, under the direction of the Compensation Committee, entered into an employment agreement with Mr. Ross that provides for a minimum base salary, a
discretionary annual cash bonus based on the achievement of Company and individual performance goals, discretionary equity incentives and severance payments as described further below under
Termination-Based Compensation
.
Paul Ashton, who served as our President and Chief Executive Officer until September 14, 2016, and Lori Freedman, who served as our Vice
President, Corporate Affairs and General Counsel until December 26, 2016, were both employed under employment agreements that were negotiated on
an arms-length basis
in 2006 in connection
with the acquisition of Control Delivery Systems by our then Managing Director and CEO and approved by our Board. Both of these employment agreements provided for a minimum base salary, a discretionary annual cash bonus based on the achievement of
Company and individual performance goals, discretionary equity incentives and severance payments. In connection with their respective terminations of employment during fiscal 2017, we entered into a separation agreement with each of Dr. Ashton
and Ms. Freedman, pursuant to which they were entitled to receive certain severance payments, as described further below under
Termination-Based Compensation
.
The Compensation Committee consulted with Radford in determining each of Ms. Lurkers and Ms. Jorns compensation in
connection with each of their hirings, with Radford recommending compensation levels based on the market practices of our fiscal 2017 peer group and biopharmaceutical company chief executive officers and executive vice presidents, corporate and
commercial development, respectively, hired since 2015. Based on Radfords advice, the Compensation Committee set Ms. Lurkers and Ms. Jorns base salary between the 50th
24
Using the above predetermined weightings, the weighted average score based on the
Compensation Committees assessment of corporate goal performance was 3.2625 out of 5.0. Based on the above payout percentage scale, this score resulted in a corporate performance achievement of 102.625%. The Compensation Committee determined
to use the performance score and the predetermined payout percentages in the determination of bonuses.
The target bonus payout
established for Ms. Lurker for fiscal 2017 was 55% of her annual base salary. Based on the corporate performance score of 102.625% and her target bonus payout of 55%, Ms. Lurker received a fiscal 2017 annual bonus of $299,152, equal to
approximately 56.4% of her fiscal 2017 base salary.
The target bonus payout established for Ms. Jorn for fiscal 2017 was 40% of her
annual base salary, weighted 75% towards corporate goals and 25% towards individual performance. The CEO recommended and the Compensation Committee approved an individual performance score of 110% for Ms. Jorn. Based on the corporate
performance score of 102.625% weighted 75%, her individual performance score of 110% weighted 25% and her target bonus payout of 40%, Ms. Jorn received a fiscal 2017 annual bonus of $158,793, equal to approximately 41.8% of her fiscal 2017 base
salary.
The target bonus payout established for Dr. Paggiarino for fiscal 2017 was 35% of his annual base salary, weighted 75%
towards corporate goals and 25% towards individual performance. The CEO recommended and the Compensation Committee approved an individual performance score of 100% for Dr. Paggiarino. Based on the corporate performance score of 102.625%
weighted 75%, his individual performance score of 100% weighted 25% and his target bonus payout of 35%, Dr. Paggiarino received a fiscal 2017 annual bonus of $137,403, equal to approximately 35.7% of his fiscal 2017 base salary.
The target bonus payout established for Mr. Ross for fiscal 2017 was 30% of his annual base salary, weighted 75% towards corporate goals
and 25% towards individual performance. The CEO recommended and the Compensation Committee approved an individual performance score of 120% for Mr. Ross. Based on the corporate performance score of 102.625% weighted 75%, his individual
performance score of 120% weighted 25% and his target bonus payout of 30%, Mr. Ross received a fiscal 2017 annual bonus of $84,364, equal to approximately 32.1% of his fiscal 2017 base salary.
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Long-Term Equity Incentive Compensation Granted for Fiscal 2017
. In July 2016, the Compensation Committee awarded time and service-based options to Dr. Ashton, Ms. Freedman and Mr. Ross, subject to
stockholder approval in the case of Dr. Ashton. In light of Radfords recommendations and our compensation philosophy, the Compensation Committee granted time and service-based options at the
50
th
percentile of our peer group for each of Dr. Ashton, Ms. Freedman and Mr. Ross with exercise prices equal to the fair market value of our stock on the date of grant as
follows: 445,000 options for Dr. Ashton, subject to stockholder approval, 125,000 options for Ms. Freedman and 95,000 options for Mr. Ross. These options vest in equal installments on each of the first four anniversaries of the date
of grant. Because Dr. Ashtons employment with us terminated prior to his fiscal 2017 award receiving stockholder approval, his 445,000 options were cancelled on the date of his employment termination.
|
Pursuant to Ms. Lurkers employment agreement, and as subsequently approved by our stockholders at the 2016 Annual General Meeting
held on December 12, 2016 in accordance with ASX Listing Rules, Mr. Lurker received a grant of 850,000 time and service-based options and a grant of performance stock units representing the right to receive up to 500,000 shares of our
common stock based on our total stockholder return relative to the total stockholder returns of the companies that comprise the NASDAQ Biotechnology Index, in each case, measured over a three-year performance period ending on September 14,
2019. Both awards were made as inducement grants within the meaning of NASDAQ Listing Rule 5635(c). Pursuant to his offer letter, Dr. Paggiarino received an award of 230,000 time and service-based options that vest in equal installments on each
of the first four anniversaries of the date of grant. Pursuant to her employment agreement, Ms. Jorn received an award of 300,000 time and service-based options and performance stock units representing the right to receive
28
up to 200,000 shares of our common stock based on our total stockholder return relative to the total stockholder returns of the companies that comprise the NASDAQ Biotechnology Index, in each
case, measured over a three-year performance period ending on November 1, 2019. The Compensation Committee set Ms. Lurkers and Ms. Jorns option awards at the
50
th
percentile
for new-hire option
grants relative to this market group, and their performance stock unit awards, if achieved at maximum,
would put their
total new-hire equity
at the 75
th
percentile.
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A
One-Time
Retention Bonus
was awarded by the Compensation Committee to Mr. Ross on January 4, 2017 in the amount of
$131,446, which is equal to 50% of Mr. Ross fiscal 2017 annual base salary. Pursuant to the retention bonus letter delivered to Mr. Ross, so long as Mr. Ross is employed by us as of December 22, 2017, or the End Date,
Mr. Ross will
receive (a) one-half of
the amount of
the one-time retention
bonus in a cash lump sum (less applicable withholding and
payroll taxes) in the last payroll cycle in December 2017,
and (b) one-half of
the amount of
the one-time retention
bonus in the form of
restricted stock units. The number of restricted stock units that will be granted to Mr. Ross will be based upon the fair market value of our common stock on the End Date, as determined by the Compensation Committee. The restricted stock units
will vest over
a one-year period
following the grant date and will be subject to the terms and conditions of our 2016 Long-Term Incentive Plan and the applicable award agreement.
The one-time retention
bonus will become payable to Mr. Ross earlier than the End Date upon certain terminations of his employment or a change of control of the Company, as described below under the
section entitled
Potential Payments upon Termination or Change in Control
.
|
Fiscal 2018 Base Salary, Bonus Target
and Long-Term Equity Incentive Compensation
In March 2017, the Compensation Committee engaged Radford to conduct a new benchmarking
study for fiscal 2018. In June 2017, following a review and analysis of our executive compensation program, Radford presented the Compensation Committee with a report and recommendations on executive compensation for fiscal 2018. Radfords
recommendations included a market analysis of base salaries, total cash compensation and equity compensation relative to a market consensus, or FY2018 Market Consensus, based on the peer group discussed below as well as peer data derived from the
published Radford Global Life Sciences Survey representing public biotechnology and pharmaceutical companies with fewer than 150 employees, weighted equally. The Compensation Committee used Radfords recommendations as a starting point to
consider market competitiveness and ultimately set compensation after also considering individual and Company performance.
The peer group
selected by the Compensation Committee for fiscal 2018 was composed of 19 public, biopharmaceutical companies selected based on a comparable business and financial profile to us, including stage of development, employee size and market value. The
fiscal 2018 peer group, which had a median market cap of $150 million and median annual revenues of $2.1 million, included, Akebia Therapeutics, Alimera Sciences, Anthera Pharmaceuticals, ArQule, BioDelivery Sciences International,
ChemoCentryx, Clearside BioMedical, Cumberland Pharmaceuticals, CytRx, DURECT, Edge Therapeutics, Ocular Therapeutix, Ohr Pharmaceutical, Paratek Pharmaceuticals, Proteon Therapeutics, Sunesis Pharmaceuticals, Syndax Pharmaceuticals, Tetraphase
Pharmaceuticals and Zogenix. Our peer group was recommended by Radford and approved by the Compensation Committee. The fiscal 2018 peer group did not include the following eight companies used in the fiscal 2017 peer group: Aerie
Pharmaceuticals, CEL-SCI, Celsion,
Cytori Therapeutics, Hemispherx BioPharma, Imprimis Pharmaceuticals, Vermillion and Vical, each of which no longer had a business or a financial profile comparable to
ours. The fiscal 2018 peer group added the following eight new comparator companies to the fiscal 2017 peer group: Akebia Therapeutics, ChemoCentryx, Clearside BioMedical, Edge Therapeutics, Ohr Pharmaceutical, Syndax Pharmaceuticals, Tetraphase
Pharmaceuticals and Zogenix.
For fiscal 2018, the Compensation Committee targeted base salary and total compensation of our executive
officers around the 50
th
percentile of FY2018 Market Consensus, but limited by a maximum increase of 3% from fiscal 2017 base salaries except in the case of outstanding performance. The
Compensation Committee approved
29
the following increases in the base salaries of our Named Executive Officers for fiscal 2018: (i) Ms. Lurkers base salary was increased to $545,900, an increase of 3.0% from her fiscal
2017 base salary; (ii) Dr. Paggiarinos base salary was increased to $396,550, an increase of 3.0% from his fiscal 2017 base salary; (iii) Ms. Jorns base salary was increased to $391,400, an increase of 3.0% from her
fiscal 2017 base salary; and (iv) Mr. Rosss base salary was increased to $283,923, an increase of 8% from his fiscal 2017 base salary, which included a 3% increase from Mr. Rosss fiscal 2017 base salary and an additional
5% increase in connection with his promotion, effective July 1, 2017, to the position of Vice President, Finance and Chief Accounting Officer. The Compensation Committee set fiscal 2018 target bonus percentages at 55% for Ms. Lurker, 35%
for Dr. Paggiarino, 40% for Ms. Jorn and 35% for Mr. Ross.
Radford recommended that consideration be given to utilizing a
combination of stock options and restricted stock units for our fiscal 2018 long-term equity incentive compensation awards, whereas we have traditionally used only stock options in prior years. In light of Radfords recommendations, the
Compensation Committee granted a combination of time and service-based options, time and service-based restricted stock units and performance stock units at the 50
th
percentile of the FY2018
Market Consensus for each of its executive officers, summarized as follows:
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Name
|
|
Stock Option
Awards
(2)
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|
|
Restricted Stock
Unit Awards
(3)
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|
Performance Stock
Unit Awards
(4)
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Nancy Lurker
(1)
|
|
|
240,000
|
|
|
|
120,000
|
|
|
|
115,000
|
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Dario Paggiarino
|
|
|
60,000
|
|
|
|
30,000
|
|
|
|
25,000
|
|
Deb Jorn
|
|
|
90,000
|
|
|
|
45,000
|
|
|
|
35,000
|
|
Leonard S. Ross
|
|
|
35,000
|
|
|
|
20,000
|
|
|
|
30,000
|
|
(1)
|
The stock option, RSU and PSU awards to Ms. Lurker approved by the Compensation Committee are subject to approval by our stockholders at the Annual Meeting of Stockholders under the rules of ASX.
|
(2)
|
The stock options were granted at an exercise price of $1.77 per share, the closing price of our common stock at June 27, 2017, the date of grant, and vest in equal installments on each of the first three
anniversaries of the date of grant.
|
(3)
|
The RSU awards vest in equal installments on each of the first three anniversaries of the date of grant.
|
(4)
|
The performance conditions associated with the PSU awards are as follows: (a) for one-third of the PSUs, upon an FDA acceptance of our NDA submission of Durasert three-year uveitis for review on or before
March 31, 2018 and
(b) for two-thirds of
the PSUs, upon an FDA approval of Durasert three-year uveitis on or before March 31, 2019. For each performance condition that is achieved, 50%
of the underlying stock units that are associated with that performance condition will vest at the achievement date and 50% will vest on the first anniversary of such date, subject to the executive officers continued employment with us through
the applicable vesting date.
|
Termination-Based Compensation
Pursuant to their employment agreements or offer letters, as applicable, Ms. Lurker, Dr. Paggiarino, Ms. Jorn and Mr. Ross
are, and Dr. Ashton and Ms. Freedman were, entitled to severance payments in certain circumstances described below under the section entitled
Potential Payments upon Termination or Change in Control
. In connection with
their respective terminations of employment during fiscal 2017, we entered into a separation agreement with each of Dr. Ashton and Ms. Freedman, pursuant to which they were entitled to receive certain severance payments, as described below
under
Potential Payments upon Termination or Change in Control
. We believe that it is important to define the relative obligations of us and these Named Executive Officers upon a termination of employment, including obtaining
protection against competition and solicitation, and that severance protections assist in attracting and retaining high quality executives and in keeping them focused on their responsibilities.
30
Tax and Accounting Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended, or Section 162(m), generally disallows a tax deduction for
individual compensation in excess of $1.0 million in any taxable year paid to a public companys CEO and the three other most highly compensated executive officers, other than its chief financial officer, unless the compensation qualifies
as performance-based under Section 162(m). Our Board and Compensation Committee may take into consideration the potential deductibility of the compensation payable under our compensation programs as one of the factors to be considered when
establishing and administering these programs. Our 2008 Incentive Plan and our 2016 Long-Term Incentive Plan are intended to permit awards that comply with the Section 162(m) exception for qualifying performance-based compensation. However, our
Board or Compensation Committee may, in their judgment, authorize compensation payments that do not comply, in whole or in part, with the performance-based exemptions in Section 162(m) or that may otherwise be limited as to tax deductibility
when they believe that such payments are appropriate to attract and retain executive talent. Our Board and Compensation Committee regularly consider the accounting implications of significant compensation decisions, especially in connection with
decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy
and objectives.
Prohibition of Hedging and Pledging of our Stock
Our Insider Trading Policy prohibits our employees, including our executive officers, and directors from engaging in transactions designed to
offset decreases in the market value of our stock, including certain forms of hedging and monetization transactions, such as collars and prepaid variable forward contracts. Our policy also prohibits employees, including our
executive officers, and directors from pledging our securities as collateral for a loan.
Stock Ownership Guidelines
Effective September 25, 2015, our Board, upon the recommendation of the Compensation Committee, adopted stock ownership guidelines for our
executive officers. These guidelines were established to further align the interests of our executive officers with those of our stockholders and to promote our commitment to sound corporate governance practices. The ownership guidelines for our
executive officers are listed below:
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Multiple of Base Salary
|
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Chief Executive Officer
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3x
|
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Each Other Executive Officer covered by the Guidelines
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1x
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Owned shares as well as shares underlying vested stock options, to the extent such options
are in-the-money, unvested
restricted shares (including performance shares) and vested restricted shares are counted towards meeting the guidelines.
All executive officers have five years from the later of the effective date of these guidelines or their appointment as a Section 16
officer to meet these guidelines, and their stock ownership is reviewed annually by the Compensation Committee. For Ms. Lurker, Dr. Paggiarino, Ms. Jorn and Mr. Ross, the compliance deadline is September 15, 2021,
August 1, 2021, November 2, 2021, and September 25, 2020, respectively, but we expect the target stock ownership levels will likely be achieved before then.
10b5-1 Plans
Each of our executive officers is required to receive the permission of our Chief Compliance Officer prior to entering into any transactions in
our securities. Generally, trading is permitted only during announced trading
31
windows. Employees subject to trading restrictions, including our Named Executive Officers, may enter into trading plans under
Rule 10b5-1 of
the
1934 Act, provided the plans are entered into during an open trading window and approved by Vice President, Finance (or, in the event the Vice President, Finance is seeking approval of
a 10b5-1 trading
plan, the Chief Executive Officer). None of our executive officers currently has
a 10b5-1 plan
in effect. In the future, one or more
of our executive officers, and other future executive officers, may be parties
to 10b5-1 plans.
Compensation Committee Processes and Procedures
The Compensation Committee is responsible for overseeing executive compensation and benefits; it administers, reviews and approves, or, as it
determines appropriate, recommends to the Board, any changes in individual compensation of executive officers, general compensation policies and equity and incentive plans. The Compensation Committee has the authority to obtain advice and assistance
from internal or external legal, accounting or other advisors, and to authorize payment of any such advisors.
No executive may be
involved in, or present during, deliberations or voting on, his or her own compensation.
Executive Compensation
The following tables, footnotes and narratives provide information regarding the compensation, benefits and equity holdings in our company of
our Named Executive Officers.
Summary Compensation Table
The following table and footnotes provide additional information concerning the compensation of our Named Executive Officers for the fiscal
years ended June 30, 2017, 2016 and 2015:
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Name and Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Stock
Awards
($)
(1)
|
|
|
Option
Awards
($)
(2)
|
|
|
Non-Equity
Incentive
Plan
Compensation ($)
(3)
|
|
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All Other
Compensation ($)
(4)
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Total ($)
|
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Nancy Lurker
President and Chief Executive Officer
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|
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2017
|
|
|
|
421,622
|
|
|
|
725,000
|
|
|
|
715,920
|
|
|
|
299,152
|
|
|
|
25,470
|
|
|
|
2,187,164
|
|
|
|
|
|
|
|
|
|
Deb Jorn
EVP, Corporate and Commercial Development
|
|
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2017
|
|
|
|
252,115
|
|
|
|
297,650
|
|
|
|
466,354
|
|
|
|
158,793
|
|
|
|
9,135
|
|
|
|
1,184,047
|
|
|
|
|
|
|
|
|
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Dario Paggiarino
VP, Chief Medical Officer
|
|
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2017
|
|
|
|
352,917
|
|
|
|
53,100
|
|
|
|
645,377
|
|
|
|
137,403
|
|
|
|
5,547
|
|
|
|
1,194,344
|
|
|
|
|
|
|
|
|
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Leonard Ross
VP, Finance and Chief Accounting Officer
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|
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2017
|
|
|
|
262,891
|
|
|
|
35,400
|
|
|
|
251,193
|
|
|
|
84,364
|
|
|
|
13,512
|
|
|
|
647,360
|
|
|
|
2016
|
|
|
|
255,234
|
|
|
|
|
|
|
|
112,038
|
|
|
|
77,091
|
|
|
|
13,954
|
|
|
|
458,317
|
|
|
|
2015
|
|
|
|
247,800
|
|
|
|
|
|
|
|
155,006
|
|
|
|
47,875
|
|
|
|
13,180
|
|
|
|
463,861
|
|
|
|
|
|
|
|
|
|
Former Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul Ashton
Former President and Chief Executive Officer
|
|
|
2017
|
|
|
|
99,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
580,231
|
(5)
|
|
|
679,690
|
|
|
|
2016
|
|
|
|
463,500
|
|
|
|
|
|
|
|
735,038
|
|
|
|
257,219
|
|
|
|
13,784
|
|
|
|
1,469,541
|
|
|
|
2015
|
|
|
|
463,500
|
|
|
|
|
|
|
|
815,528
|
|
|
|
133,836
|
|
|
|
12,888
|
|
|
|
1,425,752
|
|
|
|
|
|
|
|
|
|
Lori Freedman
Former VP, Corporate Affairs, General Counsel and Company Secretary
|
|
|
2017
|
|
|
|
176,018
|
|
|
|
|
|
|
|
278,608
|
|
|
|
|
|
|
|
597,762
|
(6)
|
|
|
1,052,388
|
|
|
|
2016
|
|
|
|
350,127
|
|
|
|
|
|
|
|
224,076
|
|
|
|
129,505
|
|
|
|
14,018
|
|
|
|
717,726
|
|
|
|
2015
|
|
|
|
339,929
|
|
|
|
|
|
|
|
258,343
|
|
|
|
76,620
|
|
|
|
13,055
|
|
|
|
687,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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32
(3)
|
The above table assumes that the market-based performance stock units granted to Ms. Lurker and Ms. Jorn will vest at the target performance level (i.e., that our total stockholder return, or TSR, percentile
rank will be in the 75th percentile). The actual number of performance stock units that vest will be between zero and 500,000 units (for Ms. Lurker) or 300,000 units (for Ms. Jorn), based on our TSR percentile rank determined as of the
executives termination of employment or the change of control, as applicable.
|
(4)
|
The above table values the acceleration of unvested stock awards using the closing price of our common stock on NASDAQ on June 30, 2017, which was $1.71.
|
The severance arrangements of each of Ms. Lurker, Ms. Jorn, Dr. Paggiarino and Mr. Ross as of June 30, 2017 are
further described in the following paragraphs. The separation agreements entered into with Dr. Ashton and Ms. Freedman in fiscal 2017 in connection with their termination of employment are further described in the following paragraphs.
Nancy Lurker
Termination of
Ms. Lurkers employment by us without cause, or by Ms. Lurker with good cause (as such terms are defined her employment agreement), would require us to pay severance to Ms. Lurker. Upon any such
termination (other than in connection with a change of control (as defined in Ms. Lurkers employment agreement)), Ms. Lurker would be entitled to receive (i) base salary continuation for a period of 12 months from
the date of termination, payable in accordance with our normal payroll practices, (ii) one times her annual target bonus, payable in equal installments during the period of base salary continuation under clause (i) above, and
(iii) provided that Ms. Lurker timely elects COBRA continuation coverage for herself and her eligible dependents, a monthly amount that equals the portion of the monthly health premiums paid by us on behalf of her and her eligible
dependents immediately preceding the date that her employment terminates until the earlier of the last day of the period of Ms. Lurkers base salary continuation or the date that Ms. Lurker and her eligible dependents become
ineligible for COBRA continuation coverage pursuant to applicable law or plan terms. Additionally, (x) with respect to
Ms. Lurkers sign-on equity
grant of 850,000 stock options, any
unvested portion of the options held by Ms. Lurker immediately prior to her employment termination by us without cause or by Ms. Lurker with good cause that would have vested as of the second anniversary of her employment termination will
vest upon any such termination, and such options would remain exercisable until the earlier of (1) three months thereafter and (2) the applicable option expiration date and (y) with respect to all other stock options held by
Ms. Lurker, any unvested portion that would have vested as of the first anniversary following the date of her termination by us without cause or by Ms. Lurker with good cause will vest upon any such termination, and such options would
remain exercisable until the earlier of (i) three months thereafter and (ii) the applicable option expiration date.
In the
event of any such termination that occurs within 60 days prior to, or within 18 months following a change of control, Ms. Lurker would be entitled to receive (i) base salary continuation for a period of 18 months, payable in accordance
with our normal payroll practices, (ii) 1.5 times her annual target bonus, payable in equal installments during the period of base salary continuation under clause (i) above, and (iii) provided that Ms. Lurker timely elects COBRA
continuation coverage for herself and her eligible dependents, a monthly amount that equals the portion of the monthly health premiums paid by us on behalf of her and her eligible dependents immediately preceding the date that her employment
terminates until the earlier of the last day of the period of Ms. Lurkers base salary continuation or the date that Ms. Lurker and her eligible dependents become ineligible for COBRA continuation coverage pursuant to applicable law
or plan terms. In addition, upon any such termination following a change of control, any unvested portion of Ms. Lurkers options and any unvested restricted shares would vest and the options would become exercisable upon such termination,
and such options would remain exercisable until the earlier of (i) one year thereafter and (ii) the applicable option expiration date, provided, however, that with respect to
Ms. Lurkers sign-on equity
grant of 850,000 stock options, pursuant to the applicable award agreement, such termination must occur within 24 months following a change of control.
Termination by us for cause or by Ms. Lurker without good cause would not require us to pay any severance to Ms. Lurker.
42
With respect to
Ms. Lurkers sign-on equity
grant of 500,000 performance stock units, in the event of a termination of Ms. Lurkers employment by us without cause or by Ms. Lurker with good
cause,
a pro-rated portion
of the performance stock units, based on the number of days elapsed between September 15, 2016 and Ms. Lurkers termination date divided by 1,095 days (the
original 3-year performance
period) would remain outstanding and eligible to be earned based on our total stockholder return, or TSR, relative to the companies that comprise the NASDAQ Biotechnology Index,
with Ms. Lurkers termination date serving as the last day of the performance period. In the event that a change of control occurs before the end of the three-year performance period, the performance stock units will be eligible to vest on
the date of the change of control based on our TSR relative to the companies that comprise the NASDAQ Biotechnology Index, with performance measured as of the change of control.
Ms. Lurkers right to receive the severance payments and benefits described above under her employment agreement is conditioned upon
her execution
and non-revocation of
a separation agreement containing a general release of claims. Ms. Lurkers employment agreement contains certain restrictive covenants,
including non-disclosure of
confidential information, assignment of rights to intellectual property,
a non-competition covenant
that runs for 12 months
following her termination of employment for any reason,
a non-solicitation covenant
with respect to certain of our customers, vendors, suppliers and business partners that runs for 12 months
following her termination of employment for any reason and
a non-solicitation covenant
with respect to our employees and independent contractors that runs for 12 months following her termination of
employment.
Deb Jorn
Termination of
Ms. Jorns employment by us without cause, or by Ms. Jorn with good cause (as such terms are defined in her employment agreement), would require us to pay severance to Ms. Jorn. Upon any such termination,
Ms. Jorn would be entitled to receive (i) base salary continuation for a period of 12 months from the date of termination (6 months if such termination were to occur within one year of Ms. Jorns start date, or November 2,
2017), payable in accordance with our normal payroll practices, (ii) one times her annual target
bonus (one-half the
target bonus if such termination were to occur within one year of
Ms. Jorns start date, or November 2, 2017), payable in equal installments during the period of base salary continuation under clause (i) above, and (iii) provided that Ms. Jorn timely elects COBRA continuation coverage
for herself and her eligible dependents, a monthly amount that equals the portion of the monthly health premiums paid by the Company on behalf of Ms. Jorn and her eligible dependents immediately preceding the date that her employment terminates
until the earlier of the last day of the period of Ms. Jorns base salary continuation or the date that Ms. Jorn and her eligible dependents become ineligible for COBRA continuation coverage pursuant to applicable law or plan terms.
Additionally, upon any such termination that occurs after a change of control (as defined in Mr. Jorns employment agreement), any unvested portion of Ms. Jorns options and any unvested restricted shares would vest
and the options would become exercisable upon such termination, and such options would remain exercisable until the earlier of (x) one year thereafter and (y) the applicable option expiration date, provided, however, that with respect to
Ms. Jorns stock options, pursuant to the applicable award agreements, such termination must occur within 24 months following a change of control. Termination by us for cause or by Ms. Jorn without good cause would not require us to
pay any severance to Ms. Jorn.
Ms. Jorns right to receive the severance payments and benefits described above under her
employment agreement is conditioned upon her execution
and non-revocation of
a separation agreement containing a general release of claims. Ms. Jorns employment agreement contains certain
restrictive covenants,
including non-disclosure of
confidential information, assignment of rights to intellectual property,
a non-competition covenant
that runs for 12 months following her termination of employment for any reason,
a non-solicitation covenant
with respect
to certain of our customers, vendors, suppliers and business partners that runs for 12 months following her termination of employment for any reason and
a non-solicitation covenant
with respect to
our employees and independent contractors that runs for 12 months following her termination of employment.
43
With respect to the 300,000 stock options granted to Ms. Jorn in connection with the
commencement of employment and the 90,000 stock options granted to her in June 2017, any unvested portion of such options held by Ms. Jorn immediately prior to her termination of employment by us without cause or by Ms. Jorn with good
cause that would have vested as of the first anniversary of her employment termination will vest upon any such termination, and such options will remain exercisable until the earlier of (i) three months thereafter and (ii) the applicable
option expiration date. Additionally, if such termination occurs within 24 months following a change of control (as defined in the applicable award agreement), then such stock options will become fully vested upon such termination, and
such options will remain exercisable until the earlier of (i) one year thereafter and (ii) the applicable option expiration date.
With respect to the 200,000 performance stock units granted to Ms. Jorn in connection with the commencement of her employment, in the
event that a change of control occurs before the end of
the 3-year performance
period, the performance stock units will be eligible to vest on the date of the change of control based on the
Companys TSR relative to the companies that comprise the NASDAQ Biotechnology Index, with performance measured as of the change of control.
With respect to the 45,000 restricted stock units granted to Ms. Jorn in June 2017, any unvested restricted stock units held by
Ms. Jorn immediately prior to her termination of employment by us without cause or by Ms. Jorn with good cause that would have vested as of the first anniversary of her employment termination will vest upon any such termination.
Additionally, if such termination occurs within 24 months following a change of control, then such restricted stock units will become fully vested upon such termination.
Dario Paggiarino
With respect to the
230,000 stock options granted to Dr. Paggiarino in connection with his commencement of employment and the 60,000 stock options granted to him in June 2017, any unvested portion of such options held by Dr. Paggiarino immediately prior to
his termination of employment by us without cause or by Dr. Paggiarino with good cause that would have vested as of the first anniversary of his employment termination will vest upon any such termination, and such
options will remain exercisable until the earlier of (i) three months thereafter and (ii) the applicable option expiration date. Additionally, if such termination occurs within 24 months following a change of control, then such
stock options will become fully vested upon such termination, and such options would remain exercisable until the earlier of (i) one year thereafter and (ii) the applicable option expiration date.
With respect to the 30,000 restricted stock units granted to Dr. Paggiarino in June 2017, any unvested restricted stock units held by
Dr. Paggiarino immediately prior to his termination of employment by us without cause or by Dr. Paggiarino with good cause that would have vested as of the first anniversary of his employment termination will vest upon any such
termination. Additionally, if such termination occurs within 24 months following a change of control, then such restricted stock units will become fully vested upon such termination.
Leonard Ross
Pursuant to his employment
agreement, termination of Mr. Ross employment by us without cause, or by Mr. Ross with good cause (as such terms are defined in his employment agreement), would require us to pay severance to Mr. Ross.
Upon any such termination (other than within 24 months of a change of control (as such term is defined in Mr. Ross employment agreement)), provided that at our election Mr. Ross remains an employee for up to nine months
after notifying us of a good cause termination, Mr. Ross would be entitled to a lump sum payment equal to the sum of (i) 75% of current annual salary and (ii) a pro rata portion of the current years bonus, calculated based on
the period from the commencement of the fiscal year until the termination date and further calculated on the assumption that all targets and formulas for determining such bonus had been met, or, if no such targets or formulas were established,
calculated as a pro rata portion of the prior years bonus. We also would be required to provide medical, life and disability benefits to Mr. Ross for a period of one year if he so elected. Termination by us for cause or by Mr. Ross
without good cause would not require us to pay any severance to Mr. Ross.
44
In the event of any such termination within 24 months of a change of control, Mr. Ross
would be entitled to a lump sum payment equal to the sum of (i) 100% of current annual salary, (ii) an amount equal to the prior years bonus and (iii) a pro rata portion of the current years bonus, calculated based on the
period from the commencement of the fiscal year until the termination date and further calculated on the assumption that all targets and formulas for determining such bonus had been met, or, if no such targets or formulas were established,
calculated as a pro rata portion of the prior years bonus, as well as medical, life and disability benefits to Mr. Ross for a period of one year if he so elected.
Mr. Ross right to receive the severance payments and benefits described above under his employment agreement is conditioned upon
his execution
and non-revocation of
a separation agreement containing a general release of claims. Mr. Ross is a party to an Employee Confidentiality, Proprietary Rights and Noncompetition
Agreement with us, pursuant to which he is subject to certain restrictive covenants,
including non-disclosure of
confidential information,
a non-recruitment of
employees covenant that runs for two years following his termination of employment for any reason, and
a non-competition covenant
that runs for one year following his termination of employment for any reason.
Pursuant to the applicable award agreements, (x) with respect to all options held by Mr. Ross, any unvested portion that would have
vested as of the first anniversary following the date of his termination of employment by us without cause or by Mr. Ross with good cause would vest upon any such termination, and such options would remain exercisable until the earlier of
(1) three months thereafter and (2) the applicable option expiration date; and (y) with respect to any unvested time-based restricted stock units held by Mr. Ross that would have vested as of the first anniversary following the
date of his termination of employment by us without cause or by Mr. Ross with good cause, would vest upon any such termination. In addition, upon any such termination within 24 months of a change of control, (i) any unvested portion
of Mr. Ross options would vest and become exercisable upon such termination, and such options would remain exercisable until the earlier of (A) one year thereafter and (B) the applicable option expiration date and (ii) any
unvested portion of Mr. Ross time-based restricted stock units would vest upon any such termination.
If Mr. Ross
employment is terminated by us without cause (as defined in Mr. Ross retention bonus letter agreement, dated January 4, 2017), prior to December 22, 2017, then he will be entitled to receive
a pro-rated
portion of
his one-time retention
bonus amount ($131,446), based on the number of days that have elapsed between January 4, 2017 and his
termination date divided by 354 days, which amount will be payable in a cash lump sum, subject to his execution
and non-revocation of
a general release of claims. In the event that a covered
transaction (as defined in Mr. Ross retention bonus letter agreement, dated January 4, 2017) occurs prior to December 22, 2017, provided he remained actively employed by us and in good standing through the consummation of
the covered transaction, we will pay Mr. Ross
a pro-rated portion
of
his one-time retention
bonus amount, based on the number of days that have
elapsed between January 4, 2017 and the date of the consummation of such covered transaction, divided by 354 days, which amount will be payable in a cash lump sum.
Paul Ashton
In connection with the
termination of Dr. Ashtons employment on September 14, 2016, he was entitled to severance compensation as follows, subject to his execution
and non-revocation of
a general release of
claims:
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$477,405, representing a lump sum payment of one year of base salary;
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$65,607, representing a lump sum payment of a pro rata portion of Dr. Ashtons maximum fiscal 2017 annual incentive compensation;
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$25,677, representing monthly payments made on Dr. Ashtons behalf for COBRA continuation coverage for one year based upon his participation in our group insurance plans;
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45
PROPOSAL 4
APPROVAL OF THE GRANT OF STOCK OPTIONS, RESTRICTED STOCK UNITS AND PERFORMANCE STOCK UNITS TO NANCY LURKER
We provide equity incentives to our executive officers as part of their compensation. On June 27, 2017, the Compensation Committee
granted three equity awards to Ms. Lurker, subject to stockholder approval in accordance with ASX Listing Rule 10.11. The awards consist of an option to purchase 240,000 shares of Common Stock, restricted stock units (RSUs)
entitling Ms. Lurker to receive up to 120,000 shares of Common Stock and performance stock units (PSUs) entitling Ms. Lurker to receive up to 115,000 shares of Common Stock based on the achievement of certain regulatory
development milestones. The Compensation Committee determined the amount and terms of the grants with advice from its independent compensation consultant, Radford, and considered peer group and survey information. The awards were designed to
incentivize Ms. Lurkers future performance and to promote her retention.
We will issue certificates representing the awards
within one month of the receipt of stockholder approval. The awards to Ms. Lurker will not have any effect upon the rights of existing security holders, except a potential reduction of each existing security holders percentage ownership
in our company by up to approximately 1.04%.
ASX Listing Rule 10.11 provides that we must not issue securities to a related party of ours
without first obtaining stockholder approval. Ms. Lurker, as a director of our company, is considered a related party for purposes of ASX Listing Rule 10.11. As stockholder approval is being sought under ASX Listing Rule 10.11, approval under
ASX Listing Rule 7.1 is not required in accordance with ASX Listing Rule 7.2 (Exception 14). If this Proposal No. 4 is approved, we will retain the flexibility to issue equity securities up to the 15% annual placement capacity set out in ASX
Listing Rule 7.1 without seeking stockholder approval (or 25% if Proposal No. 3 is approved by the stockholders at the Annual Meeting). Further commentary regarding Listing Rules 7.1 and 7.1A and our annual placement capacity is set out under
Proposal Nos. 2 and 3.
Material Terms of the Proposed Grants
Stock Option
Ms. Lurkers
option has an exercise price of US$1.77 per share, the closing price on NASDAQ of a share of our Common Stock on June 27, 2017, the date the Compensation Committee approved her grants (the approval date). The option vests and
becomes exercisable in three equal installments on the first through third anniversaries of the approval date, subject to Ms. Lurkers continued employment with us through the applicable vesting date. This option, if not earlier forfeited,
expires on the tenth anniversary of the approval date.
If Ms. Lurkers employment with us is terminated by us without
cause or by her for good cause (as each such term is defined in her employment agreement with us), then any unvested portion of the option that would have vested as of the first anniversary of her termination of employment
will vest upon any such termination, and the option will remain exercisable until the earlier of (i) three months thereafter and (ii) the option expiration date. Additionally, if such termination occurs within 24 months following a
change of control (as such term is defined in the option award agreement), then the option will become fully vested upon such termination, and the option will remain exercisable until the earlier of (x) one year thereafter and
(y) the option expiration date.
Restricted Stock Unit
Ms. Lurkers RSU grant vests in three equal installments on the first through third anniversaries of the approval date, subject to
Ms. Lurkers continued employment with us through the applicable vesting date. Each of the 120,000 RSUs represents the right to receive one share of Common Stock.
If Ms. Lurkers employment with us is terminated by us without cause or by her for good cause, then any unvested RSUs that would have
vested as of the first anniversary of her termination of employment will vest upon any such termination. Additionally, if such termination occurs within 24 months following a change of control, then the RSUs will become fully vested upon such
termination.
56
Performance Stock Unit
Ms. Lurkers PSU grant vests as follows:
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If the U.S. Food and Drug Administration (FDA) accepts the new drug application (NDA) for Durasert
3-year
treatment for posterior segment uveitis on or
before March 31, 2018, then 50% of
one-third
of the PSU grant vests on the date of such FDA acceptance (the NDA Acceptance Date) and the other 50% of
one-third
of the PSU grant will vest on the first anniversary of the NDA Acceptance Date, subject to Ms. Lurkers continued employment with us through the applicable vesting date; and
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If the FDA approves the NDA for Durasert
3-year
treatment for posterior segment uveitis on or before March 31, 2019, then 50% of
two-thirds
of the PSU grant vests on the date of such NDA approval (the NDA Approval Date) and the other 50% of
two-thirds
of the PSU grant vests on the
first anniversary of the NDA Approval Date, subject to Ms. Lurkers continued employment with us through the applicable vesting date.
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Each of the 115,000 PSUs represents the right to receive one share of Common Stock. If Ms. Lurkers employment with us terminates
for any reason prior to the vesting of the PSUs, then any unvested PSUs will be immediately and automatically forfeited upon such termination. The stock option, RSU and PSU awards will be made subject to and governed by the terms and conditions of
the 2016 Plan.
The proposed grants are being issued for no cash consideration and there are no loans being made in relation to the
proposed grants. Accordingly, no funds are being raised in connection with the grant of securities contemplated by this Proposal No. 4.
Voting
Exclusion Statement
We will disregard any votes cast in respect of Proposal No. 4 by a person who is to receive securities in
relation to this Proposal No. 4 and any associates of those persons. However, we need not disregard a vote cast on Proposal No. 4 if:
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it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy card; or
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it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy card to vote as the proxy decides.
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THE BOARD (EXCLUDING NANCY LURKER WHO ABSTAINS FROM MAKING A RECOMMENDATION DUE TO HER PERSONAL INTEREST IN THE PROPOSAL) RECOMMENDS THAT
YOU VOTE
FOR
PROPOSAL NO. 4 TO APPROVE THE GRANT OF STOCK OPTIONS, RSUS AND PSUS TO MS. LURKER.
57
PROPOSALS
5-10
APPROVAL OF THE GRANT OF STOCK OPTIONS AND/OR DEFERRED STOCK UNITS TO OUR
NON-EXECUTIVE
DIRECTORS
The Compensation Committee has granted, subject to stockholder approval for purposes of ASX Listing Rule 10.14, stock options and/or
deferred stock units to our six
non-executive
directors under the 2016 Plan, as follows:
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an annual grant of 20,000 stock options and 17,500 deferred stock units to David J. Mazzo, the Chairman of the Board;
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an annual grant of 20,000 stock options and 12,500 deferred stock units to Michael W. Rogers;
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an annual grant of 20,000 stock options and 12,500 deferred stock units to Douglas Godshall;
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an annual grant of 20,000 stock options and 12,500 deferred stock units to James Barry;
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an annual grant of 20,000 stock options and 12,500 deferred stock units to Jay Duker; and
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an initial grant of 40,000 stock options to Kristine Peterson in connection with her appointment as a director.
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The Compensation Committee has determined that (i) an initial grant to new directors of an option to purchase 40,000 shares and
(ii) annual grants to existing directors of an option to purchase 20,000 shares and deferred stock units to acquire 12,500 shares are appropriate to recruit and retain high-quality directors and are consistent with competitive director equity
compensation in peer companies. The Compensation Committee has further determined that the larger annual grant of 17,500 deferred stock units to the chairman of the Board is appropriate to reflect the additional contribution and time commitment
of that role. In determining each of these equity grants, the Compensation Committee sought the advice of its compensation consulting firm, Radford, and considered peer group and survey information.
We will issue certificates representing the awards within one month of stockholder approval. The equity grants will not have any effect upon
the rights of existing security holders, except a potential reduction of each existing security holders percentage ownership in our company by up to approximately 0.46%.
Material Terms of the Equity Grants
Stock Options
The option grants to Dr. Mazzo, Mr. Rogers, Mr. Godshall, Dr. Barry and Dr. Duker are annual director grants
of an option to purchase 20,000 shares at an exercise price of US$1.77 per share, equal to the closing price on NASDAQ of a share of our Common Stock on June 27, 2017, the date the Compensation Committee approved their grants. These options
vest and become exercisable on June 27, 2018, the first anniversary of such approval date, subject to the directors continued service on the Board through such date, and expire on the tenth anniversary of such approval date.
The option grant to Ms. Peterson is an initial new director grant of an option to purchase 40,000 shares at an exercise price of US$1.77
per share, equal to the closing price on NASDAQ of a share of our Common Stock on June 27, 2017, the date of her appointment and the date the Compensation Committee approved her grant. This option vests and becomes exercisable in three equal
annual installments commencing June 27, 2018, subject to Ms. Petersons continued service on the Board through the applicable vesting date, and expires on the tenth anniversary of such approval date.
If a directors Board service is terminated after a qualifying change of control, the option granted to that director automatically vests
and remains exercisable until the earlier of (i) one year following such termination and (ii) the option expiration date. The options are subject to the terms of the 2016 Plan.
58
Deferred Stock Units
The deferred stock unit grants to each of Dr. Mazzo, Mr. Rogers, Mr. Godshall, Dr. Barry and Dr. Duker vest on
June 27, 2018, the first anniversary of the approval date, subject to the directors continued service on the Board through such date, and the shares of Common Stock underlying each vested deferred stock unit will be delivered to the
applicable grantee upon the earlier of (i) his termination of service on the Board and (ii) the occurrence of a change of control (as defined in the applicable award agreement) that constitutes a change in the ownership
or effective control of our company or a change in the ownership of a substantial portion of the assets of our company, in each case, as determined under Section 409A of the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder.
The proposed grants are being issued for no cash consideration. Accordingly, no funds are being raised in
connection with the grants of securities contemplated by Proposal Nos. 5 through 10. There are no loans being made in relation to the proposed grants and no directors or associates of directors have received securities under the 2008 Plan or 2016
Plan since the last grants approved by stockholders (which were 2016 option grants to
non-executive
directors under the 2008 Plan in the amount of 30,000 shares for Dr. Mazzo, 20,000 shares for each of
Mr. Rogers, Mr. Godshall and Dr. Barry and 40,000 shares for Dr. Duker). All of our directors are entitled to participate in the 2016 Plan.
For a summary of the material terms of the 2016 Long-Term Incentive Plan, please refer to Proposal 5 of the Notice of General
Meeting/Proxy Form filed with the SEC on October 26, 2016 and on October 27, 2016 on the ASX.
Voting Exclusion Statement
We will disregard any votes cast in respect of Proposal Nos. 5 through 10 by all our directors and any of their associates. However, we need
not disregard a vote cast on Proposal Nos. 5 through 10 if:
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it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy card; or
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it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy card to vote as the proxy decides.
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THE BOARD (EXCLUDING DAVID J. MAZZO (WITH RESPECT TO PROPOSAL 5 ONLY), MICHAEL W. ROGERS (WITH RESPECT TO PROPOSAL 6 ONLY), DOUGLAS
GODSHALL (WITH RESPECT TO PROPOSAL 7 ONLY), JAMES BARRY (WITH RESPECT TO PROPOSAL 8 ONLY), JAY DUKER (WITH RESPECT TO PROPOSAL 9 ONLY) AND KRISTINE PETERSON (WITH RESPECT TO PROPOSAL 10 ONLY) WHO DO NOT MAKE A RECOMMENDATION WITH RESPECT TO THE
PROPOSAL IN PARENTHESIS AFTER THEIR NAME DUE TO THEIR PERSONAL INTEREST IN THAT PROPOSAL) RECOMMENDS THAT YOU VOTE
FOR
PROPOSAL NOS. 5 THROUGH 10 (INCLUSIVE) TO APPROVE THE EQUITY GRANTS TO THE
NON-EXECUTIVE
DIRECTORS.
59
PROPOSAL 11: ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required under Section 14A of the Securities Exchange Act of 1934, as amended, the Board is submitting a say on pay
proposal for stockholder consideration. While the vote on executive compensation is nonbinding and advisory, the Board and the Compensation Committee value the opinion of our stockholders, and to the extent there is any significant vote against the
executive officer compensation as disclosed in this proxy statement, we will consider our stockholders concerns and evaluate what actions may be appropriate to address those concerns. Our current policy is to provide stockholders with an
opportunity to approve the compensation of our Named Executive Officers each year at the annual meeting of stockholders. It is expected that the next such vote will occur at the 2018 annual meeting of stockholders.
Our Board and the Compensation Committee value the perspectives and concerns of our stockholders regarding executive compensation. We are
therefore pleased to entertain stockholder views and receive comments about our executive compensation practices.
At our 2016 annual
meeting of stockholders, we held an advisory vote on our Named Executive Officer compensation for fiscal 2016. This vote, commonly known as a Say on Pay vote, was approved by slightly more than 60% of the stockholder votes cast. Our
research determined that two stockholders, both of which subsequently reported major sales of their positions, accounted for a majority of the protest voting, and that only 17.6% of our total outstanding shares voted against last years Say on
Pay proposal.
During the last twelve months, our executives regularly held meetings with stockholders and participated in professional
investor conferences, to hear stockholder views on our financial performance, strategic business plans, corporate governance, executive compensation and related subjects. While we did not receive particular stockholder feedback that warranted
significant actions be undertaken to change our executive compensation program and practices during fiscal 2017, we will continue to regularly engage with stockholders and entertain their views, and also consult with professional advisors, regarding
our Named Executive Officer compensation practices in the future.
The compensation of our Named Executive Officers is described starting
on page 20 of this proxy statement, which includes the Compensation Discussion and Analysis (CD&A). The CD&A provides additional details on executive compensation, including our compensation philosophy and objectives, and the
fiscal 2017 compensation of our Named Executive Officers.
We are asking stockholders to vote on the following resolution:
RESOLVED
, that the Companys stockholders approve, on an advisory basis, the compensation of our Named Executive Officers as
disclosed in the proxy statement for the 2017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the Summary
Compensation Table for fiscal 2017, and the other related tables and disclosures).
THE BOARD RECOMMENDS THAT YOU VOTE, ON AN
ADVISORY BASIS,
FOR
PROPOSAL NO. 11 TO APPROVE OUR 2017 EXECUTIVE COMPENSATION.
60
PROPOSAL 12
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Compliance Committee has appointed Deloitte to serve as our independent registered public accounting firm and to audit our
financial statements and our internal control over financial reporting for fiscal 2018. Although ratification is not required, we are seeking stockholder approval of the selection as a matter of good corporate practice. If stockholders do not ratify
the appointment, then the Audit and Compliance Committee will consider whether it is appropriate to select a different independent registered public accounting firm or to continue Deloittes appointment as our independent registered public
accounting firm. Even if stockholders do ratify the appointment, the Audit and Compliance Committee in its discretion may select a different independent registered public accounting firm at any time during the year, if the Audit and Compliance
Committee determines that such a change would be in our and our stockholders best interests.
Deloitte was our independent
registered public accounting firm for fiscal 2017. Deloitte is expected to have a representative present at the Annual Meeting to answer appropriate questions and to make a statement if he or she desires.
THE BOARD RECOMMENDS THAT YOU VOTE
FOR
PROPOSAL NO. 12 TO RATIFY OUR SELECTION OF DELOITTE AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR FISCAL 2018.
Accounting Fees and Services
The following table sets forth the total fees paid to Deloitte and its affiliates with respect to fiscal 2017 and 2016:
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Fiscal Year Ended
June 30,
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2017
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2016
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(In thousands)
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Audit fees
(1)
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$
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404
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$
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425
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Audit-related fees
(2)
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48
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77
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Tax fees
(3)
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66
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54
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All other fees
(4)
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3
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3
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$
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521
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$
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559
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(1)
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Audit fees relate to professional services rendered in connection with the annual audit of our consolidated financial statements and internal control over financial reporting, the reviews of the condensed consolidated
financial statements performed in connection with each of our Quarterly Reports on
Form 10-Q and
the statutory audit of our wholly-owned United Kingdom subsidiary.
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(2)
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These are fees for assurance and related services that are reasonably related to performance of the audit and review of our financial statements, and which are not reported under Audit fees. These services
in fiscal 2017 were related to a comfort letter in connection with establishing our ATM program in February 2017 and review of our
Form S-8 registration
statement. These services in fiscal 2016 were
related to a comfort letter in connection with our underwritten public offering in January 2016 and review of our
Form S-3 shelf
registration statement filed in November 2015.
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(3)
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Tax fees paid to Deloitte for fiscal 2017 and 2016 were related to the preparation of various corporate tax returns as well as tax advice.
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(4)
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All other fees relate to a subscription to
Deloittes on-line accounting
research database.
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Our policies require the Audit and Compliance Committee
to pre-approve all
audit and
permitted non-audit services
provided by the independent registered public accounting firm, including engagement fees
and terms. The Audit and Compliance Committee may
delegate pre-approval authority
to one or more of its members, who will report
any pre-approval decisions
to the full committee at its next scheduled meeting, but may not
delegate pre-approval authority
to members of management.
The Audit and Compliance Committee may approve only
those non-audit services
classified as all other services that it believes to be routine and recurring services, to be consistent with
SEC rules and to not impair the auditors independence with respect to us. The Audit and Compliance Committee reviewed
and pre-approved all
audit services and
permitted non-audit services
performed during fiscal 2017 and 2016.
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INFORMATION ABOUT STOCKHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS
Stockholder proposals for inclusion in our proxy statement:
To be eligible for inclusion in our proxy statement
and form of proxy relating to our 2018 Annual Meeting of Stockholders (the 2018 Annual Meeting), stockholder proposals must be submitted pursuant to Rule
14a-8
of the Securities Exchange Act of
1934, as amended, and received at our principal executive offices no later than July 18, 2018, which is 120 calendar days before November 15, 2018the anniversary of the date this proxy statement was released to stockholders in
connection with the Annual Meeting. If the date of the 2018 Annual Meeting date is changed by more than 30 days from the anniversary date of the Annual Meeting on December 15, 2017, then the deadline is a reasonable time before we begin to
print and mail proxy materials.
Other stockholder proposals:
A nomination of one or more persons for election as a director or any
other stockholder proposal not included in our proxy statement for the 2018 Annual Meeting will be ineligible for presentation at the meeting unless the stockholder gives timely notice of the proposal in writing to our Secretary at our principal
executive offices and otherwise complies with the provisions of our
By-Laws.
To be timely, our
By-Laws
provide that we must receive the stockholders notice:
(i) not less than 60 days in advance of the meeting if the meeting is to be held on a day which is within 30 days preceding the anniversary of the Annual Meeting, (ii) not less than 90 days in advance of the meeting if the meeting is to be
held on or after the anniversary of the Annual Meeting, and (iii) in any other cases, not more than 15 days following the date on which notice or public disclosure (as defined in our
By-Laws)
of the date
of the 2018 Annual Meeting is made.
We reserve the right to reject, rule out of order or take other appropriate action with respect to
any proposal that does not comply with the foregoing requirements and with the SEC regulations regarding stockholder proposals.
HOUSEHOLDING OF PROXY MATERIALS
We have adopted a procedure, approved by the SEC, called householding. Under this
procedure, stockholders of record who have the same address and last name will receive only one copy of this proxy statement and our Annual Report, unless we are notified that one or more of these stockholders wishes to continue receiving individual
copies. This procedure will reduce our printing costs and postage fees.
If you are eligible for householding, but you and other
stockholders of record with whom you share an address currently receive multiple copies of this proxy statement and our Annual Report, or if you hold our stock in more than one account, and in either case you wish to receive only a single copy of
each of these documents for your household, please contact our Corporate Secretary by mail, c/o pSivida Corp., 480 Pleasant Street, Watertown, MA 02472, or by phone at (617)
926-5000.
If you participate in
householding and wish to receive a separate copy of this proxy statement and our Annual Report, or if you do not wish to continue to participate in householding and prefer to receive separate copies of these documents in the future, please contact
our Corporate Secretary as indicated above.
If your shares are held in street name through a broker, bank or other intermediary, please
contact your broker, bank or intermediary directly if you have questions, require additional copies of this proxy statement or our Annual Report or wish to receive a single copy of such materials in the future for all beneficial owners of shares of
our Common Stock sharing an address.
AVAILABILITY OF ANNUAL REPORT ON FORM
10-K
A copy of our Annual Report, consisting of our Form
10-K,
has been made available or mailed concurrently with this proxy statement, without charge, to stockholders entitled to notice of and to vote at the Annual Meeting,
63
provided that we have not included the exhibits to the Annual Report. We will provide copies of the exhibits to the Annual Report upon request by eligible stockholders, provided that we may
impose a reasonable fee for providing such exhibits, which is limited to our reasonable expenses. Requests for copies of such exhibits should be mailed to our Corporate Secretary by mail, c/o pSivida Corp., 480 Pleasant Street, Watertown, MA 02472.
OTHER BUSINESS
At the time of mailing this proxy statement, we do not know of any other matter that properly may come before the Annual Meeting, and do not
intend to present any other matter. However, if any other matters properly come before the meeting or any adjournment, the persons named as proxies will be able to vote on those matters in accordance with their own judgment.
If there are insufficient votes to approve the proposals, your proxy may be voted by the persons named in the proxy to adjourn the Annual
Meeting in order to solicit additional proxies in favor of the approval of such proposals. If the Annual Meeting is adjourned or postponed for any purpose, at any subsequent reconvening of the meeting your proxy will be voted in the same manner as
it would have been voted at the original convening of the Annual Meeting unless you withdraw or revoke your proxy. Your proxy may be voted in this manner even though it may have been voted on the same or any other matter at a previous session of the
Annual Meeting.
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to
vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
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Proxies submitted by the Internet or telephone must be received by 1:00 a.m., Eastern Time, on December 15, 2017.
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Vote by Internet
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Go to
www.envisionreports.com/PSDV
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Or scan the QR code with your smartphone
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Follow the steps outlined on the secure website
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Vote by telephone
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Call toll free 1-800-652-VOTE (8683) within the USA, US
territories & Canada on a touch tone telephone
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Follow the instructions provided by the recorded message
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Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the
designated areas.
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☒
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q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE,
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
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A
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The Board of Directors recommends you vote
FOR ALL
the following nominees:
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1. Election of Directors:
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01 - David J. Mazzo
05 - James Barry
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02 - Nancy
Lurker
06 - Jay Duker
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03 - Michael
Rogers
07 - Kristine Peterson
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04 - Douglas
Godshall
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☐
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Mark here to vote
FOR
all
nominees
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☐
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Mark here to
WITHHOLD
vote
from all nominees
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☐
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For All
EXCEPT
- To withhold authority to vote for any individual nominee(s), mark
For All Except and write the number(s) of the nominee(s) on the line below.
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B
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The Board of Directors recommends you vote
FOR
the following proposals:
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For
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Withhold
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Abstain
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For
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Withhold
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Abstain
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2. Ratification of the issuance of 5,900,000 shares of Common Stock between July 24, 2017 and
November 7, 2017 pursuant to Australian Securities Exchange (ASX) Listing Rule 7.4 on the terms and conditions disclosed in the proxy statement to refresh the Companys capacity to issue shares of common stock without prior
stockholder approval pursuant to ASX Listing Rule 7.1.
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☐
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☐
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3. Approval of the issuance of equity securities up to an additional 10% of the Companys
issued capital over a 12 month period pursuant to ASX Listing Rule 7.1A.
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4. Approval of stock option grant, restricted stock unit grant and performance stock unit
grant to CEO Nancy Lurker.
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5. Approval of stock option grant and deferred stock unit grant to David J. Mazzo.
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6. Approval of stock option grant and deferred stock unit grant to Michael W. Rogers.
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7. Approval of stock option grant and deferred stock unit grant to Douglas Godshall.
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8. Approval of stock option grant and deferred stock unit grant to James Barry.
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☐
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9. Approval of stock option grant and deferred stock unit grant to Jay Duker.
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10. Approval of stock option grant to Kristine Peterson.
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11. Approval on an advisory basis of pSivida Corp.s 2017 executive
compensation.
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12. Ratification of the appointment of Deloitte & Touche LLP.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on December
15, 2017: The proxy statement and the Annual Report for our fiscal year ended June 30, 2017 are available at
www.edocumentview.com/PSDV
for street holders and
www.envisionreports.com/PSDV
for registered holders
2017 Annual Meeting Admission Ticket
2017 Annual Meeting of
pSivida Corp. Stockholders
Friday, December 15, 2017, 9 a.m. (EST)
480 Pleasant Street,
Watertown, Massachusetts 02472
Upon arrival, please present this admission ticket
and photo identification at the registration desk.
You may obtain directions to the Annual Meeting
by calling our office at (617)
972-6235
or
e-mailing
our office at afandel@psivida.com
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on December 15, 2017: The proxy statement
and the Annual Report for our fiscal year ended June 30, 2017 are available at
www.edocumentview.com/PSDV
for street holders and
www.envisionreports.com/PSDV
for registered holders.
q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG
THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
Notice of 2017 Annual Meeting of Stockholders
Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders December 15, 2017
The undersigned hereby appoints Nancy S. Lurker and Leonard S. Ross, and each of them, each with the full power of substitution, as proxies to represent and
vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of pSivida Corp. to be held on Friday, December 15, 2017 or at any postponement or adjournment
thereof.
Shares represented by this proxy will be voted in the manner directed by the stockholder. If no such directions are indicated, each of the
Proxies will have authority to vote FOR the election of all nominees, and FOR proposals 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12.
In his or her
discretion, each of the Proxies is authorized to vote upon such other business as may properly come before the meeting.
(Items to be voted appear on
reverse side.)
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Change of Address
Please print your new address below.
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Comments
Please print your comments below.
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Meeting Attendance
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Mark the box to the right if you plan to attend the Annual Meeting.
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☐
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D
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Authorized Signatures This section must be completed for your vote to be counted.
Date and Sign Below
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Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator,
corporate officer, trustee, guardian or custodian, please give full title.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/ /
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⬛
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IF VOTING BY MAIL, YOU
MUST
COMPLETE SECTIONS A - D ON BOTH SIDES OF THIS CARD.
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