2018 PROXY STATEMENT SUMMARY
Here are highlights of important information you will find in this Proxy Statement. This summary does not contain all of the information that
you should consider, and you should read the entire Proxy Statement carefully before voting.
ANNUAL MEETING OF STOCKHOLDERS
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Time and Date
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Record Date
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Place
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Number of
Common Shares
Eligible to Vote
as of the Record Date
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8:00 a.m. local time June 6, 2018
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April 9, 2018
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80 W. Lancaster Avenue, Suite 300 Devon, Pennsylvania 19333
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13,561,373
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VOTING MATTERS
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Board Recommendation
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Page Reference
(for more detail)
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Proposal 1: Election of Seven Directors
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ý
FOR EACH NOMINEE
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24
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Proposal 2: Ratification of Appointment of KPMG LLP as Independent Registered Public Accounting Firm for the 2018 Fiscal Year
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ý
FOR
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25
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OUR DIRECTOR NOMINEES
You are being asked to vote on these seven directors. All directors are currently elected annually by a plurality of votes cast. Detailed
information about each director's background and areas of expertise can be found beginning on page 4.
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Committee Membership
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Director
Since
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Name, Age
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Age
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Principal Occupation
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AC
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CC
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NCGC
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Armando Anido
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2014
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Chief Executive Officer of Zynerba Pharmaceuticals, Inc.
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John Butler
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2018
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President and Chief Executive Officer of Akebia Therapeutics, Inc.
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Warren D. Cooper, MB, BS, BSc, MFPM
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2015
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Managing Director & Chief Medical Officer of Healthcare Royalty Partners
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William J. Federici
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2015
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Vice President and Chief Financial Officer of West Pharmaceutical Services, Inc.
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Thomas L. Harrison, LH.D
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2015
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Chairman Emeritus Diversified Agency Services, Division of Omnicom Group, Inc.
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Daniel L. Kisner, MD
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2015
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Independent Consultant
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ii
Table of Contents
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Committee Membership
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Director
Since
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Name, Age
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Age
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Principal Occupation
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AC
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CC
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NCGC
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Kenneth I. Moch
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2015
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President and Chief Executive Officer of Cognition Therapeutics, Inc.
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AC
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Audit Committee
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CC
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Compensation Committee
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NCGC
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Nominating and Corporate Governance Committee
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Committee Member
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Chair of the Committee
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Lead Independent Director
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CORPORATE GOVERNANCE SUMMARY FACTS
The following table summarizes our current Board structure and key elements of our corporate governance framework:
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Size of Board (set by the Board)
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7
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Number of Independent Directors
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6
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Lead Independent Director
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Yes
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Board Self-Evaluation
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Annual
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Review of Independence of Board
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Annual
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Independent Directors Meet Without Management Present
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Yes
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Annual Director Elections
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Yes
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Voting Standard for Election of Directors in Uncontested Elections
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Plurality
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Diversity of Board background, experience and skills
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Yes
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RECENT CORPORATE HIGHLIGHTS
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Focus on rare (meeting the United States Food and Drug Administration designation of an orphan disease, affecting fewer than 200,000 people in
the United States) and near-rare (affecting fewer than one million people in the United States) neurological and psychiatric disorders announced in January 2018.
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Positive results from open label Phase 2 clinical trial for ZYN002 in pediatric and adolescent patients with Fragile X syndrome, which
we refer to as the FAB-C (Treatment of Fragile X syndrome Anxiety and Behavioral Challenges with CBD) trial announced in September 2017.
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Open-label Phase 2 clinical trial for ZYN002 in children and adolescent patients with Developmental and Epileptic Encephalopathies,
including Lennox-Gastaut and Dravet syndromes, which we refer to as the BELIEVE 1 (Open La
b
el Study to Assess the Safety and
E
fficacy of ZYN002
Administered as a Transderma
l
Gel to
Ch
i
ldren and Adol
e
scents with De
v
elopmental and
E
pileptic
Encephalopathy) clinical trial, initiated in April 2018.
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Data from the Phase 2 clinical trials for ZYN002 in adult patients with refractory epileptic focal seizures, which we refer to as STAR 1
(Synthetic Transdermal Cannabidiol for the Treatment of Epilepsy) and STAR 2 trials, announced in December 2017.
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Phase 1 clinical trial for ZYN001 to assess single and multiple rising doses of several formulations of ZYN001 to identify the optimal
dose to take into Phase 2 studies.
iii
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ZYNERBA PHARMACEUTICALS, INC.
80 W. Lancaster Avenue, Suite 300
Devon, PA 19333
PROXY STATEMENT FOR THE 2018 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 6, 2018
This Proxy Statement, along with a proxy card,
is being made available to our stockholders on or about April 23, 2018
GENERAL INFORMATION
We have made these proxy materials available to you in connection with the solicitation by the Board of Directors (our
"
Board
" or the "
Board of Directors
") of Zynerba Pharmaceuticals, Inc. of proxies to be voted at
the 2018 Annual Meeting of Stockholders (the "
Annual Meeting
") to be held on Wednesday, June 6, 2018 at our corporate headquarters, located at 80
W.
Lancaster Avenue, Suite 300, Devon, Pennsylvania, 19333, at 8:00 a.m. Eastern Daylight Time and any adjournments or postponements thereof. References in this proxy statement to the
"Company," "we," "our," and "us" are to Zynerba Pharmaceuticals, Inc.
Stockholders Entitled to Vote
Holders of shares of our common stock, our only class of issued and outstanding voting securities, at the close of business on April 9,
2018 (the "
Record Date
") are entitled to vote on the proposals presented at the Annual Meeting. As of April 9, 2018, 13,561,373 shares of our
common stock were issued and outstanding. Each share is entitled to one vote on each matter properly brought to the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting will
be available for examination by any stockholder for a purpose related to the Annual Meeting during normal business hours at our executive offices for a period of at least 10 days preceding the
date of the Annual Meeting.
Quorum
The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of common stock entitled to vote at the
Annual Meeting, or 6,780,687 shares, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Votes for and against, abstentions and "broker non-votes" will each be
counted as present for purposes of determining the presence of a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your
broker, bank or other nominee) or if you attend the Annual Meeting in person and vote.
The
Annual Meeting may be adjourned or postponed from time to time and at any reconvened meeting, action with respect to the matters specified in this Proxy Statement may be taken
without further notice to stockholders except as required by applicable law or our charter documents.
Stockholders of Record
You are a "stockholder of record" if your shares are registered directly in your name with our transfer agent, American Stock Transfer &
Trust Company, LLC. As a stockholder of record, you have the right to grant your voting proxy directly to the proxy holders designated by the Company or to vote in person at the Annual Meeting.
If you are a stockholder of record of your shares, and you do not vote by proxy card, by telephone, via the internet or in person at the Annual Meeting, your shares will not be voted at the Annual
Meeting.
Shares Held in Street Name
You are deemed to beneficially own your shares in "street name" if your shares are held in an account at a brokerage firm, bank, broker, trust
or other similar organization, which organization is
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considered
the stockholder of record. If this is the case, you will receive a separate voting instruction form with this Proxy Statement from such organization. As the beneficial owner, you have the
right to direct your bank, broker, trustee, or other nominee how to vote your shares, and you are also invited to attend the Annual Meeting. If you hold your shares in street name and do not provide
voting instructions to your broker, bank, trustee or nominee, your shares will not be voted on any proposals on which such party does not have discretionary authority to vote, which is referred to
herein as a broker non-vote, as further described below under the heading "Broker Non-Votes."
Please
note that if your shares are held of record by a broker, bank, trustee or other nominee and you wish to vote at the Annual Meeting, you will not be permitted to vote in person
unless you first obtain a proxy issued in your name from your broker, bank, trustee, or other nominee.
Broker Non-Votes
Broker non-votes are shares held by brokers, banks, trustees or other nominees who are present in person or represented by proxy, but which are
not voted on a particular matter because the brokers, banks, trustees, or other nominees do not have discretionary authority with respect to that proposal and they have not received voting
instructions from the beneficial owner. Under the rules that govern brokers, brokers have the discretion to vote on routine matters, but not on non-routine matters. The routine matters to be
considered at the Annual Meeting include the ratification of the appointment of the Company's independent registered public accounting firm. The proposal for the election of our director nominees at
the Annual Meeting is considered to be a non-routine matter.
As a result, if you do not provide your broker, bank, trustee, or other nominee with voting instructions on
non-routine matters, your shares will not be voted on any non-routine proposal.
Voting Matters
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Proposal
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Votes Required
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Treatment of Abstentions and
Broker Non-Votes
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Broker
Discretionary
Voting
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Proposal 1Election of Seven Directors
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Plurality of votes cast
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Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal
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No
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Proposal 2Ratification of Appointment of KPMG LLP as our Independent Registered Public Accounting Firm for the 2018 Fiscal Year
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Majority of shares present and entitled to vote on the proposal in person or represented by proxy
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Abstentions and broker non-votes will have the effect of negative votes
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Yes
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In
each case, your shares will be voted as you instruct. If you return a signed card, but do not provide voting instructions, your shares will be voted FOR each of the proposals.
We
are currently unaware of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual
Meeting for consideration and you are a stockholder of record and have submitted your proxy, the persons named in your proxy will have discretion to vote on those matters for you.
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Voting Methods
You may vote at the Annual Meeting by delivering a proxy card in person or you may cast your vote in any of the following ways:
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Mailing your signed proxy card or voter instruction card.
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Using the Internet at
www.voteproxy.com
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Calling toll-free from the United States, U.S. territories and Canada to 1-800-776-9437.
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if you plan to attend the Annual Meeting, we encourage you to vote in advance by internet, telephone or mail so that your vote will be counted in the event you later decide not to
attend the Annual Meeting. If your shares are held in street name, please follow the separate voting instructions you receive from your broker, bank, trustee, or other nominee.
If
you are a stockholder of record, you may revoke your proxy: (i) by written notice of revocation mailed to and received by the Secretary of the Company prior to the date of the
Annual Meeting, (ii) by voting again via the Internet or by telephone at a later time, (iii) by executing and delivering to the Secretary of the Company a proxy dated as of a later date
than a previously executed and delivered proxy, or (iv) by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, without further action, revoke a proxy.
If
your shares are held by a broker, bank, trustee, or other nominee, you may change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee; or, if you
have obtained a
legal proxy from your broker, bank, trustee, or nominee giving you the right to vote your shares, by attending the Annual Meeting and voting in person.
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BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following sets forth information regarding our directors and executive officers as of April 23, 2018:
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Committee Membership
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Name, Age
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Age
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Position
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AC
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CC
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NCGC
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Armando Anido
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60
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Chairman of the Board and Chief Executive Officer
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Terri B. Sebree
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President
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James E. Fickenscher
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54
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Chief Financial Officer and Vice President, Corporate Development
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Suzanne M. Hanlon
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61
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Secretary, Vice President and General Counsel
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Brian Rosenberger
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49
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Vice President, Commercial
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John P. Butler
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53
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Director
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Warren D. Cooper, MB, BS, BSc, MFPM
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65
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Director
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William J. Federici
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58
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Director
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Thomas L. Harrison, LH.D
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70
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Director
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Daniel L. Kisner, MD
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71
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Director
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Kenneth I. Moch
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63
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Director
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AC
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Audit Committee
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CC
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Compensation Committee
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NCGC
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Nominating and Corporate Governance Committee
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Committee Member
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Chair of the Committee
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Lead Independent Director
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Armando Anido
has served as chairman of our Board and as our chief executive officer since October 2014. Prior to joining our company,
Mr. Anido served as our business consultant from May 2014 to October 2014. Mr. Anido has more than 35 years of executive, operational and commercial leadership experience in the
pharmaceutical industry. Mr. Anido served as chief executive officer and as a director of NuPathe, Inc., or NuPathe, a publicly-traded specialty pharmaceutical company, from July 2012
through March 2014, during which time he led the company through U.S. Food and Drug Administration, or FDA, approval of its lead product, Zecuity®, a transdermal patch for migraines. Prior
to joining NuPathe, Mr. Anido served as chief executive officer and president and as a director of Auxilium Pharmaceuticals, Inc., or Auxilium, a specialty pharmaceutical company, from
July 2006 through December 2011, where he led the company in its commercialization of its lead product, Testim®, a testosterone gel. Additionally, Mr. Anido led the company through
the FDA approval and commercialization of Xiaflex®, an injectable collagenase for Dupuytren's Contracture. Mr. Anido currently serves as a director of Auris Medical, a
pharmaceutical company, and has held such position since April 2016. He formerly served as a director of Respira Therapeutics, Inc., a pharmaceutical company, from May 2012 through September
2014, Adolor Corporation, a pharmaceutical company, from September 2003 through December 2011, and Aviragen Therapeutics, Inc. (formerly Biota Pharmaceuticals, Inc.), a pharmaceutical
company, from October 2015 through February 2018. Mr. Anido holds a B.S. in Pharmacy and an MBA, both from West Virginia University. With more than
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35 years
of experience in the pharmaceutical industry, Mr. Anido brings valuable executive, operational and commercial expertise to our Board.
Terri B. Sebree
has served as our president since October 2014. Prior to joining our company, Ms. Sebree served as our business
consultant from May 2014 to October 2014. Ms. Sebree has more than 30 years of executive, development and operational experience in the pharmaceutical industry, particularly in central
nervous system product development including epilepsy and pain. Ms. Sebree founded and served as president of NuPathe, a specialty pharmaceutical company, from February 2005 until April 2014,
where she led the effort to develop, achieve regulatory approval for and complete manufacturing of the company's lead product, Zecuity, a transdermal patch for migraines. Prior to founding NuPathe,
Ms. Sebree served as senior vice president, development of Auxilium, a specialty pharmaceutical company, where she led the development and approval program of Testim, a testosterone gel. Prior
to joining Auxilium, Ms. Sebree served as executive vice president, U.S. Operations at IBAH, Inc., a contract research organization. Prior to that, Ms. Sebree served in a
variety of management roles with Abbott Laboratories Inc., a global healthcare company, for over nine years. Ms. Sebree currently serves on the board of directors of Serodus ASA, a
publicly traded company on the Oslo Stock Exchange. Ms. Sebree holds a B.S. from Texas A&M University.
James E. Fickenscher
has served as our chief financial officer, vice president corporate development since September 2016. Prior to
joining our company, he served as the senior vice president, chief financial officer of Antares Pharma, Inc., a specialty pharmaceutical company, from November 2014 to September 2016.
Previously, Mr. Fickenscher served as chief financial officer of Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, from May 2005 until August 2014. From January 2000
until April 2004, Mr. Fickenscher served as senior vice president, chief financial officer of Aventis Behring L.L.C., a wholly owned subsidiary of Aventis, predecessor to Sanofi S.A.
Mr. Fickenscher joined Aventis Behring L.L.C. in 1995 as vice president, business development and strategic planning and, from that time until 2000, also held the positions of general manager,
Japan and vice president & general manager, Hemophilia Business Unit. Throughout his tenure at Aventis Behring L.L.C., he was also responsible for strategic planning. Prior to Aventis Behring
L.L.C., Mr. Fickenscher worked at Rhone-Poulenc Rorer, predecessor to Sanofi S.A., in its Collegeville, PA and Paris, France offices and at Deloitte & Touche LLP.
Mr. Fickenscher received his B.S. at Bloomsburg University of Pennsylvania. He is a member of the American Institute of Certified Public Accountants.
Suzanne M. Hanlon
has served as our secretary, general counsel and vice president, human resources since October 2014. Prior to joining
our company, Ms. Hanlon served as our legal consultant from May 2014 to October 2014. Ms. Hanlon has more than 25 years of legal experience in the pharmaceutical industry.
Ms. Hanlon served as vice president, associate general counsel of NuPathe from July 2005 to April 2014, where she worked with Mr. Anido and Ms. Sebree on the regulatory approval
of Zecuity, a transdermal patch for migraines. Prior to joining NuPathe, Ms. Hanlon served as chief development counsel of Auxilium, a specialty pharmaceutical company. Prior to joining
Auxilium, Ms. Hanlon served as vice president of global contracts and general counsel at IBAH, Inc. Prior to joining IBAH, Inc., Ms. Hanlon was a partner at Montgomery
McCracken Walker & Rhoads LLP. Ms. Hanlon holds a B.A. from Pennsylvania State University and a J.D. from Villanova University School of Law.
Brian Rosenberger
has served as our vice president, commercial, since January 2017. Over his 25-year career in the pharmaceutical
industry, Mr. Rosenberger has held several leadership roles in marketing, sales, business development, analytics and alliance management. Prior to joining our company, he was vice president,
alliance & strategic portfolio management of Cipher Pharmaceuticals, a publicly-traded, Canadian-based dermatology company, from May 2015 to January 2017, where he managed the
company's global portfolio. From 2008 to April 2015, Mr. Rosenberger also held various roles of increasing responsibility at Auxilium, a specialty biopharmaceutical company. In his last role as
5
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executive
director, corporate development & licensing and alliance management, he participated in several transformational M&A, licensing and co-promotion deals through and including Endo
International's acquisition of Auxilium in January 2015. Prior to joining Auxilium, Mr. Rosenberger held sales managerial positions at Neurocrine Biosciences during the initial commercial
build-out of the organization and spent over a decade at GlaxoSmithKline in various U.S. and global commercial roles within specialty markets, including neurohealth epilepsy marketing.
Mr. Rosenberger holds a B.A. from Dickinson College.
John P. Butler
was appointed as a member of our Board of Directors in April 2018. Mr. Butler has served as the president and chief
executive Officer of Akebia Therapeutics, Inc., a biopharmaceutical company, since September 2013 and a member of its board of directors since July 2013. Previously Mr. Butler served as
the chief executive officer of Inspiration Biopharmaceuticals, Inc., a biopharmaceutical company that filed for protection under Chapter 11 of the U.S. Bankruptcy Code in October 2012
prior to the successful sale of its hemophilia assets to Cangene Corporation and Baxter International in early 2013. From 1997 to 2011, Mr. Butler held various positions at Genzyme Corporation,
a biopharmaceutical company, most recently serving as president of the company's rare genetic diseases business. From 2002 until 2010, Mr. Butler led Genzyme's renal division. Prior to his work
at Genzyme, Mr. Butler held sales and marketing positions at Amgen and Hoffmann-La Roche. He was a member of the board of directors of Relypsa, Inc. from September 2013 to September
2016, and chairman of the board of directors of Keryx Biopharmaceuticals, Inc., a commercial stage company developing innovative products for people with renal disease, from December 2015 to
September 2017. Additionally, he served as the chairman of the American Kidney Fund board of trustees from 2013 to 2015. Mr. Butler received a B.A. in Chemistry from Manhattan College and an
M.B.A. degree from Baruch College, City University of New York. Mr. Butler brings significant operational and commercial experience in the biotechnology sector to our Board, including the
development and commercialization of products for the treatment of rare and near rare diseases.
Warren D. Cooper, MB, BS, BSc, MFPM
has served as a member of our Board since August 2015. Dr. Cooper is a U.K.-trained physician
with more than 35 years of experience in the global pharmaceutical industry. Since January 2017, Dr. Cooper has served as managing director and chief medical officer of Healthcare
Royalty Partners, a healthcare investment firm. Prior to joining Healthcare Royalty Partners in January 2017, Dr. Cooper served as the president of Coalescence Inc., a healthcare and
pharmaceutical development consultancy, where he held various positions since 1999. Dr. Cooper was the chief executive officer of Prism Pharmaceuticals, Inc., a venture-backed, specialty
pharmaceutical company that he led from inception in September 2004 until the sale of the company to Baxter International in May 2011. His career in the pharmaceutical industry began with Merck, Sharp
and Dohme and spanned 12 years, initially as a clinical research physician in the United Kingdom, then as head of European and, subsequently, Worldwide Clinical Research Operations for Merck
Research Laboratories across all therapeutic areas. Moving to AstraMerck (now AstraZeneca PLC), or
AstraZeneca, in a broad clinical development role, he eventually led that company's cardiovascular business division, a role with full business lifecycle leadership from in-licensing through
development, to P&L responsibility for sales and marketing. Dr. Cooper is a member of the Faculty of Pharmaceutical Medicine of the Royal Colleges of Physicians of the United Kingdom. He has
previously served on the boards of directors of Nutrition 21, Inc., Nuron Biotech Inc., Cardiorentis AG and the World Affairs Council of Philadelphia. Dr. Cooper holds a B.Sc. in
Physiology, an M.B. and a B.S., each from the London Hospital, University of London. With more than 35 years of experience in the global pharmaceutical industry, Dr. Cooper brings
valuable expertise in pharmaceutical company leadership and clinical pharmaceutical research to our Board.
William J. Federici
has served as a member of our Board since August 2015. Mr. Federici has served as senior vice president and
chief financial officer of West Pharmaceutical Services, Inc., a publicly traded global pharmaceutical technology company, since August 2003. He served as a member
6
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of
the board of directors and chairman of the Audit committee at NuPathe from January 2011 until February 2014. From June 2002 until August 2003, he was national industry director for pharmaceuticals
of KPMG LLP, and prior thereto, he was an audit partner with Arthur Andersen, LLP. Mr. Federici holds a B.A. in Economics and an M.B.A. in Professional Accounting from Rutgers
University and is a Certified Public Accountant. With his leadership experience in the global pharmaceutical and accounting industries, Mr. Federici brings valuable expertise in financial and
audit-related matters to our Board.
Thomas L. Harrison, LH.D
has served as a member of our Board since August 2015. Dr. Harrison is a noted author and speaker and
since April 2013, has served as chairman emeritus of Diversified Agency Services, the world's largest group of marketing services companies, and a division of Omnicom Group, Inc., or Omnicom.
In 1987 he founded Harrison & Star Business Group, a healthcare marketing agency that was acquired by Omnicom in 1992. From 1992 until 1997, he served as chairman of the Harrison & Star
Group and chairman of diversified healthcare communications for Omnicom. In 1997, Dr. Harrison was appointed president of diversified agency services, and in 1998 was named chairman and chief
executive, serving until 2011. In 1980 he began his agency career at Rolf Werner Rosenthal, a mid-sized healthcare advertising agency. From 1974 until 1980 he served in sales and marketing roles at
Pfizer, Inc. Dr. Harrison is a member of the Executive Committee of the Montefiore Health System, and served as a fellow of the New York Academy of Medicine from 2004 to 2015. He is a
governor of the New York Academy of Sciences where he sits on the Sackler Global Nutrition Committee. Dr. Harrison served as a board member of Dipexium Pharmaceuticals, Inc. from 2012 to
2017 and as a board member of rVue Inc., a digital out-of-home media company from 2013 to 2017. In 2014, he was appointed to the boards of Social Growth Technologies, Inc. and of Fifth
Street Asset Management Inc. where he serves as lead independent director and chairman of the audit committee. He previously served as a board member of each of the New York Chapter of the
Arthritis Foundation, ePocrates, Inc., a publicly traded healthcare information company until its March 2013 acquisition by athenahealth, Inc., and The Morgans Hotel Group (2006-2013).
Dr. Harrison holds a M.S. in Cell Biology, Physiology and Biochemistry, and received an honorary doctorate in 2007, from West Virginia
University. With more than 40 years of experience in the pharmaceutical and healthcare advertising industries, Dr. Harrison brings valuable expertise in pharmaceutical company
leadership, pharmaceutical sales and healthcare advertising and marketing to our Board.
Daniel L. Kisner, MD
has served as a member of our Board since August 2015. Dr. Kisner has served as an independent consultant to
the pharmaceutical/biotech industry since 2011. From 2003 until 2011 he served as a venture partner/partner at Aberdare Ventures, a venture firm with a focus on investing in healthcare technology
companies. Prior to that he was president and chief executive officer of Caliper Technologies Corp., or Caliper, from 1999 until 2003, and served as chairman of Caliper until 2008. He led Caliper from
a startup dealing with microfluidic lab-on-a-chip technology to a publically traded commercial company. From 1991 until 1999, he served as chief operating officer and president of Isis
Pharmaceuticals, Inc., a biomedical pharmaceutical company. Prior thereto, Dr. Kisner was division vice president of Pharmaceutical Development at Abbott Laboratories and vice president
of Clinical Research at SmithKline Beckman Laboratories. In addition he previously held a tenured position at the University of Texas School of Medicine at San Antonio and is certified by the American
Board of Internal Medicine in Internal Medicine and Medical Oncology. Dr. Kisner served on the board of directors of Tekmira Pharmaceuticals from 2010 until March 2015 and Lpath Inc.
from July 2012 until December 2016, and he currently serves on the boards of directors of Dynavax Technologies Corporation and Conatus Pharmaceuticals Inc. Dr. Kisner holds a B.A. degree
from Rutgers University and an M.D. from Georgetown University. With more than 25 years of healthcare technology experience, Dr. Kisner brings valuable expertise in healthcare technology
company leadership and investing, including prior experience in growing a research-stage company to a commercially successful, publicly-traded company to our Board.
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Kenneth I. Moch
has served as a member of our Board since August 2015. Mr. Moch has more than 25 years of experience in
managing and financing biomedical technologies, and has played a key role in building five life science companies. Since October 2016, Mr. Moch has served as the president and chief executive
officer of Cognition Therapeutics, Inc. He previously was the managing partner of The Salutramed Group, LLC, from September 2015 until October 2016, where he provided strategic and
tactical counsel to the biotechnology and pharmaceutical industries. Prior to that, he served as president of Euclidian Life Sciences Advisors, a strategic advisory firm for life sciences companies,
from April 2014 until September 2015. From April 2010 to April 2014, he served as president and chief executive officer, and as a director, of Chimerix, Inc., having joined the company as chief
operating officer in June 2009. Previously, he was president and chief executive officer of three life science companiesBioMedical Enterprises, Inc., Alteon, Inc., and
Biocyte Corporationand was a co-founder and vice president of The Liposome Company, Inc. He also served as managing director of Healthcare Investment Banking at ThinkEquity
Partners and as a management consultant with McKinsey & Company. In the public policy arena, Mr. Moch currently is a member of the board of the Biotechnology Innovation Organization,
serving as chair of the Bioethics Committee, and previously served as chairman of BioNJ. Mr. Moch holds an A.B. in Biochemistry from Princeton University and an M.B.A. with emphasis in Finance
and Marketing from the Stanford Graduate School of Business. With more than 25 years of experience in the biomedical technology and
pharmaceutical industries, Mr. Moch brings valuable expertise in biomedical technology company leadership and financing matters to our Board.
No Family Relationships
There are no family relationships between any of our officers and directors.
Corporate Governance Guidelines
Our corporate governance guidelines are designed to help ensure effective corporate governance of our Company. Our corporate governance
guidelines cover topics including, but not limited to, director qualification criteria, director responsibilities, director compensation, director orientation and continuing education, succession
planning and the annual evaluations of our Board and its committees. Our corporate governance guidelines are reviewed at least annually by the Nominating and Corporate Governance Committee and amended
by our Board when appropriate. The full text of our corporate governance guidelines is available on our website at www.zynerba.com.
Code of Business Conduct and Ethics
Our Board adopted a Code of Business Conduct and Ethics applicable to all of our employees, executive officers and directors. The Code of
Business Conduct and Ethics covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoiding conflicts of interest, the
protection and use of our property and information and compliance with legal and regulatory requirements. The Code of Business Conduct and Ethics is available on our website at www.zynerba.com.
Our
Board is responsible for overseeing the Code of Business Conduct and Ethics, and our Board or an appropriate committee thereof must approve any waivers of the Code of Business
Conduct and Ethics for employees, executive officers or directors. Any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, will be disclosed on our website.
Hedging and Pledging Policies
Our Board has adopted an Insider Trading Policy that prohibits all of our officers, directors and employees from engaging in any speculative
transaction designed to decrease risks associated with holding our securities, including hedging or similar transactions. Our Insider Trading Policy also prohibits any pledging of our securities as
collateral for loans and holding our securities in margin accounts.
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Our Board
Our Board currently consists of seven members. The number of directors on our Board is established by our Board and is currently set at seven.
Cynthia A. Rask, M.D., who had been a member of our Board since 2015, passed away in July 2017, resulting in a vacancy on the Board. In April, 2018, the Board appointed John P. Butler to fill this
vacancy.
During
2017, our Board met 10 times. Each director attended at least 75% of the total Board meetings and meetings of committees on which he or she served, except for Mr. Butler,
who did not join the Board until April 2018. Although we do not have a formal policy regarding attendance by members of our Board at our Annual Meeting, we strongly encourage all directors to attend.
Each director, except Mr. Butler, attended our 2017 Annual Meeting.
Our
Board observes all applicable criteria for independence established by the NASDAQ Stock Market Rules and other governing laws and applicable regulations. No director will be deemed
to be independent unless our Board determines that the director has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Our Board has determined that all of our directors with the exception of Mr. Anido are independent as defined under the NASDAQ Stock Market Rules. Our Board has also determined that:
(i) Messrs. Federici and Moch and Dr. Cooper, who comprise our Audit Committee; (ii) Drs. Kisner and Harrison and Mr. Moch, who comprise our Compensation Committee;
and (iii) Drs. Harrison and Cooper and Mr. Butler, who comprise our Nominating and Corporate Governance Committee, each satisfy the independence standards for those committees
established by the applicable rules and regulations of the SEC and the NASDAQ Stock Market Rules.
Our
Board believes its members collectively have the experience, qualifications, attributes and skills to effectively oversee the management of our Company, including a high degree of
personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing our
Company, a willingness to devote the necessary time to their Board and committee duties, a commitment to representing the best interests of the Company and our stockholders and a dedication to
enhancing stockholder value.
There
are no legal proceedings to which any of our directors is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or any
of our subsidiaries.
Board Leadership Structure
Mr. Anido currently serves as both chief executive officer and chairman of the Board. The Board does not have a formal policy on whether
the roles of chief executive officer and chairman of the Board should be separate, but believes at this time that the Company and its stockholders are best served by its current leadership structure.
Combining the roles of chief executive officer and chairman of the Board fosters accountability, effective decision-making and alignment between interests of the Board and management.
Dr. Cooper
serves as our Lead Independent Director and presides over regularly scheduled meetings at which only our independent directors are present, serves as liaison between
the chairman of the Board and the independent directors, approves meeting agendas and schedules for the Board and performs such additional duties as the Board may determine and delegate. Our Board
believes that this structure provides an environment in which the independent directors are fully informed, have significant input into the content of Board meetings, and are able to provide objective
and thoughtful oversight of management. Our Board intends to evaluate from time to time whether our chief executive officer and
chairman of the Board positions should remain combined based on what our Board determines is best for the Company and its stockholders.
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While
certain members of the Board may participate on the boards of directors of other public companies, we monitor such participation to ensure it is not excessive and does not
interfere with their duties to us.
Board Committees
Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each committee
operates under a charter that was approved by our Board and is available on our website, www.zynerba.com, under the "Investor Relations" section.
Audit Committee
Our Audit Committee consists of Messrs. Federici and Moch and Dr. Cooper, and is chaired by Mr. Federici. The primary
purpose of our Audit Committee is to assist the Board in the oversight of our accounting and financial reporting processes, the audit and integrity of our financial statements, and the qualifications
and independence of our independent auditor, and to prepare any reports required of the Audit Committee under the rules of the SEC. The Audit Committee is responsible for, among other
things:
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hiring our independent registered public accounting firm and pre-approving the audit and permitted non-audit and tax services to be performed
by our independent registered public accounting firm;
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reviewing and approving the planned scope of the annual audit and reviewing the results of the annual audit;
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reviewing the significant accounting and reporting principles to understand their impact on our financial statements;
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reviewing with management, our independent registered public accounting firm and legal counsel, as appropriate, our financial reports, earnings
announcements and our compliance with legal and regulatory requirements;
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establishing procedures for the treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters
and confidential submissions by our employees of concerns regarding questionable accounting or auditing matters;
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recommending to our Board a Code of Business Conduct and Ethics, and periodically reviewing and recommending appropriate changes thereto;
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reviewing and approving related-party transactions in accordance with our related party transactions policy; and
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reviewing and evaluating, at least annually, our Audit Committee's charter.
Both
our independent registered public accounting firm and management periodically meet privately with our Audit Committee.
Our
Board has determined that all members of the Audit Committee are deemed "independent" and financially literate under the applicable rules and regulations of the SEC and NASDAQ, and
all members qualify as an "audit committee financial expert" within the meaning of SEC regulations. In 2017, the Audit Committee met 5 times.
Compensation Committee
Our Compensation Committee consists of Drs. Kisner and Harrison and Mr. Moch, and is chaired by Dr. Kisner. The primary purpose of
our Compensation Committee is to review the performance and
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development
of our management in achieving corporate goals and objectives and to assure that our executive officers are compensated effectively in a manner consistent with the strategy of our company,
competitive practice, sound corporate governance guidelines and stockholder interests. In carrying out these responsibilities, this committee oversees, reviews and administers all of our executive
compensation, equity and benefit plans and programs. The Compensation Committee is responsible for, among other things:
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reviewing and approving the corporate goals and objectives relevant to executive compensation, evaluating performance in light of those goals
and objectives and setting the compensation for our executive officers;
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reviewing and recommending the terms of employment agreements and other employment-related arrangements with our executive officers;
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reviewing and approving our compensation strategy for our employees;
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reviewing and recommending to our Board the compensation of our directors;
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administering our equity compensation plan and benefits plans and approving the grant of equity awards to our employees and directors under
these plans;
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overseeing and periodically reviewing the operation of all of our employee benefit plans;
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when required, reviewing and discussing with management our Compensation Discussion and Analysis and recommending to the full Board its
inclusion in our periodic reports and proxy statement to be filed with the SEC;
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when required, preparing the report of the Compensation Committee to be included in our annual proxy statement;
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engaging compensation consultants or other advisors it deems appropriate to assist with its duties; and
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reviewing and evaluating, at least annually, our Compensation Committee's charter.
Pursuant
to its charter, our Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation. As a
part of determining compensation for our executive officers and directors, our Compensation Committee engaged Arnosti Consulting, Inc., or Arnosti Consulting, an independent compensation
consultant. At the request of our Compensation Committee, Arnosti Consulting provided analysis and recommendations regarding:
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trends and emerging topics with respect to executive and director compensation;
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peer group selection for executive and director compensation benchmarking;
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compensation practices of our peer group;
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compensation recommendations for our executives, directors and other employees; and
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equity compensation metrics.
Our
Compensation Committee took into account the recommendations of Arnosti Consulting and utilized information, including industry peer group data, in evaluating, recommending and
determining cash compensation levels and equity compensation awards.
Arnosti
Consulting provides no services to us other than its advice to our Compensation Committee on the executive and director compensation matters described above. Our Compensation
Committee determined Arnosti Consulting to be independent under the NASDAQ and SEC regulations. Our Board has determined that all members of our Compensation Committee are deemed
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"independent"
under the listing standards of NASDAQ, and they are "nonemployee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act,
and "outside directors" for purposes of Section 162(m) of the Internal Revenue Code, of the Code. In 2017, the Compensation Committee met 4 times.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Drs. Harrison and Cooper and Mr. Butler, and is chaired by
Dr. Harrison. The primary purpose of our Nominating and Corporate Governance Committee is to assist our Board by identifying individuals qualified to become members of our Board, recommending a
slate of nominees to be proposed by our Board to stockholders for election to our Board, ensuring that the Board has the appropriate mix of skills and experience, developing and recommending corporate
governance principles and guidelines of our company and monitoring compliance therewith, and recommending directors to serve on the committees of our Board. The Nominating and Corporate Governance
Committee is responsible for, among other things:
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assisting our Board in identifying prospective director nominees and recommending nominees for each annual meeting of stockholders to our
Board;
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reviewing developments in corporate governance practices and recommending changes to the governance guidelines applicable to our Board;
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reviewing independence of our Board;
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evaluating and making recommendations as to the size and composition of the Board;
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recommending members for each of our committees of the Board;
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determining qualifications for service on our Board;
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reviewing the adequacy of our certificate of incorporation and bylaws and recommending to our Board, as conditions dictate, amendments thereto
for consideration by our Board and, when applicable, by our stockholders; and
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reviewing and evaluating, at least annually, our Nominating and Corporate Governance Committee's charter.
Our
Board has determined that all members of the Nominating and Corporate Governance Committee are independent under the listing standards of NASDAQ. In 2017, the Nominating and
Corporate Governance Committee met 6 times.
Role of the Board in Risk Oversight
One of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management
committee, but rather administers this oversight function directly through the Board as a whole, as well as through various standing committees of our Board that address risks inherent in their
respective areas of oversight. Our Audit Committee oversees management of enterprise risks and financial risks, cybersecurity and data protection risks, as well as potential conflicts of interests.
Our Compensation Committee is responsible for overseeing management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it
administers. Our Nominating and Corporate Governance Committee is responsible for overseeing management of risks associated with the independence of our Board. Pursuant to our Board's instruction, our
management regularly reports on applicable risks to the relevant committee or the Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board
and its committees.
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Executive Sessions
Executive sessions of our independent directors are held at each regularly scheduled meeting of our Board and at other times they deem
necessary. Our Board's policy is to hold executive sessions both with and without the presence of management. Our Board committees also generally meet in executive session at the end of each regularly
scheduled committee meeting.
Consideration of Director Nominees
General.
In evaluating nominees for membership on our Board, our Nominating and Corporate Governance Committee applies our Board
membership criteria
set forth in our Corporate Governance Guidelines. Under these criteria, the Committee takes into account many factors, including an individual's business experience and skills, as well as
independence, judgment, knowledge of our business and industry, professional reputation, leadership, integrity and ability to represent the best interests of the Company's stockholders. In addition,
the Nominating and Corporate Governance Committee will also consider the ability of the nominee to commit sufficient time and attention to the activities of our Board, as well as the absence of any
potential conflicts with the Company's interests. The Nominating and Corporate Governance Committee does not assign specific weight to particular criteria and no particular criterion is necessarily
applicable to all prospective nominees. Our Board does not have a formal policy with respect to diversity of nominees. Rather, our Nominating and Corporate Governance Committee considers Board
membership criteria as a whole and seeks to achieve diversity of experience, skills and viewpoint on our Board. Our Board is responsible for selecting candidates for election as directors based on the
recommendation of the Nominating and Corporate Governance Committee.
Our
Nominating and Corporate Governance Committee and Board regularly assess the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or
otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential nominees who may come to the attention of
the Committee through current Board members, professional search firms, stockholders or other persons. Each potential nominee brought to the attention of the Committee, regardless of who recommended
such potential nominee, is considered on the basis of the criteria set forth in our Corporate Governance Guidelines.
In
connection with the vacancy on our Board resulting from the death of Dr. Rask in July 2017, our Nominating and Corporate Governance Committee, in consultation with management,
our chairman and the other board members, undertook a process to identify a potential new board member with specific qualifications to fill the vacancy on our Board. In January 2018, our Nominating
and Corporate Governance Committee retained the executive search firm Catalyst Advisors LP to assist with a director search. Our Nominating and Corporate Governance Committee screened and
interviewed the initial slate of candidates identified in the search who satisfied the criteria set forth in our Corporate Governance Guidelines and otherwise appeared qualified for membership on the
Board and made recommendations to our Board. Our search resulted in the appointment of Mr. Butler as a director and member of the Nominating and Corporate Governance Committee.
Stockholder Nominees.
The Nominating and Corporate Governance Committee will review any candidates for director recommended by a
stockholder of
record who is entitled to vote at the Annual Meeting and who satisfies the notice, information and consent provisions set forth in the Bylaws. Our Board will use the same evaluation criteria and
process for director nominees recommended by stockholders as it uses for other director nominees. For information concerning stockholder proposals, see "Stockholder Proposals or Nominations for 2019
Annual Meeting" below in this Proxy Statement.
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Communications with the Board of Directors
Stockholders wishing to formally communicate with our Board, any Board committee, the independent directors as a group or any individual
director may send communications directly to the Company at 80 W. Lancaster Avenue, Suite 300, Devon, PA 19333, Attention: Corporate Secretary. All clearly marked written
communications, other than unsolicited advertising or promotional materials, are logged and copied, and forwarded to the director(s) to whom the communication was addressed. Please note that the
foregoing communication procedure does not apply to (i) stockholder proposals pursuant to Exchange Act Rule 14a-8 and communications made in connection with such proposals or
(ii) service of process or any other notice in a legal proceeding.