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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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ESPERION THERAPEUTICS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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Date Filed:
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April 28, 2016
To
Our Stockholders:
You
are cordially invited to attend the 2016 Annual Meeting of Stockholders of Esperion Therapeutics, Inc. on Thursday, June 9, 2016, at 8:00 a.m. Eastern Time (the
"Annual Meeting") to be held as a virtual meeting, at which you will be able to attend, vote and submit your questions, at www.virtualshareholdermeeting.com/ESPR2016.
The
Notice of 2016 Annual Meeting of Stockholders and the Proxy Statement contain details of the business to be conducted at the Annual Meeting and information you should consider when
you vote your shares.
At
the Annual Meeting, the agenda includes (1) the election of three directors, (2) the ratification of the appointment of Ernst & Young LLP as our
independent registered public accounting firm for the fiscal year ending December 31, 2016, (3) the approval, by non-binding advisory vote, of the compensation of the named executive
officers and (4) the recommendation, by non-binding vote, of the frequency of future, non-binding advisory votes on the compensation of the named executive officers. The Board of Directors
unanimously recommends that you vote
FOR
the election of each director nominee,
FOR
the ratification of
the appointment of Ernst & Young LLP,
FOR
the advisory resolutions approving the compensation of our named executive officers, and for the
proposed recommendation on the frequency of future advisory votes on the compensation of our named executive officers
EVERY ONE YEAR
.
Whether
or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Therefore, I urge you to promptly vote by submitting your proxy
via the Internet at the address listed on the proxy card or by signing, dating, and returning the enclosed proxy card in the enclosed envelope. If you decide to attend the Annual Meeting, you will be
able to vote in person, even if you have previously submitted your proxy.
On
behalf of our Board of Directors, I would like to express our appreciation for your continued interest in the affairs of Esperion Therapeutics, Inc. I look forward to greeting
as many of our stockholders as possible at the Annual Meeting.
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Sincerely,
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Tim M. Mayleben
President and Chief Executive Officer
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Esperion Therapeutics, Inc.
3891 Ranchero Drive, Suite 150
Ann Arbor, MI 48108
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
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TIME:
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8:00 a.m., Eastern Time, on Thursday, June 9, 2016
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PLACE:
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Virtually at www.virtualshareholdermeeting.com/ESPR2016, where you can attend the meeting and submit your questions during the meeting.
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PURPOSES:
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To elect three Class III directors,
Scott Braunstein, M.D., Dov A. Goldstein, M.D. and Roger S. Newton, Ph.D., FAHA, to hold office until the 2019 Annual Meeting of stockholders and until their successors are duly elected and qualified, subject to their earlier resignation or
removal;
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To ratify the appointment of Ernst &
Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016;
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To hold a stockholder advisory vote on the
compensation paid to our named executive officers;
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To hold a stockholder advisory vote to
determine the frequency of future stockholder advisory votes on the compensation paid to our named executive officers; and
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To transact any other business that properly
comes before the Annual Meeting (including adjournments and postponements thereof).
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RECORD DATE:
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Stockholders of record at the close of business on April 11, 2016 are entitled to vote at the Annual Meeting of Stockholders.
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VOTING BY PROXY:
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If you cannot attend the Annual Meeting of Stockholders, you may vote your shares via the Internet or by telephone by following the instructions on your proxy card and on www.proxyvote.com, or by signing, voting and
returning the proxy card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. For specific instructions on how to vote your shares, please review the instructions for each of these voting options as detailed in your Notice
and in this Proxy Statement. If you attend the Annual Meeting, you may vote directly even if you have previously voted via the Internet, by telephone or by returning your proxy card.
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By Order of the Board of Directors,
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Richard B. Bartram
Corporate Secretary
Ann Arbor, Michigan
April 28, 2016
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IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
We are furnishing proxy materials to our stockholders primarily via the Internet. On April 28, 2016, we mailed to our
stockholders a Notice of Internet Availability containing instructions on how to access our proxy materials, including our Proxy Statement and our 2015 Annual Report. The Notice of Internet
Availability also instructs you on how to submit your proxy or voting instructions through the Internet or to request a paper copy of our proxy materials, including a proxy card or voting instruction
form that includes instructions on how to submit your proxy or voting instructions by mail or telephone. Other stockholders, in accordance with their prior requests, have received e-mail access to our
proxy materials and instructions to submit their vote via the Internet, or have been mailed paper copies of our proxy materials and a proxy card or voting instruction form.
A
copy of our Proxy Statement and our 2015 Annual Report are also available on the Internet at
http://investor.esperion.com/annuals.cfm.
Internet
distribution of our proxy materials is designed to expedite receipt by stockholders, lower the cost of the Annual Meeting, and conserve natural resources. However, if you would
prefer to receive
printed proxy materials, please follow the instructions included in the Notice of Internet Availability. If you have previously elected to receive our proxy materials electronically, you will continue
to receive these materials via e-mail unless you elect otherwise.
ATTENDING THE ANNUAL MEETING
Attending and participating via the Internet:
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any stockholder as of the record date can attend the 2016 Annual Meeting live via the Internet at
www.virtualshareholdermeeting.com/ESPR2016
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webcast starts at 8:00 a.m. Eastern Time on June 9, 2016.
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stockholders may vote and submit questions while attending the Annual Meeting on the Internet
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instructions on how to attend and participate in the Annual Meeting via the Internet, including how to demonstrate proof of stock
ownership, are posted at
www.virtualshareholdermeeting.com/ESPR2016
Anyone
can view the Annual Meeting live via the Internet at
www.virtualshareholdermeeting.com/ESPR2016
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Webcast
replay of the Annual Meeting will be available until June 8, 2017.
QUESTIONS
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For questions regarding
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Contact
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Annual Meeting
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stock ownership
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Esperion Investor Relations:
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voting
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734-887-3903
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PROXY STATEMENT
FOR THE 2016 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 9, 2016
GENERAL INFORMATION
Our Board of Directors (the "Board") solicits your proxy on our behalf for the 2016 Annual Meeting of Stockholders (the "Annual
Meeting") and at any postponement or adjournment of the Annual Meeting for the purposes set forth in this Proxy Statement and the accompanying Notice of 2016 Annual Meeting of Stockholders (the
"Notice"). The Annual Meeting will be held at 8:00 a.m. Eastern Time on June 9, 2016, virtually at www.virtualshareholdermeeting.com/ESPR2016. This Proxy Statement is first being sent or
made available to stockholders on or about April 28, 2016.
In
this Proxy Statement the terms "Esperion," "the company," "we," "us," and "our" refer to Esperion Therapeutics, Inc. The mailing address of our principal executive offices is
Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108.
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Record Date
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April 11, 2016.
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Quorum
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A majority of the shares of all issued and outstanding stock entitled to vote on the record date must be present in person or represented by proxy to constitute a quorum.
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Shares Outstanding
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22,540,466 shares of common stock outstanding as of April 11, 2016.
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Voting
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There are four ways a stockholder of record can vote:
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(1)
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By Internet: You may vote over the Internet by following the instructions provided in the Notice or, if you receive your proxy materials by U.S. mail, by following the instructions on the proxy
card.
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(2)
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By Telephone: If you receive your proxy materials by U.S. mail, you may vote by telephone by following the instructions on the proxy card.
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(3)
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By Mail: If you receive your proxy materials by U.S. mail, you may complete, sign and return the accompanying proxy card in the postage-paid envelope provided.
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(4)
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Directly at the Annual Meeting: If you are a stockholder as of the record date, you may vote directly at the meeting by going to www.virtualshareholdermeeting.com/ESPR2016 and using your unique control
number that was included in the Notice of Availability of Proxy Materials you received in the mail. Submitting a proxy will not prevent a stockholder from attending the Annual Meeting, revoking their earlier-submitted proxy, and voting directly at
the meeting. Voting directly at the Annual Meeting will revoke and replace any previous proxies or voting instructions submitted.
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In order to be counted, proxies submitted by telephone or Internet must be received by 11:59 p.m. Eastern Time on June 8, 2016. Proxies submitted by U.S. mail must be received before the start of the Annual
Meeting.
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If you hold your shares through a bank or broker, please follow their instructions.
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Revoking Your Proxy
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Stockholders of record may revoke their proxies by attending the Annual Meeting and voting directly at the meeting, by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing
a later date with our Secretary before the vote is counted or by voting again using the telephone or Internet before the cutoff time (your latest telephone or Internet proxy is the one that will be counted). If you hold shares through a bank or
broker, you may revoke any prior voting instructions by contacting that firm.
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Votes Required to Adopt Proposals
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Each share of our common stock outstanding on the record date is entitled to one vote on any proposal presented at the Annual Meeting:
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For Proposal One, the election of directors, the three nominees receiving the plurality of votes entitled to vote and cast will be elected as directors.
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For Proposal Two, an affirmative vote of a majority of the shares properly cast for and against such matter, directly or represented by proxy, and voting on such matter is required to ratify the appointment of
Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.
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For Proposal Three, a majority of the shares properly cast for and against such matter is necessary for the approval of the advisory resolution on the compensation of our named executive officers.
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For Proposal Four, a plurality of votes cast is necessary for the approval of the advisory vote on the frequency of advisory votes on the compensation of our named executive officers. This means that the option that
receives the most votes will be recommended by the stockholders to the Board.
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Effect of Abstentions and Broker Non-Votes
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Abstentions with respect to and votes withheld from any nominee, and "broker nonvotes" (
i.e.
, where a broker has not received voting instructions from the beneficial owner
and for which the broker does not have discretionary power to vote on a particular matter) are counted as present for purposes of determining the presence of a quorum. With respect to the election of directors, you may vote "for" or "withhold"
authority to vote for each of the nominees. Shares voting "withheld" have no effect on the election of directors. With respect to the ratification of Ernst & Young LLP as our independent registered public accounting firm for the fiscal
year ending December 31, 2016, and the advisory note on the compensation of our named executive officers, you may note "for", "against" or "abstain" from such proposal. Abstentions are not counted as votes cast and thus will have no effect on
such proposals. With respect to the frequency of advisory votes on the compensation of the Company's named executive officers, you may vote for whether such frequency should be every one, two or three years, or abstain from voting. Abstentions are
not counted as votes cast and thus will have no effect on this proposal.
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Under the rules that govern brokers holding shares for their customers, brokers who do not receive voting instructions from their customers have the discretion to vote uninstructed shares on routine matters, but do not
have discretion to vote such uninstructed shares on non-routine matters. Only Proposal Two, the ratification of the appointment of Ernst & Young LLP, is considered a routine matter where brokers are permitted to vote shares held by them
without instruction. If your shares are held through a broker, those shares will not be voted in the election of directors, the advisory vote on the compensation of our named executive officers or the advisory vote to approve the proposed frequency
of future stockholder advisory votes on the compensation of our named executive officers, unless you affirmatively provide the broker instructions on how to vote.
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Voting Instructions
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If you complete and submit your proxy voting instructions, the persons named as proxies will follow your instructions. If you submit proxy voting instructions but do not direct how your shares should be voted on each item,
the persons named as proxies will vote
FOR
the election of the nominees for director,
FOR
the ratification of the appointment of Ernst &
Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016,
FOR
the approval of the advisory resolution on the compensation of our named
executive officers and for the proposed recommendation of the frequency of advisory votes on the compensation of our named executive officers
EVERY ONE YEAR
. The persons named as proxies will vote on any
other matters properly presented at the Annual Meeting in accordance with their best judgment, although we have not received timely notice of any other matters that may be properly presented for voting at the Annual Meeting.
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Voting Results
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We will announce preliminary results at the Annual Meeting. We will report final results by filing a Form 8-K within four business days after the Annual Meeting. If final results are not available at that time, we
will provide preliminary voting results in the Form 8-K and will provide the final results in an amendment to the Form 8-K as soon as they become available.
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Additional Solicitation/Costs
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We are paying for the distribution of the proxy materials and solicitation of the proxies. As part of this process, we reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-
of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. Proxy solicitation expenses that we will pay include those for preparation, mailing, returning and tabulating the proxies. Our directors, officers, and employees
may also solicit proxies on our behalf in person, by telephone, email or facsimile, but they do not receive additional compensation for providing those services.
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PROPOSAL ONE
ELECTION OF CLASS III DIRECTORS
Number of Directors; Board Structure
Our Board is divided into three staggered classes of directors as nearly equal in number as possible. One class is elected each year at
the Annual Meeting of stockholders for a term of three years. The term of the Class III directors expires at the Annual Meeting. The term of the Class I directors expires at the 2017
Annual Meeting and the term of the Class II directors expires at
the 2018 Annual Meeting. After the initial terms expire, directors are expected to be elected to hold office for a three-year term or until the election and qualification of their successors in
office.
Nominees
Based on the recommendation of the nominating and corporate governance committee of our Board, our Board has nominated Scott
Braunstein, M.D., Dov A. Goldstein, M.D. and Roger S. Newton, Ph.D., FAHA for election as Class III directors to serve for three-year terms ending at the 2019 Annual Meeting or until their
successors are elected and qualified. Each of the nominees is a current member of our Board and has consented to serve if elected.
Unless
you direct otherwise through your proxy voting instructions, the persons named as proxies will vote all proxies received "for" the election of each nominee. If any nominee is
unable or unwilling to serve at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee chosen by the present Board. In the alternative, the proxies may vote
only for the remaining nominees, leaving a vacancy on the Board. The Board may fill such vacancy at a later date or reduce the size of the Board. We have no reason to believe that any of the nominees
will be unwilling or unable to serve if elected as a director.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE FOLLOWING
NOMINEES.
The
biographies of each of the nominees and continuing directors below contain information regarding each such person's service as a director, business experience, director positions
held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the nominating and corporate governance committee to determine that the
person should serve as a director of the company. In addition to the information presented below regarding each such person's specific experience, qualifications, attributes and skills that led the
Board and its nominating and corporate governance committee to the conclusion that he or she should serve as a director, we also believe that each of our directors has a reputation for integrity,
honesty and adherence to high ethical standards. Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our company and
our Board. Finally, we value our directors' experience in relevant areas of business management and on other boards of directors and board committees.
Our
corporate governance guidelines also dictate that a majority of the Board be comprised of independent directors whom the Board has determined have no material relationship with the
company and who are otherwise "independent" directors under the published listing requirements of the NASDAQ Stock Market.
Nominees for Election for a Three-Year Term Ending at the 2019 Annual Meeting
Scott Braunstein, M.D., 52,
became a member of our Board in June 2015.
Dr. Braunstein is an Operating Partner at Aisling Capital, a private investment firm, and currently serves as Senior Vice
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President
of Strategy and Corporate Development at Pacira Pharmaceuticals, Inc. (NASDAQ: PCRX). Dr. Braunstein served as a healthcare portfolio manager at Everpoint Asset Management from
2014 through 2015. Previously, from 2002 to 2014, he worked in various positions at JP Morgan Asset Management, a division of JPMorgan Chase & Co. (NYSE: JPM), most recently as a
managing director, senior portfolio manager for the JPM Global Healthcare Fund, and the JPM asset global equity analyst for the U.S. pharmaceutical and biotechnology industry. Prior to that, he worked
at Deutsche Bank from 2000 to 2002 as a health care equity sales specialist and as vice president of operations at Defined Healthcare from 1999 to 2000. He is board certified in Internal Medicine,
having completed his residency at the New York Hospital-Cornell Medical Center, and achieved the title of assistant clinical professor of medicine at Columbia University Medical Center.
Dr. Braunstein earned his bachelor degree from Cornell University and his medical degree from the Albert Einstein College of Medicine at Yeshiva University. We believe that
Dr. Braunstein is qualified to serve as a director based on his broad experience in the industry in which we operate.
Dov A. Goldstein, M.D., 48
, has served as a member of our Board since April 2008. Dr. Goldstein is a Managing Partner at Aisling
Capital, a private investment firm. From October 2014 to May 2015, he served as acting Chief Financial Officer of Loxo Oncology, Inc. (NASDAQ: LOXO). He previously served as a Partner of
Aisling Capital from 2008 to 2014, and from 2006 to 2008, he was a Principal at Aisling Capital. From 2000 to 2005, Dr. Goldstein was Chief Financial Officer of Vicuron
Pharmaceuticals, Inc. before its acquisition by Pfizer Inc. From 1998 to 2000, Dr. Goldstein was Director of Venture Analysis at HealthCare Ventures, a privately held investment
fund. Dr. Goldstein is a director of a number of companies including ADMA Biologics, Inc. (NASDAQ: ADMA) and Cempra Pharmaceuticals, Inc. (NASDAQ: CEMP). He previously served as a
member of the board of directors of Durata Therapeutics (NASDAQ: DRTX) from December 2009 until May 2013, and of Loxo Oncology (NASDAQ: LOXO) from July 2013 to October 2014. He holds a B.S. in biology
from
Stanford University, an M.D. from the Yale School of Medicine and an M.B.A. from the Columbia Business School. We believe Dr. Goldstein's experience with financial accounting matters for
complex organizations, his prior oversight of the financial reporting process of public companies and his experience working with life sciences companies qualifies him to serve as a member of our
Board.
Roger S. Newton, Ph.D., FAHA, 65
, has served as our Executive Chairman and Chief Scientific Officer since December 2012 and is a fellow of
the American Heart Association and the American College of Nutrition. Dr. Newton was previously our President and Chief Executive Officer from our founding in 2008 to December 2012. Prior to
joining our company, he was Senior Vice President, Pfizer Global R&D from 2004 to 2008. He was a Co-founder, President & CEO of the original Esperion from July 1998 until its acquisition by
Pfizer in 2004. Prior to founding the original Esperion, Dr. Newton was Chairman of the Atherosclerosis Drug Discovery Team at Warner Lambert from 1981 to 1998. Dr. Newton is a director
of a number of companies including Celsee Diagnostics (previously DeNovo Biosciences, Inc.), Juventas Therapeutics, Inc. and Rubicon Genomics, Inc. He is also a member of the
Technology Advisory Boards of Arboretum Ventures and FirstSense Medical, LLC. Dr. Newton has a Ph.D. in nutrition from the University of California, Davis, a Master of Science degree in
nutritional biochemistry from the University of Connecticut, and a Bachelor of Science degree in biology from Lafayette College. Dr. Newton's qualifications to serve as a member of our Board
include his more than 30 years of industry experience in the development and commercialization of pharmaceutical products.
Directors Continuing in Office Until the 2017 Annual Meeting
Daniel Janney, 50,
has served as a member of our Board since November 2012.
Mr. Janney is a Managing Director at Alta Partners, a life sciences venture capital firm, which he joined in 1996. Prior to joining Alta, from 1993 to 1996, he was a Vice President in
Montgomery Securities' healthcare and biotechnology investment banking group, focusing on life sciences companies. Mr. Janney is a director
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of
a number of companies including Alba Therapeutics Corporation, Prolacta Bioscience, Inc., ViroBay, Inc., and Sutro Biopharma. He holds a Bachelor of Arts in History from Georgetown
University and an M.B.A. from the Anderson School at the University of California, Los Angeles. We believe Mr. Janney's experience working with and serving on the boards of directors of life
sciences companies and his experience working in the venture capital industry qualifies him to serve as a member of our Board.
Tim M. Mayleben, 55,
has served as our President and Chief Executive Officer since December 2012 and as a member of our Board since
February 2010. Prior to joining Esperion, Mr. Mayleben was President, CEO and a director of Vericel Corporation (NASDAQ: VCEL) (formerly Aastrom Biosciences). Previously, Mr. Mayleben
was President, Chief Operating Officer and a director of NightHawk Radiology Holdings, Inc. Prior to joining Nighthawk, he was the COO of the original Esperion, until its acquisition by Pfizer
in 2004. Mr. Mayleben is an advisor to, investor in, and member of the board of directors of several life science companies, including Kaléo Pharma, Lycera Corporation, Loxo
Oncology, Inc. (NASDAQ: LOXO) and Marinus Pharmaceuticals (NASDAQ: MRNS). Mr. Mayleben earned an M.B.A., with distinction, from the J.L. Kellogg Graduate School of Management at
Northwestern University, and a B.B.A. from the University of Michigan, Ross School of Business. We believe that Mr. Mayleben's experience working in the life sciences industry, including over a
decade of experience as an executive officer of several life sciences companies, qualifies him to serve as a member of our Board.
Mark E. McGovern, M.D., 6
3, became a member of our Board in February 2014. Dr. McGovern is a board-certified cardiologist with over
20 years of experience developing lipid regulating therapies, and since 2007, has served as a consultant to the pharmaceutical industry in cardiovascular and lipid regulation.
Dr. McGovern spent 10 years, from 1997 to 2007, at Kos Pharmaceuticals, where he last served as Executive Vice President, Medical Affairs, and Chief Medical Officer, prior to its
acquisition by Abbott Laboratories. Prior to joining Kos Pharmaceuticals, Dr. McGovern spent11 years at Bristol-Myers Squibb (NYSE: BMY), from 1986 to 1997, in various capacities,
including Executive Director, Heart Failure and Atherosclerosis Clinical Research. Dr. McGovern earned his Bachelor's degree summa cum laude from Princeton University and his medical degree
from the University of Vermont. Dr. McGovern is a Fellow of the American College of Cardiology and the American College of Physicians, and has published extensively on lipid management and its
role in the treatment of coronary heart disease. We believe that Dr. McGovern is qualified to serve as a member of our Board based on his broad experience in the industry in which we operate
and his expertise in lipid regulating therapies.
Directors Continuing in Office Until the 2018 Annual Meeting
Antonio M. Gotto Jr., M.D., D.Phil., 8
1, has served as a member of our Board since
January 2014. Dr. Gotto currently serves as Dean Emeritus of the Joan and Sanford I. Weill Medical College of Cornell University and Provost for Medical Affairs Emeritus of Cornell University.
From January 2012 to December 2014, Dr. Gotto was the Co-Chairman of the Board of Overseers of Weill Cornell Medical College, and from January 1997 to December 2011, he served as the Stephen
and Suzanne Weiss Dean of the Joan and Sanford I. Weill Medical College of Cornell University and Provost for Medical Affairs of Cornell University. Previously, Dr. Gotto served as J.S.
Abercrombie Chair of Atherosclerosis and Lipoprotein Research and Chairman and Professor of the Department of Medicine at Baylor College of Medicine and Methodist Hospital. Dr. Gotto currently
serves as a member of the Institute of Medicine of the National Academy of Sciences and as a Fellow of the American Academy of Arts and Sciences. Dr. Gotto is also a past president of the
International Atherosclerosis Society and a past president of the American Heart Association. Dr. Gotto holds a B.A. degree from Vanderbilt University, a D.Phil. degree in Biochemistry from
Oxford University in England, where he was a Rhodes Scholar, and an M.D. degree from Vanderbilt University School of
Medicine. He completed his residency training at Massachusetts General Hospital in Boston, Massachusetts. Dr. Gotto is also a
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member
of the board of directors of Aegerion Pharmaceuticals, Inc. (NASDAQ: AEGR). We believe that Dr. Gotto is qualified to serve as a member of our Board based on his broad industry
experience and expertise in lipid disorders.
Gilbert S. Omenn, M.D., Ph.D., 7
4, was appointed to our Board in June 2014. Dr. Omenn is Professor of Computational
Medicine & Bioinformatics, Internal Medicine, Human Genetics and Public Health at the University of Michigan. He leads the global Human Proteome Project. He serves on the Council of the
National Academy of Medicine and the Community Preventive Services Task Force of the Centers for Disease Control and Prevention (CDC). Previously, Dr. Omenn was Chief Executive Officer of the
University of Michigan Health System and Executive Vice President of the University of Michigan for Medical Affairs; Professor of Medicine and of Environmental Health, and Dean of the School of Public
Health and Community Medicine, at the University of Washington; Associate Director of the White House Office of Science & Technology Policy and of the Office of Management and Budget; and a
Howard Hughes Medical Investigator. He has served on the National Cancer Advisory Board, National Heart, Lung and Blood Institute Advisory Council, Scientific Management Review Board of the NIH, and
the Director's Advisory Committee for the CDC. Dr. Omenn earned his Bachelor's degree summa cum laude from Princeton University, his M.D. magna cum laude from Harvard Medical School, and his
Ph.D. in genetics from the University of Washington. Dr. Omenn serves on the boards of Galectin Therapeutics, Inc. (NASDAQ: GALT) and Oncofusion Therapeutics, Inc. Previously,
Dr. Omenn was a director of Amgen, Inc. (NASDAQ: AMGN) and Rohm & Haas Company. We believe that Dr. Omenn is qualified to serve as a member of our Board based on his broad
industry, academic, and healthcare experience.
Nicole Vitullo, 58,
has served as a member of our Board since April 2008 and as our lead independent director since December 2015.
Ms. Vitullo joined Domain Associates, LLC, a venture capital firm with an exclusive focus on life sciences, in 1999 and became a Partner in 2004. From 1992 to 1999, Ms. Vitullo
was Senior Vice President at Rothschild Asset Management, Inc. Ms. Vitullo is a director of a number of companies including Celator Pharmaceuticals, Inc. (NASDAQ: CPXX), Achillion
Pharmaceuticals, Inc. (NASDAQ: ACHN), Marinus Pharmaceuticals, Inc. (NASDAQ: MRNS), Celtaxsys Inc. and VentiRx Pharmaceuticals, Inc. Ms. Vitullo received a B.A. and
an M.B.A. from the University of Rochester. We believe Ms. Vitullo's experience working with and serving on the boards of directors of life sciences companies and her experience working in the
venture capital industry qualifies her to serve as a member of our Board.
Directors Departing Office Following the Annual Meeting
Mr. Enright's term as director will conclude at the Annual Meeting, and he has not been nominated by the Board for election to a
new three-year term at the Annual Meeting.
Patrick G. Enright, 54,
became a member of our Board in April 2013. Mr. Enright is a founder of Longitude Capital
Management Co., LLC, a venture capital firm focused on investments in biotechnology, and has served as its Managing Director since 2007. From 2002 through 2006, Mr. Enright was a
Managing Director of Pequot Ventures where he co-led the life sciences investment practice. Prior to Pequot, he was a Managing Member responsible for the Delta Opportunity Fund, where he invested in
privately-held and publicly-traded biotechnology companies. He was previously Chief Financial Officer and Senior Vice President of Business Development at Valentis, Inc. (now Urigen
Pharmaceuticals, Inc.) and Senior Vice President of Finance and Business Development at Boehringer Mannheim Pharmaceuticals (now F. Hoffmann-La Roche. Ltd.). Mr. Enright is a
director of a number of privately-held companies, as well as Aimmune Therapeutics, Inc. (NASDAQ: AIMT) Corcept Therapeutics, Inc. (NASDAQ: CORT) and Jazz Pharmaceuticals plc
(NASDAQ: JAZZ). Previously, Mr. Enright served on the boards of Threshold Pharmaceuticals, Inc. (NASDAQ: THLD), Sequenom, Inc. (NASDAQ: SQNM), Valentis, Inc. (NASDAQ:
VLTS), Codexis, Inc. (NASDAQ: CDXS), Horizon Pharma plc (NASDAQ: HZNP), and MAP Pharmaceuticals, Inc. (NASDAQ: MAPP). Mr. Enright received his M.B.A. from the Wharton
School of Business at the University of Pennsylvania and his B.S. in Biological Sciences from Stanford University.
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EXECUTIVE OFFICERS
The following table presents our current executive officers and their respective ages and positions as of March 31, 2016.
Biographical information pertaining to Mr. Mayleben and Dr. Newton, who each serve as both a director and an executive officer, can be found in the section entitled "Proposal One,
Election Of Class III Directors."
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
Tim M. Mayleben
|
|
|
55
|
|
President and Chief Executive Officer
|
Roger S. Newton, Ph.D., FAHA
|
|
|
65
|
|
Executive Chairman and Chief Scientific Officer
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
|
63
|
|
Executive Vice President, Research & Development, and Chief Operating Officer
|
Mary P. McGowan, M.D.
|
|
|
56
|
|
Chief Medical Officer
|
Narendra D. Lalwani, Ph.D., FAHA, DABT,
has served as our Executive Vice President, Research & Development, and Chief Operating
Officer since August 2014. Prior to joining Esperion Dr. Lalwani was Chief Scientific Officer at Cerenis Therapeutics from 2007 to 2014 where he led R&D activities for the company. Previously,
Dr. Lalwani was Vice President of Drug Safety at the original Esperion until its acquisition by Pfizer. Prior to Esperion, Dr. Lalwani held various positions of increasing responsibility
in the Department of Pathology and Experimental Toxicology at Warner-Lambert/Parke-Davis. Dr. Lalwani is a Fellow of the American Heart Association (FAHA) and a diplomat of the American Board
of Toxicology (DABT). Dr. Lalwani earned a Ph.D. in Biophysics from the University of Bombay (India) and an M.B.A from the University of Michigan Ross School of Business.
Mary P. McGowan, M.D.
, has served as our Chief Medical Officer since June 2015. Prior to joining Esperion, Dr. McGowan served as
senior medical director of clinical development (cardiovascular) at Genzyme Corporation, a Sanofi S.A. (NYSE: SAN) company, from 2012 to 2015. Dr. McGowan has also served as a part-time
physician and co-director of the Dartmouth-Hitchcock Lipid Clinic since 2013. In 2011 she served as executive director of MedPace Clinics, and from 2004 to 2011 she served as director of the
Cholesterol Treatment Center at Concord Hospital. Dr. McGowan also served as director of the Cholesterol Management Center at Catholic Medical Center from 1992 to 2004. Dr. McGowan
served as a board member of the National Lipid Association from 2006 to 2011. She also previously served as the Chief Medical Officer of the Familial Hypercholesterolemia Foundation and was a member
of the National Lipid Association's Expert Panel on Familial Hypercholesterolemia, the New Hampshire Childhood Obesity Expert Panel and New Hampshire board of the American Heart Association.
Dr. McGowan has also served as a reviewer for the Journal of Clinical Lipidology since 2007. She earned her bachelor's degree from St. Michaels College and completed medical school and
residency training at the University of Massachusetts Medical Center and a fellowship at Johns Hopkins School of Medicine.
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CORPORATE GOVERNANCE
Board Independence
Our Board has determined that all members of the Board, except Mr. Mayleben and Dr. Newton, are independent, as
determined in accordance with the rules of the NASDAQ Stock Market. In making such independence determination, the Board considered the relationships that each such non-employee director has with us
and all other facts and circumstances that the Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In
considering the independence of the directors listed above, our Board considered the association of our directors with the holders of more than 5% of our common stock. The composition and functioning
of our Board and each of our committees complies with all applicable requirements of the NASDAQ Stock Market and the rules and regulations of the SEC. There are no family relationships among any of
our directors or executive officers.
At
least annually, the Board will evaluate all relationships between us and each director in light of relevant facts and circumstances for the purposes of determining whether a material
relationship exists that might signal a potential conflict of interest or otherwise interfere with such director's ability to satisfy his or her responsibilities as an independent director. Based on
this evaluation, the Board will make an annual determination of whether each director is independent within the meaning of NASDAQ's, the SEC's, and our applicable committees' independence standards.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including those
officers responsible for financial reporting. The current version of the Code of Business Conduct and Ethics is available on our website at http://investor.esperion.com/governance.cfm. A copy of the
Code of Business Conduct and Ethics may also be obtained, free of charge, upon a request directed to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108,
Attention: Vice President, Finance. We intend to disclose any amendment or waiver of a provision of the Code of Business Conduct and Ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or Vice President, Finance, or persons performing similar functions, by posting such information on our website (available at http://www.esperion.com)
and/or in our public filings with the SEC.
Corporate Governance Guidelines
The Board has adopted corporate governance guidelines to assist and guide its members in the exercise of its responsibilities. These
guidelines should be interpreted in accordance with any requirements imposed by applicable federal or state law or regulation, NASDAQ and our certificate of incorporation and bylaws. Our corporate
governance guidelines are available in the corporate governance section of our website at http://investor.esperion.com/governance.cfm. Although these corporate governance guidelines have been approved
by the Board, it is expected that these guidelines will evolve over time as customary practice and legal requirements change. In particular, guidelines that encompass legal, regulatory or exchange
requirements as they currently exist will be deemed to be modified as and to the extent that such legal, regulatory or exchange requirements are modified. In addition, the guidelines may also be
amended by the Board at any time as it deems appropriate.
Board and Committee Meetings
The Board meets on a regularly scheduled basis during the year to review significant developments affecting us and to act on matters
requiring their approval. It also holds special meetings when important matters require action between scheduled meetings. Members of senior management regularly attend meetings to report on and
discuss their areas of responsibility. During 2015, the Board
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held
9 meetings and acted by unanimous written consent once. The Board has three standing committees:
-
-
the audit committee, which held five meetings in 2015;
-
-
the compensation committee, which held ten meetings in 2015; and
-
-
the nominating and corporate governance committee, which held five meetings in 2015.
Each
of the incumbent directors of the Board attended at least 75% of the aggregate of all meetings of the Board and all meetings of committees of our Board upon which they served
(during the periods that they served) during 2015. The Board of Directors regularly holds executive sessions of the independent directors. Executive sessions do not include employee directors or
directors who do not qualify as independent under NASDAQ and SEC rules.
Annual Meeting Attendance
It is our policy that members of our Board are encouraged to attend annual meetings of our stockholders. All of our directors at the
time of our 2015 Annual Meeting of stockholders attended that meeting.
Committees
Our bylaws provide that the Board may delegate responsibility to committees. The Board has three standing committees: an audit
committee, a compensation committee, and a nominating and corporate governance committee. The Board has also adopted a written charter for each of the three standing committees. Each committee charter
is available in the corporate governance section of our website at http://investor.esperion.com/governance.cfm.
Audit Committee
Mr. Enright, Mr. Janney and Drs. Braunstein, Goldstein and Omenn currently serve on the audit committee, which is chaired
by Mr. Enright. Effective as of the date of our Annual Meeting, Mr. Janney and Drs. Braunstein (subject to his reelection at the Annual Meeting), Goldstein and Omenn will serve on the
Audit Committee, which will be chaired by Dr. Braunstein. Our board of directors has determined that each member of the audit committee is "independent" for audit committee purposes as that
term is defined in the applicable rules of the Securities and Exchange Commission and the NASDAQ Stock Market. Our board of directors has designated Dr. Braunstein as the "audit committee
financial expert," as defined under the applicable rules of the Securities and Exchange Commission. The audit committee's responsibilities include:
-
-
appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
-
-
approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered
public accounting firm;
-
-
reviewing the internal audit plan with our independent registered public accounting firm and members of management responsible for
preparing our financial statements;
-
-
reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial
statements and related disclosures as well as critical accounting policies and practices used by us;
-
-
reviewing the adequacy of our internal control over financial reporting;
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-
-
establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
-
-
recommending, based upon the audit committee's review and discussions with management and our independent registered public accounting
firm, whether our audited financial statements shall be included in our Annual Report on Form 10-K;
-
-
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to our
financial statements and accounting matters;
-
-
preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
-
-
reviewing all related party transactions for potential conflict of interest situations and approving all such transactions; and
-
-
reviewing quarterly earnings releases.
Compensation Committee
Mr. Janney, Ms. Vitullo and Drs. Gotto and Omenn currently serve on the compensation committee, which is chaired by
Ms. Vitullo. Our Board has determined that each member of the compensation committee is "independent" as that term is defined in the applicable NASDAQ Stock Market rules, is an "outside
director" for purposes of Section 162(m) and is "non-employee director" for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
compensation committee's responsibilities include:
-
-
annually reviewing and approving corporate goals relevant to the compensation of our Chief Executive Officer;
-
-
evaluating the performance of our Chief Executive Officer in light of such corporate goals and determining the compensation of our
Chief Executive Officer;
-
-
reviewing and approving the compensation of our other executive officers;
-
-
reviewing and establishing our overall management compensation, philosophy and policy;
-
-
overseeing and administering our compensation and similar plans;
-
-
evaluating and assessing potential and current compensation advisers in accordance with the independence standards identified in the
applicable NASDAQ Stock Market rules;
-
-
retaining and approving the compensation of any compensation advisers;
-
-
reviewing and approving our policies and procedures for the grant of equity based awards;
-
-
reviewing and making recommendations to our Board with respect to the compensation of our non-employee directors;
-
-
preparing the compensation committee report to accompany our Compensation Discussion and Analysis; and
-
-
reviewing and discussing with management the compensation disclosure required to be included in our annual proxy statement and Annual
Report on Form 10-K.
Nominating and Corporate Governance Committee
Drs. Goldstein, Gotto and McGovern currently serve on the nominating and corporate governance committee, which is chaired by
Dr. Goldstein. Our board of directors has determined that each member of the nominating and corporate governance committee is "independent" as that term is
12
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defined
in the applicable NASDAQ Stock Market rules. The nominating and corporate governance committee's responsibilities include:
-
-
developing and recommending to the board of directors criteria for board and committee membership;
-
-
establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;
-
-
identifying individuals qualified to become members of the board of directors;
-
-
recommending to the board of directors the persons to be nominated for election as directors and to each of the board's committees;
-
-
developing and recommending to the board of directors a set of corporate governance guidelines; and
-
-
overseeing the evaluation of the board of directors and management.
Our
board of directors may establish other committees from time to time.
Identifying and Evaluating Director Nominees
The Board is responsible for selecting its own members. The Board delegates the selection and nomination process to the nominating and
corporate governance committee, with the expectation that other members of the Board, and of management, will be requested to take part in the process as appropriate.
Generally,
the nominating and corporate governance committee identifies candidates for director nominees in consultation with management, through the use of search firms or other
advisors, through the recommendations submitted by stockholders or through such other methods as the nominating and corporate governance committee deems to be helpful to identify candidates. Once
candidates have been identified, the nominating and corporate governance committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the
nominating and corporate governance committee. The nominating and corporate governance committee may gather information about the candidates through interviews, detailed questionnaires, comprehensive
background checks or any other means that the nominating and corporate governance committee deems to be appropriate in the evaluation process. The nominating and corporate governance committee then
meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the Board. Based on the
results of the evaluation
process, the nominating and corporate governance committee recommends candidates for the Board's approval as director nominees for election to the Board.
Minimum Qualifications
The nominating and corporate governance committee will consider, among other things, the following qualifications, skills and
attributes when recommending candidates for the Board's selection as nominees for the Board and as candidates for appointment to the Board's committees. The nominee shall have the highest personal and
professional integrity, shall have demonstrated exceptional ability and judgment, and shall be most effective, in conjunction with the other nominees to the Board, in collectively serving the
long-term interests of the stockholders.
In
evaluating proposed director candidates, the nominating and corporate governance committee may consider, in addition to the minimum qualifications and other criteria for Board
membership approved by the Board from time to time, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed director candidate,
his or her depth
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and
breadth of professional experience or other background characteristics, his or her independence and the needs of the Board.
Stockholder Recommendations
Stockholders may submit recommendations for director candidates to the nominating and corporate governance committee by sending the
individual's name and qualifications to our Secretary at Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, who will forward all recommendations to the
nominating and corporate governance committee. The nominating and corporate governance committee will evaluate any candidates recommended by stockholders against the same criteria and pursuant to the
same policies and procedures applicable to the evaluation of candidates proposed by directors or management.
Stockholder Communications
The Board provides to every securityholder the ability to communicate with the Board, as a whole, and with individual directors on the
Board through an established process for securityholder communication. For a securityholder communication directed to the Board of Directors as a whole, securityholders may send such communication to
the attention of the Chairman of the Board via U.S. Mail or Expedited Delivery Service to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attn:
Chairman of the Board.
For
a securityholder communication directed to an individual director in his or her capacity as a member of the Board, securityholders may send such communication to the attention of the
individual director via U.S. Mail or Expedited Delivery Service to: Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108, Attn: [Name of
Individual Director].
We
will forward by U.S. Mail any such securityholder communication to each director, and the Chairman of the Board in his or her capacity as a representative of the Board, to whom such
securityholder communication is addressed to the address specified by each such director and the Chairman of the Board, unless there are safety or security concerns that mitigate against further
transmission.
Board Leadership Structure
The positions of our Executive Chairman of the Board and Chief Executive Officer are presently separated at Esperion. Our board of
directors believes that this structure allows our Chief Executive Officer to focus on our day-to-day business, while allowing the Executive Chairman of the Board to lead the board in its role of
providing strategic and long-term direction. Our board of directors believes its administration of its risk oversight function has not affected its leadership structure. Although our amended and
restated bylaws do not require our Executive Chairman and Chief Executive Officer positions to be separate, our board of directors believes that having separate positions is the appropriate leadership
structure for us at this time and demonstrates our commitment to good corporate governance.
Since
July 2015, Nicole Vitullo has served as our lead independent director. As the lead independent director, Ms. Vitullo is responsible for coordinating the activities of the
independent directors. Among
other things, the lead independent director has the following specific responsibilities:
-
-
presiding at all meetings of the board at which the Chairperson of the board is not present, including executive sessions of
independent directors;
-
-
serving as liaison between the Chairperson of the board and the independent directors;
-
-
approving information sent to the board;
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-
-
approving board meeting agendas;
-
-
approving board meeting schedules to assure that there is sufficient time for discussion of all agenda items;
-
-
having the authority to call meetings of the independent directors of the board; and
-
-
if requested by major stockholders, ensuring that he or she is available for consultation and direct communication.
Board's Role in Risk Oversight
Our board of directors oversees the management of risks inherent in the operation of our business and the implementation of our
business strategies. Our board of directors performs this oversight role by using several different levels of review. In connection with its reviews of the operations and corporate functions of our
company, our board of directors addresses the primary risks associated with those operations and corporate functions. In addition, our board of directors reviews the risks associated with our
company's business strategies periodically throughout the year as part of its consideration of undertaking any such business strategies.
Each
of our board committees also oversees the management of our company's risk that falls within the committee's areas of responsibility. In performing this function, each committee has
full access to management, as well as the ability to engage advisors. Our Vice President, Finance reports to the audit committee and is responsible for identifying, evaluating and implementing risk
management controls and methodologies to address any identified risks. In connection with its risk management role, our audit committee meets privately with representatives from our independent
registered public accounting firm and our Vice President, Finance. The audit committee oversees the operation of our risk management program, including the identification of the primary risks
associated with our business and periodic updates to such risks, and reports to our board of directors regarding these activities. The compensation committee also plays a role in that it is charged,
in overseeing our overall compensation structure, with assessing whether that compensation structure creates risks that are reasonably likely to have a material adverse effect on us.
Risks Related to Compensation Policies and Practices
In establishing and reviewing our compensation philosophy and programs, our Board considers whether such programs encourage unnecessary
or excessive risk taking. We believe that our executive compensation programs do not encourage excessive or unnecessary risk taking. This is primarily due to the fact that our compensation programs
are designed to encourage our executive officers and other employees to remain focused on both short-term and long-term strategic goals. As a
result, we do not believe that our compensation programs are reasonably likely to have a material adverse effect on us.
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PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have appointed Ernst & Young LLP as our independent registered public accounting firm to perform the audit of our
financial statements for the fiscal year ending December 31, 2016, and we are asking you and other stockholders to ratify this appointment. Ernst & Young LLP has served as our
independent registered public accounting firm since 2008.
The
audit committee annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public
accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered
public accounting firm's performance. As a matter of good corporate governance, the Board determined to submit to stockholders for ratification the appointment of Ernst & Young LLP. A
majority
of the votes properly cast is required in order to ratify the appointment of Ernst & Young LLP. In the event that a majority of the votes properly cast do not ratify this appointment of
Ernst & Young LLP, we will review our future appointment of Ernst & Young LLP.
We
expect that a representative of Ernst & Young LLP will attend the Annual Meeting and the representative will have an opportunity to make a statement if he or she so
chooses. The representative will also be available to respond to appropriate questions from stockholders.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Registered Public Accounting Firm
We have adopted a policy on under which the audit committee must pre-approve all audit and permissible non-audit services to be
provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval would generally be
requested annually, with any pre-approval detailed as to the particular service, which must be classified in one of the four categories of services listed below. The audit committee may also, on a
case-by-case basis, pre-approve particular services that are not contained in the annual pre-approval request. In connection with this pre-approval policy, the audit committee also considers whether
the categories of pre-approved services are consistent with the rules on accountant independence of the SEC and the Public Company Accounting Oversight Board.
In
addition, in the event time constraints require pre-approval prior to the audit committee's next scheduled meeting, the audit committee has authorized its Chairperson to pre-approve
services. Engagements so pre-approved are to be reported to the audit committee at its next scheduled meeting.
Audit Fees
The following table sets forth the fees billed by Ernst & Young LLP for audit, audit-related, tax and all other services
rendered for 2015 and 2014:
|
|
|
|
|
|
|
|
Fee Category
|
|
2015
|
|
2014
|
|
Audit Fees
|
|
$
|
391,225
|
|
$
|
308,710
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
Tax Fees
|
|
|
46,200
|
|
|
9,400
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
437,425
|
|
$
|
318,110
|
|
|
|
|
|
|
|
|
|
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Table of Contents
Audit Fees.
Consist of aggregate fees for professional services provided in connection with the annual audit of our financial
statements, the review
of our quarterly condensed financial statements, consultations on accounting matters directly related to the audit, and comfort letters, consents and assistance with and review of documents filed with
the SEC.
Audit-Related Fees.
Consist of aggregate fees for accounting consultations and other services that were reasonably related to the
performance of
audits or reviews of our financial statements and were not reported above under "Audit Fees".
Tax Fees.
Consist of aggregate fees for tax compliance, tax advice and tax planning services including the review and preparation of
our federal and
state income tax returns.
All Other Fees.
Consist of aggregate fees billed for products and services provided by the independent registered public accounting firm
other than
those disclosed above. These fees consisted of an amount paid for the use of an online accounting research tool.
The
audit committee pre-approved all services performed since the pre-approval policy was adopted.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.
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Report of the Audit Committee of the Board of Directors
The information contained in this audit committee report shall not be deemed to be (1) "soliciting material," (2) "filed"
with the SEC, (3) subject to Regulations 14A or 14C of the Exchange Act, or (4) subject to the liabilities of Section 18 of the Exchange Act. No portion of this audit
committee report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, through any general statement
incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that Esperion specifically incorporates this report or a portion of it by reference.
In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act.
This
report is submitted by the audit committee of the Board. The audit committee consists of the five directors whose names appear below. None of the members of the audit committee is
an officer or employee of Esperion, and the Board has determined that each member of the audit committee is "independent" for audit committee purposes as that term is defined under Rule 10A-3
of the Exchange Act, and the applicable NASDAQ Stock Market rules. Each member of the audit committee meets the requirements for financial literacy under the applicable rules and regulations of the
SEC and NASDAQ Stock Market. The Board has designated Dr. Braunstein as an "audit committee financial expert," as defined under the applicable rules of the SEC. The audit committee operates
under a written charter adopted by the Board.
The
audit committee's general role is to assist the Board in monitoring our financial reporting process and related matters. Its specific responsibilities are set forth in its charter.
The
audit committee has reviewed the company's financial statements for 2015 and met with management, as well as with representatives of Ernst & Young LLP, the company's
independent registered public accounting firm, to discuss the financial statements. The audit committee also discussed with members of Ernst & Young LLP the matters required to be
discussed by the Auditing Standard No. 16, as amended (AICPA
Performance Standards
Vol. 1. AU Section 380), as adopted by the Public
Company Accounting Oversight Board in Rule 3200T.
In
addition, the audit committee received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and discussed with members of Ernst & Young LLP its independence.
Based
on these discussions, the financial statement review and other matters it deemed relevant, the audit committee recommended to the Board that the company's audited financial
statements for 2015 be included in its Annual Report on Form 10-K for 2015.
Audit
Committee
Patrick Enright (Chairperson)
Scott Braunstein, M.D.
Dov A. Goldstein, M.D.
Daniel Janney
Gilbert S. Omenn, M.D., Ph.D.
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PROPOSAL THREE
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Our Board is committed to excellence in governance. As part of this commitment, and as required by Section 14A(a)(1) of the
Exchange Act, our Board is providing our stockholders with an opportunity to cast a non-binding, advisory vote on the compensation of our named executive officers.
As
described below under "Executive Officer and Director CompensationCompensation Discussion and Analysis," we have developed a compensation program that is designed to
attract and retain key executives responsible for our success and motivate management to enhance long-term stockholder value. The executive compensation program is designed to reward short-term and
long-term performance and to align the financial interests of executive officers with the interests of the Company's stockholders. We believe our executive compensation program strikes an appropriate
balance between the implementation of responsible, measured compensation practices and the effective provision of incentives for our named executive officers to exert their best efforts for our
success.
We
are asking for stockholder approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement, which include the disclosures in
the "Executive Compensation" and "Compensation Discussion and Analysis" sections, the compensation tables and the narrative discussion following the compensation tables in this Proxy Statement. This
vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this Proxy Statement.
For the reasons discussed above, our Board unanimously recommends that our stockholders vote in favor of the following resolution:
"RESOLVED,
that the Company's stockholders hereby approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company's proxy statement for the
2016 Annual Meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, Summary Compensation
Table and the other compensation related tables and disclosure."
As
this vote is advisory, it will not be binding upon our Board or the Compensation Committee and neither our Board nor the Compensation Committee will be required to take any action as
a result of the outcome of this vote. However, the Compensation Committee will carefully consider the outcome of this vote when considering future executive compensation policies and decisions.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE ADVISORY RESOLUTIONS APPROVING OUR NAMED EXECUTIVE OFFICER
COMPENSATION.
19
Table of Contents
PROPOSAL FOUR
ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED
EXECUTIVE OFFICER COMPENSATION
As part of our Board's commitment to excellence in corporate governance, and as required by the Section 14A(a)(2) of the
Exchange Act, our Board is providing our stockholders with an opportunity to cast a non-binding advisory vote on how frequently they would like to vote on future advisory resolutions to approve the
compensation of our named executive officers.
Consistent
with our compensation philosophy, our executive compensation program promotes both short-term and long-term incentives, especially given the long timelines and risks inherent
in our business of pharmaceutical research and development.
After
careful consideration, our Board has determined that holding a vote on an advisory resolution to approve the compensation of our named executive officers every one (1) year
is in the best interest of our stockholders. For the reasons below, the Board believes that, of the three choices, submitting a non-binding, advisory say-on-pay resolution to stockholders every year
is the most appropriate choice. We believe that say-on-pay votes should be conducted every year so that stockholders may annually express their views on our executive compensation program and
accordingly the Board recommends that this vote be held every year. It should be noted, however, that stockholders are not voting to approve or disapprove the Board's recommendation on this matter.
The compensation committee, which administers our executive compensation program, values the opinions expressed by stockholders in these votes and will continue to consider the outcome of these votes
in making its decisions on executive compensation.
For
the reasons discussed above, our Board recommends that stockholders vote to hold the advisory vote on named executive officer compensation every one (1) year. Stockholders are
not voting, however, to approve or disapprove of this particular recommendation. The proxy card provides for four choices and stockholders are entitled to vote on whether the advisory vote on named
executive officer compensation should be held every one, two, or three years, or to abstain from voting.
As
this vote is advisory, it will not be binding upon our Board and our Board may decide that it is in the best interest of our stockholders to hold an advisory vote on named executive
officer compensation more or less frequently than the frequency receiving the most votes cast by our stockholders. However, our Board will carefully consider the outcome of this vote when considering
the frequency of future advisory votes on named executive officer compensation.
Recommendation of the Board
THE BOARD RECOMMENDS THAT YOU VOTE FOR HOLDING THE ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION "EVERY
ONE YEAR."
20
Table of Contents
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us regarding the beneficial ownership of our common stock as of
April 1, 2016, for:
-
-
each person known by us to be the beneficial owner of more than 5% of our common stock;
-
-
our named executive officers;
-
-
each of our directors; and
-
-
all executive officers and directors as a group.
Beneficial
ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as noted by footnote, and
subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities named in the table below have sole voting and investment power
with respect to all shares of common stock shown as beneficially owned by them.
The
table lists applicable percentage ownership based on 22,540,466 shares of common stock outstanding as of April 1, 2016. Options to purchase shares of common stock and warrants
that are exercisable for common stock, in each case, that are exercisable within 60 days of April 1, 2016, are deemed to be beneficially owned by the persons holding these options or
warrants for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person's ownership percentage.
|
|
|
|
|
|
|
|
|
|
Shares beneficially
owned
|
|
Name and address of beneficial owner
(1)
|
|
Number
|
|
Percent
|
|
5% Stockholders
|
|
|
|
|
|
|
|
Alta Partners VIII, L.P.
(2)
|
|
|
1,781,204
|
|
|
7.9
|
%
|
Aisling Capital II, L.P.
(3)
|
|
|
1,708,362
|
|
|
7.6
|
%
|
Entities affiliated with Domain Partners VII, L.P.
(4)
|
|
|
2,344,894
|
|
|
10.4
|
%
|
Pentwater Capital Management LP
(5)
|
|
|
1,439,000
|
|
|
6.4
|
%
|
Entities affiliated with FMR LLC
(6)
|
|
|
1,882,050
|
|
|
8.3
|
%
|
Named Executive Officers
|
|
|
|
|
|
|
|
Tim M. Mayleben
(7)
|
|
|
454,460
|
|
|
2.0
|
%
|
Roger S. Newton, Ph.D., FAHA
(8)
|
|
|
807,573
|
|
|
3.6
|
%
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
(9)
|
|
|
155,937
|
|
|
*
|
|
Mary P. McGowan, M.D.
|
|
|
|
|
|
*
|
|
Other Directors
|
|
|
|
|
|
|
|
Scott Braunstein, M.D.
(10)
|
|
|
6,163
|
|
|
*
|
|
Patrick G. Enright
(11)
|
|
|
968,867
|
|
|
4.3
|
%
|
Dov A. Goldstein, M.D.
(12)
|
|
|
1,742,833
|
|
|
7.7
|
%
|
Antonio M. Gotto, Jr. M.D., D.Phil.
(13)
|
|
|
28,555
|
|
|
*
|
|
Daniel Janney
(14)
|
|
|
1,815,675
|
|
|
8.0
|
%
|
Gilbert S. Omenn, M.D., Ph.D.
(15)
|
|
|
30,777
|
|
|
*
|
|
Mark E. McGovern, M.D.
(16)
|
|
|
28,000
|
|
|
*
|
|
Nicole Vitullo
(17)
|
|
|
2,357,894
|
|
|
10.4
|
%
|
All directors and executive officers as a group (12 persons)
|
|
|
8,396,734
|
|
|
35.4
|
%
|
-
*
-
Represents
beneficial ownership of less than one percent.
21
Table of Contents
-
(1)
-
Unless
otherwise indicated, the address for each beneficial owner is c/o Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann
Arbor, MI 48108.
-
(2)
-
The
address for Alta Partners VIII, L.P. is One Embarcadero Center, 37th Floor, San Francisco, CA 94111. Consists of (a) 1,709,967
shares of common stock and (b) 71,237 shares of common stock issuable upon exercise of warrants. These shares are held of record by Alta Partners VIII, L.P. Alta Partners
Management VIII, LLC is the general partner of Alta Partners VIII, L.P. Guy Nohra, Daniel Janney and Farah Champsi are managing directors of Alta Partners
Management VIII, LLC and exercise shared voting and investment powers with respect to the shares owned by Alta Partners VIII, L.P. Each of the reporting persons disclaims
beneficial ownership of such shares, except to the extent of their proportionate pecuniary interest therein, if any. Mr. Janney is a member of our board of directors.
-
(3)
-
The
address for Aisling Capital II, L.P. is 888 7th Avenue, 30th Floor, New York, New York 10106. Consists of (a) 1,637,125
shares of common stock and (b) 71,237 shares of common stock issuable upon exercise of warrants. These shares are directly held by Aisling Capital II, LP, or Aisling, and are deemed to
be beneficially owned by Aisling Capital Partners, LP, or Aisling GP, as general partner of Aisling, Aisling Capital Partners, LLC, or Aisling Partners, as general partner of
Aisling GP, and each of the individual managing members of Aisling Partners. In addition, Dov A. Goldstein, M.D. and five other persons on the investment committee of Aisling share the power to
vote or dispose of these shares and therefore each member may be deemed to have voting and investment power with respect to such shares. Each of the members disclaims beneficial ownership of such
shares except to the extent of their pecuniary interest therein, if any. Dr. Goldstein is a member of our board of directors.
-
(4)
-
The
address for Domain Partners VII, L.P. is One Palmer Square, Suite 515, Princeton, New Jersey 08542. Consists of (a) 21,471
shares of restricted stock issued under the 2008 Plan upon exercise of an early exercise stock option originally issued to Nicole Vitullo and subsequently transferred to Domain Associates, L.L.C., all
of which are fully vested within 60 days of April 1, 2016, (b) 2,216,935 shares of common stock held by Domain Partners VII, L.P., (c) 35,253 shares of common stock
held by DP VII Associates, L.P., (d) 70,042 shares of common stock issuable upon exercise of warrants held by Domain Partners VII, L.P. and (e) 1,193 shares of common stock
issuable upon exercise of warrants held by DP VII Associates, L.P. James C. Blair, Brian H. Dovey, Jesse I. Treu, Brian K. Halak and Nicole Vitullo are the managing members of One Palmer Square
Associates VII, L.L.C., the general partner of Domain Partners VII, L.P. and DP VII Associates, L.P., and are managing members of Domain Associates, L.L.C., and share the power to vote
or dispose of these shares and therefore each of the foregoing managing members may be deemed to have voting and investment power with respect to such shares. Each of the foregoing managing members
disclaims beneficial ownership of such shares except to the extent of their pecuniary interest therein, if any. Ms. Vitullo is a member of our board of directors.
-
(5)
-
Based
upon information set forth on Schedule 13G filed by Pentwater Capital Management LP with the SEC on or about February 16, 2016.
-
(6)
-
Based
upon information set forth on Schedule 13G filed by FMR LLC with the SEC on or about February 12, 2016. Consists of securities
beneficially owned, or that may be deemed to be beneficially owned, by FMR LLC, certain of its subsidiaries and affiliates, and other companies. Members of the family of Edward C. Johnson 3d,
including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC.
The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance
with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution
22
Table of Contents
of
the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither
FMR LLC nor Edward C. Johnson 3d nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the
Investment Company Act ("Fidelity Funds") advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds' Boards of
Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds' Boards of Trustees.
-
(7)
-
Consists
of (a) 34,614 shares of common stock held and (b) 419,846 shares of common stock which Mr. Mayleben has the right to acquire
upon the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(8)
-
Consists
of (a) 629,683 shares of common stock, (b) 34,651 shares of common stock issuable upon exercise of warrants and (c) 143,239
shares of common stock which Dr. Newton has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(9)
-
Consists
of 155,937 shares of common stock that Dr. Lalwani has the right to acquire upon the exercise of outstanding options, exercisable currently
or within 60 days of April 1, 2016.
-
(10)
-
Consists
of (a) 52 shares of common stock held and (b) 6,111 shares of common stock which Dr. Braunstein has the right to acquire upon
the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(11)
-
Mr. Enright
is a managing member of Longitude Capital which holds an aggregate of 934,396 shares of our common stock. The address for Longitude
Capital Partners, LLC ("Longitude Capital") is 800 El Camino Real, Suite 220, Menlo Park, CA 94025. Consists of (a) 916,035 shares of common stock held by Longitude Venture
Partners, L.P. ("LVP") and (b) 18,361 shares of common stock held by Longitude Capital Associates, L.P. ("LCA"). Longitude Capital, as general partner of each of LVP and LCA, has
the power to vote and dispose of securities held by each of them and may be deemed to have beneficial ownership of the shares owned by LVP and LCA. Patrick G. Enright ("Enright") and Juliet Tammenoms
Bakker ("Bakker") are each managing members of Longitude Capital, and share the decision making power of Longitude Capital and may be deemed to have beneficial ownership of such shares owned by LVP
and LCA. Each of Longitude Capital, Enright and Bakker disclaims beneficial ownership of all shares, except to the extent of their pecuniary interest therein. Includes 34,471 shares of common stock
which Mr. Enright has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(12)
-
Dr. Goldstein
is on the investment committee of Aisling, which holds an aggregate of 1,708,362 shares of our common stock as disclosed in footnote 3
to this table, including common stock issuable upon the exercise of warrants exercisable within 60 days of April 1, 2016. Dr. Goldstein disclaims beneficial ownership of the
shares held by Aisling, except to the extent of his pecuniary interest therein. Includes 34,471 shares of common stock which Dr. Goldstein has the right to acquire upon the exercise of
outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(13)
-
Consists
of 28,555 shares of common stock which Dr. Gotto has the right to acquire upon the exercise of outstanding options, exercisable currently
or within 60 days of April 1, 2016.
-
(14)
-
Mr. Janney
is a managing director of Alta Partners Management VIII, LLC, which is the general partner of Alta Partners VIII, L.P.,
which holds an aggregate of 1,781,204 shares of our common stock as disclosed in footnote 2 to this table, including common stock issuable upon the exercise of warrants exercisable within
60 days of April 1, 2016. Mr. Janney has a passive economic interest in
23
Table of Contents
the
general partner of Alta Partners VIII, L.P. Mr. Janney disclaims beneficial ownership of the shares held by Alta Partners VIII, L.P., except to the extent of his pecuniary
interest therein. Includes 34,471 shares of common stock which Mr. Janney has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of
April 1, 2016.
-
(15)
-
Consists
of (a) 10,000 shares of common stock held and (b) 20,777 shares of common stock which Dr. Omenn has the right to acquire upon
the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
-
(16)
-
Consists
of 28,000 shares of common stock which Dr. McGovern has the right to acquire upon the exercise of outstanding options, exercisable
currently or within 60 days of April 1, 2016.
-
(17)
-
Ms. Vitullo
is a managing member of One Palmer Square Associates VII, L.L.C., the general partner of Domain Partners VII, L.P. and DP VII
Associates, L.P., and is a managing member of Domain Associates, L.L.C., which hold an aggregate of 2,344,894 shares of our common stock as disclosed in footnote 4 to this table, including
common stock issuable upon the exercise of warrants exercisable within 60 days of April 1, 2016. Ms. Vitullo disclaims beneficial ownership of the shares held by Domain Partners
VII, L.P., DP VII Associates, L.P. and Domain Associates, L.L.C., except to the extent of her pecuniary interest therein. Includes 13,000 shares of common stock which Ms. Vitullo
has the right to acquire upon the exercise of outstanding options, exercisable currently or within 60 days of April 1, 2016.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers and persons who own more than 10% of our common
stock, to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership. Officers, directors and greater than 10% stockholders are required by SEC
regulations to furnish us with copies of all such reports.
Based
solely on a review of reports furnished to us, all directors, executive officers, and 10% owners timely filed all reports regarding transactions in Esperion's securities required
to be filed for 2015 by Section 16(a) under the Exchange Act. Based solely on a review of reports furnished to us, Tim M. Mayleben filed a Form 5 on February 17, 2015, to
disclose, among other things, a disposition of shares by gift on September 3, 2013.
24
Table of Contents
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Compensation Discussion and Analysis
Our primary objective with respect to executive compensation is to attract and retain individuals who possess knowledge, experience and
skills that we believe are important to our business of developing and commercializing novel therapeutics for patients with elevated levels of
low-density lipoprotein cholesterol ("LDL-C"). Specifically, our executive compensation program is designed to:
-
-
attract and retain individuals with superior ability and managerial experience;
-
-
align our executive officers' incentives with our corporate strategies, business goals and the long-term interests of our
stockholders; and
-
-
increase the incentive to achieve key strategic performance goals by linking incentive award opportunities to the achievement of
performance goals and by providing a portion of the target total direct compensation opportunity for our executive officers in the form of ownership in the Company.
This
section discusses the principles underlying our policies and decisions with respect to the compensation of our executive officers who are named in the Summary Compensation Table
below, or our "named executive officers," and all material factors relevant to an analysis of these policies and decisions. Our named executive officers for 2015
are:
-
-
Tim M. Mayleben, our President and Chief Executive Officer
-
-
Roger S. Newton, Ph.D., FAHA, our Executive Chairman and Chief Scientific Officer
-
-
Narendra D. Lalwani, Ph.D., FAHA, DABT, our Executive Vice President, Research and Development, and Chief Operating Officer
-
-
Mary P. McGowan, M.D., our Chief Medical Officer
Executive Summary and Corporate Background
We are a pharmaceutical company focused on developing and commercializing first-in-class, oral, LDL-C lowering therapies for the
treatment of patients with elevated LDL-C. ETC-1002, or bempedoic acid, our lead product candidate, is an inhibitor of ATP Citrate Lyase, a well-characterized enzyme on the cholesterol biosynthesis
pathway. Bempedoic acid inhibits cholesterol synthesis in the liver, decreases intracellular cholesterol and up-regulates LDL-receptors, resulting in increased LDL-C clearance and reduced plasma
levels of LDL-C.
The
goal of our compensation committee is to ensure that our executive compensation program is aligned with the interests of our stockholders and our business goals and that the total
compensation paid to each of our named executive officers is fair, reasonable and competitive. The key elements of our executive compensation program
include:
-
-
base salary, to enable us to attract and retain the talent needed to continue to drive our business;
-
-
an annual cash incentive plan, tied to the achievement of pre-determined quantitative and qualitative corporate performance goals; and
-
-
equity incentive compensation, which is typically subject to multi-year vesting based on continued service and is primarily in the
form of stock options, the value of which depends on the market price of our common stock.
25
Table of Contents
Our
executive compensation program incorporates the following best practices:
-
-
a significant portion of our executives' total compensation opportunity is based on performance;
-
-
no executive officer is entitled to receive any tax gross-up payments;
-
-
we do not allow repricing of stock options without stockholder approval;
-
-
our compensation committee retains independent compensation consultants to advise on executive compensation; and
-
-
our compensation committee regularly reviews our incentive compensation programs to ensure they are designed to create and maintain
stockholder value and do not encourage excessive risk taking.
We
target the total cash compensation for our named executive officers with reference to the median of the competitive market. However, in accordance with our pay-for-performance
philosophy, a significant portion of executive compensation is performance-based, subject to increase when results exceed corporate goals and reduction when results fall below our target. We consider
stock options to be performance-based compensation because they only have intrinsic value if the Company's share price increases over time.
During
2015, we made significant progress on our development and business goals and achieved several important milestones, including the
following:
-
-
in February 2015, the Food and Drug Administration (the "FDA") removed the PPAR partial clinical hold on bempedoic acid;
-
-
in March 2015, we completed and reported positive top-line results from our Phase 2b 1002-009 clinical study;
-
-
in March 2015, we closed an underwritten public offering of 2,012,500 shares of common stock, at a public offering price of $100.00
per share, with net proceeds to us of approximately $190.0 million;
-
-
in July 2015, the FDA removed the 240 mg partial clinical hold on bempedoic acid; and
-
-
in July 2015, we completed and reported positive top-line results from our Phase 2 1002-014 clinical safety and tolerability
study.
Determining and Setting Executive Compensation
Our executive compensation program is designed to attract, motivate and retain qualified and talented executives, incent them to
achieve our business goals and reward them for superior short-term and long-term performance. In particular, our executive compensation program is intended to reward the achievement of specified
pre-determined quantitative and qualitative corporate performance goals and individual performance goals and to align the interests of our named executive officers with those of our stockholders.
Our
compensation committee, which is comprised entirely of independent directors, is primarily responsible for developing and implementing our compensation policies and establishing and
approving the compensation for all of our executive officers. The compensation committee oversees our compensation and benefit plans and policies, administers our equity incentive plans and reviews
and approves annually all compensation decisions relating to all of our executive officers, including our
26
Table of Contents
Chief
Executive Officer. Our compensation committee operates under a written charter adopted by our Board, which provides that the compensation committee has overall responsibility
for:
-
-
periodically reviewing and assessing our processes and procedures for the consideration and determination of executive compensation;
-
-
reviewing and approving grants and awards under incentive-based compensation plans and equity-based plans; and
-
-
determining the type and level of compensation of our Chief Executive Officer and our other executive officers.
In
reviewing and approving these matters, our compensation committee considers such matters as it deems appropriate, including our financial and operating performance, the alignment of
the interests of our executive officers and our stockholders and our ability to attract and retain qualified and committed individuals. In determining the appropriate compensation levels for our Chief
Executive Officer, the compensation committee meets outside the presence of all our executive officers. With respect to the compensation levels of all other executive officers, the compensation
committee meets outside the presence of all executive officers except our Chief Executive Officer. Our Chief Executive Officer annually reviews the performance of each of the other named executive
officers with the compensation committee.
Our
compensation committee has the authority under its charter to engage the services of a consulting firm or other outside advisor to assist it in designing our compensation programs
and in making compensation decisions and, in 2015, engaged Compensia, Inc. ("Compensia") as its compensation consultant. Our compensation committee has assessed the independence of Compensia
consistent with NASDAQ listing standards and has concluded that the engagement of Compensia does not raise any conflict of interest. In addition, the Company provides data for and subscribes to
off-the-shelf surveys produced by Radford, an Aon Hewitt Company, which our management team uses for non-executive compensation and benefits planning purposes.
Competitive Market Data
In evaluating the total compensation of our named executive officers, our compensation committee, using information gathered by
Compensia, establishes a peer group of publicly traded, national and regional companies in the biopharmaceutical and biotechnology industries that is selected based on a balance of the following
criteria:
-
-
industry;
-
-
size (market capitalization);
-
-
development stage of lead product candidate; and
-
-
similarity/relevance (small molecule, therapeutic area, etc.).
We
annually evaluate the composition of our peer group and adjust the composition of our peer group for factors such as recent acquisitions of peer companies, new markets that we have
entered or changes in the technology market landscape. Based on these criteria, our peer group for 2015, referred to as our 2015 peer group, was approved by our compensation committee and was
comprised of the companies listed below. We believe that our 2015 peer group continues to be aligned with our strategic vision and positions us to attract, retain and engage high performing
leaders:
-
-
Achillion Pharmaceuticals Inc.
-
-
Alder BioPharmaceuticals, Inc.
-
-
Array BioPharma, Inc.
27
Table of Contents
-
-
bluebird bio, Inc.
-
-
Chimerix, Inc.
-
-
Clovis Oncology, Inc.
-
-
Intra-Cellular Therapies, Inc.
-
-
Karyopharm Therapeutics, Inc.
-
-
Kite Pharma, Inc.
-
-
Lexicon Pharmaceuticals, Inc.
-
-
NewLink Genetics Corporation
-
-
Portola Pharmaceuticals, Inc.
-
-
Puma Biotechnology, Inc.
-
-
Radius Health, Inc.
-
-
Sage Therapeutics, Inc.
-
-
Synergy Pharmaceuticals, Inc.
-
-
Zafgen, Inc.
-
-
ZS Pharma, Inc.
We
believe that the compensation practices of our 2015 peer group provided the compensation committee with an appropriate understanding of the competitive market when evaluating and
determining the compensation of our named executive officers during 2015. However, due to the nature of our business, we compete for executive talent with many public companies, including
pharmaceutical companies, that are larger and more established than we are or that possess greater resources than we do, or with smaller private companies that may be able to offer greater equity
compensation potential, as well as with prestigious academic and non-profit institutions. In addition, the peer group data is just one of several factors that inform our compensation committee's
judgment in setting executive compensation. Our executive compensation decisions are made on a case-by-case basis and specific benchmark results do not, in and of themselves, determine individual
target compensation
opportunities. Accordingly, in 2015, our compensation committee generally targeted compensation for our executive officers as follows:
-
-
base salaries at approximately the 50
th
to 75
th
percentile of the base salaries of the
companies in our 2015 peer group;
-
-
annual cash incentive award opportunities at approximately the 50
th
to 75
th
percentile of
the companies in our 2015 peer group;
-
-
total annual equity incentive awards, provided in the form of stock options and restricted stock unit awards, at the
50
th
percentile of the companies in our 2015 peer group; and
-
-
target total direct compensation at the 50
th
percentile of compensation paid to similarly situated executives at
the companies in our 2015 peer group.
Our
compensation committee also considers other factors, including market conditions, the recommendation of our Chief Executive Officer with respect to named executive officers other
than himself, the experience level of the named executive officer and his or her performance against established corporate goals, in determining variations to this general target range.
28
Table of Contents
Other Key Performance Factors in Determining Executive Compensation
As the biopharmaceutical industry is characterized by very long product development cycles, including lengthy research and development
periods and rigorous approval phases involving human testing and governmental regulatory approval, many of the traditional measures for evaluating performance, such as product sales, revenues and
profits are inappropriate for a development-stage biopharmaceutical company, such as Esperion. Instead, the specific performance factors our compensation committee considers when determining the
compensation of our named executive officers include:
-
-
research and development achievements which advance the development of bempedoic acid;
-
-
successful initiation, progression and completion of clinical studies for bempedoic acid;
-
-
successful completion of non-clinical activities for bempedoic acid;
-
-
the achievement of regulatory goals; and
-
-
the establishment and maintenance of key business activities and strategic relationships, which include financings.
These
performance factors are considered by our compensation committee in connection with our annual performance reviews described below and are a critical component in the determination
of annual cash and equity incentive awards for our named executive officers.
Annual Performance Reviews
Our compensation committee conducts an annual performance review of each of our named executive officers and approves the target
compensation of each named executive officer based, in part, on this review. During the first quarter of each year, annual corporate goals are determined and set forth in writing. Before the end of
each year, our compensation committee determines the compensation levels for each named executive officer after carefully reviewing overall corporate performance and completing an evaluation of each
named executive officer's annual performance against established corporate goals, as well as his or her contributions to achievement of the corporate goals and, in the case of executive officers other
than our Chief Executive Officer, the achievement of individual performance goals. In addition, our compensation committee may apply its discretion, as it deems appropriate, in determining the
compensation of our named executive officers.
Any
merit-based increases in base salary, annual stock option grants, and cash awards made under our 2015 annual cash incentive compensation program were based on the achievement of
these corporate performance goals and individual performance goals, a review of competitive market data (based on our compensation peer group), and consideration of the other factors described above.
During
the last quarter of each year, our Chief Executive Officer evaluates our corporate performance and each named executive officer's individual performance (other than his own), as
compared to the corporate goals and, as applicable, the individual goals for that year. Based on this evaluation, our Chief Executive Officer recommends to our compensation committee any increases in
base salary, annual stock option grants and/or cash awards under our annual cash incentive compensation program. Our compensation committee, with input from our Board, evaluates our Chief Executive
Officer's individual performance and determines whether to adjust his base salary, grant him an annual stock option and/or make a cash award under our annual cash incentive compensation program.
Typically,
our compensation committee grants annual stock options, and determines adjustments to base salary and the amount of any annual cash incentive compensation award, at its last
regularly scheduled meeting of the year. Our compensation committee may also review the compensation of our
29
Table of Contents
named
executive officers throughout the course of the year. With respect to year-end reviews, any adjustments to base salary are effective at the beginning of the following year.
Executive Compensation Components
The primary elements of our executive compensation program are base salary, annual cash incentive compensation opportunities, annual
equity incentive awards and broad-based health and welfare benefits programs. We have not adopted any formal guidelines for allocating total compensation between long-term and short-term compensation,
cash compensation and non-cash compensation, or among different forms of non-cash compensation. With the exception of our 2015 annual cash incentive program, we do not have any pre-established targets
for allocations or apportionment by type of compensation. Each of the elements of executive compensation is discussed in more detail below.
Annual Cash Compensation
Base Salary
We provide base salaries to our named executive officers to compensate them with a fair and competitive base level of compensation for
services rendered during the year. Our compensation committee typically determines the base salary for each executive based on the executive's responsibilities, experience and, if applicable, the base
salary level of the executive prior to joining the Company, as well as the recommendation of our Chief Executive Officer for executive officers other than himself. In addition, our compensation
committee reviews and considers the level of base salary paid by companies in our peer group for similar positions. Generally, our compensation committee believes our named executive officers' base
salaries should be set with reference to the 50
th
and 75
th
percentiles of the base salaries in our compensation peer group.
At
the end of 2014, our compensation committee reviewed Mr. Mayleben's overall compensation and, based on his accomplishments during the year and his base salary relative to the
base salaries of chief executive officers in our peer group, determined to increase his annual base salary for 2015.
At
the end of 2014, our compensation committee approved merit-based increases in base salary for certain of our other named executive officers serving at that time for 2015, based upon
an assessment of our performance against the 2014 corporate goals, the recommendation of our Chief Executive Officer and each named executive officer's achievement of his or her individual performance
goals.
The
table below sets forth the adjustments to base salary, in dollars and as a percentage, for each of our named executive officers serving at the beginning of 2015:
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2014 Base Salary
|
|
2015 Base Salary
|
|
Increase (%)
|
|
Tim M. Mayleben
|
|
$
|
450,000
|
|
$
|
480,000
|
|
|
7
|
%
|
Roger S. Newton, Ph.D., FAHA
|
|
$
|
375,000
|
|
$
|
375,000
|
|
|
|
%
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
$
|
360,000
|
|
$
|
370,000
|
|
|
3
|
%
|
Dr. McGowan
joined the Company as our Chief Medical Officer on June 15, 2015 and her annualized base salary for 2015 was $375,000.
Annual Cash Incentive Compensation
In 2015, eligible employees, including our named executive officers, had the opportunity to earn cash bonuses under our 2015 cash
incentive compensation program, based on our achievement of the 2015 corporate goals approved by our compensation committee and, for named executive officers other than the Chief Executive Officer,
against their individual performance goals, each as determined by the
30
Table of Contents
compensation
committee. Each of our named executive officers has a target annual cash incentive opportunity, expressed as a percentage of his or her annual base salary as set forth in their respective
employment agreements. The 2015 corporate base goals approved by our compensation committee were as follows:
-
-
removal of FDA's PPAR and 240 mg partial clinical holds on bempedoic acid;
-
-
completion and reporting of positive top-line results from our 1002-009 clinical study;
-
-
completion and reporting of positive top-line results from our 1002-014 clinical safety and tolerability study;
-
-
completion of our End-of-Phase 2 meeting with FDA;
-
-
initiation of a certain additional clinical study of bempedoic acid; and
-
-
completion of a specified business development transaction, approved by the Board.
Additionally,
our 2015 corporate stretch goals approved by our compensation committee were as follows:
-
-
development of a fixed-dose combination strategy of bempedoic acid with ezetimibe;
-
-
initiation of a long-term clinical safety study for bempedoic acid;
-
-
completion of an underwritten public equity offering with net proceeds to us of greater than $100.0 million; and
-
-
manage the budget and the financial position of the Company.
Individual
goals for 2015 for our named executive officers (other than our Chief Executive Officer) focused on individual contributions that were intended to drive achievement of our
corporate goals.
In
December 2015, our Chief Executive Officer evaluated our corporate performance against the 2015 corporate goals approved by our compensation committee and each other named executive
officer's individual performance against the named executive officer's individual goals for that year. Based on this evaluation, our Chief Executive Officer recommended cash bonus payments under the
annual cash incentive compensation program for 2015 for each named executive officer other than himself. Also in December 2015, the compensation committee assessed our performance against the
pre-established 2015 corporate base and stretch goals described above, and assessed our corporate performance on an overall basis. In making its determination of the cash bonus awards under the 2015
compensation program, our compensation committee accounted for the relative importance of each of our corporate goals and the degree of achievement thereof in assessing our overall performance for
2015 and determined that we had achieved our corporate goals at 95% of target.
Certain
of our 2015 goals were very aggressive and set at challenging levels, and particularly our stretch goals, such that the attainment of all of our corporate goals would require a
high level of effort and execution on the part of the executive officers in order to achieve them. In making its determination of our overall achievement of our corporate performance goals, the
compensation committee considered the fact that we met the majority of our development and business goals during 2015, which were comprised of both base and stretch goals. They also took into account
that the goals relating to the completion of a specified business development transaction, the development of a fixed-dose combination strategy with ezetimibe and the additional clinical study
initiation goal were not achieved. While we did not achieve all of our goals established for 2015, we achieved and exceeded several stretch goals, including those related to raising capital through an
equity financing, the Company's financial position at year-end and the initiation of the long-term safety study for bempedoic acid, which the compensation committee determined should be considered in
the total analysis of determining overall performance against the stated goals.
31
Table of Contents
The
compensation committee also determined that each of Drs. Lalwani and McGowan had achieved strong performance in 2015.
Based
on our overall performance in 2015 and the individual performance of our named executive officers other than our Chief Executive Officer, in December 2015, the compensation
committee approved cash bonuses for 2015 performance to our named executive officers as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2015 Target
Award
(% of Base Salary)
|
|
2015
Target
Award
Opportunity ($)
|
|
2015
Actual Bonus
Payment ($)
|
|
2015
Actual Bonus
Payment
(% of Target
Award
Opportunity)
|
|
Tim M. Mayleben
|
|
|
50
|
%
|
|
240,000
|
|
|
228,000
|
|
|
95
|
%
|
Roger S. Newton, Ph.D., FAHA
|
|
|
|
%
|
|
|
|
|
|
|
|
|
%
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
|
40
|
%
|
|
148,000
|
|
|
127,000
|
|
|
86
|
%
|
Mary P. McGowan, M.D.
|
|
|
35
|
%
|
|
71,000
|
(1)
|
|
61,000
|
|
|
86
|
%
|
-
(1)
-
Dr. McGowan's
target bonus was pro-rated based on her hire date of June 15, 2015.
Equity Incentive Compensation
Equity incentive awards are granted to our named executive officers in the discretion of our compensation committee under the terms of
the Amended and Restated Esperion Therapeutics, Inc. 2013 Stock Option and Incentive Plan (the "Plan"). Our compensation committee believes that equity incentives subject to vesting over time
can be an effective vehicle for aligning team and individual performance with the achievement of our longer-term strategic and financial goals, and with stockholders' interests. Our equity incentive
awards are designed to:
-
-
reward demonstrated leadership and performance;
-
-
align our named executive officers' interests with those of our stockholders;
-
-
retain our named executive officers through the term of the awards;
-
-
maintain competitive levels of executive equity incentive compensation; and
-
-
motivate our named executive officers for outstanding future performance.
The
market for qualified and talented executives in the biopharmaceutical industry is highly competitive and we compete for talent with many companies, including major pharmaceutical
companies, that have greater resources than we do. Accordingly, we believe equity compensation is a crucial component of any competitive executive compensation package we offer.
Historically,
our equity incentive awards have generally been in the form of stock options. We typically grant stock options to each of our named executive officers upon commencement of
employment, annually in conjunction with our review of individual performance or in connection with a promotion or as a special incentive.
All
stock options granted to our named executive officers are approved by our compensation committee and, other than stock options granted to new hires, or those made in connection with
a promotion, are typically granted as of the beginning of the year. The size of these stock option grants vary among our named executive officers based on their positions and annual performance
assessments. All stock options granted to our named executive officers have exercise prices equal to the fair market value of our common stock on the date of grant, so that the recipient will not
realize any value from his or her options unless our share price increases above the exercise price. Accordingly, this portion of
32
Table of Contents
our
named executive officers' compensation is "at risk" and is directly aligned with stockholder value creation.
In
addition, the stock options granted to our named executive officers typically vest over four years, which we believe provides an incentive to our named executive officers to create
value over the long-term and to remain with Esperion. Typically, the stock options we grant to our named executive officers have a ten-year term and 25% of the shares vest on the first anniversary of
their hire date or grant date, as applicable, and then in equal quarterly installments thereafter until the fourth anniversary of such date, subject to continued employment through each such vesting
date. In 2015, the compensation committee made the stock option grants to Mr. Mayleben and Drs. Newton and Lalwani and stock option and restricted stock unit ("RSU") grants to
Dr. McGowan, each of which are described below. Stock options, which have exercise prices equal to at least fair market value of our
common stock on the date of grant, reward executive officers only if the stock price increases from the date of grant. RSUs do not have exercise prices, but appreciate in value if the stock price
increases from the date of grant.
In
January 2015, the compensation committee granted Mr. Mayleben an option to purchase 92,000 shares of our common stock. In March 2015, the compensation committee granted
Mr. Mayleben an additional option to purchase an additional 36,800 shares of our common stock. Each of these stock options is subject to time-based vesting.
In
January 2015, the compensation committee granted Dr. Newton an option to purchase 20,000 shares of our common stock. In March 2015, the compensation committee granted
Dr. Newton an additional option to purchase an additional 8,000 shares of our common stock. Each of these stock options is subject to time-based vesting.
In
January 2015, the compensation committee granted Dr. Lalwani an option to purchase 50,000 shares of our common stock. In March 2015, the compensation committee granted
Dr. Lalwani an additional option to purchase an additional 20,000 shares of our common stock. Each of these stock options is subject to time-based vesting.
In
August 2015, in connection with her hire, the compensation committee granted Dr. McGowan an option to purchase 210,000 shares of our common stock and 15,000 RSUs. Both the
stock option and RSUs are subject to time-based vesting. For additional information regarding equity incentive grants made to our named executive officers, including the vesting terms of such grants,
see the "Outstanding Equity Awards at Fiscal Year-End2015" table below.
Employee Benefits
In addition to the primary elements of compensation described above, the named executive officers also participate in broad-based
employee benefits programs available to all of our employees, including health insurance, life and disability insurance, dental insurance and our 401(k) plan. We match 50% of the first 12% of salary
contributed to Esperion Therapeutics' 401(k) plan by employees, including named executive officers.
Severance and Change in Control Arrangements
We have entered into employment agreements with our named executive officers that provide for specified payments and benefits in
connection with a termination of employment by the Company without cause or a resignation by the executive officer for good reason. Our goal in providing severance and change in control benefits is to
offer sufficient cash continuity protection such that our executives will focus their full time and attention on the requirements of the business rather than the potential implications for their
respective positions. We prefer to have certainty regarding the potential severance amounts payable to the named executive officers, rather than negotiating severance at the time that a
33
Table of Contents
named
executive officer's employment terminates. We have also determined that accelerated vesting provisions with respect to equity awards in connection with a qualifying termination in connection
with a change in control are appropriate because they encourage our named executive officers, to stay focused on the business in those circumstances, rather than focusing on the potential implications
for them personally. In addition, these employment agreements with our named executive officers contain non-solicitation, non-competition and confidentiality provisions.
For
a description of severance and change in control arrangements with our named executive officers, see "Employment Agreements" and "Potential Payments upon Termination or Change in
Control" below.
Other Compensation Policies
Hedging and Pledging Prohibitions
Our insider trading policy expressly prohibits short sales and derivative transactions of our stock by our named executive officers,
directors and specified other employees, including short sales of our securities, including short sales "against the box." Our insider trading policy expressly prohibits, without the advance approval
of our audit committee, purchases or sales of puts, calls or other derivative securities of the company or any derivative securities that provide the economic equivalent of ownership of any of our
securities or an opportunity, direct or indirect, to profit from any change in the value of our securities; or other hedging or monetization transactions accomplished through the use of prepaid
variable forwards, equity swaps, collars and exchange funds. In addition, our insider trading policy expressly prohibits our named executive officers, directors and specified other employees from
purchasing our securities on margin or borrowing against company securities held in a margin account, or, without the advance approval of our audit committee, pledging our securities as collateral for
a loan or modifying an existing pledge.
Tax and Accounting Considerations
We have not provided any of our executive officers or directors with a gross-up or other reimbursement for tax amounts they might pay
pursuant to Section 4999 or Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). Sections 280G and 4999 of the Code provide that executive officers,
directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits in connection with a
change in control of our Company that exceed certain limits, and that we or our successor could lose a deduction on the amounts subject to the additional tax.
Section 162(m)
of the Code imposes a $1 million cap on the federal income tax deduction for compensation paid to our Chief Executive Officer and to certain other highly
compensated officers during any fiscal year unless the compensation is "performance-based" under Section 162(m). Qualified performance-based compensation is not subject to the deduction
limitation if specified requirements are met. We periodically review the potential effects of Section 162(m) and consider whether to structure the performance-based portion of our executive
compensation to comply with exemptions in Section 162(m).
34
Table of Contents
Summary Compensation Table2015
The following tables provide information regarding the compensation awarded to or earned during our fiscal years ended
December 31, 2015, 2014 and 2013 by our named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and principal position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
(1)
|
|
Stock
awards
($)
(2)
|
|
Option
awards
($)
(3)
|
|
Non-equity
incentive plan
compensation
($)
(4)
|
|
All other
compensation
($)
|
|
Total
($)
|
|
Tim M. Mayleben,
|
|
|
2015
|
|
|
480,000
|
|
|
228,000
|
|
|
|
|
|
5,008,892
|
|
|
|
|
|
34,405
|
(5)
|
|
5,751,297
|
|
President and Chief Executive
|
|
|
2014
|
|
|
450,000
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
|
750,000
|
|
Officer
|
|
|
2013
|
|
|
400,000
|
|
|
|
|
|
|
|
|
2,890,165
|
|
|
160,000
|
|
|
|
|
|
3,450,165
|
|
Roger S. Newton, Ph.D., FAHA,
|
|
|
2015
|
|
|
375,000
|
|
|
|
|
|
|
|
|
1,008,890
|
|
|
|
|
|
|
|
|
1,383,890
|
|
Executive Chairman and Chief
|
|
|
2014
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
|
425,000
|
|
Scientific Officer
|
|
|
2013
|
|
|
375,000
|
|
|
|
|
|
|
|
|
1,304,635
|
|
|
150,000
|
|
|
|
|
|
1,829,635
|
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
|
2015
|
|
|
370,000
|
|
|
127,000
|
|
|
|
|
|
2,722,224
|
|
|
|
|
|
12,000
|
(6)
|
|
3,231,224
|
|
Executive Vice President, Research
|
|
|
2014
|
|
|
150,000
|
(7)
|
|
|
|
|
|
|
|
2,842,054
|
|
|
70,000
|
|
|
146,750
|
(8)
|
|
3,208,804
|
|
and Development and Chief
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mary P. McGowan, M.D.
|
|
|
2015
|
|
|
203,125
|
(9)
|
|
61,000
|
|
|
863,100
|
|
|
7,556,420
|
|
|
|
|
|
|
|
|
8,683,645
|
|
Chief Medical Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
amounts reported represent bonuses awarded based on overall Company performance and, for Drs. Lalwani and McGowan, on individual performance. See
"Compensation Discussion and AnalysisAnnual Cash CompensationAnnual Cash Incentive Compensation" above for additional information.
-
(2)
-
Amounts
represent the aggregate grant date fair value of restricted stock units granted to our named executive officers computed in accordance with FASB ASC
Topic 718. See Note 11 of the notes to our financial statements in our annual report on Form 10-K filed on February 25, 2016, for a discussion of our assumptions in determining
the grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by the named executive officers.
-
(3)
-
Amounts
represent the aggregate grant date fair value of option awards granted to our named executive officers computed in accordance with FASB ASC Topic
718. See Note 11 of the notes to our financial statements in our annual report on Form 10-K filed on February 25, 2016, for a discussion of our assumptions in determining the
grant date fair values of equity awards. These amounts do not correspond to the actual value that may be recognized by the named executive officers.
-
(4)
-
The
amounts in reported represent cash incentive awards made to our named executive officers under our annual incentive program for the years indicated
-
(5)
-
Consists
of (1) $12,000 in matching contributions to our 401(k) plan and (2) $22,405 in commuting allowances paid to Mr. Mayleben for
expenses incurred for travel between his primary residence and our corporate headquarters.
-
(6)
-
Represents
matching contributions to our 401(k) plan.
-
(7)
-
Dr. Lalwani
joined the company as our Executive Vice President, Research and Development, and Chief Operating Officer effective August 1,
2014. The amount reflected in the Salary column for 2014 is based upon an annualized base salary of $360,000.
-
(8)
-
Amount
represents consulting fees earned by Dr. Lalwani for consulting services performed in 2014 prior to joining the Company on August 1,
2014.
-
(9)
-
Dr. McGowan
joined the company as our Chief Medical Officer effective June 15, 2015. The amount reflected in the Salary column for 2015 is
based upon an annualized base salary of $375,000.
35
Table of Contents
Grants of Plan-Based Awards
The following table shows information regarding grants of plan-based awards during the fiscal year end December 31, 2015, to our
named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and principal position
|
|
Grant
date
|
|
Estimated
future
payouts under
non-equity
incentive plan
awards
target ($)
(1)
|
|
All other
stock
awards: number
of shares
of stock or
units (#)
|
|
All other
option
awards: number
of securities
underlying
options (#)
|
|
Exercise or
base price
of option
awards
($/sh)
(2)
|
|
Grant date
fair value of
stock and
option
awards ($)
(3)
|
|
Tim M. Mayleben
|
|
|
|
|
|
240,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Executive
|
|
|
1/2/2015
|
|
|
|
|
|
|
|
|
92,000
|
|
|
41.23
|
|
|
2,519,904
|
|
Officer
|
|
|
3/18/2015
|
|
|
|
|
|
|
|
|
36,800
|
|
|
105.72
|
|
|
2,488,988
|
|
Roger S. Newton, Ph.D., FAHA
|
|
|
1/2/2015
|
|
|
|
|
|
|
|
|
20,000
|
|
|
41.23
|
|
|
547,805
|
|
Executive Chairman and Chief
|
|
|
3/18/2015
|
|
|
|
|
|
|
|
|
8,000
|
|
|
105.72
|
|
|
541,084
|
|
Scientific Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
|
|
|
|
148,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Research
|
|
|
1/2/2015
|
|
|
|
|
|
|
|
|
50,000
|
|
|
41.23
|
|
|
1,369,513
|
|
and Development and Chief
|
|
|
3/18/2015
|
|
|
|
|
|
|
|
|
20,000
|
|
|
105.72
|
|
|
1,352,711
|
|
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mary P. McGowan, M.D.
|
|
|
|
|
|
71,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Medical Officer
|
|
|
8/19/2015
|
|
|
|
|
|
|
|
|
210,000
|
|
|
57.54
|
|
|
7,556,420
|
|
|
|
|
8/19/2015
|
|
|
|
|
|
15,000
|
|
|
|
|
|
57.54
|
|
|
863,100
|
|
-
(1)
-
Represents
the target amount of each executive's cash payments under our 2015 annual incentive program as established by the Compensation Committee and
described in "Compensation Discussion and Analysis" above. Actual payments made for 2015 are provided in the "Summary Compensation Table." Dr. McGowan's target bonus has been prorated to
reflect her start date with the Company of June 15, 2015.
-
(2)
-
The
exercise price of these stock options was determined by the Company based on the closing price of its common stock on the Nasdaq Global Market on the
grant date.
-
(3)
-
Amounts
represent the grant date fair value of the named executive officer's stock options, calculated in accordance with FASB ASC Topic 718, using a
Black-Scholes valuation model. For purposes of these calculations, we have disregarded the estimate of forfeitures related to service-based vesting conditions.
36
Table of Contents
Outstanding Equity Awards at Fiscal Year-End2015
The following table shows information regarding outstanding equity awards at December 31, 2015, for our named executive
officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option awards
|
|
Stock awards
|
|
Name
|
|
Grant date
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
|
|
Number of
securities
underlying
unexercised
options (#)
unexercisable
|
|
Option
exercise
price ($)
|
|
Option
expiration
date
|
|
Number of
shares or
units of
stock that
have not
vested (#)
|
|
Market value
of shares
or units of
stock that
have not
vested ($)
|
|
Tim M. Mayleben
|
|
6/1/2008
(3)
|
|
|
1,939
|
|
|
|
|
|
1.05
|
|
6/1/2018
|
|
|
|
|
|
|
|
|
|
4/2/2010
(2)
|
|
|
2,610
|
|
|
|
|
|
1.26
|
|
4/2/2020
|
|
|
|
|
|
|
|
|
|
1/16/2013
(1)
|
|
|
273,659
|
|
|
|
|
|
2.10
|
|
1/16/2023
|
|
|
|
|
|
|
|
|
|
7/23/2013
(2)
|
|
|
106,875
|
|
|
83,125
|
|
|
17.11
|
|
7/23/2023
|
|
|
|
|
|
|
|
|
|
12/20/2013
(2)
|
|
|
20,000
|
|
|
20,000
|
|
|
12.92
|
|
12/20/2023
|
|
|
|
|
|
|
|
|
|
1/2/2015
(2)
|
|
|
17,250
|
|
|
74,750
|
|
|
41.23
|
|
1/2/2025
|
|
|
|
|
|
|
|
|
|
3/18/2015
(2)
|
|
|
6,900
|
|
|
29,900
|
|
|
105.72
|
|
3/18/2025
|
|
|
|
|
|
|
|
Roger S. Newton, Ph.D., FAHA
|
|
1/16/2013
(1)
|
|
|
76,141
|
|
|
|
|
|
2.10
|
|
1/16/2023
|
|
|
|
|
|
|
|
|
|
7/23/2013
(2)
|
|
|
50,625
|
|
|
39,375
|
|
|
17.11
|
|
7/23/2023
|
|
|
|
|
|
|
|
|
|
12/20/2013
(2)
|
|
|
10,000
|
|
|
10,000
|
|
|
12.92
|
|
12/20/2023
|
|
|
|
|
|
|
|
|
|
1/2/2015
(2)
|
|
|
3,750
|
|
|
16,250
|
|
|
41.23
|
|
1/2/2025
|
|
|
|
|
|
|
|
|
|
3/18/2015
(2)
|
|
|
1,500
|
|
|
6,500
|
|
|
105.72
|
|
3/18/2025
|
|
|
|
|
|
|
|
Narendra D. Lalwani, Ph.D., FAHA, DABT
|
|
5/15/2014
(4)
|
|
|
25,000
|
|
|
|
|
|
14.42
|
|
5/15/2024
|
|
|
|
|
|
|
|
|
|
8/7/2014
(5)
|
|
|
78,125
|
|
|
171,875
|
|
|
15.33
|
|
8/7/2024
|
|
|
|
|
|
|
|
|
|
1/2/2015
(6)
|
|
|
|
|
|
50,000
|
|
|
41.23
|
|
1/2/2025
|
|
|
|
|
|
|
|
|
|
3/18/2015
(6)
|
|
|
|
|
|
20,000
|
|
|
105.72
|
|
3/18/2025
|
|
|
|
|
|
|
|
Mary P. McGowan, M.D.
|
|
8/19/2015
(7)
|
|
|
|
|
|
210,000
|
|
|
57.54
|
|
8/19/2025
|
|
|
|
|
|
|
|
|
|
8/19/2015
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
333,900
|
(9)
|
-
(1)
-
The
options vest over a four-year period with 25% vesting on December 10, 2013, and the remainder in equal monthly installments on each monthly
anniversary of such date thereafter, subject to continued employment through each such date, and are subject to an early exercise provision pursuant to which all shares underlying the option are
immediately exercisable subject to a repurchase right in favor of the Company, which lapses as the options vest.
-
(2)
-
The
options vest over a four-year period following the grant date in equal quarterly installments, subject to continued employment through each such date.
-
(3)
-
At
the grant date, the option vested over a four-year period following the grant date in equal monthly installments. Pursuant to an amendment to the option
agreement, dated April 2, 2010, the remaining unvested shares underlying the option vest over a four-year period following the grant date in equal quarterly installments, subject to continued
service as a member of the Board through each such date.
-
(4)
-
The
option vests over a one-year period following the grant date in equal quarterly installments.
-
(5)
-
The
option vests over a four-year period with 25% of the shares underlying the option vesting on the one-year anniversary of August 1, 2015, and
1/16
th
vesting in equal installments on each
37
Table of Contents
quarterly
anniversary of such date thereafter, subject to continued employment through each such date.
-
(6)
-
The
option vests over a four-year period following the grant date with 25% of the shares underlying the option vesting on the one-year anniversary of the
grant date and 1/16
th
vesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
-
(7)
-
The
option vests over a four-year period with 25% of the shares underlying the option vesting on the one-year anniversary of June 15, 2015, and
1/16
th
vesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
-
(8)
-
The
RSUs vest over a four-year period with 25% of the units vesting on the one-year anniversary of June 15, 2015, and
1/16
th
vesting in equal installments on each quarterly anniversary of such date thereafter, subject to continued employment through each such date.
-
(9)
-
The
market value of the unvested units is calculated based on the number of unvested units at December 31, 2015, and the closing market price of the
Company's stock on December 31, 2015, of $22.26 per share.
Option Exercises and Stock Vested
None of our named executive officers exercised stock options or had other equity awards vest in the year ended December 31,
2015.
Pension Benefits
None of our named executive officers participates in or has account balances in qualified or non-qualified defined benefit plans
sponsored by us.
Non-Qualified Deferred Compensation
None of our named executive officers participates in or has account balances in non-qualified defined contribution plans or other
deferred compensation plans maintained by us.
Employment Arrangements with Our Named Executive Officers
Employment Agreements
We have entered into amended and restated employment agreements with each of our named executive officers. Except as noted below, these
amended and restated employment agreement provide for "at will" employment.
On
May 14, 2015, the Company entered into an employment agreement with Mr. Mayleben. Mr. Mayleben currently receives an annual base salary of $535,000. Pursuant to
the terms of his employment agreement, Mr. Mayleben is also eligible to receive an annual performance bonus, with a target amount equal to 55% of his annual base salary. Mr. Mayleben is
also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to his employment agreement, in the event that Mr. Mayleben's employment is
terminated by the Company without "cause" (as defined in the employment agreement) or Mr. Mayleben resigns his employment for "good reason" (as defined in the employment agreement), subject to
his execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company, Mr. Mayleben is entitled to receive (i) severance in an
amount equal to his then-current annual base salary, payable in twelve monthly installments, and (ii) if Mr. Mayleben is participating in our group health plan immediately prior to his
termination, a monthly cash payment until the earlier of twelve
38
Table of Contents
months
following termination or the end of Mr. Mayleben's COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to
Mr. Mayleben had he remained employed with us. In the event of a "sale event" (as defined in the employment agreement), all stock options and other stock-based awards with time-based vesting
held by Mr. Mayleben shall immediately accelerate and become exercisable or non-forfeitable as of the date of the sale event. In the event that Mr. Mayleben's employment is terminated by
the Company without cause or Mr. Mayleben resigns his employment for good reason, in either case within a twelve-month period following a sale event, subject to his execution and non-revocation
of a separation agreement that includes a customary release of claims in favor of the Company, Mr. Mayleben is entitled to receive
(i) an amount equal to one and a half times his then-annual base salary, plus his target bonus, payable in lump sum within 60 days after the date of termination, and (ii) if
Mr. Mayleben is participating in our group health plan immediately prior to his termination, a cash payment equal to the amount that we would have made to provide health insurance to
Mr. Mayleben had he remained employed with us for eighteen months following termination. In addition, Mr. Mayleben has entered into an employee non-competition, non-solicitation,
confidentiality and assignment agreement that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Mr. Mayleben's employment and for one
year thereafter.
Effective
December 10, 2012, the Company entered into an employment agreement with Dr. Newton. Dr. Newton currently receives an annual base salary of $375,000.
Dr. Newton is also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to the terms of his employment agreement, Dr. Newton was
entitled to a discretionary bonus of up to 40% of his annual base salary, which Dr. Newton and the compensation committee agreed to forgo for 2015. Pursuant to his employment agreement, in the
event that Dr. Newton's employment is terminated by the Company without "cause" (as defined in the employment agreement) or Dr. Newton resigns his employment for "good reason" (as
defined in the employment agreement), Dr. Newton is entitled to receive severance in an amount equal to his then-current annual base salary, payable over the course of one year in accordance
with the Company's standard payroll procedures. In the event of a "change of control" of the Company (as defined in the employment agreement), the unvested portion of the stock option granted to
Dr. Newton pursuant to his employment agreement will be accelerated such that 50% of the unvested shares underlying such option will become vested and exercisable upon the change in control
and, if, during the twelve-month period following the change in control, Dr. Newton's employment is terminated by the Company without cause or Dr. Newton terminates his employment with
the Company for good reason, 100% of the unvested portion of such stock option will immediately become vested and exercisable. Dr. Newton's employment agreement contains non-competition and
non-solicitation provisions that apply during his employment and for one year thereafter.
On
May 14, 2015, the Company entered into an employment agreement with Dr. Lalwani. Dr. Lalwani currently receives an annual base salary of $390,000. Pursuant to the
terms of his employment agreement, Dr. Lalwani is also eligible to receive an annual performance bonus, with a target amount equal to 40% of his annual base salary. Dr. Lalwani is also
eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to his employment agreement, in the event that Dr. Lalwani's employment is
terminated by the Company without "cause" (as defined in the employment agreement), subject to his execution and non-revocation of a separation agreement that includes a customary release of claims in
favor of the Company, Dr. Lalwani is entitled to receive (i) an amount equal to nine months of his then-current annual base salary, payable in nine monthly installments, and
(ii) if Dr. Lalwani is participating in our group health plan immediately prior to his termination, a monthly cash payment until the earlier of nine months following termination or the
end of Dr. Lalwani's COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Lalwani had he remained employed with
us. In the event of a "sale event" (as defined in the employment agreement), all stock options and other
39
Table of Contents
stock-based
awards with time-based vesting held by Dr. Lalwani shall immediately accelerate and become exercisable or non-forfeitable as of the date of the sale event. In the event that
Dr. Lalwani's employment is terminated by the Company without cause or Dr. Lalwani resigns his employment for "good reason" (as defined in the employment agreement), in either case
within a twelve-month period following a sale event, subject to his execution and non-revocation of a separation agreement that includes a customary release of claims in favor of the Company,
Dr. Lalwani is entitled to receive (i) an amount equal to his then-annual base salary, plus his target bonus, payable in lump sum within 60 days after the date of termination, and
(ii) if Dr. Lalwani is participating in our group health plan immediately prior to his termination, a cash payment equal to the amount that we would have made to provide health insurance
to Dr. Lalwani had he remained employed with us for twelve months following termination. In addition, Dr. Lalwani has entered into an employee non-competition, non-solicitation,
confidentiality and assignment agreement that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Dr. Lalwani's employment and for one
year thereafter.
On
June 15, 2015, the Company entered into an employment agreement with Dr. McGowan. Dr. McGowan currently receives an annual base salary of $395,000. Pursuant to
the terms of her employment agreement, Dr. McGowan is also eligible to receive an annual performance bonus, with a target amount equal to 35% of her annual base salary. Dr. McGowan is
also eligible to participate in the Company's employee benefit plans, subject to the terms of such plans. Pursuant to her employment agreement, in the event that Dr. McGowan's employment is
terminated by the Company without "cause" (as defined in the employment agreement), subject to her execution and non-revocation of a separation agreement that includes a customary release of claims in
favor of the Company, Dr. McGowan is entitled to receive (i) an amount equal to nine months of her then-current annual base salary, payable in nine monthly installments, and
(ii) if Dr. McGowan is participating in our group health plan immediately prior to her termination, a monthly cash payment until the earlier of nine months following termination or the
end of Dr. McGowan's COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. McGowan had she remained employed with
us. In the event that Dr. McGowan's employment is terminated by the Company without cause or Dr. McGowan resigns her employment for "good reason" (as defined in the employment
agreement), in either case within a twelve-month period following a sale event, subject to her execution and non-revocation of a separation agreement that includes a customary release of claims in
favor of the Company, Dr. McGowan is entitled to receive (i) an amount equal to her then-annual base salary, plus her target bonus, payable in lump sum within 60 days after the
date of termination, and (ii) if Dr. McGowan is participating in our group health plan immediately prior to her termination, a cash payment equal to the amount that we would have made to
provide health insurance to Dr. McGowan had she remained employed with us for twelve months following termination. In addition, Dr. McGowan has entered into an employee non-competition,
non-solicitation, confidentiality and assignment agreement that contains, among other things, non-competition and non-solicitation provisions that apply during the term of Dr. McGowan's
employment and for one year thereafter.
We
provide these benefits to promote retention and ease the consequences to the executive of an unexpected termination of employment. These arrangements are also intended to preserve
morale and productivity in the face of the potentially disruptive impact of a change in control. These benefits also allow our named executive officers to focus on the value of strategic alternatives
to stockholders
without concern for the impact on their own continued employment, as each of their offices is at heightened risk of turnover in the event of a change in control.
Estimated Payment and Benefits Upon Termination or Change in Control
The amount of compensation and benefits payable to each of our named executive officers in various termination and change in control
situations, assuming that the triggering event occurred on
40
Table of Contents
December 31,
2015, has been estimated in the tables below. The closing price of the Company's stock on the Nasdaq Global Market as of December 31, 2015, the last trading day of 2015, was
$22.26 per share. The value of the unvested stock options was calculated by multiplying the number of unvested option shares subject to vesting acceleration as of December 31, 2015, by the
difference between the closing price of the Company's stock as of December 31, 2015, and the exercise price for such unvested option shares.
Mr. Tim M. Mayleben
The following table describes the potential payments and benefits upon employment termination for Tim M. Mayleben, the Company's
President and Chief Executive Officer, as if the triggering event occurred on December 31, 2015, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive benefits and payment upon termination
|
|
Voluntary
resignation not
for good
reason ($)
|
|
Voluntary
resignation
for good
reason ($)
|
|
Termination
by Company
without cause ($)
|
|
Termination
by Company
for cause ($)
|
|
Upon a
sale
event ($)
|
|
Termination by
Company without
cause or voluntary
resignation for
good reason within
12 months
following a sale
event ($)
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
|
|
|
|
480,000
|
|
|
480,000
|
|
|
|
|
|
|
|
|
720,000
|
|
Cash incentive bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240,000
|
|
Stock options unvested and accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,994,447
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
|
|
|
|
21,095
|
|
|
21,095
|
|
|
|
|
|
|
|
|
31,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
501,095
|
|
|
501,095
|
|
|
|
|
|
1,994,447
|
|
|
991,624
|
|
Dr. Roger S. Newton
The following table describes the potential payments and benefits upon employment termination for Roger S. Newton, the Company's
Executive Chairman and Chief Scientific Officer, as if the triggering event occurred on December 31, 2015, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive benefits and payment upon termination
|
|
Voluntary
resignation not
for good
reason ($)
|
|
Voluntary
resignation
for good
reason ($)
|
|
Termination
by Company
without cause ($)
|
|
Termination
by Company
for cause ($)
|
|
Upon a
change of
control ($)
|
|
Termination by
Company without
cause or voluntary
resignation for
good reason in
within 12 months
following change
of control ($)
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
|
|
|
|
375,000
|
|
|
375,000
|
|
|
|
|
|
|
|
|
375,000
|
|
Cash incentive bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options unvested and accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
387,994
|
|
|
387,994
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
375,000
|
|
|
375,000
|
|
|
|
|
|
387,994
|
|
|
762,994
|
|
41
Table of Contents
Dr. Narendra D. Lalwani
The following table describes the potential payments and benefits upon employment termination for Narendra D. Lalwani, the Company's
Executive Vice President, Research and Development and Chief Operating Officer, as if the triggering event occurred on December 31, 2015, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive benefits and payment upon termination
|
|
Voluntary
resignation not
for good
reason ($)
|
|
Voluntary
resignation
for good
reason ($)
|
|
Termination
by Company
without cause ($)
|
|
Termination
by Company
for cause ($)
|
|
Upon a
sale
event ($)
|
|
Termination by
Company without
cause or voluntary
resignation for
good reason within
12 months
following a sale
event ($)
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
|
|
|
|
|
|
|
277,500
|
|
|
|
|
|
|
|
|
370,000
|
|
Cash incentive bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,000
|
|
Stock options unvested and accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191,094
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
|
|
|
|
|
|
|
10,629
|
|
|
|
|
|
|
|
|
14,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
288,129
|
|
|
|
|
|
1,191,094
|
|
|
532,172
|
|
Dr. Mary P. McGowan
The following table describes the potential payments and benefits upon employment termination for Mary P. McGowan, the Company's Chief
Medical Officer, as if the triggering event occurred on December 31, 2015, the last business day of the fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive benefits and payment upon termination
|
|
Voluntary
resignation not
for good
reason ($)
|
|
Voluntary
resignation
for good
reason ($)
|
|
Termination
by Company
without cause ($)
|
|
Termination
by Company
for cause ($)
|
|
Upon a
sale
event ($)
|
|
Termination by
Company without
cause or voluntary
resignation for
good reason within
12 months
following a sale
event ($)
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base salary
|
|
|
|
|
|
|
|
|
281,250
|
|
|
|
|
|
|
|
|
375,000
|
|
Cash incentive bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,250
|
|
Stock options unvested and accelerated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Health care continuation
|
|
|
|
|
|
|
|
|
26,994
|
|
|
|
|
|
|
|
|
35,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
308,244
|
|
|
|
|
|
|
|
|
542,242
|
|
Director Compensation
We reimburse each member of our Board who is not an employee for reasonable travel and other expenses in connection with attending
meetings of the Board or committees thereof.
We
initially adopted a non-employee director compensation policy that became effective upon our initial public offering. Each of the non-employee members of our Board is entitled to the
following equity compensation pursuant to such policy:
-
-
Upon initial election to the Board, each non-employee director receives an initial equity grant of an option to purchase 20,000 shares
of common stock, with an exercise price equal to the fair market value of our common stock on the date of grant, that vests in equal monthly installments over three years, provided, however, that all
vesting ceases if the director resigns from the Board
42
Table of Contents
Effective
December 7, 2015, each of our directors also annually receives a $35,000 retainer for general availability and participation in meetings and conference calls of our
Board. Additionally, the audit committee chairperson annually receives a $15,000 retainer, each audit committee member (other than the chairperson) annually receives a $7,500 retainer, the
compensation committee chairperson annually receives a $10,000 retainer, each compensation committee member (other than the chairperson) annually receives a $5,000 retainer, the nominating and
corporate governance committee chairperson annually receives a $7,000 retainer and each nominating and corporate governance committee member (other than the chairperson) annually receives a $3,500
retainer. The lead independent director receives an additional annual retainer of $15,000. The amounts for such annual retainers are pro-rated based on the number of calendar days served by such
director during the applicable year.
The
following table provides compensation information for the fiscal year ended December 31, 2015, for each non-employee member of our Board. No member of our Board employed by us
receives separate compensation for services rendered as a member of our Board.
|
|
|
|
|
|
|
|
|
|
|
Director Name
|
|
Fees Earned
or Paid in
Cash ($)
|
|
Stock
Option
Awards ($)
(1)
|
|
Total ($)
|
|
Scott Braunstein, M.D.
|
|
|
23,021
|
|
|
706,732
|
(2)
|
|
729,753
|
|
Patrick G. Enright
|
|
|
50,000
|
|
|
513,297
|
(3)
|
|
563,297
|
|
Dov A. Goldstein, M.D.
|
|
|
49,500
|
|
|
513,297
|
(3)
|
|
562,797
|
|
Antonio M. Gotto, Jr., M.D., D.Phil.
|
|
|
43,500
|
|
|
513,297
|
(3)
|
|
556,797
|
|
Daniel Janney
|
|
|
47,500
|
|
|
513,297
|
(3)
|
|
560,797
|
|
Mark E. McGovern, M.D.
|
|
|
38,500
|
|
|
513,297
|
(3)
|
|
551,797
|
|
Gilbert S. Omenn, M.D., Ph.D.
|
|
|
45,625
|
|
|
513,297
|
(3)
|
|
558,922
|
|
Nicole Vitullo
|
|
|
45,863
|
|
|
513,297
|
(3)
|
|
559,160
|
|
-
(1)
-
Amount
represents the fair value of the awards on the date of grant computed in accordance with FASB ASC Topic 718. See Note 11 of the notes to our
financial statements in our annual report on Form 10-K filed on February 25, 2016, for a discussion of our assumptions in determining the grant date fair values of equity awards.
-
(2)
-
Aggregate
amount based on a fair value per option of $35.34 on the date of grant, as computed in accordance with FASB ASC Topic 718.
-
(3)
-
Aggregate
amount based on a fair value per option of $64.16 on the date of grant, as computed in accordance with FASB ASC Topic 718.
43
Table of Contents
The
following table provides the aggregate number of unexercised options to purchase common stock held by each non-employee director of our Board as of December 31, 2015:
|
|
|
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised Options
|
|
Scott Braunstein, M.D.
|
|
|
20,000
|
|
Patrick G. Enright
|
|
|
34,471
|
|
Dov A. Goldstein, M.D.
|
|
|
34,471
|
|
Antonio M. Gotto, Jr., M.D., D.Phil.
|
|
|
33,000
|
|
Daniel Janney
|
|
|
34,471
|
|
Mark E. McGovern, M.D.
|
|
|
33,000
|
|
Gilbert S. Omenn, M.D., Ph.D.
|
|
|
28,000
|
|
Nicole Vitullo
|
|
|
13,000
|
|
Equity Compensation Plans
The following table sets forth information as of December 31, 2015 regarding shares of common stock that may be issued under our
equity compensation plans, consisting of the 2008 Plan and the Amended and Restated 2013 Stock Option and Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of outstanding
options (#)
|
|
Weighted-average
exercise price
of outstanding
options ($)
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in first
column)
|
|
Equity compensation plans approved by security holders
|
|
|
2,662,862
|
(1)
|
|
32.42
|
|
|
680,973
|
(2)
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,662,862
|
|
|
32.42
|
|
|
680,973
|
|
-
(1)
-
Does
not include 2,399 shares of restricted stock as they have been reflected in our total shares outstanding.
-
(2)
-
As
of April 1, 2016, there were 944,759 shares available for grant under the Amended and Restated 2013 Stock Option and Incentive Plan.
Exchange Act Rule 10b5-1 Sales Plans
Our policy governing transactions in our securities by directors, officers and employees permits our officers, directors and certain
other persons to enter into trading plans complying with Rule 10b5-1 under the Exchange Act. Generally, under these trading plans, the individual relinquishes control over the transactions once
the trading plan is put into place. Accordingly, sales under these plans may occur at any time, including possibly before, simultaneously with, or immediately after significant events involving our
company.
Compensation Committee Interlocks and Insider Participation
During 2015, Ms. Vitullo, Mr. Janney and Drs. Gotto and Omenn served as members of our compensation committee. No member
of the compensation committee was an employee or officer of
44
Table of Contents
Esperion
during 2015, a former officer of Esperion, or had any other relationship with us requiring disclosure herein.
During
the last fiscal year, none of our executive officers served as: (1) a member of the compensation committee (or other committee of the board of directors performing
equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our compensation committee; (2) a
director of another entity, one of whose executive officers served on our compensation committee; or (3) a member of the compensation committee (or other committee of the board of directors
performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Board.
45
Table of Contents
RELATED PARTY TRANSACTIONS
Other than compensation arrangements, we describe below transactions and series of similar transactions since January 1, 2015,
to which we were a party or will be a party, in which:
-
-
the amounts involved exceeded or will exceed $120,000; and
-
-
any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the
foregoing persons, had or will have a direct or indirect material interest.
Compensation
arrangements for our directors and named executive officers are described elsewhere in this proxy statement.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers. These agreements, among other
things, require us to indemnify each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses such as attorneys' fees, judgments, fines and
settlement amounts incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a
director or executive officer.
Procedures for Approval of Related Party Transactions
Our audit committee reviews and approves transactions with directors, officers and holders of 5% or more of our capital stock and their
affiliates, each of whom we refer to as a related party. We have adopted a written related party transaction approval policy that governs the review of related party transactions. Pursuant to this
policy, our audit committee shall review the material facts of all related party transactions. The audit committee shall take into account, among other factors that it deems appropriate, whether the
related party transaction is on terms no less favorable to us than terms generally available in a transaction with an unrelated third party under the same or similar circumstances and the extent of
the related party's interest in the related party transaction. Further, when stockholders are entitled to vote on a transaction with a related party, the material facts of the related party's
relationship or interest in the transaction are disclosed to the stockholders, who must approve the transaction in good faith.
46
Table of Contents
TRANSACTION OF OTHER BUSINESS
The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly
brought before the Annual Meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under
applicable laws.
ADDITIONAL INFORMATION
Procedures for Submitting Stockholder Proposals
Requirements for Stockholder Proposals to be Brought Before the Annual Meeting.
Our bylaws provide that, for nominations of persons for
election to
our Board or other proposals to be considered at an Annual Meeting of stockholders, a stockholder must give written notice to our Secretary at 3891 Ranchero Drive, Suite 150, Ann Arbor, MI
48108, not later than the close of business 90 days, nor earlier than the close of business 120 days, prior to the first anniversary of the date of the preceding year's Annual Meeting.
However, the bylaws also provide that in the event the date of the Annual Meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be delivered
not later than the close of business on the later of the 90th day prior to such Annual Meeting or the 10th day following the day on which public announcement of the date of such meeting
is first made. Any nomination must include all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors in election contests or is
otherwise required under Regulation 14A of the Exchange Act, the person's written consent to be named in the proxy statement
and to serve as a director if elected and such information as we might reasonably require to determine the eligibility of the person to serve as a director. As to other business, the notice must
include a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest of such stockholder (and the
beneficial owner) in the proposal. The proposal must be a proper subject for stockholder action. In addition, to make a nomination or proposal, the stockholder must be of record at the time the notice
is made and must provide certain information regarding itself (and the beneficial owner), including the name and address, as they appear on our books, of the stockholder proposing such business, the
number of shares of our capital stock which are, directly or indirectly, owned beneficially or of record by the stockholder proposing such business or its affiliates or associates (as defined in
Rule 12b-2 promulgated under the Exchange Act) and certain additional information.
The
advance notice requirements for the Annual Meeting are as follows: a stockholder's notice shall be timely if delivered to our Secretary at the address set forth above not later than
the close of business on the later of the 90th day prior to the scheduled date of the Annual Meeting or the 10th day following the day on which public announcement of the date of the
Annual Meeting is first made or sent by us.
Requirements for Stockholder Proposals to be Considered for Inclusion in the Company's Proxy Materials.
In addition to the requirements
stated above,
any stockholder who wishes to submit a proposal for inclusion in our proxy materials must comply with Rule 14a-8 promulgated under the Exchange Act. For such proposals to be included in our
proxy materials relating to our 2017 Annual Meeting of stockholders, all applicable requirements of Rule 14a-8 must be satisfied and we must receive such proposals no later than
December 29, 2016. Such proposals must be delivered to our Secretary, c/o Esperion Therapeutics, Inc., 3891 Ranchero Drive, Suite 150, Ann Arbor, MI 48108.
47
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ESPERION THERAPEUTICS, INC. 3891 RANCHERO DRIVE, SUITE 150 ANN ARBOR, MI 48108 During The Meeting - Go to www.virtualshareholdermeeting.com/ESPR2016 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E09336-P74787 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ESPERION THERAPEUTICS, INC. The Board of Directors recommends you vote FOR the following: 1. Election of Class III Directors Nominees: For Withhold ! ! ! ! ! ! 1a. Scott Braunstein, M.D. 1b. Dov A. Goldstein, M.D. 1c. Roger S. Newton, Ph.D., FAHA For Against Abstain The Board of Directors recommends you vote FOR proposals 2 and 3. ! ! Every Two Years ! ! ! Every Three Years ! ! ! 2. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016 3. To approve the advisory resolution on the compensation of our named executive officers Every One Year ! The Board of Directors recommends you vote for EVERY ONE YEAR for proposal 4. Abstain ! 4. To determine the frequency of future advisory votes on the compensation of our named executive officers NOTE: The proxies are authorized to vote on such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature (Joint Owners) Date Signature [PLEASE SIGN WITHIN BOX] Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held June 9, 2016: The Proxy Statement and our Annual Report on Form 10-K are available at www.proxyvote.com. E09337-P74787 ESPERION THERAPEUTICS, INC. Annual Meeting of Stockholders June 9, 2016 8:00 AM Eastern Time This proxy is solicited on behalf of the Board of Directors of Esperion Therapeutics, Inc. The undersigned hereby appoints Tim M. Mayleben and Richard B. Bartram as proxies and attorneys-in-fact of the undersigned, each with the power to act without the other and with the power of substitution, and hereby authorizes them to represent and vote all the shares of common stock of Esperion Therapeutics, Inc. (the Company) standing in the name of the undersigned on April 11, 2016, with all powers which the undersigned would possess if present at the 2016 Annual Meeting of Stockholders of the Company to be held on June 9, 2016 or at any adjournment or postponement thereof. Receipt of the Notice of the 2016 Annual Meeting of Stockholders, Proxy Statement and the 2015 Annual Report is hereby acknowledged. In order for your vote to be submitted by this proxy, you must (i) properly complete the telephone or Internet voting instructions no later than 11:59 P.M. Eastern Time on June 8, 2016 or (ii) properly complete and return this proxy card so your vote is received prior to the vote at the 2016 Annual Meeting of Stockholders of the Company. Submitting your proxy by mail, via the Internet or by telephone will not affect your right to vote in person should you decide to attend the 2016 Annual Meeting of Stockholders of the Company. This proxy, when properly executed, will be voted in the manner directed by you. If you do not give any direction, the proxy will be voted (i) "FOR" the election of each of the nominees for director; (ii) "FOR" the ratification of the appointment of Ernst & Young LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2016; (iii) "FOR" the approval of the advisory resolution on the compensation of the Company's named executive officers; (iv) "EVERY ONE YEAR" for the approval of the advisory vote on executive compensation; and (v) in the discretion of the proxies upon such other matters as may properly come before the 2016 Annual Meeting. Continued and to be signed on reverse side
*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 9, 2016 ESPERION THERAPEUTICS, INC. XXXX XXXX XXXX XXXX (located on the following page). You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. ESPERION THERAPEUTICS, INC. 3891 RANCHERO DRIVE, SUITE 150 ANN ARBOR, MI 48108 proxy materials and voting instructions. E09338-P74787 See the reverse side of this notice to obtain Meeting Information Meeting Type: Annual Meeting For holders as of: April 11, 2016 Date: June 9, 2016 Time: 8:00 AM Eastern Time Location: Meeting live via the Internet-please visit www.virtualshareholdermeeting.com/ESPR2016 The company will be hosting the meeting live via the Internet this year. To attend the meeting via the Internet please visit www.virtualshareholdermeeting.com/ESPR2016 and be sure to have the information that is printed in the box marked by the arrow
Before You Vote How to Access the Proxy Materials Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. How To Vote Please Choose One of the Following Voting Methods XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. E09339-P74787 Vote By Internet: Before The Meeting: Go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow During The Meeting: Go to www.virtualshareholdermeeting.com/ESPR2016. Have the information that is printed in the box marked by Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Proxy Materials Available to VIEW or RECEIVE: THE PROXY STATEMENTANNUAL REPORT ON FORM 10-K How to View Online: following page) and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1) BY INTERNET:www.proxyvote.com 2) BY TELEPHONE:1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 26, 2016 to facilitate timely delivery.
The Board of Directors recommends you vote FOR the following: 1. Election of Class III Directors Nominees: 1a. Scott Braunstein, M.D. 1b. Dov A. Goldstein, M.D. 1c. Roger S. Newton, Ph.D., FAHA The Board of Directors recommends you vote FOR proposals 2 and 3: 2. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016 3. To approve the advisory resolution on the compensation of our named executive officers The Board of Directors recommends you vote for EVERY ONE YEAR for proposal 4: 4. To determine the frequency of future advisory votes on the compensation of our named executive officers NOTE: The proxies are authorized to vote on such other business as may properly come before the meeting or any adjournment thereof. E09340-P74787 Voting Items
E09341-P74787
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