Jon S. Saxe
has served as the Chairman of our Board since July 2009 and as a Director since August 2000. Mr. Saxe was President of PDL BioPharma, Inc. (formerly Protein Design Labs, Inc.) from 1995 to early 1999. From 1993 to 1995, Mr. Saxe was President of Saxe Associates, Inc., consultants to venture capital firms and biotechnology, diagnostic, and pharmaceutical companies. He was the President and CEO of Synergen, Inc., a biotechnology company acquired by Amgen, from 1989 to 1993. Mr. Saxe is former Vice President, Licensing and Corporate Development and Head of Patent Law for Hoffmann-LaRoche Inc., where he
worked for almost 30 years. Mr. Saxe received his B.S. Ch.E. from Carnegie-Mellon University, his J.D. from George Washington University School of Law and his LL.M. from New York University School of Law. He serves as a director of other public and private companies, including Durect Corporation and as Chairman of VistaGen Therapeutics, Inc. Mr. Saxe brings to the Board experience across a wide range of functions in the pharmaceutical industry including legal, business development and operational experience. He also has broad experience as a Board member in our industry including experience as an audit committee, business development committee, compensation committee, and corporate governance committee member.
Friedhelm Blobel, Ph.D.
has served as our President, Chief Executive Officer and as a Director since June 2006. From July 2000 to 2006, Dr. Blobel was President, CEO and a Director of Gryphon Therapeutics, Inc., a South San Francisco based biopharmaceutical company. Prior to joining Gryphon Therapeutics in July 2000, Dr. Blobel spent more than two decades as an executive with the Hoechst Group and the Boehringer Mannheim Group including responsibilities in the areas of diabetes and in vitro diagnostics. His roles at these companies included Group President of several product divisions, Chief Technology Officer
and General Manager in Tokyo, Japan of a marketing and sales joint venture between Boehringer and Yamanouchi Pharmaceuticals (now Astellas Pharma, Inc.), and Senior Vice President of Research and Development Diabetes and Patient Care in Mannheim, Germany as well as in Indianapolis, Indiana. Dr. Blobel earned his doctorate degree (Dr.rer.nat.; a Ph.D. equivalent) with a dissertation in Biochemistry and Microbiology from the University of Hohenheim, Germany and holds an advanced degree in Chemistry from the University of Stuttgart, Germany. Dr. Blobel has spent his entire career in the pharmaceutical and biotechnology industry and brings to the Board experience in general management, research and development, and product marketing and distribution.
Nancy T. Chang, Ph.D.
has served as a Director since September 2013. Since 2007, Dr. Chang has served as the President of Apex Enterprises, Inc., an investment management company with a major focus on healthcare investments. From 2007 to 2012, she was the Chairperson and Senior Managing Director of Caduceus Asia Partners at OrbiMed Advisors L.L.C. From 1987 to 2007, Dr. Chang served as Co-Founder, President and Chairman of Tanox, Inc., which was sold to Genentech in 2007. Prior to founding Tanox, Dr. Chang held several leadership positions at Centocor, now a division of Johnson & Johnson. She was also an
Associate Professor at Baylor College of Medicine, and before that, she worked at the Roche Institute of Molecular Biology. Dr. Chang received her Doctorate in Biological Chemistry from Harvard University. Dr. Chang brings to the Board deep industry and business expertise, drawing on her scientific knowledge and her long history as a president and board member at a variety of public and private biopharmaceutical companies.
Richard J. Hawkins
has served as a Director since October 2004. Since 2011, Mr. Hawkins has been the President and Chief Executive Officer of Lumos Pharma, Inc., a privately-held company. Mr. Hawkins has served as the President and Chief Executive Officer of id2, Inc., a privately-held company since 1992, and as the Chairman and CEO of LabNow, Inc., a privately-held company he founded that develops lab-on-a-chip sensor technology to be used in point-of-care diagnostic testing systems since 2003. From 1994 to 2000, Mr. Hawkins co-founded and served as Director at Corning BioPro, a protein contract manufacturing
firm. From 1992 to 2000, Mr. Hawkins co-founded and served as Chairman of Sensus Drug Development, which developed and received regulatory approval for SOMAVERT®, a growth hormone antagonist approved for the treatment of acromegaly and now marketed by Pfizer in both the United States and Europe. In 1982, Mr. Hawkins founded Pharmaco, a clinical research organization (CRO) that in 1991 was merged with the predecessor of PPD-Pharmaco, one of the largest CROs in the world today. Mr. Hawkins has served as a member of the board of directors of Cytori Therapeutics, Inc. since 2007. Mr. Hawkins graduated cum laude with a B.S. in Biology from Ohio University. Mr. Hawkins is an entrepreneur who has formed, financed and
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to beneficial ownership of shares of our Common Stock as of March 31, 2017 by:
|
|
all those known by us to be beneficial owners of more than 5% of our Common Stock;
|
|
|
each of our Named Executive Officers identified in the section entitled
Executive Compensation and Other Matters
;
|
|
|
each of our directors; and
|
|
|
all of our directors and executive officers as a group.
|
This table is based upon the information supplied to us by officers and directors of the Company and upon information about principal stockholders known to us based on a Schedule 13G or 13D or amendments thereto filed with the SEC. Applicable percentages are based on 51,569,182 shares outstanding on March 31, 2017 provided that any additional shares of common stock that a stockholder has the right to acquire within 60 days after March 31, 2017 pursuant to grants of stock options or awards of restricted stock are deemed to be outstanding and beneficially owned by the person holding such options or restricted stock for the
purpose of computing the number of shares beneficially owned.
|
|
|
|
|
|
|
Shares Beneficially Owned
(1)
|
Stockholders
|
|
Number
|
|
Percent
|
BlackRock, Inc.
(2)
55 East 52
nd
Street
New York, NY 10022
|
|
|
6,912,779
|
|
|
|
12.83
|
%
|
GL Trade Investment Limited
(3)
Unit 3001, China World Tower 2
No. 1 Jian Guo Men Wai Avenue
Beijing 100004, Peoples Republic of China
|
|
|
4,750,116
|
|
|
|
8.82
|
%
|
Dimensional Fund Advisors LP
(4)
Building One
6300 Bee Cave Road
Austin, TX 78746
|
|
|
2,888,743
|
|
|
|
5.36
|
%
|
The Vanguard Group
(5)
100 Vanguard Blvd.
Malvern, PA 19355
|
|
|
2,700,061
|
|
|
|
5.01
|
%
|
Named Executive Officers
|
|
|
|
|
|
|
|
|
Friedhelm Blobel, Ph.D.
(6)
|
|
|
1,222,926
|
|
|
|
2.27
|
%
|
Wilson W. Cheung
(7)
|
|
|
117,373
|
|
|
|
|
*
|
Robert King, Ph.D.
|
|
|
64,087
|
|
|
|
|
*
|
Lan Xie
(8)
|
|
|
25,835
|
|
|
|
|
*
|
Hong Zhao
(9)
|
|
|
179,667
|
|
|
|
|
*
|
Outside Directors
|
|
|
|
|
|
|
|
|
Jon S. Saxe
(10)
|
|
|
402,500
|
|
|
|
|
*
|
Nancy T. Chang, Ph.D.
(11)
|
|
|
127,500
|
|
|
|
|
*
|
Richard J. Hawkins
(12)
|
|
|
201,863
|
|
|
|
|
*
|
Gregg A. Lapointe
(13)
|
|
|
262,500
|
|
|
|
|
*
|
Simon Li
(14)
|
|
|
150,000
|
|
|
|
|
*
|
All directors and executive officers as a group (11 persons)
(15)
|
|
|
2,778,886
|
|
|
|
5.16
|
%
|
22
|
(1)
|
Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Unless otherwise indicated above, the address for the persons or entities listed below is 950 Tower Lane, Suite 900, Foster City, California 94404.
|
|
(2)
|
Based on a Schedule 13G filed with the Securities and Exchange Commission on January 17, 2017 by BlackRock, Inc., a holding company with the following subsidiaries: BlackRock (Netherlands) B.V., BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management Schweiz AG, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Institutional Trust Company, M.A., BlackRock International Limited, BlackRock Investment Management, LLC, and BlackRock Japan Co. Ltd. BlackRock, Inc.s subsidiaries are the beneficial owners of 6,912,779 shares of the common shares of the Company.
|
|
(3)
|
Based on a Schedule 13D/A filed with the Securities and Exchange Commission on November 14, 2016 and amended on February 17, 2017, by GL Trade Investment Limited a China corporation (
GL Trade
). GL Trade includes GL China Opportunities Fund L.P. (
GL Fund
), GL Capital Management GP L.P. (
GL Capital
), GL Capital Management GP Limited (
GL Management
), GL Partners Capital Management Limited (
GL Partners
), and Mr. Zhenfu Li. GL Trade is deemed to be the beneficial owner of 4,750,116 shares of the common stock of the Company. GL Fund owns 100% of GL Trade. GL Capital is the sole general partner of GL Fund. GL Management is the sole general partner of GL Capital. GL Partners owns 51% of the voting interests of GL Management.
|
|
(4)
|
Based on a Schedule 13G filed with the Securities and Exchange Commission on February 9, 2017 by Dimensional Fund Advisors LP.
|
|
(5)
|
Based on a Schedule 13G filed with the Securities and Exchange Commission on February 13, 2017 by The Vanguard Group, an investment advisor with the following subsidiaries: Vanguard Fiduciary Trust Company which is the beneficial owner of 97,094 shares and Vanguard Investments Australia, Ltd. which is the beneficial owner of 6,800 shares.
|
|
(6)
|
Includes 1,130,400 shares issuable pursuant to options exercisable or awards issuable within 60 days of March 31, 2017.
|
|
(7)
|
Includes 115,501 shares issuable pursuant to options exercisable or awards issuable within 60 days of March 31, 2017.
|
|
(8)
|
Consists of 25,835 shares issuable pursuant to options exercisable or awards issuable within 60 days of March 31, 2017.
|
|
(9)
|
Consists of 179,667 shares issuable pursuant to options exercisable or awards issuable within 60 days of March 31, 2017.
|
|
(10)
|
Includes 267,500 shares issuable pursuant to options exercisable within 60 days of March 31, 2017.
|
|
(11)
|
Includes 57,500 shares issuable pursuant to options exercisable within 60 days of March 31, 2017.
|
|
(12)
|
Includes 177,500 shares pursuant to options exercisable within 60 days of March 31, 2017.
|
|
(13)
|
Consists of 262,500 shares issuable pursuant to options exercisable within 60 days of March 31, 2017.
|
|
(14)
|
Consists of 150,000 pursuant to options exercisable within 60 days of March 31, 2017.
|
|
(15)
|
Includes 2,441,612 shares issuable pursuant to options exercisable or awards issuable within 60 days of March 31, 2017.
|
23
EXECUTIVE COMPENSATION AND OTHER MATTERS
Executive Officers
The following table sets forth the name, age and title for each of our executive officers:
|
|
|
|
|
Name
|
|
Age
|
|
Title
|
Friedhelm Blobel, Ph.D.
|
|
68
|
|
President and Chief Executive Officer, Director
|
Wilson W. Cheung
|
|
48
|
|
Chief Financial Officer and Senior Vice President, Finance
|
Carey Chern
|
|
50
|
|
General Counsel, Corporate Secretary and Chief Compliance Officer
|
Raymond A. Low
|
|
60
|
|
Vice President, Finance and Controller
|
Lan Xie
|
|
44
|
|
Vice President Finance, China Chief Financial Officer
|
Hong Zhao
|
|
53
|
|
Chief Executive Officer, China Operations
|
Friedhelm Blobel, Ph.D.
is one of our directors as well as our President and Chief Executive Officer, and, as such, his biographical information is included above under Election of Directors.
Wilson W. Cheung
joined SciClone in July 2013 and serves as Chief Financial Officer and Senior Vice President, Finance. Prior to joining SciClone, from 2009 to 2013, Mr. Cheung served in various positions at Velti plc, a publicly traded global mobile marketing and advertising software-as-a-service provider, including most recently as Chief Compliance Officer, Asia Pacific and previously as Chief Financial Officer. From 2004 to 2009, Mr. Cheung served as Chief Financial Officer of AXT, Inc., a publicly traded manufacturer of high performance semi-conductor substrates. Mr. Cheung holds a B.A. degree in
Economics/Business from the University of California, Los Angeles (UCLA) and is a Certified Director of Corporate Governance from UCLAs Executive Program. He is a California Certified Public Accountant (inactive).
Carey Chern
joined SciClone in October 2016 and serves as General Counsel and Corporate Secretary, as well as SciClones Chief Compliance Officer. Prior to joining SciClone, from 2011 to 2016, Mr. Chern served in various roles at The Clorox Company covering healthcare matters, including as the division counsel for its Professional Products Division. Prior to The Clorox Company, from 2006 to 2010, Mr. Chern served in various roles at Amgen Inc., including as a senior counsel for corporate transactions and as the managing attorney for its technology transactions department. Prior to Amgen, Mr. Chern served as
an attorney in several large international law firms covering life sciences and corporate transactions matters. Mr. Chern earned a J.D. from Stanford Law School and his A.B. in Economics and Government from Harvard University.
Raymond A. Low
joined SciClone as Vice President, Finance and Controller in October 2013. Prior to joining SciClone, from 2009 to 2013, Mr. Low served as Chief Financial Officer, and from 2005 to 2009 as Corporate Controller at AXT, Inc., a publicly traded manufacturer of high performance semi-conductor substrates. From 2002 to 2004, Mr. Low was Corporate Controller of Therasense, Inc. (now Abbott Laboratories), a health care products company. Mr. Low is a California Certified Public Accountant and a member of the California Society of CPAs. He is a past member of the Chartered Institute of Management Accountants
in the United Kingdom. Mr. Low has an M.B.A. degree from Chadwick University, Alabama, a Bachelor of Accounting Science Honors degree from the University of South Africa, and a Bachelor of Commerce degree from Rhodes University, South Africa.
Lan Xie
joined SciClone as Vice President Finance, China Chief Financial Officer in August 2012. From 2007 to 2012, Ms. Xie served as Vice President of Finance and Investor Relations at ShangPharma Corporation, a pharmaceutical company. From 2005 to 2007, Ms. Xie served as a senior manager, transaction services, at PricewaterhouseCoopers Zhong Tian LLP in Shanghai and from 2003 to 2005, Ms. Xie served as manager, mergers and acquisitions at Deloitte & Touche in New York. Ms. Xie also served in various finance
24
and accounting positions at Reuters Incorporated and PricewaterhouseCoopers in Boston. She is a Massachusetts certified public accountant and received her M.B.A from INSEAD, Singapore/France.
Hong Zhao
joined SciClone as Chief Executive Officer, China Operations, in April 2013. Prior to SciClone, from 2011 to 2013, Mr. Zhao served as Executive Vice President of Simcere Pharmaceutical Group, a manufacturer and supplier of pharmaceuticals in China, where he was responsible for all business operations and had direct reporting responsibility for medical affairs, market access, marketing and sales operations, training and personnel development. Prior to Simcere, from 1999 to 2011, Mr. Zhao held various positions at Novartis China, a health care products company, including most recently, Senior Vice
President of Novartis Greater China and General Manager of Novartis Shanghai. Mr. Zhao earned a Bachelor of Medicine degree from Nanjing Medical College and an Executive Masters of Business Administration degree from China European International Business School (CEIBS) in Shanghai.
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is intended to provide an explanation of our compensation program relating to fiscal 2016, with particular focus on our Chief Executive Officer (
CEO
) and the other listed executives as presented in the 2016 Summary Compensation Table that follows this discussion (herein referred to as the
Named Executive Officers
). For 2016, our Named Executive Officers were:
|
|
Friedhelm Blobel, Ph.D., President and Chief Executive Officer, Director;
|
|
|
Wilson W. Cheung, Chief Financial Officer and Senior Vice President, Finance;
|
|
|
Robert King, Ph.D., Former Senior Vice President, Product Development and Supply Chain;
|
|
|
Lan Xie, Vice President Finance, China Chief Financial Officer; and
|
|
|
Hong Zhao, Chief Executive Officer, China Operations.
|
Overview
The Compensation Committee of the Board administers our executive compensation and benefit programs. The Compensation Committee is comprised of exclusively independent directors and oversees all compensation and benefit programs and actions that affect our executive officers, except that our Board reviews the recommendations of the Compensation Committee and approves the compensation of the Chief Executive Officer.
Compensation Philosophy
We are committed to developing and commercializing innovative products to treat life-threatening diseases particularly for the growing Chinese pharmaceutical market. We are engaged in a competitive industry, and to accomplish this objective, we design our compensation programs to attract, motivate and retain qualified executives dedicated to working towards our short and long-term corporate goals. People are one of our key assets, and we seek to hire employees and executives who share our corporate vision and values and have the skills and motivation to execute on our corporate strategy. In our dynamic work environment, we
foster the following corporate values:
|
|
Compliance and Integrity;
|
Our compensation structure is particularly focused upon rewarding our executives for achieving our publicly stated corporate objectives, and for strong and dedicated performance to the interests of our stockholders.
25
Objectives of Our Compensation Program
The primary objective of our compensation programs for our executive officers is to attract and retain qualified executives and employees of outstanding ability and potential and to:
|
|
Motivate executives and employees to work towards completing our overall corporate goals and milestones and their individual employee objectives over the short and long-term;
|
|
|
Align our executives and employees performance with our stockholders interests; and
|
|
|
Compete effectively with the compensation programs of comparable companies to allow us to compete with our peers for valuable human resources.
|
What Our Compensation Program is Designed to Reward
Our compensation program is designed to reward performance and exceptional effort measured over a short and long-term basis. We seek to align our executives performance with the interests of our stockholders. Base salaries, annual cash incentives and the vesting of our equity awards encourage executive retention and provide a balance between short and long-term compensation.
We generally set corporate objectives at the beginning of the fiscal year, against which the performance of our Chief Executive Officer is evaluated for determining adjustments in compensation for the subsequent fiscal year. Certain of these corporate objectives are also objectives of other executives with functional responsibility for a particular objective, or for activities in other functions that will support the achievement of an objective. The objectives for our other executives are set by our Chief Executive Officer. Our corporate objectives typically include revenue, income and other financial objectives, successful
commercialization or business development activities and specific organization objectives, including compliance related objectives.
For 2016, our corporate goals included goals regarding the following:
|
|
Increase overall sales for SciClone;
|
|
|
Increase overall operating net profit and cashflow;
|
|
|
Organizational targets; and
|
|
|
Business and product development goals.
|
Compensation Process, Role of Management, Independent Compensation Consultants, Peer Group Selection and Benchmarking
Compensation Process, Role of Management
The Compensation Committee is responsible for determining and approving all compensation for our executive officers, except our President and Chief Executive Officer, whose compensation is approved by our full Board. Pursuant to its charter, the Compensation Committee recommends to the full Board the salary, bonus, equity awards and other aspects of the compensation of our President and Chief Executive Officer, approves the salary, bonus targets and bonus payments for other executive officers, approves equity awards to other executive officers and approves all employment, severance and retention agreements applicable to other
executive officers. Our Chief Executive Officer participates with the Compensation Committee in its deliberations with respect to the compensation payable to our other executive officers, and typically recommends specific compensation packages for our executive officers based upon his assessment and evaluation of their performance for the prior year. The Chief Executive Officer may not be present during deliberations regarding his own compensation.
Following the end of each fiscal year, our Chief Executive Officer evaluates executive officer performance for the prior fiscal year, other than his own performance, and discusses the results of such evaluations with the Compensation Committee. The Chief Executive Officer also provides his assessment of our performance against our corporate objectives for the fiscal year for evaluation by the Compensation Committee. The Chief Executive Officers assessment is based upon subjective factors concerning such officers individual business goals and objectives, and the contributions made by the executive officer to our
overall results. The Chief Executive Officer then makes specific recommendations to the Compensation
26
Committee for adjustments of base salary, target bonus, and equity awards, if appropriate, as part of the compensation packages for each executive officer, other than himself, for the next fiscal year.
The Compensation Committee reviews the performance of the Chief Executive Officer and recommends all compensation for the Chief Executive Officer, subject to the review and approval by the full Board. The Chief Executive Officer was not present at the time the Compensation Committee reviewed his performance and discussed his compensation for fiscal 2016.
In addition, at our 2016 annual meeting of stockholders, we provided our stockholders the opportunity to vote to approve, on an advisory basis, the compensation of our Named Executive Officers, as disclosed in the proxy statement for our 2016 annual meeting. At the 2016 annual meeting, approximately 97% of the votes cast were voted in favor of the Companys executive compensation program for the prior year. As the stockholder advisory vote was held after the Compensation Committee and the Board had determined the compensation to be paid to the Companys named executive officers for 2016, the Compensation Committee
and the Board did not take such results into account in determining executive compensation for 2016. However, in determining and deciding on executive compensation for fiscal year 2017 and in determining bonus compensation for fiscal 2016, our Compensation Committee took into account the results of the 2016 stockholder advisory vote to approve executive compensation, particularly the strong support expressed by the Companys stockholders, as one of many factors considered in deciding that the Companys compensation policies and procedures for 2017 should largely remain consistent with our policies and procedures in prior years.
Independent Compensation Consultants, Peer Group Selection and Benchmarking
In 2016, the Compensation Committee retained Setren to conduct an assessment of our executive officer compensation and advise the Committee regarding optimal allocation of the different elements of executive officer compensation among base salary, bonuses and equity and to recommend target amounts for each element of compensation. The Compensation Committees policy is to conduct an in-depth assessment of our executive compensation structure including comparative compensation at comparable companies, using detailed data and recommendations provided by Setren, each year.
The Compensation Committees policy is to target the amount of each element of compensation of the survey data it reviewed at approximately the 50
th
percentile for executive officers in the United States and in the 75
th
percentile for executive officers in China, and confirmed the applicability of these levels by reference to the results of the review of compensation information. While the 50
th
and 75
th
percentile were the reference points for compensation decisions, the actual amount paid or awarded varied from that percentile due to various factors the Compensation Committee
has taken into account, including individual capabilities and performance, length of current and prior experience in the particular position, initial compensation offered when an executive joins the Company, and the perceived applicability of any set of compensation data for a position to the actual role of the executive in the Company.
For fiscal 2016 salary, target bonuses and equity awards, the Compensation Committee obtained a written report from Setren regarding executive compensation. In providing advice to the Compensation Committee, Setren provided information based on the Radford Global Life Sciences Survey from Radford, part of Aon Hewitt, a business unit of Aon plc. (
Radford
), which includes the average, median and range amounts of base salary, annual cash incentives and long-term equity incentives from comparable pharmaceutical, biotechnology and medical device companies.
27
In addition, Setren supplemented the Radford data with its own survey of publicly available information filed by a group of the following peer companies (
Peer Data
) determined in consultation with the Compensation Committee:
|
|
|
Aegerion Pharmaceuticals, Inc.
|
|
Ironwood Pharmaceuticals, Inc.
|
Albany Molecular Research, Inc.
|
|
Momenta Pharmaceuticals, Inc.
|
Alnylam Pharmaceuticals, Inc.
|
|
Nektar Therapeutics
|
Amphastar Pharmaceuticals, Inc.
|
|
OraSure Technologies, Inc.
|
Anika Therapeutics, Inc.
|
|
Sagent Pharmaceuticals, Inc.
|
AVEO Pharmaceuticals, Inc.
|
|
Sequenom, Inc.
|
Codexis, Inc.
|
|
Spectrum Pharmaceuticals, Inc.
|
Depomed, Inc.
|
|
Sucampo Pharmaceuticals, Inc.
|
Emergent BioSolutions, Inc.
|
|
Supernus Pharmaceuticals, Inc.
|
Enzo Life Sciences, Inc.
|
|
Targacept, Inc.
|
Genomic Health, Inc.
|
|
Vivus, Inc.
|
Ionis Pharmaceuticals, Inc.
|
|
|
The compensation for our executives who are based in China is compared to other similar positions in China and is based on Aon/Hewitt Pharmaceutical Industry Survey (
AON
) survey data.
Setren compared the current base salary of each of our executive officers in the U.S. to the median and the 75
th
percentile of the Radford data, and the annual cash incentives to the median of the Radford data. Setren compared the current base salary of each of our executive officers in China to the median and the 75
th
percentile of the AON data, and the annual cash incentives to the median of the AON data. Setren compared the current long term equity incentives for executive officers in the U.S. to the median and 75
th
percentile of the Peer Data. For executives in the U.S., Setren used both
summary Radford data and Peer Data with respect to review of base salary and annual cash incentives. For executives in China, Setren used summary AON data with respect to review of base salary and annual cash incentives. Setren used Peer Data with respect to review of long term equity incentives for U.S. executives.
Annual Compensation Review for Fiscal 2016
The Compensation Committees annual review of executive compensation generally occurs during the first quarter of the fiscal year. In 2017, after reviewing Setrens written report, meeting with a representative of Setren, and considering recommendations of our Chief Executive Officer, the Compensation Committee reviewed the amount of each element of compensation for our executive officers and reached conclusions about each element of compensation for each executive other than our Chief Executive Officer. The Compensation Committee also made recommendations to the Board as to each element of compensation for our Chief
Executive Officer, which recommendations were reviewed and approved by the independent members of the Board.
Elements of Our Compensation Program and How Each Element is Chosen
The key elements of our compensation program for executives and employees consist of base salary, annual cash incentives and long-term equity incentives. Our compensation package also includes a comprehensive benefits package of healthcare, disability and insurance coverage as well as a 401(k) plan. Our equity and retirement plans have vesting schedules to encourage employee retention and a long-term commitment towards advancing our corporate objectives. The elements of our compensation programs are varied to achieve the following balances:
|
|
Fixed and variable compensation to reward individual and corporate performance;
|
|
|
Cash and equity compensation to align an executives performance with our stockholders interests; and
|
|
|
Short and long-term compensation to encourage retention and reward long-term service.
|
Base Salary
Base salaries for executive officers and other officers are targeted at a competitive market level, which in 2016 was the 50
th
percentile of the Radford and the Peer Data for executives in the U.S. and the
28
75
th
percentile of the AON survey for executives in China, on a position-by-position basis with individual variations explained by differences in experience, skills and sustained performance. The Compensation Committee reviews the executive officers salaries on an annual basis.
In consultation with the Compensation Committee, the Company determined to increase overall employee salaries for fiscal 2016 for merit, promotion and market adjustments by approximately 4% in the U.S., 5% in Hong Kong and 8.5% in China.
When setting each element of compensation for fiscal 2016, the Compensation Committee discussed the Companys overall salary increases for the fiscal year, the Setren report described above, the summary survey data included in the report as it relates to each of our executive officers, and for the executive officers other than himself, the recommendations of our Chief Executive Officer.
For Dr. Blobel, the Compensation Committee approved an approximately 8% increase in his salary which continued to be less than the 50
th
percentile of the peer companies included in the Peer Data.
|
|
|
|
|
|
|
Name
|
|
2015 Base
Salary
($)
|
|
2016 Base
Salary
($)
|
|
%
Increase
|
Friedhelm Blobel, Ph.D.
|
|
|
600,000
|
|
|
|
650,000
|
|
|
|
8
|
%
|
Wilson W. Cheung
|
|
|
374,325
|
|
|
|
391,170
|
|
|
|
5
|
%
|
Robert King, Ph.D.
|
|
|
333,632
|
|
|
|
346,977
|
|
|
|
4
|
%
|
Lan Xie
|
|
|
296,973
|
|
|
|
299,991
|
|
|
|
1
|
%
|
Hong Zhao
|
|
|
457,379
|
|
|
|
466,695
|
|
|
|
2
|
%
|
As discussed in the footnotes to the 2016 Summary Compensation Table, Ms. Xie and Mr. Zhao are paid in Chinese Yuan Renminbi (
RMB
). In RMB, Ms. Xies base salary increased 6% between fiscal 2015 and fiscal 2016. However, as a result of exchange rate fluctuations between the U.S. dollar and RMB, when reported in U.S. dollars, the percentage increase of Ms. Xies base salary was 1%. In RMB, Mr. Zhaos base salary increased 7%, between fiscal 2015 and fiscal 2016. However, as a result of exchange rate fluctuations between the U.S. dollar and RMB, when reported in U.S. dollars, the
percentage increase of Mr. Zhaos base salary was 2%.
Annual Cash Incentives
We provide annual cash incentives in the form of cash bonuses intended to motivate employees to achieve our overall corporate goals and their individual employee objectives. For executive officers, these annual cash incentives are paid pursuant to our executive incentive plan. Incentive bonuses are based on a percentage of cash compensation and account for a significant percentage of each executive officers potential compensation, putting a significant percentage of total compensation at risk based on achievement of both corporate and individual objectives. Executive officers may earn up to 150% of their individual cash
incentive target depending upon the Compensation Committees assessment of performance in relation to their predetermined objectives. Our other employees are also eligible to receive annual cash incentives, which typically account for a smaller percentage of total compensation.
At the beginning of each fiscal year, the Compensation Committee reviews each officers annual cash incentive targets, determined as a percentage of base salary and determines whether to adjust such targets. For newly hired executives, the Compensation Committee reviews and considers the terms of their proposed offers and approves the elements of their compensation at the time of their offer of employment. The percentages for the cash incentive plan for fiscal 2016 were 60% of base salary for Dr. Blobel, 40% of base salary for Mr. Cheung, 35% of base salary for Dr. King, 35% of base salary for Ms. Xie and 40% of base
salary for Mr. Zhao. Commencing in the last quarter of each fiscal year, the Compensation Committee, in conjunction with the Board and CEO, develops our overall corporate objectives for the next fiscal year and weights the value of each of those objectives, finalizing the corporate objectives in the first quarter of the next fiscal year. The corporate objectives serve as the individual objectives for Dr. Blobel. The other Named Executive Officers goals are proposed by Dr. Blobel and reviewed and approved by the Compensation Committee after the corporate objectives have been determined. Generally, each of the Named Executive Officers goals relate to the achievement of our corporate goals, but executives may have goals that vary from the corporate goals
29
based upon their individual responsibilities. Financial objectives in both the corporate and individuals goals are determined in a manner consistent with the Companys annual operating budget. In particular as to any financial goals as to which the Company provides guidance, the related corporate or individual objective is set within the range of our initial guidance first published for that fiscal year. Our corporate goals include goals for implementation and improvement of our compliance program.
The Company maintains an executive incentive plan related to bonus payments. In order for any bonus to be paid under our executive incentive plan, the Compensation Committee must determine that total achievement against goals is at least 60%, (ii) the Compensation Committee may make discretionary bonus awards of up to 25% of the executives target bonus for unanticipated outstanding achievement and (iii) the total pay-out under the plan may not exceed 150% of the target amount. The actual cash incentive award earned is determined by the Compensation Committees judgment in its discretion of the relative attainment of
our overall corporate performance objectives, the relative attainment of individual employee performance objectives, and the individuals performance in relation to the objectives subject to targeted overall compensation. Some of these judgments are subjective. However, the Compensation Committee is increasingly using formulas for determining the amount of bonus to be awarded in the case of over or under achievement against goals, and particularly financial goals. In addition, while the Compensation Committees decisions are focused primarily upon the achievement against specific goals, it does consider its overall assessment of corporate performance and individual performance in the process of making final decisions as to bonus awards. Cash incentive awards are typically paid in the year following the year for which performance is evaluated.
Our corporate objectives for fiscal 2016, which were also Dr. Blobels objectives, were as follows, weighted as indicated:
|
|
|
Corporate Objectives
|
|
Weight
|
Achieve (i) revenues in excess of $167.0 million and (ii) target ZADAXIN sales
|
|
30%
|
Achieve non-GAAP operating profit of $35.2 million and non-GAAP operating cashflow in excess of $27.0 million
|
|
25%
|
Achieve organizational targets
|
|
10%
|
Achieve business development goals
|
|
15%
|
Achieve product development goals
|
|
20%
|
Achievement of our corporate objectives for 2016 was also subject to a gating requirement that the Company meets internal compliance goals, including continued efforts to strengthen the Companys compliance environment and continued cooperation with the government investigations conducted by the SEC and Department of Justice, which were fully resolved in February 2016. The Compensation Committee determined that the Company met the gating requirement.
Decisions regarding compensation of our other Named Executive Officers goals are based on the officers achievements with respect to their individual goals, and, with respect to our corporate goals, individual achievements in support of the corporate goals. In some cases, in evaluating the individual officers, achievement goals are adjusted to reflect changes in key assumptions or external factors impacting the business.
30
The following is a summary of the key individual goals for 2016 for each of our other Named Executive Officers:
|
|
|
|
|
Executive Officer
|
|
Summary of Key Individual Goals
|
|
Weight
|
Wilson W. Cheung
|
|
Achieve a year-end target for the combination of cash balance and investments above $126.3 million
|
|
10%
|
|
|
Achieve non-GAAP operating profit of $35.2 million and an operating cash flow in excess of $27.0 million
|
|
25%
|
|
|
Achieve financial and management reporting project targets
|
|
15%
|
|
|
Manage information technology projects
|
|
10%
|
|
|
Maintain effective internal controls
|
|
20%
|
|
|
Increase investor relations activities and relationships with analysts
|
|
20%
|
Lan Xie
|
|
Achieve revenues in excess of $161.2 million in China
|
|
10%
|
|
|
Achieve China non-GAAP operating net profit in excess of $62.7 million
|
|
30%
|
|
|
Achieve improvements to the China control environment
|
|
10%
|
|
|
Achieve entity consolidation project
|
|
10%
|
|
|
Achieve organizational goals
|
|
20%
|
|
|
Complete administrative finance projects
|
|
20%
|
Hong Zhao
|
|
Achieve (i) revenues in China of $161.2 million and (ii) target ZADAXIN sales
|
|
35%
|
|
|
Achieve non-GAAP operating income in China of $62.7 million
|
|
20%
|
|
|
Achieve organizational goals
|
|
15%
|
|
|
Achieve business and product development goals
|
|
30%
|
|
(1)
|
Dr. King, our former executive officer, departed in early 2017 and received no bonus under our executive incentive plan. Mr. King had goals similar to the goals of our other named executive officers.
|
The target levels for these performance measures may be expressed on an absolute basis or relative to a standard specified by the Compensation Committee. The degree of attainment of financial performance measures will be calculated in accordance with the written goal but prior to the accrual or payment of any performance award for the same performance period and excluding the effect (whether positive or negative) of changes in accounting standards or any unusual or infrequently occurring event or transaction occurring after the establishment of the performance goals applicable to a performance award. A goal may be based upon
generally accepted accounting principles (
GAAP
) or according to criteria established by the Compensation Committee, may exclude certain items. For purposes of calculating achievement of the non-GAAP net operating profit and non-GAAP cash flow goals for fiscal 2016, the Compensation Committee determined that amounts relating to the stock-based compensation, the strategic review expenses, and upfront and milestone fees related to in-licensing were excluded.
The Compensation Committee made the following determinations with respect to achievement of corporate goals and individual goals for fiscal 2016. With respect to the performance of Mr. Cheung, Ms. Xie, and Mr. Zhao, the Compensation Committee relied primarily on Dr. Blobels assessment of their performance as to goals other than our revenue and net operating profit goals.
Financial Goals
. The Compensation Committee determined that we achieved our revenue goals worldwide, including our revenue goals in China, exceeded the minimum goal for ZADAXIN sales and exceeded our year end cash balance and investment goal. Based upon formulas for these financial goals, Dr. Blobel, Ms. Xie, and Mr. Zhao received 114.3%, 106%, and 111.1% credit, respectively, for their revenue and ZADAXIN sales goals. Dr. Blobel, Mr. Cheung, Ms. Xie, and Mr. Zhao received 150%, 150%, 136%, and 136% credit, respectively, for their non-GAAP operating net profit goals. Dr. Blobel and Mr. Cheung received
150% and 111% credit, respectively, for their cash, cash flow and investments goals.
31
Business Development Goals
. The Compensation Committee determined that Dr. Blobel and Mr. Zhao received 113.3% and 107% credit, respectively, for achievement of their business development goals.
Product Development Goals.
The Compensation Committee determined that Dr. Blobel and Mr. Zhao received 65% and 60 105%, respectively, for achievement of their product development goals.
Organizational Goals
. The Compensation Committee determined that we made progress in our human resources and corporate structuring goals. As a result, Ms. Xie received 50 100%, and Mr. Zhao received 100 140% credit for those portions of their individual goals.
Internal Controls, Compliance and Audit Goals
. The Compensation Committee determined that we had implemented and executed satisfactory internal control and audit programs that substantially met or exceeded our goals. As a result, Mr. Cheung received 125% credit for his internal control and audit goals. Ms. Xie received 50% credit for her internal control and compliance goals.
Other Goals
. The Compensation Committee reviewed each of the other goals and determined that Dr. Blobel received 120% credit for his other goals, Mr. Cheung received 90 100% related to his other goals, and Ms. Xie received 100% credit related to her other goals. Dr. Blobel, Mr. Cheung, Ms. Xie and Mr. Zhao also received credit equal to 16%, 13%, 14% and 20% respectively of their total target bonus amounts based upon overall exceptional performance.
The Compensation Committee reviewed its initial assessment of achievement against our Corporate Objectives with the Board before making a final determination as to Dr. Blobels bonus.
Based on the assessments of the achievement in 2016 of the corporate performance objectives and the individual objectives described above, the Compensation Committee approved a $507,000 bonus for Dr. Blobel (78% of his base salary compared to his target of 60%), a $203,408 bonus for Mr. Cheung (52% of his base salary, compared to his 40% target), a $109,949 bonus for Ms. Xie (38.5% of her base salary, compared to her 35% target), and a $232,659 bonus for Mr. Zhao (52% of his base salary, compared to his 40% target).
Ms. Xie and Mr. Zhaos bonuses earned as a percentage of base salary of 38.5% and 52%, respectively, were calculated based on RMB. However, as a result of exchange rate fluctuations between the U.S. dollar and RMB, when reported in U.S. dollars, the percentage of bonuses earned compared to base salary was 37% for Ms. Xie and was 50% for Mr. Zhao.
Long-Term Incentives for the CEO
In 2016, the Compensation Committee determined that the best way to continue to align Dr. Blobels long-term incentive with the interests of the stockholders was to award Dr. Blobel a combination of restricted stock units and stock options. Based upon the recommendation of the Compensation Committee, the Board determined to grant Dr. Blobel 20,000 restricted stock units effective as of March 15, 2016, that will vest in four equal annual installments on the anniversaries of the grant date. The Board also determined to grant Dr. Blobel 140,000 options to purchase common stock of the Company subject to time-based vesting
over four years. The vesting of RSUs and options is contingent upon Dr. Blobels continued employment.
The vesting of all restricted stock units, granted to Dr. Blobel will accelerate upon the same terms and conditions as the stock options as set forth in the agreements described below under
Potential Payments upon Termination or Change-in-Control.
Long-Term Equity Incentives
We provide long-term equity incentives to motivate employees to achieve individual and corporate objectives and align interests of employees with those of stockholders. Our long-term equity incentives for executive officers and employees currently consist of options and restricted stock unit awards granted under our equity plans. Stock options granted under equity plans to our Named Executive Officers generally vest over a four-year period, providing incentive to create value for our stockholders over the long-term since the full benefit of the option cannot be realized unless the employee remains with us and stock price
appreciation occurs over a number of years. Restricted stock unit awards granted to our Named Executive Officers generally vest in four equal annual installments on the anniversaries of the grant date or on such later date as the Companys trading window opens if it is not open on any vesting date.
32
The Compensation Committee has typically granted equity awards to executive employees upon commencement of employment and has granted additional equity awards following a significant change in job responsibility, scope or title or a particularly noteworthy corporate or individual achievement. For any newly-hired executive officer, any promotion to executive officer or any other grant to executive officers, the Compensation Committee makes its determinations after analyzing comparable compensation data from biotechnology companies, as described above under
Independent Compensation Consultants, Peer Group Selection and
Benchmarking
. In addition, as part of our annual compensation review, key employees of the Company, including our executives, are generally awarded a stock option or other equity grant. During 2016, our executive officers were each granted equity awards based on the Committees evaluation of prior and anticipated individual contribution to the performance of the Company.
The Boards policy is that the grant date of equity awards granted at a meeting of the Compensation Committee or the Board held between the end of any fiscal quarter and the public announcement of the financial results of such quarter be a pre-determined number of days after such public announcement of financial results. The Boards grants of options in 2014, 2015 and 2016 complied with this policy.
Effective March 15, 2016, the Compensation Committee approved RSU grants to Mr. Cheung, Ms. Xie, and Mr. Zhao, for 12,000 shares, 4,000 shares, and 12,000 shares, respectively, that will vest in four equal annual installments on the anniversaries of the grant date. Effective March 15, 2016, the Compensation Committee approved option grants to Mr. Cheung, Ms. Xie, and Mr. Zhao, for 84,000 shares, 28,000 shares, and 84,000 shares, respectively. All of these option grants are subject to SciClones standard vesting schedule for time-based vesting. All RSU and option grants vest contingent upon the executives continued
employment. All of these option grants are subject to SciClones standard vesting schedule for time-based vesting. All RSU and option grants vest contingent upon the executives continued employment.
At present, we do not have any equity or security ownership requirements for our executive officers.
Retention Incentives
In addition, in August 2016, in connection with the Companys termination of its active strategic review process, the Board of Directors of the Company approved a retention program to provide incentives for key employees, including certain named executive officers, to remain with the Company and to reward them for their continuing efforts. The retention plan provides that if that Dr. Blobel, Mr. Cheung, Dr. King, Ms. Xie and Mr. Zhao remain with SciClone through April 30, 2017, in the case of Dr. Blobel, or December 31, 2016 for the others, such officer will receive a cash payment of $487,500, $195,585, $173,489, $81,594
and $235,742, respectively. The Board has additionally approved RSU grants of 40,000 RSUs for Dr. Blobel and 30,000 RSUs for each of Mr. Cheung and Mr. Zhao and 10,000 RSUs for Ms. Xie, in each case vesting on August 15, 2017.
Change in Control and Termination Benefits
We have, from time to time, entered into offer letters or employment agreements that contain certain benefits payable upon termination in certain situations. All such benefits extended to our executive officers are approved by the Compensation Committee in order to be competitive in our hiring and retention of executive officers, in comparison with other biotechnology companies of similar size with which we compete for talent. All such agreements with the Named Executive Officers are described in
Potential Payments upon Termination or Change-in-Control
elsewhere in this
Executive Compensation and
Other Matters
section of this Proxy Statement.
We have entered into Employee Retention Agreements with our executive officers with the goal of retaining such executive officers during the pendency of a proposed change in control transaction, and in order to align the interests of the executive officers with our stockholders in the event of a change in control. We believe that a proposed or actual change in control transaction can adversely impact the morale of officers and create uncertainty regarding their continued employment. Without the benefits under the Employee Retention Agreements, executive officers may be tempted to leave our employment prior to the closing of
the change in control, especially if they do not wish to remain with the entity after the transaction closes, and any such departures could jeopardize the consummation of the transaction or our interests if the transaction does not close and we remain independent. The Compensation Committee believes that these benefits therefore serve to
33
enhance stockholder value in the transaction, and align the executive officers interests with those of our stockholders in change in control transactions. A description of the terms and conditions of such Employee Retention Agreements is set forth in
Potential Payments upon Termination or Change-in-Control
elsewhere in this
Executive Compensation and Other Matters
section of this Proxy Statement.
Tax Considerations
In its deliberations regarding compensation for 2016, the Compensation Committee considered the impact of Section 162(m) of the Internal Revenue Code, which disallows a deduction for any publicly-held corporation for payment of individual compensation exceeding $1,000,000 in any taxable year to the Chief Executive Officer or any of three other most highly compensated executive officers (excluding the principal financial officer), unless such compensation meets the requirements for the performance-based exception to the general rule. Income resulting from options and performance-based restricted stock unit awards granted under
the 2005 and 2015 Equity Incentive Plans should qualify for this exception. The Compensation Committee intends to continue to consider the impact of Section 162(m) on the deductibility of future executive compensation but reserves the right to provide for compensation to executive officers that may not be fully deductible.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis included in this Proxy Statement with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in SciClones Annual Report on Form 10-K for the year ended December 31, 2016 and this Proxy Statement. The material in this report shall not be deemed to be soliciting material or filed with the SEC, will be deemed furnished in SciClones Annual Report on Form 10-K for the year
ended December 31, 2016, and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, as a result of furnishing the disclosure in this manner.
Respectfully submitted by the Compensation Committee,
Gregg A. Lapointe, Richard J. Hawkins, and Simon Li
34
Summary Compensation Table
The following table sets forth information concerning the compensation earned during the fiscal years ended December 31, 2016, 2015 and 2014 by our Named Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Year
|
|
Salary
($)
(1)
|
|
Bonus
($)
(2)
|
|
Stock
Awards
($)
(3)
|
|
Option
Awards
($)
(4)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(5)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
Friedhelm Blobel, Ph.D.
President and Chief
Executive Officer
(Principal Executive Officer)
|
|
|
2016
|
|
|
|
650,000
|
|
|
|
|
|
|
|
598,800
|
|
|
|
566,580
|
|
|
|
507,000
|
|
|
|
|
|
|
|
16,191
|
(6)
|
|
|
2,338,571
|
|
|
|
2015
|
|
|
|
600,000
|
|
|
|
61,200
|
(7)
|
|
|
1,858,475
|
(8)
|
|
|
586,670
|
|
|
|
406,800
|
|
|
|
|
|
|
|
16,191
|
|
|
|
3,529,336
|
|
|
|
2014
|
|
|
|
566,500
|
|
|
|
|
|
|
|
31,640
|
|
|
|
459,080
|
|
|
|
441,870
|
|
|
|
|
|
|
|
15,691
|
|
|
|
1,514,781
|
|
Wilson W. Cheung
Chief Financial Officer and
Senior Vice President, Finance
(Principal Financial Officer)
|
|
|
2016
|
|
|
|
391,170
|
|
|
|
195,585
|
(9)
|
|
|
421,740
|
|
|
|
339,948
|
|
|
|
203,408
|
|
|
|
|
|
|
|
9,810
|
|
|
|
1,561,661
|
|
|
|
2015
|
|
|
|
374,325
|
|
|
|
|
|
|
|
946,898
|
(10)
|
|
|
352,002
|
|
|
|
194,649
|
|
|
|
|
|
|
|
9,810
|
|
|
|
1,877,684
|
|
|
|
2014
|
|
|
|
356,500
|
|
|
|
|
|
|
|
|
|
|
|
160,678
|
|
|
|
202,380
|
|
|
|
|
|
|
|
6,810
|
|
|
|
726,368
|
|
Robert King, Ph.D.
Former Senior Vice President,
Product Development & Supply Chain
|
|
|
2016
|
|
|
|
346,977
|
|
|
|
173,489
|
(9)
|
|
|
63,840
|
|
|
|
198,303
|
|
|
|
|
|
|
|
|
|
|
|
13,242
|
|
|
|
795,851
|
|
|
|
2015
|
|
|
|
333,632
|
|
|
|
|
|
|
|
70,640
|
|
|
|
234,668
|
|
|
|
138,958
|
|
|
|
|
|
|
|
13,242
|
|
|
|
791,140
|
|
Lan Xie
(11)
Vice President Fnance,
China Chief Financial Officer
|
|
|
2016
|
|
|
|
299,991
|
(12)
|
|
|
81,594
|
(13)
|
|
|
140,580
|
|
|
|
113,316
|
|
|
|
109,949
|
|
|
|
|
|
|
|
3,364
|
|
|
|
748,794
|
|
|
|
2015
|
|
|
|
296,973
|
(14)
|
|
|
|
|
|
|
35,320
|
|
|
|
117,334
|
|
|
|
105,388
|
|
|
|
|
|
|
|
3,104
|
|
|
|
558,119
|
|
|
|
2014
|
|
|
|
276,837
|
(15)
|
|
|
24,297
|
(16)
|
|
|
|
|
|
|
91,816
|
|
|
|
113,737
|
|
|
|
|
|
|
|
2,774
|
|
|
|
509,461
|
|
Hong Zhao
(11)
Chief Executive Officer,
China Operations
|
|
|
2016
|
|
|
|
466,695
|
(17)
|
|
|
235,742
|
(18)
|
|
|
421,740
|
|
|
|
339,948
|
|
|
|
232,659
|
|
|
|
|
|
|
|
696
|
|
|
|
1,697,480
|
|
|
|
2015
|
|
|
|
457,379
|
(19)
|
|
|
|
|
|
|
946,898
|
(10)
|
|
|
352,002
|
|
|
|
230,383
|
|
|
|
|
|
|
|
847
|
|
|
|
1,987,509
|
|
|
|
2014
|
|
|
|
423,810
|
(20)
|
|
|
119,590
|
|
|
|
|
|
|
|
229,540
|
|
|
|
219,230
|
|
|
|
|
|
|
|
840
|
|
|
|
993,010
|
|
|
(1)
|
Reflects annual base salary for 2016, 2015 and 2014 respectively, and includes amounts (if any) deferred at the Named Executive Officers option under our 401(k) plan.
|
|
(2)
|
Except as otherwise noted, amounts reported as Bonus represent discretionary bonuses awarded by the Compensation Committee in addition to the amount (if any) earned under our executive incentive plan. See Compensation Disclosure and Analysis-Overview.
|
|
(3)
|
Represents the aggregate grant-date fair value of the restricted stock units awarded to the Named Executive Officer for the applicable year, calculated in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures. Assumptions used in the calculation of such grant-date fair values are set forth in Notes to our Consolidated Financial Statements for the year ended December 31, 2016, included in our Annual Report on Form 10-K for such fiscal year. The aggregate grant-date fair value of the performance-based restricted stock unit awards included for each applicable fiscal year is calculated in accordance with FASB ASC 718 based on the probable outcome of the attainment of one or more pre-established performance objectives, excluding the impact of estimated forfeitures.
|
|
(4)
|
Represents the aggregate grant-date fair value of the stock options awarded to the Named Executive Officer for the applicable year, calculated in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures. Assumptions used in the calculation of such grant-date fair values are set forth in Notes to our Consolidated Financial Statements for the year ended December 31, 2016, included in our Annual Report on Form 10-K for such fiscal year. The actual value, if any, that an executive may realize on each option will depend on the excess of the stock price over the exercise price on the date the option is exercised and the shares underlying such option are sold. There is no assurance that the actual value realized by an executive will be at or near the value estimated by the Black-Scholes model.
|
|
(5)
|
Reflects incentive cash compensation earned by our executive officers under our executive incentive plan for performance in the year indicated, although such non-equity incentive plan compensation is generally paid in the year following performance.
|
|
(6)
|
This amount represents (i) $12,000 for matching contributions under our 401(k) plan and (ii) $4,191 for life insurance premiums.
|
|
(7)
|
For 2015, Dr. Blobel received a bonus amount of $61,200 for his additional responsibilities assumed and his overall exceptional performance during the fiscal year ended December 31, 2015, as determined by
|
35
|
|
the Compensation Committee. Although the bonus was related to performance for the year ended December 31, 2015, the amount was paid to Dr. Blobel in 2016.
|
|
(8)
|
Includes a performance restricted stock unit award having a grant-date fair value of $336,375 based upon the probable outcome of the performance conditions. The value of the award at its grant date is $1,345,500 assuming that the highest level of performance conditions will be achieved.
|
|
(9)
|
For 2016, Mr. Cheung, and Dr. Kings bonus amounts reflect a retention bonus paid in 2016 as determined by the Compensation Committee.
|
|
(10)
|
For Mr. Cheung and Mr. Zhao includes performance restricted stock unit awards having grant-date fair values of $168,188 for each based upon the probable outcome of the performance conditions. The value of each award at its grant date is $672,750 assuming that the highest level of performance conditions will be achieved.
|
|
(11)
|
The Company generally sets and pays cash-based compensation (including for all of our Named Executive Officers) in the local currency of the country of service. Accordingly, Ms. Xie and Mr. Zhao are paid in RMB and the U.S. dollar amounts disclosed for fiscal 2016, 2015 and 2014 have been converted from RMB. Fiscal salary and other compensation amounts were converted using an average exchange rate and non-equity incentive compensation was converted using the exchange rate as of December 31 for the fiscal year of performance. Restricted stock unit and option awards are valued in U.S. dollars; therefore, no foreign currency conversion occurs. Other bonus amounts were converted to RMB at exchange rates applicable at the time of payment.
|
|
(12)
|
For 2016, Ms. Xies salary amount of $299,991 includes $195,465 of salary and $104,526 for rent and living expenses.
|
|
(13)
|
For 2016, Ms. Xies bonus amount of $81,594 reflects a retention bonus as determined by the Compensation Committee. Although the amount related to service provided in 2016, the amount is expected to be paid to Ms. Xie in March 2017.
|
|
(14)
|
For 2015, Ms. Xies salary amount of $296,973 includes $193,240 of salary and $103,733 for rent and living expenses.
|
|
(15)
|
For 2014, Ms. Xies salary amount of $276,837 includes $179,807 of salary and $97,030 for rent and living expenses.
|
|
(16)
|
For 2014, Ms. Xies bonus amount of $24,297 reflects a discretionary bonus payment as approved by the Board of Directors.
|
|
(17)
|
For 2016, Mr. Zhaos salary amount of $466,695 includes $367,560 of salary and $99,135 for rent and living expenses.
|
|
(18)
|
For 2016, Mr. Zhaos bonus amount of $235,742 reflects a retention bonus as determined by the Compensation Committee. Although the amount related to service provided in 2016, the amount is expected to be paid to Mr. Zhao in March 2017.
|
|
(19)
|
For 2015, Mr. Zhaos salary amount of $457,379 includes $353,166 of salary and $104,213 for rent and living expenses.
|
|
(20)
|
For 2014, Mr. Zhaos salary amount of $423,810 includes $318,075 of salary and $105,735 for rent and living expenses.
|
36
Grants of Plan-Based Awards
The following table sets forth certain information with respect to stock and option awards and other plan-based awards, including non-equity incentive awards, granted during the fiscal year ended December 31, 2016 to our Named Executive Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(1)
|
|
All Other
Stock
Awards;
Number
of Stock
or Units
(#)
|
|
All other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
|
|
Exercise
or Base
Price of
Options
Awards
($)
|
|
Grant
Date Fair
Value of
Stock and
Option
Awards
($)
(2)
|
Name
|
|
Grant
Date
|
|
Approval
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
Friedhelm Blobel, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Plan
|
|
|
|
|
|
|
|
|
|
|
234,000
|
|
|
|
390,000
|
|
|
|
585,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award
(3)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
182,400
|
|
Stock Award
(4)
|
|
|
8/12/2016
|
|
|
|
8/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
416,400
|
|
Option Award
(5)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
140,000
|
|
|
|
9.12
|
|
|
|
566,580
|
|
Wilson W. Cheung
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Plan
|
|
|
|
|
|
|
|
|
|
|
93,881
|
|
|
|
156,468
|
|
|
|
234,702
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award
(3)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
109,440
|
|
Stock Award
(4)
|
|
|
8/12/2016
|
|
|
|
8/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
312,300
|
|
Option Award
(5)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,000
|
|
|
|
9.12
|
|
|
|
339,948
|
|
Robert King, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
72,865
|
|
|
|
121,442
|
|
|
|
182,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award
(3)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
|
|
|
|
|
|
|
|
63,840
|
|
Option Award
(5)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,000
|
|
|
|
9.12
|
|
|
|
198,303
|
|
Lan Xie
|
|
|
|
|
|
|
|
|
|
|
62,998
|
|
|
|
104,997
|
|
|
|
157,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award
(3)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
36,480
|
|
Stock Award
(4)
|
|
|
8/12/2016
|
|
|
|
8/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
104,100
|
|
Option Award
(5)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,000
|
|
|
|
9.12
|
|
|
|
113,316
|
|
Hong Zhao
|
|
|
|
|
|
|
|
|
|
|
112,007
|
|
|
|
186,678
|
|
|
|
280,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Award
(3)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
109,440
|
|
Stock Award
(4)
|
|
|
8/12/2016
|
|
|
|
8/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
312,300
|
|
Option Award
(5)
|
|
|
3/15/2016
|
|
|
|
2/24/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,000
|
|
|
|
9.12
|
|
|
|
339,948
|
|
|
(1)
|
These columns show the threshold, target and maximum potential payouts under our executive incentive plan for each of the Named Executive Officers. The threshold payouts, target payouts and maximum payouts listed represent the threshold, target and maximum amounts payable based upon achievement of objectives established by the Compensation Committee at the beginning of each fiscal year and described above in the section entitled
Compensation Discussion and Analysis
Elements of Compensation and How Each Element is Chosen, Annual Incentive Compensation.
Actual payouts under the executive incentive plan for the fiscal years ended December 31, 2014, 2015 and 2016 are set forth in the Summary Compensation Table under the heading
Non-Equity Incentive Plan Compensation.
|
|
(2)
|
Represents the aggregate grant-date fair value of the stock and options awarded to the Named Executive Officer for the applicable year, calculated in accordance with FASB ASC Topic 718, excluding the impact of estimated forfeitures. Assumptions used in the calculation of such grant-date fair values are set forth in Notes to our Consolidated Financial Statements for the year ended December 31, 2016, included in our Annual Report on Form 10-K for such fiscal year. The actual value, if any, that an executive may realize on each option award will depend on the excess of the stock price over the exercise price on the date the option is exercised and the shares underlying such option are sold. There is no assurance that the actual value realized by an executive will be at or near the value estimated by the Black-Scholes model.
|
37
|
(3)
|
Represents a restricted stock unit award that will vest 25% on March 15, 2017, 25% on March 15, 2018, 25% on March 15, 2019, and 25% on March 15, 2020, contingent upon the executives continued employment.
|
|
(4)
|
Represents a restricted stock unit award that will vest 100% on August 15, 2017, contingent upon the executives continued employment.
|
|
(5)
|
Amounts shown represent options issued under our 2015 Equity Incentive Plan. Contingent upon the executives continued employment, one-quarter of the options vest twelve months following the grant date and the balance vest monthly over the following three years. The exercise price for the options equals the closing price of our common stock on the date of grant. Each option has a maximum term of ten years.
|
The equity awards granted to all of our Named Executive Officers will vest on an accelerated basis upon the executives termination of employment under certain prescribed circumstances. Additional information regarding the vesting acceleration provisions applicable to equity awards granted to our Named Executive Officers is included in this proxy statement under the heading
Potential Payments upon Termination or Change in Control
.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect to the value of all unexercised options and unvested stock awards previously awarded to our Named Executive Officers and outstanding as of December 31, 2016.
38
Outstanding Equity Awards at December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
Option Awards
|
|
Stock Awards
|
|
Number of Securities
Underlying Unexercised Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
(2)
|
|
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($)
(3)
|
|
Equity Incentive
Plan Awards
|
|
Exercisable
|
|
Unexercisable
(1)
|
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock that
Have Not
Vested
($)
(3)
|
Friedhelm Blobel, Ph.D.
|
|
|
3/18/2008
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
|
1.81
|
|
|
|
3/18/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/6/2009
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
1.08
|
|
|
|
3/6/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/5/2010
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
3.55
|
|
|
|
3/5/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/12/2011
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
5.13
|
|
|
|
5/12/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2012
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
6.22
|
|
|
|
3/15/2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4/2013
|
|
|
|
183,333
|
|
|
|
16,667
|
|
|
|
|
|
|
|
4.53
|
|
|
|
4/4/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/14/2014
|
|
|
|
137,500
|
|
|
|
62,500
|
|
|
|
|
|
|
|
4.52
|
|
|
|
3/14/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
61,250
|
|
|
|
78,750
|
|
|
|
|
|
|
|
8.83
|
|
|
|
3/16/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
140,000
|
|
|
|
|
|
|
|
9.12
|
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
162,000
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(4)
|
|
|
1,080,000
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(5)
|
|
|
216,000
|
|
|
|
|
|
|
|
|
|
|
|
|
8/12/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
(6)
|
|
|
432,000
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
(7)
|
|
|
405,000
|
|
Wilson W. Cheung
|
|
|
8/9/2013
|
|
|
|
2,083
|
|
|
|
7,292
|
|
|
|
|
|
|
|
5.97
|
|
|
|
8/9/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/14/2014
|
|
|
|
2,917
|
|
|
|
21,875
|
|
|
|
|
|
|
|
4.52
|
|
|
|
3/14/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
36,750
|
|
|
|
47,250
|
|
|
|
|
|
|
|
8.83
|
|
|
|
3/16/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
84,000
|
|
|
|
|
|
|
|
9.12
|
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/9/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(8)
|
|
|
135,000
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
97,200
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(4)
|
|
|
540,000
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(5)
|
|
|
129,600
|
|
|
|
|
|
|
|
|
|
|
|
|
8/12/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(6)
|
|
|
324,000
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,750
|
(7)
|
|
|
202,500
|
|
Robert King, Ph.D.
|
|
|
6/1/2011
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
5.76
|
|
|
|
6/1/2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/4/2013
|
|
|
|
45,833
|
|
|
|
4,167
|
|
|
|
|
|
|
|
4.53
|
|
|
|
4/4/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/14/2014
|
|
|
|
8,333
|
|
|
|
25,000
|
|
|
|
|
|
|
|
4.52
|
|
|
|
3/14/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
24,500
|
|
|
|
31,500
|
|
|
|
|
|
|
|
8.83
|
|
|
|
3/16/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
49,000
|
|
|
|
|
|
|
|
9.12
|
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
64,800
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
(6)
|
|
|
75,600
|
|
|
|
|
|
|
|
|
|
Lan Xie
|
|
|
4/4/2013
|
|
|
|
1,250
|
|
|
|
1,250
|
|
|
|
|
|
|
|
4.53
|
|
|
|
4/4/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/14/2014
|
|
|
|
4,167
|
|
|
|
12,500
|
|
|
|
|
|
|
|
4.52
|
|
|
|
3/14/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
2,917
|
|
|
|
15,750
|
|
|
|
|
|
|
|
8.83
|
|
|
|
3/16/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
28,000
|
|
|
|
|
|
|
|
9.12
|
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,000
|
|
|
|
32,400
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
(5)
|
|
|
43,200
|
|
|
|
|
|
|
|
|
|
|
|
|
8/12/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
(6)
|
|
|
108,000
|
|
|
|
|
|
|
|
|
|
Hong Zhao
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(9)
|
|
|
4.62
|
|
|
|
4/1/2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/14/2014
|
|
|
|
58,750
|
|
|
|
31,250
|
|
|
|
|
|
|
|
4.52
|
|
|
|
3/14/2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
36,750
|
|
|
|
47,250
|
|
|
|
|
|
|
|
8.83
|
|
|
|
3/16/2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
84,000
|
|
|
|
|
|
|
|
9.12
|
|
|
|
3/15/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4/1/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(10)
|
|
|
135,000
|
|
|
|
|
|
|
|
|
|
|
|
|
3/16/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
97,200
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(4)
|
|
|
540,000
|
|
|
|
|
|
|
|
|
|
|
|
|
3/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
(5)
|
|
|
129,600
|
|
|
|
|
|
|
|
|
|
|
|
|
8/12/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(6)
|
|
|
324,000
|
|
|
|
|
|
|
|
|
|
|
|
|
4/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,750
|
(7)
|
|
|
202,500
|
|
39
|
(1)
|
Except as otherwise noted, each option vests at the rate of 1/4 of the underlying shares on the first anniversary of the date of grant and 1/48 of the shares each month thereafter, contingent upon the executives continued employment. Vesting may accelerate under certain circumstances for certain options, as described in
Potential Payments upon Termination or Change-in-Control
elsewhere in this
Executive Compensation and Other Matters
section of this proxy statement.
|
|
(2)
|
Except as otherwise noted, each stock award vests in four equal annual installments on the anniversaries of the grant date or on such later date as the Companys trading window opens if it is not open on any vesting date, contingent upon the executives continued employment.
|
|
(3)
|
Assumes a price per share of our common stock equal to $10.80, the closing market price on December 31, 2016.
|
|
(4)
|
Dr. Blobel, Mr. Cheung and Mr. Zhao were granted restricted stock units that will vest at the rate of 33.33% on January 4, 2016, 33.33% on January 3, 2017, and 33.34% on January 2, 2018, or on such later date thereafter as the Companys trading window opens if it is not open any vesting date, contingent upon the executives continued employment
|
|
(5)
|
Dr. Blobel, Mr. Cheung, Ms. Xie and Mr. Zhao were granted restricted stock units that will vest at the rate of 25% on March 15, 2017, 25% on March 15, 2018, 25% March 15, 2019, and 25% on March 15, 2020, contingent upon the executives continued employment.
|
|
(6)
|
Dr. Blobel, Mr. Cheung, Ms. Xie and Mr. Zhao were granted restricted stock units that will vest at the rate of 100% on August 15, 2017, contingent upon the executives continued employment.
|
|
(7)
|
Dr. Blobel, Mr. Cheung and Mr. Zhao were granted restricted stock unit awards with performance-based vesting as described in
Elements of Our Compensation Program and How Each Element is Chosen
Long-Term Incentives for the CEO
elsewhere in this
Executive Compensation and Other Matters
section of this proxy statement.
|
|
(8)
|
Mr. Cheungs restricted stock unit award vests 12,500 shares on July 16, 2017, or on such later date thereafter as the Companys trading window opens if it is not open such vesting date, contingent upon the executives continued employment.
|
|
(9)
|
Mr. Zhao received an option award subject to performance conditions that would have vested if 2016 China revenue met or exceeded specified levels.
|
|
(10)
|
Mr. Zhaos restricted stock unit award vests 12,500 shares on April 1, 2017, or on such later date thereafter as the Companys trading window opens if it is not open such vesting date, contingent upon the executives continued employment.
|
Option Exercises and Stock Vested During Last Fiscal Year
The following is a summary of options exercised and restricted stock units vested during the fiscal year ended December 31, 2016 for each Named Executive Officer.
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Shares
Acquired on
Exercise
(#)
|
|
Value
Realized on
Exercise
($)
|
|
Number of
Shares
Acquired on
Vesting
(#)
|
|
Value
Realized on
Vesting
($)
|
Friedhelm Blobel, Ph.D.
|
|
|
1,020,000
|
(1)
|
|
|
9,570,991
|
|
|
|
58,500
|
(2)
|
|
|
608,985
|
|
Wilson W. Cheung
|
|
|
135,833
|
|
|
|
612,959
|
|
|
|
40,500
|
(3)
|
|
|
421,605
|
|
Robert King, Ph.D.
|
|
|
46,667
|
|
|
|
274,990
|
|
|
|
2,000
|
|
|
|
20,820
|
|
Lan Xie
|
|
|
31,832
|
|
|
|
137,513
|
|
|
|
1,000
|
|
|
|
10,410
|
|
Hong Zhao
|
|
|
|
|
|
|
|
|
|
|
40,500
|
|
|
|
421,605
|
|
No other options were exercised by our Named Executive Officers and no other shares of restricted stock units that were granted to our Named Executive Officers vested during 2016 other than those noted in the table above.
|
(1)
|
Dr. Blobel acquired 659,800 shares of which 405,770 shares were withheld to cover withholding tax obligations and the exercise price in connection with the exercise of the vested options.
|
40
|
(2)
|
Dr. Blobel acquired 58,500 shares of which 30,527 shares were withheld to cover tax obligations related to the vested restricted stock units.
|
|
(3)
|
Mr. Cheung acquired 40,500 shares of which 15,222 shares were withheld to cover tax obligations related to the vested restricted stock units.
|
Pension Benefits and Nonqualified Deferred Compensation Plans
We do not have any plans with any of the Named Executive Officers that provide for payments or other benefits at, following, or in connection with retirement. We do not have any defined contribution or other plan with any of the Named Executive Officers that provides for the deferral of compensation on a basis that is not tax qualified.
Potential Payments upon Termination or Change-in-Control
In June and July 2015, we entered into employee retention agreements with our Named Executive Officers that provide specified payments and benefits in the event of a termination of employment under specified circumstances or a change in control of SciClone. These employee retention agreements supersede prior employment or other agreements with the Named Executive Officers that provide payments and benefits under these circumstances, other than any equity award plan or agreement providing more favorable treatment upon a change in control.
Pursuant to the terms of Dr. Blobels employee retention agreement with us, in the event Dr. Blobel is terminated without Cause (as described in
Certain Definitions Used in Employee Retention Agreements
below), he will become entitled to the following severance payments and benefits provided that he releases all claims he may have against us and resigns from all positions with us and from the Board: (i) continued payment of his base salary for 12 months, (ii) a lump sum payment equal to a pro rata portion through his termination date of the average of his annual performance bonuses earned for the two
most recent fiscal years for which bonuses have been earned prior to his termination date, (iii) continued group health insurance coverage (or reimbursement of premiums he pays for COBRA continuation coverage) until the earlier of 12 months after his termination date or his commencement of new employment, and (iv) treatment of his equity awards in accordance with the applicable plan or award agreement.
If, within one year, following a Change in Control (as described in
Certain Definitions Used in Employee Retention Agreements
below), Dr. Blobel is terminated without Cause or resigns from his employment following Constructive Termination (as described in
Certain Definitions Used in Employee Retention Agreements
below), he will become entitled to the following severance payments and benefits provided that he releases all claims he may have against us and resigns from all positions with us and from the Board: (i) a lump sum payment equal to 150% of his annual base salary, (ii) a lump sum
payment equal to 100% of the average of his annual performance bonuses earned for the two most recent fiscal years for which bonuses have been earned prior to his termination date, (iii) vesting in full of all of his options and other equity awards (but excluding any such awards that are subject to performance-based vesting unless the terms of the applicable equity award agreement provides treatment that is more favorable) and all of his options will remain exercisable until the earlier of 12 months following his termination date or expiration of the options term, and (iv) continued group health insurance coverage (or reimbursement of premiums he pays for COBRA continuation coverage) until the earlier of 12 months after his termination date or his commencement of new employment.
Our employee retention agreement with Dr. Blobel provides that if his employment terminates under any of the foregoing circumstances he will be retained as an independent contractor to provide consulting services at our request for up to five hours per week for three months for a fee of $400 per hour, up to a maximum of $2,500 per day, plus reasonable out-of-pocket expenses, for actual services rendered.
If Dr. Blobel voluntarily resigns other than following Constructive Termination or is terminated for Cause, whether before or following a Change in Control, he will not be entitled to any severance payments or accelerated vesting of his equity awards.
In June and July 2015, we also entered into employee retention agreements with our other Named Executive Officers, Mr. Cheung, Mr. King, Ms. Xie and Mr. Zhao. These agreements provide that if the officers employment is terminated without Cause, the officer will become entitled to the following severance
41
payments and benefits provided that he releases all claims he may have against us and resigns from all positions with us: (i) continued payment of the officers base salary for 12 months, (ii) a lump sum payment equal to 50% of the average (50% of the total in the case of Dr. King) of the officers annual performance bonuses earned for the two most recent fiscal years for which bonuses have been earned prior to his termination date (or, in the case of Mr. Zhao, 50% of target bonus if no such annual bonuses have been paid), (iii) continued group health insurance coverage (or, in the cases of Messrs. Cheung and King,
reimbursement of premiums the officer pays for COBRA continuation coverage) until the earlier of 12 months after his termination date or his commencement of new employment, and (iv) treatment of the officers equity awards in accordance with the applicable plan or award agreement.
In addition, the employee retention agreements with Mr. Cheung, Mr. King, Ms. Xie and Mr. Zhao, provide that if, within one year following a Change in Control, the officer is terminated without Cause or resigns from his employment following Constructive Termination, he will become entitled to the following severance payments and benefits provided that he releases all claims he may have against us and resigns from all positions with us: (i) a lump sum payment equal to 100% (200% in the case of Mr. Zhao) of his annual base salary, (ii) a lump sum payment equal to 50% of the average (50% of the total in the case of Dr. King) of
his annual performance bonuses earned for the two most recent fiscal years for which bonuses have been earned prior to his termination date (or, in the case of Mr. Zhao, 50% of target bonus if no such annual bonuses have been paid), (iii) vesting in full of all of his options and other equity awards (but excluding any such awards that are subject to performance-based vesting unless the terms of the applicable equity award agreement provides treatment that is more favorable) and all of his options will remain exercisable until the earlier of 12 months following his termination date or expiration of the options term, and (iv) continued group health insurance coverage (or, in the cases of Messrs. Cheung and King, reimbursement of premiums the officer pays for COBRA continuation coverage) until the earlier of 12 months after his termination date or his commencement of new employment.
Our employee retention agreements with Mr. Cheung, Mr. King, Ms. Xie and Mr. Zhao provide that if the officers employment terminates under any of the foregoing circumstances he will be retained as an independent contractor to provide consulting services at our request for up to eight hours per week for six months (12 months in the case of Dr. King) for a fee of $1,000 per eight hour day, plus reasonable out-of-pocket expenses, for actual services rendered.
The employee retention agreements with all of our Named Executive Officers provide that if, in connection with a Change in Control, the successor company or its parent fails to assume or continue any then-outstanding equity award held by the officer or substitute a substantially equivalent equity award, then the vesting of the outstanding equity award will be accelerated in full, subject to consummation of the Change in Control. However, the employee retention agreements provide that they will not supersede any treatment more favorable to the officer that is provided under any other applicable plan or equity award agreement.
Certain Definitions Used in Employee Retention Agreements
For the Employee Retention Agreements for Dr. Blobel, Mr. Cheung, Dr. King, Ms. Xie, and Mr. Zhao:
(1)
Change in Control
means any of the following:
|
|
a merger or other transaction in which we or substantially all of our assets are sold or merged and as a result of such transaction, the holders of our common stock prior to such transaction do not own or control a majority of the outstanding shares of the successor corporation;
|
|
|
the election of nominees constituting a majority of the Board which nominees were not approved by a majority of the Board prior to such election; or
|
|
|
the acquisition by a third party of twenty percent (20%) or more of our outstanding shares which acquisition was without the approval of a majority of the Board in office prior to such acquisition.
|
(2)
Cause
means any of the following by the officer:
|
|
theft, dishonesty, misconduct or falsification of any records;
|
42
|
|
misappropriation or improper disclosure of confidential or proprietary information;
|
|
|
any intentional action which has a material detrimental effect on the reputation or business of the Company, its successor any subsidiary of the Company or its successor;
|
|
|
failure or inability to perform any reasonable assigned duties after written notice and a reasonable opportunity to cure, such failure or inability;
|
|
|
any material breach of any employment agreement, which breach is not cured pursuant to the terms of such agreement; or
|
|
|
the conviction of any criminal act which impairs the officers ability to perform the officers duties.
|
(3)
Constructive Termination
means any of the following:
|
|
without the officers express written consent, the assignment of any title or duties, or any limitation of responsibilities, that are substantially inconsistent with the officers title(s), duties, or responsibilities immediately prior to the date of the Change in Control;
|
|
|
without the officers express written consent, the relocation of the principal place of employment, following the Change in Control, to a location that is more than fifty (50) miles from the principal place of employment immediately prior to the date of the Change in Control, or the imposition of travel requirements substantially more demanding than such travel requirements existing immediately prior to the date of the Change in Control;
|
|
|
any failure, following the Change in Control, to pay, or any material reduction of, (1) the base salary in effect immediately prior to the date of the Change in Control, or (2) bonus compensation, if any, in effect immediately prior to the date of the Change in Control (subject to applicable performance requirements with respect to the actual amount of bonus compensation earned), unless base salary and/or bonus reductions comparable in amount and duration are concurrently made for a majority of our other employees who have substantially similar titles and responsibilities; and
|
|
|
any failure, following the Change in Control, to (1) continue to provide the opportunity to participate, on terms no less favorable than provided to persons holding comparable positions, in any benefit or compensation plans and programs, including, but not limited to, our life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the officer was participating immediately prior to the date of the Change in Control, or in substantially similar plans or programs, or (2) provide the officer with all other fringe benefits (or substantially similar benefits), including, but not limited to, relocation benefits which they were receiving immediately prior to the date of the Change in Control on the same basis as provided to persons holding comparable positions.
|
The following table describes our estimated potential payments and the estimated value of any accelerated vesting of stock options or restricted stock units to our Named Executive Officers upon a change in control of SciClone and/or termination of employment, assuming such change in control or termination of employment occurred on December 31, 2016. The amounts contained in the table are based on each Named Executive Officers period of employment and compensation as of December 31, 2016 and, where applicable, the closing price of our common stock on December 31, 2016. The table presents estimates of incremental amounts
that would become payable had a triggering event occurred on December 31, 2016 and does not include amounts that were earned and payable as of that date regardless of the occurrence of a triggering event. The actual amounts to be paid and the value of any accelerated vesting of stock options or restricted stock units can be determined only at the time of a triggering event, and are dependent upon the facts and circumstances then applicable.
43
Potential Payments upon Termination or Change in Control
|
|
|
|
|
|
|
Name
|
|
Involuntary
Termination
Other Than
For Cause
(1)
|
|
Termination
Following
Change in
Control
(2)
|
|
Non-Assumption
of Equity
Awards Upon
Change in
Control
(3)
|
Friedhelm Blobel, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and bonus
(4)
|
|
$
|
1,137,500
|
|
|
$
|
1,462,500
|
|
|
$
|
|
|
Option and stock award vesting acceleration
(5)
|
|
|
1,485,000
|
|
|
|
4,397,340
|
|
|
|
4,397,340
|
|
Post-termination consulting fees
(6)
|
|
|
26,000
|
|
|
|
26,000
|
|
|
|
|
|
Health and welfare benefits
(7)
|
|
|
13,209
|
|
|
|
13,209
|
|
|
|
|
|
Total
|
|
$
|
2,661,709
|
|
|
$
|
5,899,049
|
|
|
$
|
4,397,340
|
|
Wilson W. Cheung
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and bonus
(4)
|
|
$
|
490,684
|
|
|
$
|
490,684
|
|
|
$
|
|
|
Option and stock award vesting acceleration
(5)
|
|
|
742,500
|
|
|
|
2,442,598
|
|
|
|
2,442,599
|
|
Post-termination consulting fees
(6)
|
|
|
26,000
|
|
|
|
26,000
|
|
|
|
|
|
Health and welfare benefits
(7)
|
|
|
17,158
|
|
|
|
17,158
|
|
|
|
|
|
Total
|
|
$
|
1,276,342
|
|
|
$
|
2,976,440
|
|
|
$
|
2,442,599
|
|
Robert King, Ph.D.
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and bonus
(4)
|
|
$
|
416,456
|
|
|
$
|
416,456
|
|
|
$
|
|
|
Option and stock award vesting acceleration
(5)
|
|
|
|
|
|
|
467,902
|
|
|
|
467,902
|
|
Post-termination consulting fees
(6)
|
|
|
52,000
|
|
|
|
52,000
|
|
|
|
|
|
Health and welfare benefits
(7)
|
|
|
29,741
|
|
|
|
29,741
|
|
|
|
|
|
Total
|
|
$
|
498,197
|
|
|
$
|
966,099
|
|
|
$
|
467,902
|
|
Lan Xie
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and bonus
(4)
|
|
$
|
352,095
|
|
|
$
|
352,095
|
|
|
$
|
|
|
Option and stock award vesting acceleration
(5)
|
|
|
|
|
|
|
348,005
|
|
|
|
348,005
|
|
Post-termination consulting fees
(6)
|
|
|
26,000
|
|
|
|
26,000
|
|
|
|
|
|
Health and welfare benefits
(7)
|
|
|
27,600
|
|
|
|
27,600
|
|
|
|
|
|
Total
|
|
$
|
405,695
|
|
|
$
|
753,700
|
|
|
$
|
348,005
|
|
Hong Zhao
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary and bonus
(4)
|
|
$
|
582,455
|
|
|
$
|
1,049,150
|
|
|
$
|
|
|
Option and stock award vesting acceleration
(5)
|
|
|
742,500
|
|
|
|
2,466,253
|
|
|
|
2,775,253
|
|
Post-termination consulting fees
(6)
|
|
|
26,000
|
|
|
|
26,000
|
|
|
|
|
|
Health and welfare benefits
(7)
|
|
|
24,620
|
|
|
|
24,620
|
|
|
|
|
|
Total
|
|
$
|
1,375,575
|
|
|
$
|
3,566,022
|
|
|
$
|
2,775,253
|
|
|
(1)
|
Assumes termination without cause as of December 31, 2016 (the last business day of the last fiscal year), other than within one year after a change in control. As a condition to receiving any such benefits, the applicable Named Executive Officer is required to execute a general release of known and unknown claims in a form satisfactory to us and resign from all of the Named Executive Officers positions with us, including from the Board and any committees thereof on which the Named Executive Officer serves.
|
|
(2)
|
Assumes termination without cause or constructive termination as of December 31, 2016, within one year after a change in control. As a condition to receiving any such benefits, the applicable Named Executive Officer is required to execute a general release of known and unknown claims and resign from all of the Named Executive Officers positions with us, including from the Board and any committees thereof on which the Named Executive Officer serves.
|
44
|
(3)
|
Assumes non-termination as of December 31, 2016 (the last business day of the last fiscal year), after a change in control in which the surviving, continuing, successor, or purchasing corporation does not assume or continue the Companys rights and obligations under a then-outstanding equity award or substitute for such equity award a substantially equivalent exercisability and settlement (as applicable) of such equity award.
|
|
(4)
|
The amounts listed in the column headed Involuntary Termination Other Than For Cause represent severance benefits under the Named Executive Officers employee retention agreement determined on the basis of salary and bonus, but do not include the payment of accrued salary and vacation that would be due upon termination of employment, and are not adjusted for any applicable tax withholding. The salary portion of the severance benefit is equal to 12 months of continued payment of the Named Executive Officers base salary in effect on December 31, 2016. The bonus portion of the severance benefit is equal to 50% (100% pro-rated to the separation date in the case of Dr. Blobel) of the average of the Named Executive Officers annual performance bonuses earned for the two most recent fiscal years (total of such bonuses for the two most recent fiscal years in the case of Dr. King) for which bonuses have been earned prior to
the termination date.
|
The amounts listed in the column headed Termination Following Change in Control represent severance benefits under the Named Executive Officers employee retention agreement determined on the basis of salary and bonus, but do not include the payment of accrued salary and vacation that would be due upon termination of employment, and are not adjusted for any applicable tax withholding. The salary portion of the severance benefit is equal to 100% (150% and 200% in the cases of Dr. Blobel and Mr. Zhao, respectively) of the Named Executive Officers annual base salary in effect on December 31, 2016. The bonus
portion of the severance benefit is equal to 50% (100% in the case of Dr. Blobel) of the average of the Named Executive Officers annual performance bonuses earned for the two most recent fiscal years (total of such bonuses for the two most recent fiscal years in the case of Dr. King) for which bonuses have been earned prior to the termination date.
|
(5)
|
The amounts listed in the column headed Involuntary Termination Other Than For Cause represent the value, based on the closing market price of $10.80 of our common shares on December 31, 2016, of the accelerated vesting of certain outstanding restricted stock unit awards held by the Named Executive Officer as of December 31, 2016 in accordance with the terms of such awards.
|
The amounts listed in the column headed Termination Following Change in Control represent the value, based on the closing market price of $10.80 of our common shares on December 31, 2016, of the accelerated vesting of all outstanding options and restricted stock unit awards held by the Named Executive Officer as of December 31, 2016 in accordance with the terms of the Named Executive Officers employee retention agreement or the award agreement, as applicable. The amount listed for Mr. Zhao excludes one outstanding performance-vesting option for 50,000 shares whose vesting would not accelerate pursuant to its
terms. The values of the accelerated vesting of options have been reduced in each instance by the options exercise price.
The amounts listed in the column headed Non-Assumption of Equity Awards Upon Change in Control represent the value, based on the closing market price of $10.80 of our common shares on December 31, 2016, of the accelerated vesting of all outstanding options and restricted stock unit awards held by the Named Executive Officer as of December 31, 2016 in accordance with the terms of the Named Executive Officers employee retention agreement. The values of the accelerated vesting of options have been reduced in each instance by the options exercise price.
|
(6)
|
The amounts listed represent the maximum fees that could become payable under the Named Executive Officers employee retention agreement for the performance of consulting services following termination without cause or involuntary termination following a change in control. Dr. Blobel may be retained to provide consulting services for up to five hours per week for three months for a fee of $400 per hour, up to a maximum of $2,500 per day, plus reasonable out-of-pocket expenses. Mr. Cheung, Ms. Xie and Mr. Zhao may be retained to provide consulting services for up to eight hours per week for six months for a fee of $1,000 per day, plus reasonable out-of-pocket expenses. Dr. King may be retained to provide consulting services for up to eight hours per week for twelve months for a fee of $1,000 per day, plus reasonable out-of-pocket expenses.
|
45
|
(7)
|
The amounts listed represent the premium cost to continue the Named Executive Officers coverage under our existing health insurance plans, if permitted, or to reimburse the Named Executive Officer for health insurance premiums paid by the officer to obtain continued health insurance coverage (under COBRA in the case of Messrs. Blobel, Cheung and King, if eligible). The amount assumes our payment of all premiums necessary to cover the Named Executive Officer from January 1, 2017 to December 31, 2017 in effect as of January 1, 2017.
|
Transactions with Related Persons
Since January 1, 2016, there has not been, nor is there currently proposed, any transaction to which SciClone was or is to be a participant in which the amount involved exceeds $120,000, and in which any of our directors, executive officers or holder of more than 5% of our capital stock, or and any members of such persons immediate family had or will have a direct or indirect material interest.
Procedures for Approval of Related Person Transactions and Related Policies
Under the charter of the Audit Committee of our Board, the Audit Committee has the responsibility and duty to review and approve all transactions between the Company and related parties, other than those previously reviewed and approved by (i) an independent committee of the Board or (ii) an independent majority of the Board, after reviewing each such transaction for potential conflicts of interest and other improprieties.
Pursuant to our Corporate Code of Business Conduct and Ethics, and our related corporate policies, our executive officers and directors, including their immediate family members, are required to report any actual or potential conflict of interests to a supervisor, who in turn is required to refer all such reports to the Chief Executive Officer, the Chief Financial Officer or the Chair of the Audit Committee. Our Employee Handbook provides a non-exhaustive list of examples of actual or potential conflicts with respect to the persons subject to the Code of Conduct, including without limitation:
Receipt of improper personal benefits as a result of the persons (or family members) position in SciClone;
|
|
Having a financial or personal interest in a competitor, vendor or customer (where the Audit Committee would need to review whether such financial or personal interest is significant enough to cause divided loyalty with us or the appearance of divided loyalty (the significance of a financial or personal interest depends on many factors, such as size of investment in relation to the persons (or family members) income, net worth and/or financial needs, the persons (or family members) potential to influence decisions that could impact interests, and the nature of the business or level of competition between us and the competitor, vendor or customer);
|
|
|
Benefiting personally from any transaction involving us, including from any kickbacks, gifts or otherwise;
|
|
|
Employing a relative of an employee of us, especially if the relative works in a direct supervisory relationship with the employee; or
|
|
|
Benefiting personally from any transaction involving us, including from any kickbacks, gifts or otherwise.
|
Employing a relative of an employee of us, especially if the relative works in a direct supervisory relationship with the employee Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who beneficially own more than 10% of our Common Stock to file initial reports of ownership and reports of changes in ownership with the SEC. These persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file.
Based solely on our review of the forms furnished to it and written representations from certain reporting persons, we believe that all filing requirements applicable to its executive officers, directors and persons who beneficially own more than 10% of our common stock were complied with during 2016.
46
EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2016, we maintained four compensation plans that provide for the issuance of common stock to officers and other employees, directors and consultants. These consist of the SciClone Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan, the 2004 Outside Directors Stock Option Plan, the 2005 Equity Incentive Plan, and the 2015 Equity Incentive Plan. All of these plans have been approved by our stockholders. We do not currently maintain any compensation plans that have not been approved by the stockholders. The following table sets forth information regarding outstanding options and shares reserved for future
issuance under the foregoing plans as of December 31, 2016.
|
|
|
|
|
|
|
Plan Category
|
|
Number of shares
to be issued upon
exercise of
outstanding options,
vest of restricted
stock units,
warrants and rights
(a)
|
|
Weighted-average
exercise
price of
outstanding
options, restricted
stock units,
warrants and
rights ($)
(b)
|
|
Number of shares
remaining available
for future issuance
under equity
compensation plans
(excluding shares
reflected in
column (a))
(c)
|
Equity compensation plans approved by stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
SciClone Pharmacetuicals, Inc.
|
|
|
|
|
2016 Employee Stock Purchase Plan
(1)
|
|
|
|
|
|
|
|
|
|
|
2,398,138
|
(1)
|
2004 Outside Directors Stock Option Plan
|
|
|
537,500
|
|
|
|
4.42
|
|
|
|
|
|
2005 Equity Incentive Plan
|
|
|
3,697,952
|
|
|
|
5.87
|
|
|
|
|
|
2015 Equity Incentive Plan
|
|
|
1,925,500
|
|
|
|
9.64
|
|
|
|
4,798,424
|
|
Total
|
|
|
6,160,952
|
|
|
|
6.87
|
|
|
|
7,196,562
|
|
|
(1)
|
The SciClone Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan is a voluntary plan open to employees. This plan allows employees to elect payroll deductions which are used to purchase common stock directly from us.
|
47
COMPENSATION RISK ASSESSMENT
During 2016, we conducted a risk assessment of our compensation policies and practices. Included in the analysis were such factors as the behaviors being induced by our fixed and variable pay components, the balance of annual-term and long-term performance goals in our incentive compensation system and the alignment of our compensation structure with publicly stated corporate objectives and for strong alignment with the interests of stockholders. Our compensation risk is also mitigated by established limits on permissible incentive award levels, the oversight of our Compensation Committee and Board in the operation of our
incentive plans and in strategic direction, the high level of Board involvement in approving material investments and capital expenditures, and our internal controls. Management presented the results of this assessment to the Compensation Committee for its review in early 2016 as part of its obligation to oversee our compensation risk assessment process.
48
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees our financial reporting process on behalf of the Board. The Audit Committee consists of four directors each of whom, in the judgment of the Board, is an independent director as defined in the NASDAQ Listing Rules. The Audit Committee held 8 meetings during 2016. The Audit Committee acts pursuant to a written charter that has been adopted by the Board. This charter is available in the Investors and Media section of our website at
www.sciclone.com
. The Audit Committee reviews and reassesses at least annually the adequacy of the Charter.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, for preparing our financial statements and for the public reporting process. Our independent registered public accounting firm for the fiscal year ended December 31, 2016, PricewaterhouseCoopers Zhong Tian LLP, was responsible for expressing opinions on the conformity of our audited financial statements with United States generally accepted accounting principles as of and for the period ended December 31, 2016. In addition, PricewaterhouseCoopers Zhong Tian LLP expressed its own opinion on the effectiveness of our
internal control over financial reporting as of December 31, 2016.
In this context, the Audit Committee has reviewed and discussed our audited financial statements with management. For the year ended December 31, 2016, the Audit Committee has discussed with the Companys current principal auditor, PricewaterhouseCoopers Zhong Tian LLP, the matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (the
PCAOB
). The Audit Committee has met with PricewaterhouseCoopers Zhong Tian LLP, with and without management present, to discuss the overall scope of the external audit, the results of examinations, the external
auditors evaluations of our internal controls, and the overall quality of the Companys financial reporting. The Audit Committee meets with the outside auditors each quarter, and typically meets with them independently each quarter. The Audit Committee has also received from PricewaterhouseCoopers Zhong Tian LLP with respect to the audit for the fiscal year ended December 31, 2016, the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firms communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm its independence. In evaluating the auditors independence, the Audit Committee concluded that the provision of non-audit related services provided by, and covered by fees paid to, PricewaterhouseCoopers Zhong Tian LLP by SciClone was compatible with
maintaining their independence.
The Audit Committee requires that all audit and permissible non-audit services be submitted to it for review and approval in advance.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in SciClones Annual Report on Form 10-K for the year ended December 31, 2016.
Respectfully submitted by the Audit Committee,
Jon S. Saxe, Richard J. Hawkins, Gregg A. Lapointe, and Simon Li
49
YEAR 2018 STOCKHOLDER PROPOSALS
We welcome comments or suggestions from our stockholders.
Stockholder proposals submitted for inclusion in our proxy materials for our 2018 Annual Meeting of Stockholders must be received by December 29, 2017. Stockholder nominations for director that are to be included in our proxy materials under the proxy access provision of our Bylaws must be received no earlier than November 29, 2017 and no later than the close of business on December 29, 2017. Stockholder nominations for director and other proposals that are not to be included in such materials must be received by December 29, 2017. Any such stockholder proposals or nominations for director must be submitted to our Corporate
Secretary, SciClone Pharmaceuticals, Inc., 950 Tower Lane, Suite 900, Foster City, California 94404.
The requirements for providing advance notice of stockholder business as summarized above are qualified in their entirety by our Bylaws, which we recommend that you read in order to comply with the requirements for bringing a proposal. You may contact the Companys Secretary at our principal executive offices for a copy of our current Bylaws, including the relevant provisions regarding the requirements for making stockholder proposals and nominating director candidates, or you may refer to the copy of our Bylaws most recently filed with the SEC and available at
www.sec.gov
.
OTHER MATTERS
At the date of this Proxy Statement, the Board knows of no other business that will be presented at the Annual Meeting other than as described in this Proxy Statement. If any other matter or matters are properly brought before the Annual Meeting, or any adjournment or postponement of the Annual Meeting, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their best judgment.
It is important that the proxies be voted promptly and that your shares be represented. Please vote your shares at your earliest convenience by phone, via the internet or by completing, signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope.
By order of the Board,
Friedhelm Blobel, Ph.D.
President and Chief Executive Officer
Foster City, California
April 28, 2017
50