DEF 14A of Tvardi Therapeutics, Inc., Apr 22, 2024

DEF 14A of Tvardi Therapeutics, Inc.

Filed Apr 22, 2024 · FY20230001104659-24-049971

Open on EDGAR

  1. PROPOSAL 1 ELECTION OF DIRECTORS

    PROPOSAL 1 ELECTION OF DIRECTORS Our Board is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board presently has six members. There are two directors currently serving on the Board in the class whose term of office expires in 2024, both of whom have been recommended for nomination to the Board by the Nominating and Corporate Governance Committee of the Board: Dr. Shiff and Ms. Boudreau. Dr. Shiff is currently a director of the Company who was previously elected by the stockholders. Ms. Boudreau was recommended for appointment to the Board by a non-management director. If elected at the Annual Meeting, each of these nominees would serve until the 2027 Annual Meeting of Stockholders and until her successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal. The biographies of each of our nominees for election to the Board as Class I directors, and all other directors are set forth below, including the offices held, other business directorships and the class and term of each director nominee and director. Each of the biographies highlights specific experience, qualifications, attributes, and skills that led us to conclude that such person should serve as a director. We believe that, as a whole, our Board possesses the requisite skills and characteristics, leadership traits, work ethic, and independence to provide effective oversight. No director or executive officer is related by blood, marriage, or adoption to any other director or executive officer. No arrangements or understandings exist between any director and any other person pursuant to which such person was selected as a director or nominee.

  2. Class I Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting

    Class I Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting Susan Shiff, Ph.D. has served as a member of our Board since June 2020. Dr. Shiff serves as President of Susan Shiff Consulting, LLC. Previously, she served as President and Chief Executive Officer from March 2021 to July 2023 of Ontada LLC, a US provider technology, real world data and insights, and education company. From June 2014 to March 2021, she was a Senior Vice President at Merck & Co and Head of the Center for Observational and Real-World Evidence, an organization that lead the measurement and communication of the value of medicines and vaccines worldwide. She holds an M.B.A. from Cornell University and a Ph.D. from the University of California at Los Angeles. Her extensive experience in the pharmaceutical industry as a leader in the development and implementation of evidence, access, and pricing strategies for products globally provides her with the qualifications to serve on our Board. Helen M. Boudreau has served as a member of our Board since August 2023. Currently, Ms. Boudreau, serves as Managing Director at Estuary Ventures LLC, a board and advisory services company. From June 2018 to July 2019, she served as Chief Operating Officer of the Bill & Melinda Gates Medical Research Institute, a non-profit biotechnology company. Ms. Boudreau currently serves as a board member of Premier, Inc., a publicly traded healthcare improvement company, Shattuck Labs Inc., a publicly traded biotechnology company, and Rallybio Corp, a publicly traded biopharmaceutical company, positions she has held since June 2020, July 2020 and September 2020, respectively. Ms. Boudreau also previously served on the board of directors of Reunion Neuroscience, Inc., a biopharmaceutical company that was publicly traded prior to its acquisition by MPM BioImpact, from April 2020 to August 2023 and Evaxion Biotech A/S, a publicly traded AI-immunology platform company, from June 2020 to May 2021. Ms. Boudreau earned a B.A. in Economics from the University of Maryland and an M.B.A. from the Darden Graduate School of Business at the University of Virginia. Ms. Boudreau is Directorship Certified® by the National Association of Corporate Directors (“NACD”) and earned the CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University Software Engineering Institute and NACD. Her extensive experience in the biotechnology industry as a leader in corporate strategy and financial management provides her with the qualifications to serve on our Board. Vote Required: Directors are elected by a plurality of the votes of the holders of shares present at the meeting (by virtual attendance) or represented by proxy and entitled to vote on the election of directors. Accordingly, the nominees receiving the highest number of “FOR” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the nominees named above. Broker non-votes will have no effect on the outcome of Proposal 1. If either nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee proposed by Cara. Each person nominated for election has agreed to be named in this proxy statement and to serve if elected. Our management has no reason to believe that the nominees will be unable to serve. The Board of Directors Unanimously Recommends a Vote for Each of the Named Nominees.

  3. Class II Directors Continuing in Office Until the 2025 Annual Meeting

    Class II Directors Continuing in Office Until the 2025 Annual Meeting Jeffrey L. Ives, Ph.D. has served as a member of our Board since July 2014. Dr. Ives currently is an advisor to Access Biotechnology, a healthcare technology venture firm, and a Principal at NeuroPharma Advisors, LLC, an advisory group focused on companies developing therapeutics for the central nervous system. Dr. Ives also serves as a board member for Acumen Pharmaceuticals, a public clinical-stage biopharmaceutical company, a position he has held since May 2014. Previously, Dr. Ives served as a Venture Partner at New Leaf Venture Partners from January 2017 to March 2021. Dr. Ives received his Doctorate and Master degrees from Yale University and received his bachelor of arts degree from Colgate University. His extensive experience leading research and drug development provides him with the qualifications to serve on our Board. Christopher Posner has served as our President and Chief Executive Officer since November 2021 and has served as a member of our Board since August 2018. From July 2017 to October 2021, he served as the Chief Executive Officer of LEO Pharma, Inc. US, a subsidiary of LEO Pharma A/S, a global healthcare company specializing in dermatology and critical care, including such conditions as psoriasis and atopic dermatitis. Mr. Posner served as a director of Zevra Therapeutics, Inc. (formerly KemPharm, Inc.), a publicly traded rare disease therapeutics company, from November 2022 through April 2023. Mr. Posner holds an M.B.A. from Fuqua School of Business, Duke University and a B.A. in Economics from Villanova University. His extensive experience in global pharmaceutical management, sales and products provides him with the qualifications to serve on our Board.

  4. Class III Directors Continuing in Office Until the 2026 Annual Meeting

    Class III Directors Continuing in Office Until the 2026 Annual Meeting Martin Vogelbaum has served as a member of our Board since July 2010, and Chairperson of our Board since June 2022. He currently serves as Managing Partner of Inning One Ventures, an early stage life sciences venture capital firm. He also serves as Chief Executive Officer and a director of Ajax Therapeutics, a private oncology company, and as Managing Director of Syno Capital, a global healthcare investment firm. Mr. Vogelbaum received his A.B. in biology and history from Columbia University. Mr. Vogelbaum’s experience in the life sciences industry as a venture capitalist provides him with the qualifications and skills to serve on our Board. Lisa von Moltke, M.D. has served as a member of our Board since November 2022. She is currently EVP, Chief Medical Officer at Seres Therapeutics, a publicly traded commercial-stage company developing novel microbiome therapeutics for serious diseases, a position she has held since April 2020. Previously, she served in various roles of increasing seniority at Alkermes plc, a publicly traded biopharmaceutical company, from June 2015 to March 2020, including most recently as SVP, Head of Clinical Development from June 2018 to March 2020. Dr. von Moltke earned a B.A. at Wellesley College and her M.D. from Michigan State University, College of Human Medicine. Dr. von Moltke’s extensive clinical development and pharmacology expertise provide her with the qualifications and skill to serve on our Board.

  5. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table shows certain information with respect to the compensation of all of our non-employee directors for the fiscal year ended December 31, 2023:

  6. DIRECTOR COMPENSATION

    | Director | Fees Earned or Paid in Cash(3) ($) | Stock Awards(4)(5) ($) | Option Awards(4)(5) ($) | Total ($) | | Harrison M. Bains, Jr.(1) | 60,772 | 99,999 | 99,993 | 260,764 | | Martin Vogelbaum | 120,000 | 199,997 | 199,989 | 519,986 | | Jeffrey L. Ives, Ph.D. | 72,500 | 99,999 | 99,993 | 272,492 | | Susan Shiff, Ph.D. | 62,500 | 99,999 | 99,993 | 262,492 | | Lisa von Moltke, M.D. | 55,000 | 99,999 | 99,993 | 254,992 | | Helen M. Boudreau(2) | 26,043 | — | 349,964 | 376,007 |

  7. DIRECTOR COMPENSATION

    (1) During 2023, Mr. Bains served on our Board until his resignation in November 2023 and the fees earned or paid in cash reflect the pro rata amount earned in 2023. (2) Ms. Boudreau was appointed to the Board and as a member of the Audit Committee in August 2023 and as chair of the Audit Committee upon Mr. Bains resignation in November 2023, and the fees earned or paid in cash reflect the pro rata amount earned in 2023. (3) Amounts reflect the annual fees paid to all non-employee directors for their service on the Board, including for their committee membership and service as Lead Independent Director or Chair of a committee, under our non-employee director compensation policy, as described below in more detail. (4) Amounts reflect the aggregate grant date fair value of options and stock awards granted during 2023 calculated in accordance with ASC Topic 718. The assumptions used in the calculation of the grant date fair values of such awards are set forth in Note 15, Stock-Based Compensation in the notes to our financial statements in the Form 10-K. These amounts do not reflect the actual economic value that may be realized by the non-employee director. (5) The following table sets forth the aggregate number of unvested RSUs and the aggregate number of shares underlying stock options held by our non-employee directors held as of December 31, 2023 by each non-employee director who was serving as of December 31, 2023:

  8. DIRECTOR COMPENSATION

    | Director | RSUs | Number of Shares Underlying Options | | Martin Vogelbaum | 135,152 | 257,616 | | Jeffrey L. Ives, Ph.D. | 64,638 | 100,596 | | Susan Shiff, Ph.D. | 51,438 | 110,757 | | Lisa von Moltke, M.D. | 32,362 | 90,802 | | Helen M. Boudreau | — | 155,747 |

  9. DIRECTOR COMPENSATION

    Mr. Posner is also a member of our Board but does not receive any additional compensation for his service as a director. Mr. Posner’s compensation as an executive officer is set forth below under “Executive Compensation.” The Board has adopted a non-employee director compensation policy. Under our non-employee director compensation policy, we pay each of our non-employee directors a cash retainer for service on the Board and for service on each committee on which the director is a member. These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on the Board. The retainers paid during 2023 to non-employee directors for service on the Board and for service on each committee of the Board on which the director is a member were as follows:

  10. DIRECTOR COMPENSATION

    | | Member Annual Service Retainer | Chairperson / Lead Independent Director and Committee Chair Annual Service Retainer | | Board of Directors | $50,000 | $35,000 | | Audit Committee | 10,000 | 20,000 | | Compensation Committee | 7,500 | 15,000 | | Nominating and Corporate Governance Committee | 5,000 | 10,000 |

  11. DIRECTOR COMPENSATION

    We also reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with attending the Board and committee meetings. Under the terms of the policy, our non-employee directors are also entitled to the following equity compensation: • Upon initial election to the Board, a stock option having a Black-Scholes value of $350,000, with an exercise price equal to the fair market value of our common stock on the date of grant, with such option vesting over three years in 12 equal quarterly installments, subject to the director’s continued service as a director through each such vesting date. • On the date of each annual meeting of stockholders, (1) a stock option with a Black-Scholes value of $100,000 (or in the case of the Chairperson of the Board or Lead Independent Director, $200,000) with an exercise price equal to the fair market value of our common stock on the date of grant and (2) RSU grant with a grant date fair value of $100,000 (or in the case of the Chairperson of the Board or Lead Independent Director, $200,000), with each such equity award vesting on the earlier of the first-year anniversary of the date of grant and our next annual meeting of stockholders, subject to the director’s continued service as a director through such vesting date. This policy is intended to provide a total compensation package that enables us to attract and retain qualified and experienced individuals to serve as directors and to align our directors’ interests with those of our stockholders.

  12. Responsible Executive Compensation Practices

    | What we do: | What we do not do: | | ✓ Performance metrics tied to company performance. The performance metrics for our annual executive bonus plan are tied to company performance, aligning the interests of our executives with those of our stockholders. ✓ Multi-year vesting requirements. The equity awards we grant to our executive officers generally vest over multi-year periods, consistent with current market practice and our retention objectives. ✓ Double-trigger termination rights. Our agreements with our executive officers require both a change-in-control and a termination of employment for full severance benefits to be triggered. ✓ Independent compensation committee. Our compensation committee is comprised solely of independent members of our Board. ✓ Independent compensation consultant. Our compensation committee uses an independent compensation consultant that provides no other material services to the company. | ✘ No tax gross-ups. None of our compensation agreements and arrangements provide for tax “gross-ups.” ✘ No special perquisites. Except as otherwise discussed below, we generally do not provide our executives with perquisites or other personal benefits that differ materially from those available to employees generally. ✘ No retirement plans other than 401(k). We do not provide any pension or other retirement benefits to our executive officers, except that we offer all employees the right to participate in a company-sponsored 401(k) plan under which we contribute 3% of their salary up to the annual Internal Revenue Code limit. ✘ No special health or welfare benefits. We do not provide our executives with any special health or welfare benefits. Our executive officers participate in the same broad-based company-sponsored health and welfare benefits programs to our other full-time, salaried employees. ✘ Hedging, short selling and pledging prohibited. Our insider trading policy prohibits our executive officers and directors from hedging, short selling or pledging our securities. |

  13. 2023 Summary Compensation Table

    2023 Summary Compensation Table The table below shows for the periods presented, compensation awarded to or paid to, or earned by, our named executive officers.

  14. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | | Christopher Posner President and Chief Executive Officer | 2023 | $728,000 | — | $0 | $1,769,000 | $414,960 | $10,509 | $2,922,469 | | | 2022 | 700,000 | $200,000 | 407,940 | 898,280 | 294,000 | 9,759 | 2,509,979 | | Ryan Maynard Chief Financial Officer | 2023 | $478,400 | — | $0 | $573,156 | $181,792 | $10,509 | $1,243,857 | | | 2022 | 140,600 | $8,312 | — | 1,701,405 | 38,788 | 197 | 1,889,302 | | Joana Goncalves, M.D. former Chief Medical Officer | 2023 | $500,240 | — | $0 | $573,156 | $190,091 | $10,509 | $1,273,996 | | | 2022 | 481,000 | $121,860 | 209,200 | 593,904 | 134,680 | 9,711 | 1,550,355 |

  15. 2023 Summary Compensation Table

    (1) Stock awards represent RSUs granted to the named executive officers. Each RSU represents the contingent right to receive one share of our common stock upon the satisfaction of the vesting conditions of the award, subject to the recipient’s continuous service through the vesting events. For 2022, the RSU grants consisted of a combination of time-based RSUs and performance-based RSUs, which vest upon the achievement of certain performance conditions. For 2023, the RSU grants consisted entirely of performance-based RSUs. In accordance with SEC rules, the amounts in the table above reflect the grant date fair values of the RSUs, calculated in accordance with ASC 718 for stock-based compensation transactions. In the case of performance-based awards, this grant date fair value is based on the probable outcome of the vesting conditions of these RSUs, determined as of the grant date. Assuming that all of the performance vesting conditions of the performance-based RSUs were met as of the grant date, the value of the performance-based RSUs granted during 2023 would have been $1,820,860, $402,400 and $402,400 for Mr. Posner, Mr. Maynard and Dr. Goncalves, respectively. See Note 15, Stock-Based Compensation in the notes to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for a further description of our valuation methodology for equity awards. Amounts reflect the grant date fair value of each option award granted, calculated in accordance with ASC 718. All of the option awards reported in the table above were granted under our 2014 Plan and have a term of ten years from the date of grant. Assumptions used in the calculation of the grant date fair values of these awards are set forth in Note 15, Stock-Based Compensation in the notes to our financial statements in the Form 10-K. Amounts reflect annual performance-based cash bonus awards earned by each applicable executive officer based on the Compensation Committee’s assessment of our performance against corporate objectives determined by the Compensation Committee which were communicated to such officer around the beginning of the fiscal year. For the fiscal years presented, the annual cash incentive bonuses were based on our achievement of clinical, regulatory, financial and operational objectives. (4) Amounts reflect for 2023: (a) for Mr. Posner, $9,900 for 401(k) Plan safe harbor contribution, and $609 of life insurance premiums; (b) for Mr. Maynard $9,900 for 401(k) Plan safe harbor contribution, and $609 in life insurance premiums, and (c) for Dr. Goncalves, $9,900 for 401(k) Plan safe harbor contribution, and $609 of life insurance premiums.

  16. Outstanding Equity Awards at 2023 Fiscal-Year End

    Outstanding Equity Awards at 2023 Fiscal-Year End The following table shows certain information regarding outstanding equity awards held by our named executive officers at December 31, 2023.

  17. Outstanding Equity Awards at 2023 Fiscal-Year End

    | | Option Awards | | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Option (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares of Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Christopher Posner President and Chief Executive Officer | 8/2/2018 | 35,000 | — | 17.94 | 08/02/2028 | — | — | — | — | | | 6/4/2019 | 9,000 | — | 20.47 | 06/04/2029 | — | — | — | — | | | 6/4/2020 | 10,800 | — | 15.62 | 06/04/2030 | — | — | — | — | | | 6/3/2021 | 10,800 | — | 13.06 | 06/03/2031 | — | — | — | — | | | 10/29/2021 | 283,000 | 283,000(4) | 16.83 | 10/29/2031 | 71,000(5) | 52,753 | — | — | | | 2/25/2022 | 55,458 | 65,542(6) | 10.46 | 2/25/2032 | 26,000(7) | 19,318 | — | — | | | 3/1/2023 | 46,875 | 203,125(6) | 10.06 | 3/1/2033 | — | — | 181,000 | 134,483 | | Ryan Maynard Chief Financial Officer | 9/12/2022 | 70,132 | 154,688(8) | 10.75 | 9/12/2032 | — | — | — | — | | | 3/1/2023 | 15,187 | 65,813(6) | 10.06 | 3/1/2033 | — | — | 40,000 | 29,720 | | Joana Goncalves, M.D. former Chief Medical Officer | 10/22/2018 | 250,000 | — | 19.27 | 10/22/2028 | — | — | — | — | | | 2/24/2020 | 30,666 | 1,334(6) | 16.36 | 02/24/2030 | — | — | — | — | | | 3/30/2021 | 22,000 | 10,000(6) | 20.59 | 03/30/2031 | 5,334(7) | 3,963 | — | — | | | 2/25/2022 | 36,666 | 43,334(6) | 10.46 | 2/25/2032 | 13,334(7) | 9,907 | — | — | | | 3/1/2023 | 15,187 | 65,813(6) | 10.06 | 3/1/2033 | — | — | 40,000 | 29,720 |

  18. Outstanding Equity Awards at 2023 Fiscal-Year End

    (1) Awards in this column consist of time-based RSUs that were unvested as of December 31, 2023. Market value is calculated based on the closing price of our common stock on December 29, 2023, which was $0.7430 per share, as reported on Nasdaq. Awards in this column consist of performance-based RSUs that were unvested as of December 31, 2023. Subsequent to December 31, 2023, the actual level of achievement of the performance metrics for these awards was determined. Based on these performance metrics, 62,500 shares vested for Mr. Posner, 13,500 shares vested for Mr. Maynard and 13,500 shares vested for Dr. Goncalves, with the remaining balance of such awards being forfeited. (4) 25% of the shares underlying the option vested on the first anniversary of the date of grant, with the remainder vesting in 12 equal quarterly installments thereafter, subject to the named executive officer’s continuous service through each such date. (5) These time-based RSUs will vest in 12 equal quarterly installments through October 29, 2025, subject to the named executive officer’s continuous service as of each vesting date. (6) Shares underlying these stock options vest monthly over a four-year period from the grant date, subject to the named executive officer’s continuous service through each such date. (7) These time-based RSUs vest in three equal annual installments on the first, second and third anniversary following date of the grant, subject to the named executive officer’s continuous employment with the Company. (8) Shares underlying these stock options vest over a four-year period as follows: 25% of the shares underlying the option vest on the first anniversary of the date of grant, with the remainder vesting in equal monthly installments over the 36 months thereafter, subject to the named executive officer’s continuous service through each such date.

  19. Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”)

    Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Company Total Shareholder Return (“TSR”) The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years.

  20. Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income

    Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the three most recently completed fiscal years. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.