DEF 14A 1 navb_def-14a.htm DEFINITIVE 14A Blueprint
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
 
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Filed by a Party other than the Registrant
 
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X Definitive Proxy Statement
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    Soliciting Material under §240.14a-12
 
NAVIDEA BIOPHARMACEUTICALS, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
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Fee paid previously with preliminary materials.
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1) 
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Date Filed:
 
 
 
 
2017 ANNUAL MEETING OF STOCKHOLDERS
 
 
May 24, 2017
 
 
Dear Stockholder:
 
You are cordially invited to attend the 2017 Annual Meeting of Stockholders of Navidea Biopharmaceuticals, Inc., which will be held at 9:00 a.m., Eastern Daylight Time, on June 29, 2017, at the Hilton Garden Inn, 70 Challenger Road, Ridgefield Park, NJ 07660, 201-641-2024. The matters on the meeting agenda are described in the Notice of 2017 Annual Meeting of Stockholders and proxy statement which accompany this letter.
 
We hope you will be able to attend the meeting, but regardless of your plans, we ask that you please complete, sign, and date the enclosed proxy card and return it in the envelope provided, or take advantage of the opportunity to vote online or by telephone, so that your shares will be represented at the meeting.
 
Very truly yours,
 
/s/ Michael M. Goldberg, M.D.
 
                                                                            
Michael M. Goldberg, M.D.
                                                                            
President and Chief Executive Officer
 
 
NAVIDEA BIOPHARMACEUTICALS, INC.
5600 Blazer Parkway, Suite 200
Dublin, Ohio 43017
 
NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS
 
 
 
To the Stockholders of
NAVIDEA BIOPHARMACEUTICALS, INC.:
 
The Annual Meeting of the Stockholders of Navidea Biopharmaceuticals, Inc., a Delaware corporation (the “Company”), will be held at the Hilton Garden Inn, 70 Challenger Road, Ridgefield Park, NJ 07660, 201-641-2024, on June 29, 2017, at 9:00 a.m., Eastern Daylight Time, for the following purposes:
 
1.
To elect two directors, to serve for a term of three years or until their successors are duly elected and qualified;
 
2.
To hold an advisory vote on the compensation of our named executive officers;
 
3.
To hold an advisory vote on the frequency of voting on the compensation of our named executive officers;
 
4.
To approve a potential amendment to our amended and restated certificate of incorporation to effect a one-for-twenty reverse stock split;
 
5.
To ratify the appointment of Marcum LLP as our independent registered public accounting firm for 2017; and
 
6.
To transact such other business as may properly come before the meeting or any adjournment thereof.
 
The Board of Directors has fixed the close of business on May 15, 2017, as the Record Date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. A list of stockholders will be available for examination by any stockholder at the Annual Meeting and for a period of 10 days before the Annual Meeting at the executive offices of the Company.
 
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 29, 2017: The proxy statement and annual report to security holders are available at www.proxyvote.com.
 
Whether or not you plan to attend the Annual Meeting, please complete, sign, and date the enclosed proxy card and return it in the envelope provided, or take advantage of the opportunity to vote your proxy online or by telephone.
 
By Order of the Board of Directors
 
/s/ Michael M. Goldberg, M.D.
 
                                                                            
Michael M. Goldberg, M.D.
                                                                            
President and Chief Executive Officer
Dublin, Ohio
May 24, 2017
 
 
NAVIDEA BIOPHARMACEUTICALS, INC.
_______________________________
 
2017 ANNUAL MEETING OF STOCKHOLDERS
 
June 29, 2017
_______________________________
 
PROXY STATEMENT
 
Dated May 24, 2017
_______________________________
 
GENERAL INFORMATION
 
Date, Time and Place of Annual Meeting. The Annual Meeting of the Stockholders of Navidea Biopharmaceuticals, Inc. will be held at the Hilton Garden Inn, 70 Challenger Road, Ridgefield Park, NJ 07660, 201-641-2024, on June 29, 2017, at 9:00 a.m., Eastern Daylight Time.
 
Solicitation. This proxy statement is furnished to the stockholders of Navidea Biopharmaceuticals, Inc., a Delaware corporation (“Navidea,” the “Company,” “we,” “our,” or “us”), in connection with the solicitation by the Board of Directors of the Company (the “Board of Directors”) of proxies to be voted at our 2017 Annual Meeting of Stockholders (“Annual Meeting”) to be held on June 29, 2017, and any adjournment thereof. We have elected to furnish proxy materials and our 2016 annual report to our stockholders using the full set delivery option pursuant to the rules of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, a copy of the notice of meeting, this proxy statement, together with a proxy card, and annual report were first mailed to stockholders on or about May 24, 2017. These proxy materials are also available free of charge at www.proxyvote.com. All expenses in connection with this solicitation of proxies will be paid by us. Proxies will be solicited principally by mail, but directors, officers and certain other individuals authorized by us may personally solicit proxies. We will reimburse custodians, nominees or other persons for their out-of-pocket expenses in sending proxy materials to beneficial owners.
 
Company Address. The mailing address of our principal executive offices is 5600 Blazer Parkway, Suite 200, Dublin, Ohio 43017.
 
Voting Rights. Stockholders of record at the close of business on May 15, 2017 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of that date, there were 161,898,338 shares of common stock, par value $0.001 per share (“Common Stock”) outstanding and no shares of any series of preferred stock outstanding (“Preferred Stock”). Each holder of Common Stock of record on May 15, 2017, is entitled to one vote per share held with respect to all matters which may be brought before the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please carefully review the enclosed proxy statement and then cast your vote, regardless of the number of shares you hold. If you are a stockholder of record, you may vote over the Internet, by telephone, or by completing, signing, dating and mailing to us the accompanying proxy card in the postage-prepaid envelope provided.
 
Authorization. The shares represented by the accompanying proxy will be voted as directed if the proxy is properly completed, signed, and received by us or otherwise properly voted on the Internet or by telephone. The proxy will be voted at the discretion of the persons acting under the proxy to transact such other business as may properly come before the Annual Meeting and any adjournment thereof. If you are a holder of record and you sign, date, and send in your proxy but do not indicate how you want to vote, your proxy will be voted “For” each of the proposals to be voted on at the Annual Meeting.
 
Revocation. Any stockholder returning the accompanying proxy has the power to revoke it at any time before its exercise by giving notice of revocation to the Company, by duly executing and delivering to the Company a proxy card bearing a later date, or by voting in person at the Annual Meeting. Please note, however, if your shares are held of record by a broker, bank, or other nominee and you wish to vote at the Annual Meeting, you must obtain from the record holder a proxy issued in your name.
 
 
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Tabulation. Under Section 216 of the Delaware General Corporation Law (the “DGCL”) and our bylaws (“Bylaws”), the presence, in person or by proxy, of the holders of a majority of the outstanding shares of our Common Stock is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Shares represented by signed proxies that are returned to the Company will be counted toward the quorum even though they are marked as “Abstain,” “Against” or “Withhold Authority” on one or more, or all matters, or they are not marked at all. Brokers, banks, or other nominees who hold their customers’ shares in street name, may, under the applicable rules of the exchanges and other self-regulatory organizations of which such brokers, banks, or other nominees are members, sign and submit proxies for such shares and may vote such shares on routine matters. The proposal to ratify the appointment of Marcum LLP as our independent registered public accounting firm is considered a routine matter. Brokers, banks, or other nominees may not vote on matters considered non-routine without specific instructions from the customer who owns the shares. The proposals to elect two directors, approve the compensation of our named executive officers and the frequency of voting to approve such compensation, and approve an amendment to our amended and restated certificate of incorporation to effect a reverse stock split, are not considered routine matters. Proxies signed and submitted by brokers, banks, or other nominees that have not been voted on certain matters are referred to as broker non-votes. Such proxies count toward the establishment of a quorum. We encourage you to provide voting instructions to any broker, bank or other nominee that holds your shares by carefully following the instructions provided in the notice from such entity.
 
Under Section 216 of the DGCL and our Bylaws, the election of each director nominee requires the favorable vote of a plurality of all votes cast by the holders of our Common Stock at a meeting at which a quorum is present. Proxies that are marked “Withhold Authority” and broker non-votes will not be counted toward a nominee’s achievement of a plurality and, thus, will have no effect.
 
Under our Bylaws, approval of the proposals relating to the compensation of our named executive officers as well as the frequency of voting for such compensation requires the affirmative vote of a majority of the shares of our Common Stock represented in person or by proxy at the Annual Meeting. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a vote “Against” the proposal. Broker non-votes are disregarded and will have no effect.
 
Under Section 242 of the DGCL and our Bylaws, the amendment to our amended and restated certificate of incorporation to effectuate a one-for-twenty reverse stock split requires the affirmative vote of the holders of a majority of the shares of our outstanding Common Stock entitled to vote. For purposes of determining the number of shares of our Common Stock voting on the amendment, abstentions will be counted and will have the effect of a negative vote; broker non-votes will not be counted and thus will have the effect of a negative vote.
 
The ratification of Marcum LLP as our independent registered public accounting firm requires the affirmative vote of a majority of the shares of our Common Stock represented in person or by proxy at the Annual Meeting. Abstentions will be counted as represented and entitled to vote and will therefore have the effect of a vote “Against” each proposal. Broker non-votes are disregarded and will have no effect.
 
Effect of Not Casting Your Vote. If you hold your shares in street name it is critical that you cast your vote if you want it to count. If you hold your shares in street name and you do not instruct your bank, broker, or other nominee how to vote, no votes will be cast on your behalf for any of the proposals to be considered at the Annual Meeting; except, your bank, broker, or other nominee will continue to have discretion to vote any uninstructed shares on the proposal to ratify the appointment of Marcum LLP as our independent registered public accounting firm.
 
 
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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
 
Nominees for Election as Directors
 
We presently have five directors on our Board of Directors, comprised of three classes with terms expiring at the Annual Meetings in 2017, 2018 and 2019, respectively, and each containing, two, one and two director(s), respectively. At the 2017 Annual Meeting, the nominees to the Board of Directors receiving the highest number of votes will be elected as directors to a term of three years expiring in 2020.
 
Our Compensation, Nominating and Governance Committee (“CNG Committee”) has nominated Michael M. Goldberg, M.D. and Mark I. Greene, M.D., Ph.D., FRCP for election as directors to serve for a term of three years. Stockholders may not vote for a greater number of persons than the number of nominees named.
 
Only “For” or “Withhold Authority” votes are counted in determining whether a plurality has been cast in favor of a director nominee. You cannot abstain in the election of a director, and broker non-votes are not counted. We have no reason to believe that any nominee will not stand for election or serve as a director. In the event that a nominee fails to stand for election, the proxies will be voted for the election of another person designated by the persons named in the proxy. See the section entitled “General Information–Tabulation.”
 
Set forth below is current biographical information about our directors, including the qualifications, experience and skills that make them suitable for service as a director. Each listed director’s respective experience and qualifications described below led the CNG Committee to conclude that such director is qualified to serve as a member of our Board of Directors.
 
The Board of Directors has nominated the following persons to serve as directors of the Company until the 2020 Annual Meeting:
 
Michael M. Goldberg, M.D. has served as a director of Navidea since November 2013 and as President and Chief Executive Officer of Navidea since September 2016. Dr. Goldberg has been a Managing Partner of Montaur Capital Partners since January 2007. From 2007 to 2013 Dr. Goldberg managed a life science investment portfolio for Platinum Partners called Platinum-Montaur Life Sciences, LLC (“Platinum-Montaur” and together with its affiliates, “Platinum”). Prior to that, Dr. Goldberg served as the Chief Executive Officer of Emisphere Technologies, Inc., from August 1990 to January 2007 and as its President from August 1990 to October 1995. He also served on Emisphere’s board of directors from November 1991 to January 2007. Previous to that, Dr. Goldberg served as Vice President of The First Boston Corp., where he was a founding member of the Healthcare Banking Group. Dr. Goldberg has been a Director of Echo Therapeutics, Inc., AngioLight, Inc., Urigen Pharmaceuticals, Inc., Alliqua BioMedical, Inc., and ADVENTRX Pharmaceuticals, Inc. Dr. Goldberg received a B.S. degree from Rensselaer Polytechnic Institute, an M.D. from Albany Medical College of Union University in 1982, and an M.B.A. from Columbia University Graduate School of Business in 1985.
 
Mark I. Greene, M.D., Ph.D., FRCP has served as a director of Navidea since March 2016. Dr. Greene has been Director of the Division of Immunology, Department of Pathology at University of Pennsylvania School of Medicine since 1986. Dr. Greene was the Associate Director of the Division for Fundamental Research, University of Pennsylvania Cancer Center from 1987-2009 and has been the John Eckman Professor of Medical Science of the University of Pennsylvania School of Medicine since 1989. From 1980 to1986 he served as an Associate Professor of both Harvard University and Harvard Medical School. His groundbreaking work in erbB receptor function led to the development of Herceptin (Genentech) and to the development of a proprietary method for the rapid, reliable design of allosteric inhibitors of receptors and enzymes. Dr. Greene currently serves as a Member of the Scientific Advisory Board of Navidea’s subsidiary Macrophage Therapeutics. He previously served as a scientific advisor to Ception Therapeutics, Antisome PLC and Fulcrum Technologies and also served as a Member of the Scientific Advisory Boards of Fulcrum Pharmaceuticals, Inc. and Tolerx, Inc. He previously served as an Emeritus Director of Emisphere Technologies, Inc. where he also served as a Director. Additionally, Dr. Greene previously served as a Director of Ribi Immunochem Research, Inc. and currently serves as a Consultant of Martell Biosystems, Inc. Dr. Greene has an outstanding record of contributions to cancer biology and drug discovery that is well-documented in over 400 publications. Dr. Greene is a recipient of many awards and patents and has collaborated with a number of pharmaceutical companies. He received his M.D. (1972) and Ph.D. (1977) from the University of Manitoba, Canada, became a Fellow of the Royal College in 1976 and then joined the faculty of Harvard Medical School in 1978.
 
 
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The Board of Directors unanimously recommends a vote “FOR” each of the director nominees named above.
 
Director whose term continues until the 2018 Annual Meeting:
 
Anthony S. Fiorino, M.D., Ph.D. has served as a Director of Navidea since March 2016. Dr. Fiorino has almost 20 years of experience in biotechnology finance and drug development. Since December 2015, he has been President and Chief Executive Officer of Triumvira Immunologics, located in Hamilton, Ontario, Canada and Hackensack, New Jersey.  Prior to this he was Chief Executive Officer at BrainStorm Cell Therapeutics from June 2014 to November 2015.  From January 2013 to May 2014, he was a Managing Director at Greywall Asset Management, a healthcare equity fund, and President and Managing Member of Alchimia Partners, his consulting firm, from February 2008 to December 2012. Dr. Fiorino was also Founder, President and Chief Executive Officer of EnzymeRx, where he led the acquisition of a late-stage pre-clinical biologic and the development of the compound through Phase 1/2 clinical trials and its subsequent sale to 3SBio. Before founding EnzymeRx, Dr. Fiorino worked as a biotechnology and pharmaceuticals analyst and portfolio manager at firms including JP Morgan, Citigroup, and Pequot Capital. Dr. Fiorino earned an M.D. (1996) and a Ph.D. (1995) from the Albert Einstein College of Medicine where he studied the differentiation of liver progenitor cells, a B.S. in Biology from the Massachusetts Institute of Technology (1989) and has authored over 20 publications in the medical and scientific literature.
 
Directors whose terms continue until the 2019 Annual Meeting:
 
Y. Michael Rice has served as a director of Navidea since May 2016. Mr. Rice is a founding partner of LifeSci Advisors, LLC and LifeSci Capital, LLC, companies which he co-founded in March 2010. Prior to co-founding LifeSci Advisors and LifeSci Capital, Mr. Rice was the co-head of health care investment banking at Canaccord Adams, where he was involved in debt and equity financing. Mr. Rice was also a Managing Director at ThinkEquity Partners where he was responsible for managing Healthcare Capital Markets, including the structuring and execution of numerous transactions. Prior to that, Mr. Rice served as a Managing Director at Banc of America serving large hedge funds and private equity healthcare funds. Previously, he was a Managing Director at JPMorgan/Hambrecht & Quist. Mr. Rice currently serves on the board of directors of RDD Pharma, a specialty pharmaceuticals company. Mr. Rice received a B.A. from the University of Maryland.
 
Eric K. Rowinsky, M.D. has served as a director of Navidea since July 2010. Dr. Rowinsky has served as Executive Chairman, President, and Head of the Scientific Advisory Board of RGenix, Inc, since June 2015. Dr. Rowinsky is also the Chief Scientific Officer of Clearpath Development Corporation, which accelerates the development of novel therapeutics to proof of concept, and an Adjunct Professor of Medicine at New York University School of Medicine. He was the Head of Research and Development, Executive Vice President, and Chief Medical Officer of Stemline Therapeutics, Inc. from 2012 to 2015, and was the Chief Executive Officer and Founder of Primrose Therapeutics from August 2010 to September 2011 at which time it was acquired. From 2005 to 2009, he served as the Chief Medical Officer and Executive Vice President of Clinical Development and Regulatory Affairs of ImClone Systems Incorporated, a life sciences company, which was acquired by Eli Lilly. Prior to that, Dr. Rowinsky held several positions at the Cancer Therapy & Research Center’s Institute of Drug Development, including Director of the Institute, Director of Clinical Research and SBC Endowed Chair for Early Drug Development, and concurrently served as Clinical Professor of Medicine in the Division of Medical Oncology at the University of Texas Health Science Center at San Antonio. Dr. Rowinsky was an Associate Professor of Oncology at the Johns Hopkins University School of Medicine and on active staff at the Johns Hopkins School of Medicine from 1987 to 1996. Dr. Rowinsky is a member of the boards of directors of Biogen Idec, Inc., Fortress Biosciences, Inc. and Verastem, Inc., publicly-held life sciences companies. He is also an Adjunct Professor of Medicine at New York University. Dr. Rowinsky has extensive research and drug development experience, oncology expertise, corporate strategy, and broad scientific and medical knowledge.
 
 
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CORPORATE GOVERNANCE
 
Directors
 
Set forth below are the names and committee assignments of the persons who constitute our Board of Directors.
 
Name
 
 
Age
 
 
Committee(s)
 
Anthony S. Fiorino, M.D., Ph.D.
 
 
49
 
 
Audit
 
Michael M. Goldberg, M.D.
 
 
58
 
 
--
 
Mark I. Greene, M.D. Ph.D., FRCP
 
 
68
 
 
Compensation, Nominating and Governance
 
Y. Michael Rice
 
 
52
 
 
Audit (Chairman); Compensation, Nominating and Governance
 
Eric K. Rowinsky, M.D.
 
 
60
 
 
Audit; Compensation, Nominating and Governance (Chairman)
 
 
Director Qualifications
 
Our Board of Directors believes that individuals who serve on the Board of Directors should have demonstrated notable or significant achievements in their respective field; should possess the requisite intelligence, education and experience to make a significant contribution to the Board of Directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of our stockholders. The following are qualifications, experience and skills for board members which are important to our business and its future:
 
 General Management. Directors who have served in senior leadership positions are important to us as they bring experience and perspective in analyzing, shaping, and overseeing the execution of important operational and policy issues at a senior level. These directors’ insights and guidance, and their ability to assess and respond to situations encountered in serving on our Board of Directors, are enhanced by their leadership experience developed at businesses or organizations that operated on a global scale, faced significant competition, or involved other evolving business models.
 
Industry Knowledge. Because we are a pharmaceutical development company, education or experience in our industry, including medicine, pharmaceutical development, marketing, distribution, or the regulatory environment, is important because such experience assists our directors in understanding and advising our Company.
 
Business Development/Strategic Planning. Directors who have a background in strategic planning, business development, strategic alliances, mergers and acquisitions, and teamwork and process improvement provide insight into developing and implementing strategies for growing our business.
 
Finance/Accounting/Control. Knowledge of capital markets, capital structure, financial control, audit, reporting, financial planning, and forecasting are important qualities of our directors because such qualities assist in understanding, advising, and overseeing our Company’s capital structure, financing and investing activities, financial reporting, and internal control of such activities.
 
Board Experience/Governance. Directors who have served on other public company boards can offer advice and insights with regard to the dynamics and operation of a board of directors, the relations of a board to the chief executive officer and other management personnel, the importance of particular agenda and oversight matters, and oversight of a changing mix of strategic, operational, and compliance-related matters.
 
Board of Directors Meetings
 
Our Board of Directors held a total of 17 meetings in the fiscal year ended December 31, 2016, and each of the directors attended at least 75 percent of the aggregate number of meetings of the Board of Directors and committees (if any) on which he served, except for Ricardo J. Gonzalez, who attended 73 percent of the aggregate number of meetings of the Board of Directors held during his time as a board member. It is our policy that all directors attend the Annual Meeting of Stockholders. However, conflicts and unforeseen events may prevent the attendance of a director, or directors. All then-current members of our Board of Directors attended the 2016 Annual Meeting of Stockholders in person, except for Mark I. Greene, M.D., Ph.D., FRCP.
 
 
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Board of Directors Leadership Structure and Role in Risk Oversight
 
Our Board of Directors has determined that it is generally in the best interests of the Company and its stockholders that the roles of Chairman of the Board and Chief Executive Officer be held by different individuals within our organization. Our Chief Executive Officer is responsible for setting the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides strategic guidance, presides over meetings of the full Board of Directors, and acts as the lead independent director. The Board of Directors believes that this structure helps facilitate the role of the independent directors in the oversight of the Company and the active participation of the independent directors in setting agendas and establishing priorities and procedures that work for the Board of Directors. The Chairman of the Board also acts as a key liaison between the Board of Directors and management. Moreover, in addition to feedback provided during the course of meetings of the Board of Directors, our independent directors have executive sessions led by the Chairman of the Board. Our Chairman of the Board acts as a liaison between the independent directors and the Chief Executive Officer regarding any specific feedback or issues following an executive session of independent directors, provides the Chief Executive Officer with input regarding agenda items for Board of Director and committee meetings, and coordinates with the Chief Executive Officer regarding information to be provided to the independent directors in performing their duties. From time to time, particularly during periods of leadership transition, a lead independent director may be appointed until an independent Chairman of the Board is named.
 
Our Chief Executive Officer and senior management are responsible for the day-to-day management of the risks we face. Following the termination of our former Chief Executive Officer, Ricardo J. Gonzalez, in May 2016, the Interim Chief Operating Officer, Jed A. Latkin, was functioning as the Company’s principal executive officer until the permanent replacement, Michael M. Goldberg, M.D., was identified in September 2016. Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management, including general oversight of (i) the financial exposure of the Company, (ii) risk exposure as related to overall company portfolio and impact on earnings, (iii), oversight for information technology security and risk, and (iv) all systems, processes, and organizational structures and people responsible for finance and risk functions. Certain risks are overseen by committees of the Board of Directors and these committees make reports to the full Board of Directors, including reports on noteworthy risk management issues. Financial risks are overseen by the Audit Committee which meets with management to review the Company’s major financial risk exposure and the steps management has taken to monitor and control such exposures. Compensation risks are overseen by the CNG Committee.
 
Members of the Company’s senior management report to the full Board of Directors about their areas of responsibility, including reports regarding risk within such area of responsibility and the steps management has taken to monitor and control such exposures. Additional review or reporting of risks is conducted as needed or as requested by the Board of Directors or committee.
 
Independence
 
Our Board of Directors has adopted the definition of “independence” as described under the Sarbanes-Oxley Section 301, Rule 10A-3 under the Exchange Act and Section 803A of the NYSE MKT Company Guide. Our Board of Directors has determined that Drs. Fiorino, Greene and Rowinsky, and Mr. Rice, meet the independence requirements.
 
Compensation, Nominating and Governance Committee
 
The CNG Committee of the Board of Directors discharges the Board’s responsibilities relating to the compensation of the Company’s directors, executive officers and associates, identifies and recommends to the Board of Directors nominees for election to the Board, and assists the Board of Directors in the implementation of sound corporate governance principles and practices. With respect to its compensation functions, the CNG Committee evaluates and approves executive officer compensation and reviews and makes recommendations to the Board of Directors with respect to director compensation, including incentive or equity-based compensation plans; reviews and evaluates any discussion and analysis of executive officer and director compensation included in the Company’s annual report or proxy statement, and prepares and approves any report on executive officer and director compensation for inclusion in the Company’s annual report or proxy statement required by applicable rules and regulations; and monitors and evaluates, at the CNG Committee’s discretion, matters relating to the compensation and benefits structure of the Company and such other domestic and foreign subsidiaries or affiliates, as it deems appropriate. The members of our CNG Committee are: Eric K. Rowinsky, M.D. (Chairman), Mark I. Greene, M.D., Ph.D., FRCP and Y. Michael Rice. The CNG Committee held two meetings in the fiscal year ended December 31, 2016 to complement compensation-related discussions held by the full Board of Directors. The Board of Directors has adopted a written Compensation, Nominating and Governance Committee Charter. A copy of the Compensation, Nominating and Governance Committee Charter is posted on the Company’s website at www.navidea.com.
 
 
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The CNG Committee strives to provide fair compensation to executive officers based on their performance and contribution to the Company and to provide incentives that attract and retain key executives, instill a long-term commitment to the Company, and develop a sense of pride and Company ownership, all in a manner consistent with stockholder interests. In addition, the CNG Committee strives to provide fair compensation to directors, taking into consideration compensation paid to directors of comparable companies and the specific duties of each director.
 
With respect to its nominating and governance functions, the CNG Committee’s purpose is to:
 
Assist the Board of Directors by identifying individuals qualified to become board members, and recommend to the Board of Directors the director nominees whenever directors are to be appointed or elected, whether at the next annual meeting of stockholders or otherwise;
 
Review the qualifications and independence of the members of the Board of Directors and its various committees on a periodic basis and make any recommendations to the Board of Directors which the CNG Committee may deem appropriate concerning any recommended changes in the composition or membership of the Board of Directors, or any of its committees;
 
Develop and recommend to the Board of Directors any policies it may deem appropriate with regard to consideration of director candidates to be recommended to security holders;
 
Develop and recommend to the Board of Directors corporate governance principles applicable to the Company;
 
Conduct the annual review of the performance of the Board of Directors, the committees of the Board of Directors and Company’s executive management;
 
Recommend to the Board of Directors director nominees for each committee; and
 
Develop and recommend to the Board of Directors any policies or processes it may deem appropriate for security holders to send communications to the Board of Directors.
 
Our directors play a critical role in guiding our strategic direction and oversee the management of our Company. Board candidates are considered based on various criteria, such as their broad based business and professional skills and experiences, a global business and social perspective, concern for long term interests of stockholders, and personal integrity and judgment. In addition, directors must have available time to devote to board activities and to enhance their knowledge of the industry. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to our Company. Recent developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The CNG Committee does not have a formal policy with regard to the consideration of diversity in identifying director nominees; however, how a specific nominee contributes to the diversity of the Board of Directors is considered by the CNG Committee in determining candidates for the board. The CNG Committee and the Board of Directors consider diversity by identifying a nominee’s experience and background and determining how such experience and background will complement the overall makeup of the Board of Directors. The CNG Committee and the Board of Directors prefer nominees who will contribute to a board that is diverse in terms of business training, experience across a range of industries, leadership, background, and education.
 
 
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Our Board of Directors will consider the recommendations of stockholders regarding potential director candidates. In order for stockholder recommendations regarding possible director candidates to be considered by our Board of Directors:
 
such recommendations must be provided to the Board of Directors c/o Corporate Secretary, Navidea Biopharmaceuticals, Inc., 5600 Blazer Parkway, Suite 200, Dublin, Ohio 43017, in writing at least 120 days prior to the one year anniversary date of the Company’s proxy statement released to stockholders in connection with this year’s annual meeting; provided, however, that if the date of the current year’s annual meeting is more than 30 days before or after the first anniversary of the most recently concluded annual meeting, such notice shall be delivered to the Company not more than seven days after the date of the notice of the annual meeting.
 
the nominating stockholder must meet the eligibility requirements to submit a valid stockholder proposal under Rule 14a-8 of the Exchange Act;
 
the stockholder must describe the qualifications, attributes, skills or other qualities of the recommended director candidate; and
 
the stockholder must follow the procedures set forth in Article III, Section 2 of our Bylaws.
 
Audit Committee
 
The Audit Committee of the Board of Directors selects our independent registered public accounting firm with whom the Audit Committee reviews the scope of audit and non-audit assignments and related fees, the accounting principles that we use in financial reporting, and the adequacy of our internal control procedures. The members of our Audit Committee are: Y. Michael Rice (Chairman), Anthony S. Fiorino, M.D., Ph.D., and Eric K. Rowinsky, M.D., each of whom is “independent” under Section 803A of the NYSE MKT Company Guide. The Board of Directors has determined that Y. Michael Rice meets the requirements of an “audit committee financial expert” as set forth in Section 407(d)(5) of Regulation S-K promulgated by the SEC. The Audit Committee held 16 meetings in the fiscal year ended December 31, 2016. The Board of Directors adopted a written Amended and Restated Audit Committee Charter on April 30, 2004. A copy of the Amended and Restated Audit Committee Charter is posted on the Company’s website at www.navidea.com.
 
Stockholder Communications
 
Stockholders may send communications to our Board of Directors, or to individual directors, by mailing communications in writing to Navidea Biopharmaceuticals, Inc., c/o Corporate Secretary, 5600 Blazer Parkway, Suite 200, Dublin, OH 43017.
 
Executive Officers
 
In addition to Dr. Goldberg, the following individuals are senior executive officers of Navidea and serve in the position(s) indicated below:
 
Name
 
 
Age
 
 
Position
 
Frederick O. Cope, Ph.D.
 
 
70
 
 
Senior Vice President and Chief Scientific Officer
 
Jed A. Latkin
 
 
42
 
 
Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary
 
William J. Regan
 
 
65
 
 
Senior Vice President and Chief Compliance Officer
 
 
8
 
 
Frederick O. Cope, Ph.D., F.A.C.N., C.N.S., has served as Senior Vice President and Chief Scientific Officer of Navidea since May 2013. Previous to that, Dr. Cope served as Senior Vice President, Pharmaceutical Research and Clinical Development of Navidea from July 2010 to May 2013 and as Vice President, Pharmaceutical Research and Clinical Development from February 2009 to July 2010. Prior to accepting his position with Navidea, Dr. Cope served as the Assistant Director for Research and Head of Program Research Development for The Ohio State University Comprehensive Cancer Center, The James Cancer Hospital and The Richard J. Solove Research Institute. Dr. Cope also served as head of the Cancer and AIDS product development and commercialization program for the ROSS/Abbott Laboratories division, and head of human and veterinary vaccine production and improvement group for Wyeth Laboratories. Dr. Cope served a fellowship in oncology at the McArdle Laboratory for Cancer Research at the University of Wisconsin and was the honored scientist in residence at the National Cancer Center Research Institute in Tokyo; he is the recipient of the Ernst W. Volwiler Research Award and nominee for the European Association of Nuclear Medicine Marie Curie award. Dr. Cope is also active in a number of professional and scientific organizations such as serving as an editorial reviewer for several professional journals, and as an advisor/director to the research program of Roswell Park Memorial Cancer Center. Dr. Cope received his B.Sc. from the Delaware Valley College of Science and Agriculture, his M.S. from Millersville University of Pennsylvania and his Ph.D. from the University of Connecticut.
 
Jed A. Latkin has served as Navidea’s Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary of Navidea since April 2016. Mr. Latkin has more than twenty years of experience in the financial industry supporting many investments in major markets including biotechnology and pharmaceuticals. He most recently was employed by Nagel Avenue Capital, LLC since 2010 and in that capacity he provided contracted services as a Portfolio Manager, Asset Based Lending for Platinum Partners Value Arbitrage Fund L.P. (“PPVA”). Mr. Latkin has been responsible for a large diversified portfolio of asset based investments in varying industries, including product manufacturing, agriculture, energy, and healthcare. In connection with this role, he served as Chief Executive Officer of End of Life Petroleum Holdings, LLC and Black Elk Energy, LLC, Chief Financial Officer of Viper Powersports, Inc. and West Ventures, LLC (“West Ventures”), and Portfolio Manager of Precious Capital, LLC (“Precious Capital”). Mr. Latkin served on the Board of Directors for Viper Powersports, Inc. from 2012 to 2013 and currently serves on the boards of directors of the Renewable Fuels Association and Buffalo Lake Advanced Biofuels. Mr. Latkin earned a B.A from Rutgers University and a M.B.A. from Columbia Business School.
 
William J. Regan joined Navidea in October 2012 and currently serves as our Senior Vice President and Chief Compliance Officer. Prior to accepting his position with Navidea, Mr. Regan served as a consultant to Navidea from July 2011 to September 2012. As Principal of Regan Advisory Services (RAS) from September 2006 to September 2012, Mr. Regan consulted on all aspects of regulatory affairs within pharmaceutical, biotechnology and diagnostic imaging businesses, including PET diagnostic agents (cardiovascular, neurology, and oncology), contrast agents, and radiopharmaceuticals. Previous to RAS, Mr. Regan held roles of increasing responsibility in radiopharmaceutical manufacturing, quality assurance, pharmaceutical technology and regulatory affairs at Bristol-Myers Squibb (BMS). From September 2001 to August 2006, he served as global regulatory head for BMS’ Medical Imaging business where he was responsible for all regulatory aspects of the company’s in-market and pipeline products and led regulatory actions resulting in product approvals. Mr. Regan has led efforts to gain two major FDA label expansions for Tc 99m tilmanocept and in addition has obtained EU regulatory approval for Tc 99m tilmanocept during 2014. Mr. Regan has been an active member in the Society of Nuclear Medicine, Council on Radionuclides and Radiopharmaceuticals (CORAR), and Medical Imaging and Technology Alliance, and formerly served as the industry chair of the Regulatory and Clinical Practice committee on behalf of CORAR. Mr. Regan serves on the Mass Down Syndrome Congress Business Advisory Council and is a Managing Board Director for Turner Hill LLC. Mr. Regan holds a B.A. in Chemistry from Rutgers University.
 
 
 
9
 
 
PROPOSAL NO. 2 – ADVISORY VOTE ON THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS
 
Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires the Company to include in its proxy statement an advisory vote on named executive officer compensation at least once every three years. In 2011, following the approval of our stockholders on an advisory, non-binding, basis we decided to include a stockholder vote on the compensation of our named executive officers in our proxy materials every third year, until the next required vote on the frequency of stockholder votes on the compensation of named executive officers. The last advisory vote on the compensation of our named executive officers occurred in 2014.
 
We ask that you indicate your approval of the compensation paid to our named executive officers as described in this proxy statement under the heading “Executive Compensation,” which includes compensation tables and narratives included elsewhere in this proxy statement. Because your vote is advisory, it will not be binding on the Board of Directors. However, the Board of Directors and the CNG Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation. The CNG Committee has structured its executive compensation programs primarily to motivate executives to achieve the business goals established by the Company and reward executives for meeting business goals and delivering superior performance as measured against those business goals.
 
For the reasons discussed above and in this proxy statement under the heading “Executive Compensation,” the Board of Directors recommends that stockholders vote to approve the following resolution:
 
“RESOLVED, that the compensation of the named executive officers of the Company, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion in this proxy statement, is approved.”
 
The Board of Directors recommends that our stockholders vote “FOR” the approval of the compensation of our named executive officers as set forth in this proxy statement.
 
 
10
 
 
PROPOSAL NO. 3 - ADVISORY VOTE ON THE FREQUENCY OF
VOTING ON THE COMPENSATION OF NAMED EXECUTIVE OFFICERS
 
Section 14A of the Exchange Act, requires the Company to include in its proxy statement an advisory vote on named executive officer compensation at least once every three years. Section 14A also requires the Company to include in its proxy statement at least every six years, a vote regarding the frequency with which the vote on named executive officer compensation should be held. Stockholders may choose from the following alternatives: “1 year,” “2 years,” “3 years,” or to abstain from voting on this proposal. While the Company will continue to monitor developments in this area, the Board of Directors currently plans to continue to seek an advisory vote on executive compensation every third year. The Board of Directors believes this approach aligns more closely with the interests of stockholders by giving stockholders the opportunity to vote on the compensation decisions made by the CNG Committee every third year. We believe investor feedback is more useful if the success of a compensation program and management’s performance is judged over an extended period of time. Our compensation incentives are designed to promote long-term, sustainable results, which generally are not realizable within a short period of time. The Company asks that you indicate your support for holding the advisory vote on executive compensation every third year. Because your vote is advisory, it will not be binding on the Board of Directors. However, the Board of Directors will review the voting results and take them into consideration when making future decisions regarding the frequency with which the advisory vote on executive compensation will be held.
 
The Board of Directors recommends that our stockholders vote “FOR” holding an advisory vote on executive compensation every third year.
 
 
11
 
 
EXECUTIVE COMPENSATION
 
Compensation Discussion and Analysis
 
Overview of Compensation Program. The CNG Committee of the Board of Directors is responsible for establishing and implementing our compensation policies applicable to senior executives and monitoring our compensation practices. The CNG Committee seeks to ensure that our compensation plans are fair, reasonable and competitive. The CNG Committee is responsible for reviewing and approving all senior executive compensation, all awards under our cash bonus plan, and awards under our equity-based compensation plans.
 
Philosophy and Goals of Executive Compensation Plans. The CNG Committee’s philosophy for executive compensation is to:
 
Pay for performance: The CNG Committee believes that our executives should be compensated based upon their ability to achieve specific operational and strategic results. Therefore, our compensation plans are designed to provide rewards for the individual’s contribution to our performance.
 
Pay commensurate with other companies categorized as value creators: The CNG Committee has set a goal that the Company should move towards compensation levels for senior executives that are, at a minimum, at the 40th to 50th percentile for similar executives in the workforce while taking into account current market conditions and Company performance. This allows us to attract, hire, reward and retain senior executives who formulate and execute our strategic plans and drive exceptional results.
 
To ensure our programs are competitive, the CNG Committee periodically reviews compensation information of peer companies, national data and trends in executive compensation to help determine the appropriateness of our plans and compensation levels. These reviews, and the CNG Committee’s commitment to pay for performance, become the basis for the CNG Committee’s decisions on compensation plans and individual executive compensation payments.
 
The CNG Committee has approved a variety of programs that work together to provide a combination of basic compensation and strong incentives. While it is important for us to provide certain base level salaries and benefits to remain competitive, the CNG Committee’s objective is to provide compensation plans with incentive opportunities that motivate and reward executives for consistently achieving superior results. The CNG Committee designs our compensation plans to:
 
Reward executives based upon overall company performance, their individual contributions and creation of stockholder value;
 
Encourage executives to make a long-term commitment to our Company; and
 
Align executive incentive plans with the long-term interests of stockholders.
 
The CNG Committee reviews competitive information and individual compensation levels at least annually. During the review process, the CNG Committee addresses the following questions:
 
Do any existing compensation plans need to be adjusted to reflect changes in competitive practices, different market circumstances or changes to our strategic initiatives?
 
Should any existing compensation plans be eliminated or new plans be added to the executive compensation programs?
 
What are the compensation-related objectives for our compensation plans for the upcoming fiscal year?
 
Based upon individual performance, what compensation modifications should be made to provide incentives for senior executives to perform at superior levels?
 
In addressing these questions, the CNG Committee considers input from management, outside compensation experts and published surveys of compensation levels and practices.
 
 
12
 
 
The CNG Committee does not believe that our compensation policies and practices for our employees give rise to risks that are reasonably likely to have a material adverse effect on the Company. As noted below, our incentive-based compensation is generally tied to Company financial performance (i.e., revenue or gross margin) or product development goals (i.e., clinical trial progress or regulatory milestones). The CNG Committee believes that the existence of these financial performance incentives creates a strong motivation for Company employees to contribute towards the achievement of strong, sustainable financial and development performance, and believes that the Company has a strong set of internal controls that minimize the risk that financial performance can be misstated in order to achieve incentive compensation payouts.
 
In addition to the aforementioned considerations, the CNG Committee also takes into account the outcome of stockholder advisory (“say-on-pay”) votes, taken every three years, on the compensation of our Chief Executive Officer, Chief Financial Officer, and our next three highest-paid executive officers (the Named Executive Officers). At the Annual Meeting of Stockholders held on July 17, 2014, approximately 74% of our stockholders voted in favor of the resolution relating to the compensation of our Named Executive Officers. The CNG Committee believes this affirmed stockholders’ support of the Company’s executive compensation program, and as such has not changed its approach since then. The CNG Committee will continue to consider the results of future say-on-pay votes when making future compensation decisions for the executive officers.
 
The CNG Committee believes that, given the increased responsibilities of the President and Chief Executive Officer related to the Company’s legal and financial difficulties at the time of his appointment, Dr. Goldberg’s compensation is commensurate with that of his predecessor.
 
Scope of Authority of the CNG Committee. The Board of Directors has authorized the CNG Committee to establish the compensation programs for all executive officers and to provide oversight for compliance with our compensation philosophy. The CNG Committee delegates the day-to-day administration of the compensation plans to management (except with respect to our executive officers), but retains responsibility for ensuring that the plan administration is consistent with the Company’s policies. Annually, the CNG Committee sets the compensation for our executive officers, including objectives and awards under incentive plans. The Chief Executive Officer provides input for the CNG Committee regarding the performance and appropriate compensation of the other officers. The CNG Committee gives considerable weight to the Chief Executive Officer’s evaluation of the other officers because of his direct knowledge of each officer’s performance and contributions. The CNG Committee also makes recommendations to the Board of Directors on appropriate compensation for the non-employee directors. In addition to overseeing the compensation of executive officers, the CNG Committee approves awards under short-term cash incentive and long-term equity-based compensation plans for all other employees. For more information on the CNG Committee’s role, see the CNG Committee’s charter, which can be found on our website at www.navidea.com.
 
Independent Compensation Expertise. The CNG Committee is authorized to periodically retain independent experts to assist in evaluating executive compensation plans and in setting executive compensation levels. Such evaluations are generally conducted every three years, although the CNG Committee may request them at other intervals in its discretion. These experts provide information on trends and best practices so the CNG Committee can formulate ongoing plans for executive compensation. The CNG Committee retained Pearl Meyer & Partners (“Pearl Meyer”) as its independent expert to assist in the determination of the reasonableness and competitiveness of the executive compensation plans and senior executives’ individual compensation levels for fiscal 2015. No conflict of interest exists that would prevent Pearl Meyer from serving as independent consultant to the CNG Committee.
 
For fiscal 2015, Pearl Meyer performed a benchmark compensation review of our key executive positions, including our Named Executive Officers. Pearl Meyer utilized both published survey and proxy reported data from compensation peers, with market data aged to March 1, 2016 by an annualized rate of 3.0%, the expected pay increase in 2016 for executives in the life sciences industry.
 
In evaluating appropriate executive compensation, it is common practice to set targets at a point within the competitive marketplace. The CNG Committee sets its competitive compensation levels based upon its compensation philosophy. Following completion of the Pearl Meyer study for 2015, the CNG Committee noted that our overall executive compensation was, in aggregate, below the 25th percentile for an established peer group of companies.
 
 
13
 
 
Peer Group Companies. In addition to independent survey analysis, in 2015 the CNG Committee also reviewed the compensation levels at specific competitive benchmark companies. With input from management, the CNG Committee chose the peer companies because they operate within the biotechnology industry, have market capitalization between $100 million and $500 million, have similar business models to our Company or have comparable key executive positions. While the specific plans for these companies may or may not be used, it is helpful to review their compensation data to provide benchmarks for the overall compensation levels that will be used to attract, hire, retain and motivate our executives.
 
As competitors and similarly situated companies that compete for the same executive talent, the CNG Committee determined that the following peer group companies most closely matched the responsibilities and requirements of our executives:
 
Sangamo Biosciences, Inc.
 
ArQule, Inc.
Inovio Pharmaceuticals, Inc.
 
Galena Biopharma, Inc.
Geron Corporation
 
Keryx Biopharmaceuticals, Inc.
Rigel Pharmaceuticals, Inc.
 
BioTime, Inc.
OncoMed Pharmaceuticals, Inc.
 
Omeros Corporation
CTI BioPharma Corp.
 
Immunomedics, Inc.
Unilife Corporation
 
Nymox Pharmaceutical Corporation
 
Pearl Meyer and the CNG Committee used the publicly available compensation information for these companies to analyze our competitive position in the industry. Base salaries and short-term and long term incentive plans of the executives of these companies were reviewed to provide background and perspective in analyzing the compensation levels for our executives.
 
Specific Elements of Executive Compensation
 
Base Salary. Using information gathered by Pearl Meyer, peer company data, national surveys, general compensation trend information and recommendations from management, the CNG Committee approved the fiscal 2015 base salaries for our senior executives. Base salaries for senior executives are set using the CNG Committee’s philosophy that compensation should be competitive and based upon performance. Executives should expect that their base salaries, coupled with a cash bonus award, would provide them the opportunity to be compensated at or above the competitive market at the 40th to 50th percentile.
 
Based on competitive reviews of similar positions, industry salary trends, overall company results and individual performance, salary increases may be approved from time to time. The CNG Committee reviews and approves base salaries of all executive officers. In setting specific base salaries for fiscal 2015, the CNG Committee considered published proxy data for similar positions at peer group companies. Base salaries for fiscal 2016 remained unchanged from 2015.
 
14
 
 
 The following table shows the changes in base salaries for the Named Executive Officers that were approved for fiscal 2016 compared to the approved salaries for fiscal 2015:
 
Named Executive Officer
 
Fiscal 2016
Base Salary(a)
 
 
Fiscal 2015
Base Salary
 
 
Change(b)
Michael M. Goldberg, M.D. (c)
 
$
400,000
 
 
$
 
 
 
N/A
 
Ricardo J. Gonzalez (d)
 
 
375,000
 
 
 
375,000
 
 
 
0.0
%
Frederick O. Cope, Ph.D.
 
 
279,130
 
 
 
279,130
 
 
 
0.0
%
Thomas J. Klima (e)
 
 
270,000
 
 
 
270,000
 
 
 
0.0
Brent L. Larson (f)
 
 
260,000
 
 
 
260,000
 
 
 
0.0
%
Jed A. Latkin (g)
 
 
300,000
 
 
 
 
 
 
N/A
 
William J. Regan
 
 
250,000
 
 
 
250,000
 
 
 
0.0
 
(a)
The amount shown for fiscal 2016 is the approved annual salary of the Named Executive Officer in effect at the earlier of termination of employment or the end of 2016. The actual amount paid to the Named Executive Officer during fiscal 2016 is shown under “Salary” in the Summary Compensation table below.
(b)
Due to the Company’s financial difficulties in 2015 and 2016, Named Executive Officers did not receive salary increases in 2016.
(c)
Dr. Goldberg was appointed President and Chief Executive Officer of the Company effective September 22, 2016.
(d)
Mr. Gonzalez separated from the Company effective May 13, 2016.
(e)
Mr. Klima separated from the Company effective March 8, 2017.
(f)
Effective May 9, 2016, Mr. Larson was approved for short term disability by the Company’s insurance carrier and ceased acting as Chief Financial Officer. Mr. Larson separated from the Company effective October 6, 2016.
(g)
Mr. Latkin was appointed Interim Chief Operating Officer and Chief Financial Officer of the Company effective April 21, 2016.
 
On May 4, 2017, the Company executed a 12-month employment agreement with Jed A. Latkin effective May 4, 2017 through May 3, 2018. The employment agreement provides for an annual base salary of $325,000. Base salaries for all other executive officers for fiscal 2017 remained unchanged from 2016.
 
Short-Term Incentive Compensation. Our executive officers, along with all of our employees, are eligible to participate in our annual cash bonus program, which has four primary objectives:
 
Attract, retain and motivate top-quality executives who can add significant value to the Company;
 
Create an incentive compensation opportunity that is an integral part of the employee’s total compensation program;
 
Reward participants’ contributions to the achievement of our business results; and
 
Provide an incentive for individuals to achieve corporate objectives that are tied to our strategic goals.
 
The cash bonus compensation plan provides each participant with an opportunity to receive an annual cash bonus based on our Company’s performance during the fiscal year. Cash bonus targets for senior executives are determined as a percentage of base salary, based in part on published proxy data for similar positions at peer group companies. The following are the key provisions of the cash bonus compensation plan:
 
The plan is administered by the CNG Committee, which has the power and authority to establish, adjust, pay or decline to pay the cash bonus for each participant, including the power and authority to increase or decrease the cash bonus otherwise payable to a participant. However, the CNG Committee does not have the power to increase, or make adjustments that would have the effect of increasing, the cash bonus otherwise payable to any executive officer. The CNG Committee has the right to delegate to the Chief Executive Officer its authority and responsibilities with respect to the cash bonuses payable to employees other than executive officers.
 
 
15
 
 
All Company employees are eligible to participate.
 
The CNG Committee is responsible for specifying the terms and conditions for earning cash bonuses, including establishing specific performance objectives. Cash bonuses payable to executive officers are intended to constitute “qualified performance-based compensation” for purposes of Code Section 162(m). Consequently, each cash bonus awarded to an executive officer must be conditioned on one or more specified “Performance Measures,” calculated on a consolidated basis. Possible Performance Measures include revenues; gross margin; operating income; net income; clinical trial progress; regulatory milestones; or any other performance objective approved by the CNG Committee.
 
As soon as reasonably practicable after the end of each fiscal year, the CNG Committee determines whether and to what extent each specified business performance objective has been achieved and the amount of the cash bonus to be paid to each participant.
 
For the Named Executive Officers, cash bonus targets remained the same for fiscal 2016 as those that were established for fiscal 2015:
 
Named Executive Officer
 
Target Cash Bonus (% of Salary)
 
 
Target Cash Bonus ($ Amount)
 
Michael M. Goldberg, M.D. (a)
 
 
75.0
%
 
$
300,000
 
Ricardo J. Gonzalez (b)
 
 
50.0
%
 
 
187,500
 
Frederick O. Cope, Ph.D.
 
 
35.0
%
 
 
97,696
 
Thomas J. Klima (c)
 
 
35.0
%
 
 
94,500
 
Brent L. Larson (d)
 
 
35.0
%
 
 
91,000
 
Jed A. Latkin (e)
 
 
0.0
%
 
 
 
William J. Regan (f)
 
 
35.0
%
 
 
87,500
 
 
(a)
Dr. Goldberg was appointed President and Chief Executive Officer of the Company effective September 22, 2016. Dr. Goldberg’s annual salary is $400,000, however payment of 25% of that amount was deferred pending the sale of certain assets to Cardinal Health 414, LLC, which occurred on March 3, 2017. In April 2017, the CNG Committee awarded Dr. Goldberg a bonus of $110,685 representing 100% of his annual salary, pro-rated for his time served as President and Chief Executive Officer during 2016.
(b)
Mr. Gonzalez separated from the Company effective May 13, 2016, therefore no bonus was awarded to Mr. Gonzalez for fiscal 2016.
(c)
In February 2017, the CNG Committee awarded Mr. Klima a bonus of $52,920, 50% of which was paid in stock as further described below. Mr. Klima separated from the Company effective March 8, 2017.
(d)
Effective May 9, 2016, Mr. Larson was approved for short term disability by the Company’s insurance carrier and ceased acting as Chief Financial Officer. Mr. Larson separated from the Company effective October 6, 2016, therefore no bonus was awarded to Mr. Larson for fiscal 2016.
(e)
Mr. Latkin was appointed Interim Chief Operating Officer and Chief Financial Officer effective April 21, 2016. As an interim employee, Mr. Latkin’s employment agreement does not provide for payment of a bonus. However, in April 2017, the CNG Committee awarded Mr. Latkin a bonus of $122,903 representing 75% of his annual salary, pro-rated for his time served as Interim Chief Operating Officer and Chief Financial Officer during 2016.
(f)
In February 2017, the CNG Committee awarded Mr. Regan a bonus of $49,000, 67% of which was paid in stock as further described below.
 
On April 25, 2017, the CNG Committee set the following bonus targets, stated as a percentage of base salary, for executive officers for fiscal 2017: Dr. Goldberg – 75%-100%; Mr. Latkin – 75%-100%; Dr. Cope – 35%.
 
The Board of Directors did not set specific bonus goals for fiscal 2016. On February 6, 2017, the Board of Directors determined the amounts to be awarded as 2016 bonuses to all employees, including the Named Executive Officers other than Dr. Goldberg and Mr. Latkin, whose bonus determination was deferred pending closing of the sale of certain assets to Cardinal Health 414, LLC. The Board of Directors also determined that a portion of the 2016 bonus amount payable would be paid in stock in lieu of cash. The portion of the 2016 bonus amount payable in cash is either fifty percent or thirty-three percent, as determined by the Board of Directors. As such, Dr. Cope, Mr. Klima and Mr. Regan were awarded 70,492, 50,885 and 63,135, respectively, shares of Common Stock of the Company valued at $0.52 per share, the closing price of Navidea’s Common Stock on February 6, 2017. The cash portion of the 2016 bonus awards was paid on March 15, 2017.
 
 
16
 
 
On April 25, 2017, the CNG Committee awarded bonuses to Dr. Goldberg and Mr. Latkin, which bonus awards had previously been deferred pending the closing of the Company’s sale of certain assets to Cardinal Health 414, LLC, which occurred on March 3, 2017. In light of the successful closing of the asset sale to Cardinal Health 414, the CNG Committee determined that Dr. Goldberg and Mr. Latkin should be rewarded commensurate with the effort that went into closing the sale. Dr. Goldberg’s bonus of $110,685 represents 100% of his annual salary, pro-rated for his time served as President and Chief Executive Officer during 2016. Mr. Latkin’s bonus of $122,903 represents 75% of his annual salary, pro-rated for his time served as Interim Chief Operating Officer and Chief Financial Officer during 2016.
 
On February 25, 2016, the Board of Directors determined that fifty percent of the 2015 bonus amount payable to certain executive officers would be paid in stock options in lieu of cash, calculated based on the Black-Scholes value of the options on the date of grant. As such, Dr. Cope and Mr. Regan were awarded options to purchase 58,510 and 52,405, respectively, shares of Common Stock of the Company at an exercise price of $0.98 per share, vesting immediately upon the date of grant and expiring after ten years. On February 6, 2017, the Board of Directors determined that the amounts previously awarded as 2015 bonuses would be subject to the same split between cash and stock as the 2016 bonus awards. As such, Dr. Cope and Mr. Regan were awarded an additional 17,886 and 16,020, respectively, shares of Common Stock of the Company valued at $0.52 per share, the closing price of our Common Stock on February 6, 2017. The cash portion of the 2015 bonus awards was paid on March 15, 2017.
 
Long-Term Incentive Compensation. All Company employees are eligible to receive equity awards in the form of stock options or restricted stock. Equity instruments awarded under the Company’s equity-based compensation plan are based on the following criteria:
 
Analysis of competitive information for comparable positions;
 
Evaluation of the value added to the Company by hiring or retaining specific employees; and
 
Each employee’s long-term potential contributions to our Company.
 
Although equity awards may be made at any time as determined by the CNG Committee, they are generally made to all full-time employees once per year or on the recipient’s hire date in the case of new-hire grants.
 
The CNG Committee’s philosophy on equity awards is that equity-based compensation is an effective method to align the interests of stockholders and management and focus management’s attention on long-term results. When awarding equity-based compensation the CNG Committee considers the impact the participant can have on our overall performance, strategic direction, financial results and stockholder value. Therefore, equity awards are primarily based upon the participant’s position in the organization, competitive necessity and individual performance. Equity awards for senior executives are determined as a percentage of base salary, based on published proxy data for similar positions at peer group companies. Stock option awards have vesting schedules over several years to promote long-term performance and retention of the recipient, and restricted stock awards may include specific performance criteria for vesting or vest over a specified period of time.
 
Other Benefits and Perquisites. The Named Executive Officers are generally eligible to participate in other benefit plans on the same terms as other employees. These plans include medical, dental, vision, disability and life insurance benefits, and our 401(k) Plan.
 
Our vacation policy allows employees to carry up to 40 hours of unused vacation time forward to the next fiscal year. Any unused vacation time in excess of the amount eligible for rollover is generally forfeited.
 
Our Named Executive Officers are considered “key employees” for purposes of IRC Section 125 Plan non-discrimination testing. Based on such non-discrimination testing, we determined that our Section 125 Plan was “top-heavy.” As such, our key employees are ineligible to participate in the Section 125 Plan and are unable to pay their portion of medical, dental, and vision premiums on a pre-tax basis. As a result, the Company reimburses its key employees an amount equal to the lost tax benefit.
 
 
17
 
 
We pay group life insurance premiums on behalf of all employees, including the Named Executive Officers. The benefit provides life insurance coverage at two times the employee’s annual salary plus $10,000, up to a maximum of $630,000.
 
We also pay group long-term disability insurance premiums on behalf of all employees, including the Named Executive Officers. The benefit provides long-term disability insurance coverage at 60% of the employee’s annual salary, up to a maximum of $10,000 per month, beginning 180 days after the date of disability and continuing through age 65.
 
401(k) Retirement Plan. All employees are given an opportunity to participate in our 401(k) Plan, following a new-hire waiting period. The 401(k) Plan allows participants to have pre-tax amounts withheld from their pay and provides for a discretionary employer matching contribution (currently, a 40% match up to 5% of salary in the form of our Common Stock). Participants may invest their contributions in various fund options, but are prohibited from investing their contributions in our Common Stock. Participants are immediately vested in both their contributions and Company matching contributions. The 401(k) Plan qualifies under section 401 of the Internal Revenue Code, which provides that employee and company contributions and income earned on contributions are not taxable to the employee until withdrawn from the Plan, and that we may deduct our contributions when made.
 
Employment Agreements
 
Our senior executive officers are generally employed under employment agreements which specify the terms of their employment such as base salary, benefits, paid time off, and post-employment benefits as shown in the tables below. Our employment agreements also specify that if a change in control occurs with respect to our Company and the employment of a senior executive officer is concurrently or subsequently terminated:
 
by the Company without cause (cause is defined as any willful breach of a material duty by the senior executive officer in the course of his or her employment or willful and continued neglect of his or her duty as an employee);
 
by the expiration of the term of the employment agreement; or
 
by the resignation of the senior executive officer because his or her title, authority, responsibilities, salary, bonus opportunities or benefits have materially diminished, a material adverse change in his or her working conditions has occurred, his or her services are no longer required in light of the Company’s business plan, or we breach the agreement;
 
then, the senior executive officer would be paid a severance payment as disclosed in the tables below. For purposes of such employment agreements, a change in control includes:
 
the acquisition, directly or indirectly, by a person (other than our Company, an employee benefit plan established by the Board of Directors, or a participant in a transaction approved by the Board of Directors for the principal purpose of raising additional capital) of beneficial ownership of 30% or more of our securities with voting power in the next meeting of holders of voting securities to elect the directors;
 
a majority of the Directors elected at any meeting of the holders of our voting securities are persons who were not nominated by our then current Board of Directors or an authorized committee thereof;
 
our stockholders approve a merger or consolidation of our Company with another person, other than a merger or consolidation in which the holders of our voting securities outstanding immediately before such merger or consolidation continue to hold voting securities in the surviving or resulting corporation (in the same relative proportions to each other as existed before such event) comprising 80% or more of the voting power for all purposes of the surviving or resulting corporation; or
 
our stockholders approve a transfer of substantially all of our assets to another person other than a transfer to a transferee, 80% or more of the voting power of which is owned or controlled by us or by the holders of our voting securities outstanding immediately before such transfer in the same relative proportions to each other as existed before such event.
 
 
18
 
 
Michael M. Goldberg, M.D. Dr. Goldberg is employed under a 12-month employment agreement effective through September 22, 2017. The employment agreement provides for an annual base salary of $400,000, of which (i) $300,000 shall be payable in semi-monthly installments of $12,500, and (ii) $100,000 shall be payable at such time as the Board of Directors determines in its sole discretion that the Company has adequate cash flow, subject to annual review and increase by the CNG Committee. On April 25, 2017, the CNG Committee approved payment of Dr. Goldberg’s total deferred compensation of $61,005, as well as payment of Dr. Goldberg’s full $400,000 annual salary in cash beginning May 1, 2017. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Dr. Goldberg would be $300,000, to be pro-rated based on time served during 2016. In light of the successful closing of the asset sale to Cardinal Health 414, the CNG Committee determined that Dr. Goldberg should be rewarded commensurate with the effort that went into closing the sale. On April 25, 2017, the CNG Committee awarded a bonus of $110,685 to Dr. Goldberg, representing 100% of his annual salary, pro-rated for his time served as President and Chief Executive Officer in 2016. In connection with Dr. Goldberg’s appointment as Chief Executive Officer of the Company, the Board of Directors awarded options to purchase 5,000,000 shares of our Common Stock to Dr. Goldberg, subject to stockholder approval of the 2016 Stock Incentive Plan (the “2016 Plan”). If approved, these stock options will vest 100% when the average closing price of the Company’s Common Stock over a period of five consecutive trading days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant. If the 2016 Plan is not approved, the Company will be obligated to pay in cash the implied market value of the options at the time of “exercise” by Dr. Goldberg, assuming the share price exceeds $2.50 and all other vesting conditions are met. Dr. Goldberg has agreed that the 2016 Plan need not be presented to the shareholders for vote before the 2018 annual meeting and that he will not require any cash payment prior to that time.
 
Ricardo J. Gonzalez. Prior to his separation effective May 13, 2016, Mr. Gonzalez was employed under a 36-month employment agreement effective through October 13, 2017. The employment agreement provided for an annual base salary of $375,000. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Mr. Gonzalez would be $187,500. Following his separation effective May 13, 2016, no bonus was awarded to Mr. Gonzalez for fiscal 2016.
 
Frederick O. Cope, Ph.D. Dr. Cope was employed under a 24-month employment agreement effective through December 31, 2014. The employment agreement provided for an annual base salary of $271,000. Effective May 1, 2013, Dr. Cope’s annual base salary was increased to $279,130. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Dr. Cope would be $97,696. Although Dr. Cope’s employment agreement expired on December 31, 2014, the terms of the agreement provide for continuation of certain terms of the employment agreement as long as Dr. Cope continues to be an employee of the Company following expiration of the agreement.
 
Thomas J. Klima. Mr. Klima was employed under a 24-month employment agreement effective through January 1, 2017. The employment agreement provided for an annual base salary of $270,000. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Mr. Klima would be $94,500. The Company did not renew Mr. Klima’s employment agreement, and Mr. Klima separated from the Company effective March 8, 2017.
 
Brent L. Larson. Mr. Larson was employed under a 24-month employment agreement effective through December 31, 2014. The employment agreement provided for an annual base salary of $265,000. Effective May 1, 2013, Mr. Larson’s annual base salary was increased to $279,575. Effective January 1, 2014, Mr. Larson agreed to a reduction in his annual base salary to $260,000. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Mr. Larson would be $91,000. Although Mr. Larson’s employment agreement expired on December 31, 2014, the terms of the agreement provided for continuation of certain terms of the employment agreement as long as Mr. Larson continued to be an employee of the Company following expiration of the agreement. Effective October 6, 2016, Mr. Larson was approved for long term disability by the Company’s insurance carrier and is accordingly no longer an employee of the Company. Following his separation effective October 6, 2016, no bonus was awarded to Mr. Larson for fiscal 2016.
 
 
19
 
 
Jed A. Latkin. Mr. Latkin was employed under an at-will employment agreement effective April 21, 2016 through May 3, 2017. The interim employment agreement provided for a monthly base salary of $15,000 during the first and second months of employment, $17,500 during the third and fourth months of employment and $20,000 per month thereafter. Effective October 21, 2016, Mr. Latkin’s base salary was increased to $25,000 per month. As an interim employee, Mr. Latkin’s employment agreement did not provide for payment of a bonus. However, in light of the successful closing of the asset sale to Cardinal Health 414, the CNG Committee determined that Mr. Latkin should be rewarded commensurate with the effort that went into closing the sale. On April 25, 2017, the CNG Committee awarded a bonus of $122,903 to Mr. Latkin, representing 75% of his annual salary, pro-rated for his time served as Interim Chief Operating Officer and Chief Financial Officer during 2016. On May 4, 2017, the Company executed a 12-month employment agreement with Mr. Latkin effective May 4, 2017 through May 3, 2018. The employment agreement provides for an annual base salary of $325,000. In connection with his employment agreement, Mr. Latkin was granted options to purchase 1,000,000 shares of our common stock with vesting terms as follows: (i) 333,334 options with a strike price of $0.65 will vest on or after May 4, 2017, so long as the closing market price of the underlying common stock equals or exceeds $0.65; (ii) 333,333 options with a strike price of $0.75 will vest on or after December 31, 2017, so long as the closing market price of the underlying common stock equals or exceeds $1.00, and (iii) 333,333 options with a strike price of $1.00 will vest on or after December 31, 2018, so long as the closing market price of the underlying common stock equals or exceeds $1.25.
 
William J. Regan. Mr. Regan was employed under a 15-month employment agreement effective through December 31, 2015. The employment agreement provided for an annual base salary of $250,000. For the calendar year ending December 31, 2016, the CNG Committee determined that the maximum bonus payment to Mr. Regan would be $87,500. Although Mr. Regan’s employment agreement expired on December 31, 2015, the terms of the agreement provide for continuation of certain terms of the employment agreement as long as Mr. Regan continues to be an employee of the Company following expiration of the agreement.
 
Post-Employment Compensation
 
The following tables set forth the expected benefit to be received by each of our Named Executive Officers in the event of his termination resulting from various scenarios, assuming a termination date of December 31, 2016 and a stock price of $0.64, our closing stock price on December 31, 2016.
 
Michael M. Goldberg, M.D. (e)
 
 
 
For Cause
 
 
Resignation
 
 
Death
 
 
Disability
 
 
End of Term
 
 
Without Cause
 
 
Change in Control
 
Cash payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance (a)
 
$
 
 
$
 
 
$
 
 
$
 
 
$
800,000
 
 
$
800,000
 
 
$
1,100,000
 
Disability supplement (b)
 
 
 
 
 
 
 
 
 
 
 
197,600
 
 
 
 
 
 
 
 
 
 
Paid time off (c)
 
 
7,692
 
 
 
7,692
 
 
 
7,692
 
 
 
7,692
 
 
 
7,692
 
 
 
7,692
 
 
 
7,692
 
Continuation of benefits (d)
 
 
 
 
 
 
 
 
26,858
 
 
 
26,858
 
 
 
 
 
 
 
 
 
 
Total
 
$
7,692
 
 
$
7,692
 
 
$
36,750
 
 
$
234,350
 
 
$
807,692
 
 
$
807,692
 
 
$
1,107,692
 
 
(a)
Severance amounts are pursuant to Dr. Goldberg’s employment agreement.
(b)
During the first 6 months of disability, the Company will supplement disability insurance payments to Dr. Goldberg to achieve 100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of 24 weeks.
(c)
Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2016.
(d)
Amount represents 12 months of medical, dental and vision insurance premiums at rates in effect at December 31, 2016.
(e)
Dr. Goldberg was appointed President and Chief Executive Officer of the Company effective September 22, 2016.
 
 
20
 
 
Frederick O. Cope, Ph.D.
 
 
 
For Cause
 
 
Resignation
 
 
Death
 
 
Disability
 
 
End of Term
 
 
Without Cause
 
 
Change in Control
 
Cash payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance (a)
 
$
 
 
$
 
 
$
 
 
$
 
 
$
245,000
 
 
$
245,000
 
 
$
367,500
 
Disability supplement (b)
 
 
 
 
 
 
 
 
 
 
 
137,165
 
 
 
 
 
 
 
 
 
 
Paid time off (c)
 
 
5,368
 
 
 
5,368
 
 
 
5,368
 
 
 
5,368
 
 
 
5,368
 
 
 
5,368
 
 
 
5,368
 
2016 401(k) match (d)
 
 
5,300
 
 
 
5,300
 
 
 
5,300
 
 
 
5,300
 
 
 
5,300
 
 
 
5,300
 
 
 
5,300
 
Continuation of benefits (e)
 
 
 
 
 
 
 
 
20,166
 
 
 
20,166
 
 
 
 
 
 
20,166
 
 
 
20,166
 
Stock option vesting acceleration (f)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restricted stock vesting acceleration (g)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31,950
 
Total
 
$
10,668
 
 
$
10,668
 
 
$
30,834
 
 
$
167,999
 
 
$
255,668
 
 
$
275,834
 
 
$
430,284
 
 
(a)
Severance amounts are pursuant to Dr. Cope’s employment agreement.
(b)
During the first 6 months of disability, the Company will supplement disability insurance payments to Dr. Cope to achieve 100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of 24 weeks.
(c)
Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2016.
(d)
Amount represents the value of 6,375 shares of Company stock which was accrued during 2016 as the Company’s 401(k) matching contribution but was unissued as of December 31, 2016.
(e)
Amount represents 12 months of medical, dental and vision insurance premiums at rates in effect at December 31, 2016.
(f)
Pursuant to Dr. Cope’s stock option agreements, all unvested stock options outstanding will vest upon termination at the end of the term of his employment agreement, termination without cause, or a change in control. Amount represents the value of the stock at $0.64, the closing price of the Company’s stock on December 31, 2016, less the exercise price of the options. Amount does not include stock options with an exercise price higher than $0.64, the closing price of the Company’s stock on December 31, 2016.
(g)
Pursuant to Dr. Cope’s restricted stock agreements, certain unvested restricted stock outstanding will vest upon a change in control. Amount represents the value of the stock at $0.64, the closing price of the Company’s stock on December 31, 2016, less the purchase price of the stock.
 
 
Thomas J. Klima (e)
 
 
 
For Cause
 
 
Resignation
 
 
Death
 
 
Disability
 
 
End of Term
 
 
Without Cause
 
 
Change in Control
 
Cash payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Disability supplement (a)
 
$
 
 
$
 
 
$
 
 
$
132,600
 
 
$
 
 
$
 
 
$
 
Paid time off (b)
 
 
5,192
 
 
 
5,192
 
 
 
5,192
 
 
 
5,192
 
 
 
5,192
 
 
 
5,192
 
 
 
5,192
 
Continuation of benefits (c)
 
 
 
 
 
 
 
 
14,529
 
 
 
14,529
 
 
 
 
 
 
 
 
 
 
Stock option vesting acceleration (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
5,192
 
 
$
5,192
 
 
$
19,721
 
 
$
152,321
 
 
$
5,192
 
 
$
5,192
 
 
$
5,192
 
(a)
During the first 6 months of disability, the Company will supplement disability insurance payments to Mr. Klima to achieve 100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of 24 weeks.
(b)
Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2016.
(c)
Amount represents 6 months of medical, dental and vision insurance premiums at rates in effect at December 31, 2016.
(d)
Pursuant to Mr. Klima’s stock option agreements, all unvested stock options outstanding will vest upon termination at the end of the term of his employment agreement, termination without cause, or a change in control. Amount represents the value of the stock at $0.64, the closing price of the Company’s stock on December 31, 2016, less the exercise price of the options. Amount does not include stock options with an exercise price higher than $0.64, the closing price of the Company’s stock on December 31, 2016.
(e)
The Company did not renew Mr. Klima’s employment agreement, and Mr. Klima separated from the Company effective March 8, 2017.
 
 
21
 
 
Jed A. Latkin (a)
 
 
 
For Cause
 
 
Resignation
 
 
Death
 
 
Disability
 
 
End of Term
 
 
Without Cause
 
 
Change in Control
 
Total
 
$
 
 
$
 
 
$
 
 
$
 
 
$
 
 
$
 
 
$
 
(a)
As an interim employee, Mr. Latkin’s employment agreement did not provide for severance or any other post-employment benefits.
 
 
William J. Regan
 
 
 
For Cause
 
 
Resignation
 
 
Death
 
 
Disability
 
 
End of Term
 
 
Without Cause
 
 
Change in Control
 
Cash payments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Severance (a)
 
$
 
 
$
 
 
$
 
 
$
 
 
$
250,000
 
 
$
250,000
 
 
$
375,000
 
Disability supplement (b)
 
 
 
 
 
 
 
 
 
 
 
122,600
 
 
 
 
 
 
 
 
 
 
Paid time off (c)
 
 
4,808
 
 
 
4,808
 
 
 
4,808
 
 
 
4,808
 
 
 
4,808
 
 
 
4,808
 
 
 
4,808
 
2016 401(k) match (d)
 
 
5,036
 
 
 
5,036
 
 
 
5,036
 
 
 
5,036
 
 
 
5,036
 
 
 
5,036
 
 
 
5,036
 
Continuation of benefits (e)
 
 
 
 
 
 
 
 
1,150
 
 
 
1,150
 
 
 
 
 
 
1,150
 
 
 
1,150
 
Stock option vesting acceleration (f)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
9,844
 
 
$
9,844
 
 
$
10,993
 
 
$
133,593
 
 
$
259,844
 
 
$
260,993
 
 
$
385,993
 
(a)
Severance amounts are pursuant to Mr. Regan’s employment agreement.
(b)
During the first 6 months of disability, the Company will supplement disability insurance payments to Mr. Regan to achieve 100% salary replacement. The Company’s short-term disability insurance policy currently pays $100 per week for a maximum of 24 weeks.
(c)
Amount represents the value of 40 hours of accrued but unused vacation time as of December 31, 2016.
(d)
Amount represents the value of 6,015 shares of Company stock which was accrued during 2016 as the Company’s 401(k) matching contribution but was unissued as of December 31, 2016.
(e)
Amount represents 12 months of dental and vision insurance premiums at rates in effect at December 31, 2016.
(f)
Pursuant to Mr. Regan’s stock option agreements, all unvested stock options outstanding will vest upon termination at the end of the term of his employment agreement, termination without cause, or a change in control. Amount represents the value of the stock at $0.64, the closing price of the Company’s stock on December 31, 2016, less the exercise price of the options. Amount does not include stock options with an exercise price higher than $0.64, the closing price of the Company’s stock on December 31, 2016.
 
 
22
 
 
Report of Compensation, Nominating and Governance Committee
 
The CNG Committee is responsible for establishing, reviewing and approving the Company’s compensation philosophy and policies, reviewing and making recommendations to the Board of Directors regarding forms of compensation provided to the Company’s directors and officers, reviewing and determining cash and equity awards for the Company’s officers and other employees, and administering the Company’s equity incentive plans.
 
In this context, the CNG Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement for the Annual Meeting. In reliance on the review and discussions referred to above, the CNG Committee recommended to the Board of Directors, and the Board of Directors has approved, that the Compensation Discussion and Analysis be included in this proxy statement for filing with the SEC.
 
The Compensation, Nominating
and Governance Committee
 
Eric K. Rowinsky, M.D. (Chairman)
Mark I. Greene, M.D., Ph.D., FRCP
Y. Michael Rice
 
Compensation, Nominating and Governance Committee Interlocks and Insider Participation
 
The current members of our CNG Committee are: Eric K. Rowinsky, M.D. (Chairman), Mark I. Greene, M.D., Ph.D., FRCP, and Y. Michael Rice. During the fiscal year ended December 31, 2016, the members of our CNG Committee were: Anton Gueth (Chairman), Eric K. Rowinsky, M.D. (Chairman), Brendan A. Ford, Mark I. Greene, M.D., Ph.D., FRCP, Y. Michael Rice and Gordon A. Troup. None of these individuals were at any time during the fiscal year ended December 31, 2016, or at any other time, an officer or employee of the Company.
 
No director who served on the CNG Committee during 2016 had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director of the Company or member of the CNG Committee during 2016.
 
 
23
 
 
Summary Compensation Table
 
The following table sets forth certain information concerning the annual and long-term compensation of our Named Executive Officers for the last three fiscal years.
 
Summary Compensation Table for Fiscal 2016
 
Named Executive Officer
 
Year
 
Salary
 
 
(a)
Stock
Awards
 
 
(b)
Option
Awards
 
 
(c)
Non-Equity
Incentive Plan
Compensation
 
 
(d)
All Other
Compensation
 
 
TotalCompensation
 
Michael M. Goldberg (e)
 
2016
 
$
83,077
 
 
$
 
 
$
 
 
$
110,685
 
 
$
436
 
 
$
194,198
 
President and
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chief Executive Officer
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ricardo J. Gonzalez (f)
 
2016
 
$
137,981
 
 
$
 
 
$
 
 
$
 
 
$
3,352
 
 
$
141,333
 
President and
 
2015
 
 
375,000
 
 
 
 
 
 
 
 
 
105,001
 
 
 
7,692
 
 
 
487,693
 
Chief Executive Officer
 
2014
 
 
82,452
 
 
 
 
 
 
768,247
 
 
 
16,241
 
 
 
 
 
 
866,940
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frederick O. Cope, Ph.D.
 
2016
 
$
279,130
 
 
$
 
 
$
 
 
$
54,710
 
 
$
6,735
 
 
$
340,575
 
Senior Vice President and
 
2015
 
 
279,130
 
 
 
 
 
 
155,026
 
 
 
54,709
 
 
 
6,657
 
 
 
495,522
 
Chief Scientific Officer
 
2014
 
 
279,130
 
 
 
 
 
 
144,067
 
 
 
27,913
 
 
 
6,173
 
 
 
457,283
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas J. Klima (g)
 
2016
 
$
270,000
 
 
$
 
 
$
 
 
$
52,920
 
 
$
2,326
 
 
$
325,246
 
Senior Vice President and
 
2015
 
 
270,000
 
 
 
192,900
 
 
 
112,163
 
 
 
52,921
 
 
 
3,114
 
 
 
631,098
 
Chief Commercial Officer
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brent L. Larson (h)
 
2016
 
$
188,393
 
 
$
 
 
$
 
 
$
 
 
$
5,826
 
 
$
194,219
 
Executive Vice President
 
2015
 
 
260,000
 
 
 
 
 
 
144,499
 
 
 
50,960
 
 
 
7,692
 
 
 
463,151
 
and Chief Financial Officer
 
2014
 
 
260,000
 
 
 
 
 
 
134,318
 
 
 
17,875
 
 
 
6,727
 
 
 
418,920
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jed A. Latkin (i)
 
2016
 
$
163,309
 
 
$
 
 
$
39,992
 
 
$
122,903
 
 
$
 
 
$
326,204
 
Chief Operating Officer
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
and Chief Financial Officer
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William J. Regan
 
2016
 
$
250,000
 
 
$
 
 
$
 
 
$
49,000
 
 
$
6,142
 
 
$
305,142
 
Senior Vice President and
 
2015
 
 
250,000
 
 
 
 
 
 
157,896
 
 
 
49,001
 
 
 
6,410
 
 
 
463,307
 
Chief Compliance Officer
 
2014
 
 
250,000
 
 
 
 
 
 
113,587
 
 
 
25,000
 
 
 
6,280
 
 
 
394,867
 
 
(a)
Amount represents the aggregate grant date fair value in accordance with FASB ASC Topic 718. Assumptions made in the valuation of stock awards are disclosed in Note 1(e) of the Notes to the Consolidated Financial Statements of the Company’s Form 10-K filed on March 31, 2017.
(b)
Amount represents the aggregate grant date fair value in accordance with FASB ASC Topic 718. Assumptions made in the valuation of option awards are disclosed in Note 1(e) of the Notes to the Consolidated Financial Statements of the Company’s Form 10-K filed on March 31, 2017.
(c)
Amount represents the total non-equity incentive plan amounts which have been approved by the Board of Directors as of the date this filing, and are disclosed for the year in which they were earned (i.e., the year to which the service relates).
For 2016, the Board of Directors determined that a portion of the 2016 bonus amount payable would be paid in stock in lieu of cash. The portion of the 2016 bonus amount payable in cash is either fifty percent or thirty-three percent, as determined by the Board of Directors. As such, Dr. Cope, Mr. Klima and Mr. Regan were awarded 70,492, 50,885 and 63,135, respectively, shares of Common Stock of the Company valued at $0.52 per share, the closing price of Navidea’s Common Stock on February 6, 2017. Since these shares represent incentive compensation earned in 2016, they are reported in this column, and not included in the column “Stock Awards.” The cash portion of the 2016 bonus awards was paid on March 15, 2017.
For 2015, the Board of Directors initially determined that fifty percent of the 2015 bonus amount payable to certain executive officers would be paid in stock options in lieu of cash, calculated based on the Black-Scholes value of the options on the date of grant. As such, Dr. Cope, Mr. Klima, Mr. Larson and Mr. Regan were awarded, respectively, options to purchase 58,510, 56,598, 54,501 and 52,405 shares of Common Stock of the Company at an exercise price of $0.98 per share, vesting immediately upon the date of grant and expiring after ten years. Since these options represent incentive compensation earned in 2015, they are reported in this column, and not included in the column “Option Awards.” In February 2017, the Board of Directors determined that the amounts previously awarded as 2015 bonuses would be subject to the same split between cash and stock as the 2016 bonus awards. As such, Dr. Cope and Mr. Regan were awarded an additional 17,886 and 16,020, respectively, shares of Common Stock of the Company valued at $0.52 per share, the closing price of Navidea’s Common Stock on February 6, 2017. Since these shares represent incentive compensation earned in 2015, they are reported in this column, and not included in the column “Stock Awards.” The cash portion of the 2015 bonus awards was paid on March 15, 2017.
 
24
 
(d)
Amount represents additional compensation as disclosed in the All Other Compensation table below.
(e)
Dr. Goldberg commenced employment with the Company effective September 22, 2016. Dr. Goldberg’s annual salary is $400,000, however payment of 25% of that amount was deferred pending the sale of certain assets to Cardinal Health 414, LLC, which occurred on March 3, 2017. The salary shown in this table is equal to the actual amount paid to Dr. Goldberg during 2016. In connection with Dr. Goldberg’s appointment as Chief Executive Officer of the Company, the Board of Directors awarded options to purchase 5,000,000 shares of our Common Stock to Dr. Goldberg, subject to stockholder approval of the 2016 Plan. If approved, these stock options will vest 100% when the average closing price of the Company’s Common Stock over a period of five consecutive trading days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant.
(f)
Mr. Gonzalez commenced employment with the Company effective October 13, 2014 and separated from the Company effective May 13, 2016.
(g)
Mr. Klima commenced employment with the Company effective January 1, 2015 and separated from the Company effective March 8, 2017.
(h)
Mr. Larson was approved for long term disability by the Company’s insurance carrier and separated from the Company effective October 6, 2016.
(i)
Mr. Latkin commenced employment with the Company effective April 21, 2016.
 
 
25
 
 
All Other Compensation
 
The following table describes each component of the amounts shown in the “All Other Compensation” column in the Summary Compensation table above.
 
All Other Compensation Table for Fiscal 2016
 
Named Executive Officer
 
Year
 
(a)
Reimbursement
of Additional
Tax Liability
Related to
Insurance
Premiums
 
 
(b)
401(k) Plan
Employer
Matching
Contribution
 
 
 
(c)Opt-Out Bonus
 
 
Total
All Other
Compensation
 
Michael M. Goldberg, M.D.
 
2016
 
$
436
 
 
$
 
 
 
$
 
 
$
436
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ricardo J. Gonzalez
 
2016
 
$
836
 
 
$
2,516
 
 
 
$
 
 
$
3,352
 
 
 
2015
 
 
2,392
 
 
 
5,300
 
 
 
 
 
 
 
7,692
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frederick O. Cope, Ph.D.
 
2016
 
$
1,435
 
 
$
5,300
 
 
 
$
 
 
$
6,735
 
 
 
2015
 
 
1,357
 
 
 
5,300
 
 
 
 
 
 
 
6,657
 
 
 
2014
 
 
973
 
 
 
5,200
 
 
 
 
 
 
 
6,173
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas J. Klima
 
2016
 
$
2,326
 
 
$
 
 
 
$
 
 
$
2,326
 
 
 
2015
 
 
1,310
 
 
 
1,804
 
 
 
 
 
 
 
3,114
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brent L. Larson
 
2016
 
$
2,007
 
 
$
3,819
 
 
 
$
 
 
$
5,826
 
 
 
2015
 
 
2,392
 
 
 
5,300
 
 
 
 
 
 
 
7,692
 
 
 
2014
 
 
1,527
 
 
 
5,200
 
 
 
 
 
 
 
6,727
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jed A. Latkin
 
2016
 
$
 
 
$
 
 
 
$
 
 
$
 
 
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William J. Regan
 
2016
 
$
106
 
 
$
5,036
 
 
 
$
1,000
 
 
$
6,142
 
 
 
2015
 
 
110
 
 
 
5,300
 
 
 
 
1,000
 
 
 
6,410
 
 
 
2014
 
 
80
 
 
 
5,200
 
 
 
 
1,000
 
 
 
6,280
 
 
(a)
Amount represents reimbursement of the lost tax benefit due to the ineligibility of our Named Executive Officers to pay their portion of medical, dental, and vision premiums on a pre-tax basis under our IRC Section 125 Plan.
(b)
Amount represents the value of the Common Stock contributed to the Named Executive Officer’s account in our 401(k) Plan as calculated on a quarterly basis.
(c)
Amount represents additional bonus paid for non-participation in the Company’s medical plan.
 
 
26
 
 
Grants of Plan-Based Awards
 
The following table sets forth certain information about plan-based awards that we made to the Named Executive Officers during fiscal 2016. For information about the plans under which these awards were granted, see the discussion under “Short-Term Incentive Compensation” and “Long-Term Incentive Compensation” in the “Compensation Discussion and Analysis” section above.
 
Grants of Plan-Based Awards Table for Fiscal 2016
 
 
 
 
 
Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards (a)
 
 
Estimated Future
Payouts Under
Equity Incentive
Plan Awards
 
 
All Other
Stock
Awards:
Number
of Shares
 
 
All Other
Option
Awards:
Number of
Securities
Underlying
 
 
Exercise
Price of
Option
 
 
Grant Date
Fair Value
of Stock
and Option
 
 
Named Executive Officer
 
Grant Date
 
Threshold
 
 
Maximum
 
 
Threshold
 
 
Maximum
 
 
of Stock
 
 
Options
 
 
Awards
 
 
Awards
 
 
Michael M. Goldberg, M.D. (d)
 
N/A
 
$
 
 
$
83,013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
 
$
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ricardo J. Gonzalez
 
N/A
 
$
 
 
$
187,500
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
 
$
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frederick O. Cope, Ph.D.
 
N/A
 
$
 
 
$
97,696
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
 
$
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas J. Klima
 
N/A
 
$
 
 
$
94,500
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brent L. Larson
 
N/A
 
$
 
 
$
91,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
 
$
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jed A. Latkin
 
4/20/2016
 
$
 
 
$
 
 
 
 
 
 
 
 
 
 
 
 
45,000
 
 
$
1.50
 
 
$
29,339
 
(b)
 
 
10/14/2016
 
$
 
 
$
 
 
 
 
 
 
 
 
 
 
 
 
20,000
 
 
$
1.00
 
 
$
10,653
 
(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William J. Regan
 
N/A
 
$
 
 
$
87,500
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
 
 
$
 
(a)
 
(a)
The threshold amount reflects the possibility that no cash bonus awards will be payable. The maximum amount reflects the cash bonus awards payable if the Board of Directors, in their discretion, awards the maximum cash bonus. The maximum cash bonus payable to Dr. Goldberg has been pro-rated beginning September 22, 2016.
(b)
These stock options vested as to 7,500 options on the 20th day of each of the first six months following the date of grant, and expire on the tenth anniversary of the date of grant.
(c)
These stock options vested as to 10,000 options on the 20th day of each of the first two months following the date of grant, and expire on the tenth anniversary of the date of grant.
(d)
In connection with Dr. Goldberg’s appointment as Chief Executive Officer of the Company on September 22, 2016, the Board of Directors awarded options to purchase 5,000,000 shares of our Common Stock to Dr. Goldberg, subject to stockholder approval of the 2016 Plan. If approved, these stock options will vest 100% when the average closing price of the Company’s Common Stock over a period of five consecutive trading days equals or exceeds $2.50 per share, and expire on the tenth anniversary of the date of grant.
 
 
27
 
 
Outstanding Equity Awards
 
The following table presents certain information concerning outstanding equity awards held by the Named Executive Officers as of December 31, 2016.
 
Outstanding Equity Awards Table at Fiscal 2016 Year-End
 
 
 
 
Option Awards
 
Stock Awards
 
 
Number of Securities
Underlying Unexercised
Options (#)
 
 
 
 
 
 
 
 
 
 
 
 
MarketValue of Shares of
 
 
Equity Incentive
Plan Awards
Named ExecutiveOfficer
 
Exercisable
 
 
Unexercisable
 
 
Option
Exercise
Price
 
 
Option
Expiration
Date
 
Note
 
Number of
Shares of
Stock that
Have Not
Vested
 
 
Stock that
HaveNot
Vested
 
 
Number of
Unearned
Shares
 
 
MarketValue
of Unearned
Shares (v)
 
 
Note
Michael M. Goldberg, M.D.
 
 
 
 
 
 
 
$
1.00
 
 
9/22/2026
 
(p)
 
 
 
 
 
 
 
 
 
 
28,000
 
 
$
17,920
 
 
(r)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ricardo J. Gonzalez (s)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Frederick O. Cope, Ph.D.
 
 
50,000
 
 
 
 
 
$
0.65
 
 
2/16/2019
 
(c)
 
 
 
 
 
 
 
 
 
 
50,000
 
 
$
32,000
 
 
(q)
 
 
 
75,000
 
 
 
 
 
$
1.10
 
 
10/30/2019
 
(d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
120,000
 
 
 
 
 
$
1.90
 
 
12/21/2020
 
(e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
127,000
 
 
 
 
 
$
3.28
 
 
2/17/2022
 
(g)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
108,750
 
 
 
36,250
 
 
$
3.08
 
 
2/15/2023
 
(h)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
66,500
 
 
 
66,500
 
 
$
1.77
 
 
1/28/2024
 
(i)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
54,000
 
 
 
108,000
 
 
$
1.65
 
 
3/26/2025
 
(l)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
58,510
 
 
 
 
 
$
0.98
 
 
2/25/2026
 
(m)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas J. Klima (t)
 
 
25,000
 
 
 
75,000
 
 
$
1.89
 
 
1/1/2025
 
(k)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
56,598
 
 
 
 
 
$
0.98
 
 
2/25/2026
 
(m)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Brent L. Larson (u)
 
 
50,000
 
 
 
 
 
$
0.362
 
 
1/3/2018
 
(a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25,000
 
 
 
 
 
$
0.59
 
 
1/5/2019
 
(b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75,000
 
 
 
 
 
$
1.10
 
 
10/30/2019
 
(d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
95,000
 
 
 
 
 
$
1.90
 
 
12/21/2020
 
(e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
88,000
 
 
 
 
 
$
3.28
 
 
2/17/2022
 
(g)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106,500
 
 
 
 
 
$
3.08
 
 
2/15/2023
 
(h)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
62,000
 
 
 
 
 
$
1.77
 
 
1/28/2024
 
(i)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50,334
 
 
 
 
 
$
1.65
 
 
3/26/2025
 
(l)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
54,501
 
 
 
 
 
$
0.98
 
 
2/25/2026
 
(m)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jed A. Latkin
 
 
45,000
 
 
 
 
 
$
1.50
 
 
4/20/2026
 
(n)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,000
 
 
 
 
 
$
1.00
 
 
10/14/2026
 
(o)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
William J. Regan
 
 
20,000
 
 
 
 
 
$
3.29
 
 
7/1/2021
 
(f)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
84,000
 
 
 
 
 
$
3.28
 
 
2/17/2022
 
(g)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
75,000
 
 
 
25,000
 
 
$
3.08
 
 
2/15/2023
 
(h)
 
 
 
 
 
 
 
 
 
`
 
 
 
 
 
 
 
 
 
 
 
42,500
 
 
 
42,500
 
 
$
1.77
 
 
1/28/2024
 
(i)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,500
 
 
 
12,500
 
 
$
1.50
 
 
12/17/2024
 
(j)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55,000
 
 
 
110,000
 
 
$
1.65
 
 
3/26/2025
 
(l)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
52,405
 
 
 
 
 
$
0.98
 
 
2/25/2026
 
(m)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Options were granted 1/3/2008 and vested as to one-third on each of the first three anniversaries of the date of grant.
(b)
Options were granted 1/5/2009 and vested as to one-third on each of the first three anniversaries of the date of grant.
(c)
Options were granted 2/16/2009 and vested as to one-third on each of the first three anniversaries of the date of grant.
(d)
Options were granted 10/30/2009 and vested as to one-third on each of the first three anniversaries of the date of grant.
(e)
Options were granted 12/21/2010 and vested as to one-fourth on each of the first four anniversaries of the date of grant.
(f)
Options were granted 7/1/2011 and vested as to one-fourth at the end of each of the first four quarters following the date of grant.
(g)
Options were granted 2/17/2012 and vested as to one-fourth on each of the first four anniversaries of the date of grant.
(h)
Options were granted 2/15/2013 and vest as to one-fourth on each of the first four anniversaries of the date of grant.
(i)
Options were granted 1/28/2014 and vest as to one-fourth on each of the first four anniversaries of the date of grant.
 
28
 
(j)
Options were granted 12/17/2014 and vest as to one-fourth on the date of grant, and one-fourth on January 28th of 2016, 2017 and 2018.
(k)
Options were granted 1/1/2015 and vest as to one-fourth on each of the first four anniversaries of the date of grant.
(l)
Options were granted 3/26/2015 and vest as to one-third on each of the first three anniversaries of the date of grant.
(m)
Options were granted 2/25/2016 and vested immediately. Options were granted in lieu of cash payment for fifty percent of the 2015 bonus payable to certain executive officers, calculated based on the Black-Scholes value of the options on the date of grant.
(n)
Options were granted 4/20/2016 and vested as to one-sixth on the 20th day of each of the first six months following the date of grant.
(o)
Options were granted 10/14/2016 and vested as to one-half on the 20th day of each of the first two months following the date of grant.
(p)
Options were granted 9/22/2016 and vest 100% when the average closing price of the Company’s Common Stock over a period of five consecutive trading days equals or exceeds $2.50 per share, subject to stockholder approval of the 2016 Plan.
(q)
Restricted shares granted February 16, 2009. Pursuant to the terms of the restricted stock agreement between the Company and Dr. Cope, the restricted shares will vest upon the commencement of patient enrollment in a Phase 3 clinical trial in humans of NAV1800. All of the restricted shares vest upon the occurrence of a change in control as defined in Dr. Cope’s employment agreement. If the employment of Dr. Cope with the Company is terminated for reasons other than a change in control before all of the restricted shares have vested, then pursuant to the terms of the restricted stock agreement all restricted shares that have not vested at the effective date of Dr. Cope’s termination shall immediately be forfeited by Dr. Cope. As a result of the Company’s decision to abandon the NAV1800 project in favor of Manocept platform development projects, the CNG Committee vested all 50,000 shares on April 25, 2017.
(r)
Restricted shares granted April 20, 2016 in connection with Dr. Goldberg’s service on the Company’s Board of Directors. Pursuant to the terms of the restricted stock agreement between the Company and Dr. Goldberg, the restricted shares will vest on the first anniversary of the date of grant. If the employment of Dr. Goldberg with the Company is terminated for reasons other than a change in control before all of the restricted shares have vested, then pursuant to the terms of the restricted stock agreement all restricted shares that have not vested at the effective date of Dr. Goldberg’s termination shall immediately be forfeited by Dr. Goldberg.
(s)
Mr. Gonzalez separated from the Company effective May 13, 2016. All of Mr. Gonzalez’s stock options were forfeited as of the date of separation.
(t)
Mr. Klima separated from the Company effective March 8, 2017. All of Mr. Klima’s stock options, if not exercised, will expire on June 6, 2017.
(u)
Mr. Larson was approved for long term disability by the Company’s insurance carrier and separated from the Company effective October 6, 2016. All of Mr. Larson’s stock options, if not exercised, will expire on October 6, 2017.
(v)
Estimated by reference to the closing market price of the Company’s Common Stock on December 31, 2016, pursuant to Instruction 3 to Item 402(p)(2) of Regulation S-K. The closing price of the Company’s Common Stock on December 31, 2016, was $0.64.
 
 
29
 
 
Options Exercised and Stock Vested
 
The following table presents, with respect to the Named Executive Officers, certain information about option exercises and restricted stock vested during fiscal 2016.
 
Options Exercised and Stock Vested Table for Fiscal 2016
 
 
 
Option Awards
 
 
Stock Awards
 
 
 
Named Executive Officer
 
Number of
Shares
Acquired
on Exercise
 
 
Value
Realized on
Exercise (a)
 
 
Number of
Shares
Acquired
on Vesting
 
 
Value
Realized
on
Vesting (a)
 
 
Note
Michael M. Goldberg, M.D.
 
 
 
 
$
 
 
 
22,000
 
 
$
21,098
 
 
(b)
Ricardo J. Gonzalez
 
 
 
 
$
 
 
 
 
 
$
 
 
 
Frederick O. Cope, Ph.D.
 
 
 
 
$
 
 
 
 
 
$
 
 
 
Thomas J. Klima
 
 
 
 
$
 
 
 
 
 
$
 
 
 
Brent L. Larson
 
 
50,000
 
 
$
23,000
 
 
 
 
 
$
 
 
(c) 
Jed A. Latkin
 
 
 
 
$