UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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the Securities Exchange Act of 1934 (Amendment No.   )
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Zynerba Pharmaceuticals, Inc.
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ZYNERBA PHARMACEUTICALS, INC.
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 10, 2020
April 23, 2020
The 2020 Annual Meeting of Stockholders of Zynerba Pharmaceuticals, Inc. will be held at our corporate headquarters located at 80 W. Lancaster Avenue, Suite 300, Devon, Pennsylvania 19333, on Wednesday, June 10, 2020 at 8:00 a.m. Eastern Daylight Time. The items of business are:
1.
Election of seven nominees named in this Proxy Statement as directors, each to hold office until the 2021 Annual Meeting of Stockholders and until their respective successors are elected and qualified;
2.
Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020; and
3.
Transaction of such other business as may properly be brought before the Annual Meeting or any adjournment or postponement thereof.
Stockholders of record of Zynerba Pharmaceuticals, Inc. common stock at the close of business on April 14, 2020 are entitled to vote at the meeting and any postponements or adjournments of the meeting.
We intend to hold the Annual Meeting of Stockholders in person. However, we are monitoring the emerging public health impact of the novel coronavirus pandemic and there is a possibility that we may need to change the date or location of the meeting, including, potentially, holding a virtual meeting. Any change to the date or location of the meeting will be announced via press release, a copy of which will be available on EDGAR and on our website at www.zynerba.com. If we decide to hold a virtual meeting, there will be no impact on stockholders’ ability to provide their proxy by using the Internet, telephone or by completing, signing, dating and returning the proxy card or voting instruction card, each as explained below under the heading “Voting Methods.” Please retain your control number, which can be found on your notice of the Annual Meeting, on your proxy card or on the instructions that accompanied your proxy materials as such control number will be necessary to facilitate your participation if a virtual meeting is held. As always, we encourage you to vote your shares prior to the meeting.
By Order of the Board of Directors
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Armando Anido
Chief Executive Officer and Chairman of the Board of Directors
April 23, 2020
Important Notice Regarding Availability of Proxy Materials for the Annual Meeting: Our Annual Report and Proxy Statement are available at http://www.astproxyportal.com/ast/20275/.
Your vote is important.   Please vote as promptly as possible electronically via the phone or Internet or by completing, signing, dating and returning the proxy card or voting instruction card.
 

 
TABLE OF CONTENTS
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4
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26
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26
28
28
29
30
30
30
30
 
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2020 PROXY STATEMENT SUMMARY
Here are highlights of important information you will find in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
ANNUAL MEETING OF STOCKHOLDERS
Time and Date
Record Date
Place
Number of
Common Shares
Eligible to Vote
as of the Record Date
8:00 a.m. EDT June 10, 2020
April 14,2020 80 W. Lancaster Avenue,
Suite 300 Devon,
Pennsylvania 19333
23,580,341
VOTING MATTERS
Board Recommendation
Page Reference
(for more detail)
Proposal 1: Election of Seven Directors
☒  FOR EACH NOMINEE
28
Proposal 2: Ratification of Appointment of KPMG LLP as
Independent Registered Public Accounting Firm for the 2020
Fiscal Year
☒  FOR 29
OUR DIRECTOR NOMINEES
You are being asked to vote on these seven directors. All directors are currently elected annually by a plurality of votes cast. Detailed information about each director’s background and areas of expertise can be found beginning on page 4.
Committee Membership
Name
Age
Director Since
Principal Occupation
AC
CC
NCGC
Armando Anido
62 2014 Chairman & Chief Executive Officer of Zynerba Pharmaceuticals, Inc.
John Butler
55 2018
President and Chief Executive Officer of Akebia Therapeutics, Inc.
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Warren D. Cooper, MB, BS, BSc, MFPM†


67


2015
Partner & Chief Medical Officer of Healthcare Royalty Partners
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William J. Federici
60 2015
Retired Senior Vice President and
Chief Financial Officer of West
Pharmaceutical Services, Inc.
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Daniel L. Kisner, MD
73 2015
Independent Consultant
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Kenneth I. Moch
65 2015
Former President and Chief Executive Officer of Cognition Therapeutics, Inc.
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Committee Membership
Name
Age
Director Since
Principal Occupation
AC
CC
NCGC
Pamela Stephenson
52 2019
Chief Commercial Officer of Albireo Pharma, Inc.
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AC
Audit Committee
CC
Compensation Committee
NCGC
Nominating and Corporate Governance Committee
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Committee Member
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Chair of the Committee

Lead Independent Director
CORPORATE GOVERNANCE SUMMARY FACTS
The following table summarizes our current Board structure and key elements of our corporate governance framework:
Size of Board (set by the Board)
7
Number of Independent Directors
6
Lead Independent Director
Yes
Board Self-Evaluation
Annual
Review of Independence of Board
Annual
Independent Directors Meet Without Management Present
Yes
Annual Director Elections
Yes
Voting Standard for Election of Directors in Uncontested Elections
Plurality
Diversity of Board background, experience and skills
Yes
RECENT CORPORATE HIGHLIGHTS

Completed enrollment in a multi-national randomized, double-blind, placebo-controlled 14 week clinical trial for Zygel™ (formerly referred to as “ZYN002”) in children and adolescents ages three to 17 years who have Fragile X syndrome (“FXS”), which we refer to as the CONNECT-FX (Clinical study of Cannabidiol (“CBD”) in Children and Adolescents with Fragile X Syndrome) clinical trial. This trial is designed to assess the efficacy, safety and tolerability of Zygel in the treatment of behavioral symptoms of FXS. Topline results are anticipated in late Q2 2020.

Completed enrollment in Phase 2 BRIGHT (An Open-Label Tolerability and Efficacy Study of ZYN002 Administered as a Transdermal Gel to Children and Adolescents with Autism Spectrum Disorder) clinical trial, a 14-week open label clinical trial designed to assess the safety, tolerability and efficacy of Zygel for the treatment of pediatric and adolescent patients with autism spectrum disorder (“ASD”).

Announced positive top-line results from the BELIEVE 1 (Open Label Study to Assess the Safety and Efficacy of Zygel Administered as Transdermal Gel to Children and Adolescents with Developmental and Epileptic Encephalopathy) clinical trial, a six-month open label multi-dose clinical trial designed to evaluate the efficacy and safety of Zygel in children and adolescents (age three to 17 years) with Developmental and Epileptic Encephalopathies.

Initiated open-label Phase 2 INSPIRE (Assessing the Impact of Zygel [Transdermal CBD Gel] on Pediatric Behavior and Emotional Symptoms of 22q11.2 Deletion Syndrome) trial, a 14-week
 
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open-label clinical trial designed to assess the safety, tolerability and efficacy of Zygel for treatment of behavioral symptoms of 22q.

Entered into a Controlled Equity Offering Sales AgreementSM (the “2019 Sales Agreement”) with Cantor Fitzgerald & Co., Canaccord Genuity, LLC, H.C. Wainwright & Co. LLC and Ladenburg Thalmann & Co. Inc., as sales agents pursuant to which we may sell, from time to time, up to $75.0 million of our common stock.

Received Fast Track Designation for Zygel for treatment of behavioral symptoms associated with Fragile X Syndrome.

Appointed Pamela Stephenson to the Company’s Board of Directors.

Announced issuance of U.S. Patent No. 10,314,792 titled “Treatment of Autism with Cannabidiol” which includes claims directed to methods of treating ASD by administering a therapeutically effective amount of synthetic cannabidiol and U.S. Patent No. 10,568,848, titled “Treatment of Autism with Cannabidiol” which includes claims directed to methods of treating ASD by transdermally administering, via a gel or cream, a therapeutically effective amount of purified CBD.
 
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ZYNERBA PHARMACEUTICALS, INC.
80 W. Lancaster Avenue, Suite 300
Devon, PA 19333
PROXY STATEMENT FOR THE 2020 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 10, 2020
This Proxy Statement, along with a proxy card,
is being made available to our stockholders on or about April 23, 2020
GENERAL INFORMATION
We have made these proxy materials available to you in connection with the solicitation by the Board of Directors (our “Board” or the “Board of Directors”) of Zynerba Pharmaceuticals, Inc. of proxies to be voted at the 2020 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Wednesday, June 10, 2020 at our corporate headquarters, located at 80 W. Lancaster Avenue, Suite 300, Devon, Pennsylvania, 19333, at 8:00 a.m. Eastern Daylight Time and any adjournments or postponements thereof. References in this proxy statement to the “Company,” “we,” “our,” and “us” are to Zynerba Pharmaceuticals, Inc.
We intend to hold the Annual Meeting of Stockholders in person. However, we are monitoring the emerging public health impact of the novel coronavirus (“COVID-19”) pandemic and there is a possibility that we may need to change the date or location of the meeting, including, potentially, holding a virtual meeting. Any change to the date or location of the meeting will be announced via press release, a copy of which will be available on EDGAR and on our website at www.zynerba.com. If we decide to hold a virtual meeting, there will be no impact on stockholders’ ability to provide their proxy by using the Internet, telephone or by completing, signing, dating and returning the proxy card or voting instruction card, each as explained below under the heading “Voting Methods.” Please retain your control number, which can be found on your notice of the Annual Meeting, on your proxy card or on the instructions that accompanied your proxy materials as such control number will be necessary to facilitate your participation if a virtual meeting is held. As always, we encourage you to vote your shares prior to the meeting.
Stockholders Entitled to Vote
Holders of shares of our common stock, our only class of issued and outstanding voting securities, at the close of business on April 14, 2020 (the “Record Date”) are entitled to vote on the proposals presented at the Annual Meeting. As of April 14, 2020, 23,580,341shares of our common stock were issued and outstanding. Each share is entitled to one vote on each matter properly brought to the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder for a purpose related to the Annual Meeting during normal business hours at our executive offices for a period of at least 10 days preceding the date of the Annual Meeting.
Quorum
The presence, in person or by proxy, of the holders of a majority of the issued and outstanding shares of common stock entitled to vote at the Annual Meeting, or 11,790,171shares, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Votes for and against, abstentions and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you attend the Annual Meeting in person and vote.
The Annual Meeting may be adjourned or postponed from time to time and at any reconvened meeting, action with respect to the matters specified in this Proxy Statement may be taken without further notice to stockholders except as required by applicable law or our charter documents.
Stockholders of Record
You are a “stockholder of record” if your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC. As a stockholder of record, you have the right to
 

 
grant your voting proxy directly to the proxy holders designated by the Company or to vote in person at the Annual Meeting. If you are a stockholder of record of your shares, and you do not vote by proxy card, by telephone, via the internet or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.
Shares Held in Street Name
You are deemed to beneficially own your shares in “street name” if your shares are held in an account at a brokerage firm, bank, broker, trust or other similar organization, and that organization is considered the stockholder of record. If this is the case, you will receive a separate voting instruction form with this Proxy Statement from such organization. As the beneficial owner, you have the right to direct your bank, broker, trustee, or other nominee how to vote your shares, and you are also invited to attend the Annual Meeting. If you hold your shares in street name and do not provide voting instructions to your broker, bank, trustee or nominee, your shares will not be voted on any proposals on which such party does not have discretionary authority to vote, which is referred to herein as a broker non-vote, as further described below under the heading “Broker Non-Votes.”
Please note that if your shares are held of record by a broker, bank, trustee or other nominee and you wish to vote at the Annual Meeting, you will not be permitted to vote in person unless you first obtain a proxy issued in your name from your broker, bank, trustee, or other nominee.
Broker Non-Votes
Broker non-votes are shares held by brokers, banks, trustees or other nominees who are present in person or represented by proxy, but which are not voted on a particular matter because the brokers, banks, trustees, or other nominees do not have discretionary authority with respect to that proposal and they have not received voting instructions from the beneficial owner. Under the rules that govern brokers, brokers have the discretion to vote on routine matters, but not on non-routine matters. The routine matters to be considered at the Annual Meeting include the ratification of the appointment of the Company’s independent registered public accounting firm. The proposal for the election of our director nominees at the Annual Meeting is considered to be a non-routine matter. As a result, if you do not provide your broker, bank, trustee, or other nominee with voting instructions on non-routine matters, your shares will not be voted on any non-routine proposal.
Voting Matters
Proposal
Votes Required
Treatment of Abstentions and
Broker Non-Votes
Broker
Discretionary
Voting
Proposal 1 — Election of Seven Directors Plurality of votes cast Abstentions and broker non-votes will not be taken into account in determining the outcome of the proposal
No
Proposal 2 — Ratification of Appointment of KPMG LLP as our Independent Registered Public Accounting Firm for the 2020 Fiscal Year Majority of shares present and entitled to vote on the proposal in person or represented by proxy Abstentions and broker non-votes will have the effect of negative votes
Yes
In each case, your shares will be voted as you instruct. If you return a signed card, but do not provide voting instructions, your shares will be voted FOR each of the proposals.
We are currently unaware of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted your proxy, the persons named in your proxy will have discretion to vote on those matters for you.
 
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Voting Methods
You may vote at the Annual Meeting by delivering a proxy card in person or you may cast your vote in any of the following ways:
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Mailing your signed proxy card or voter instruction card.
Using the Internet at www.voteproxy.com.
Calling toll-free from the United States, U.S. territories and Canada to 1-800-776-9437.
Even if you plan to attend the Annual Meeting, we encourage you to vote in advance by internet, telephone, or mail so that your vote will be counted in the event you later decide not to attend the Annual Meeting. If your shares are held in street name, please follow the separate voting instructions you receive from your broker, bank, trustee, or other nominee.
If you are a stockholder of record, you may revoke your proxy: (i) by written notice of revocation mailed to and received by the Secretary of the Company prior to the date of the Annual Meeting; (ii) by voting again via the Internet or by telephone at a later time; (iii) by executing and delivering to the Secretary of the Company a proxy dated as of a later date than a previously executed and delivered proxy; or (iv) by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not, without further action, revoke a proxy.
If your shares are held by a broker, bank, trustee, or other nominee, you may change your vote by submitting new voting instructions to your broker, bank, trustee, or nominee; or, if you have obtained a legal proxy from your broker, bank, trustee, or nominee giving you the right to vote your shares, by attending the Annual Meeting and voting in person.
We pay the costs of soliciting proxies. Proxies will be solicited on behalf of the Board by mail, telephone and other electronic means or in person. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
 
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BOARD OF DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following sets forth information regarding our directors and executive officers as of April 23, 2020:
Committee Membership
Name, Age
Age
Position
AC
CC
NCGC
Armando Anido
62 Chairman of the Board and Chief
Executive Officer
Terri B. Sebree
62 President
James E. Fickenscher
56 Chief Financial Officer and Vice
President, Corporate Development
Suzanne M. Hanlon
63 Secretary, Vice President and General
Counsel
Brian Rosenberger
51 Vice President, Commercial and
Business Development
John P. Butler
55
Director
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Warren D. Cooper, MB, BS, BSc, MFPM†
67
Director
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William J. Federici
60
Director
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Daniel L. Kisner, MD
73
Director
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Kenneth I. Moch
65
Director
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Pamela Stephenson
52
Director
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AC Audit Committee
CC Compensation Committee
NCGC Nominating and Corporate Governance Committee
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Committee Member
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Chair of the Committee
Lead Independent Director
 
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Armando Anido
Age: 62
Chairman and Chief Executive Officer Since: 2014
Committee Memberships: N/A
Other Public Directorships: Auris Medical Holding Ltd.; SCYNEXIS, Inc.
Armando Anido has served as chairman of our Board and as our chief executive officer since October 2014. Prior to joining our company, Mr. Anido served as our business consultant from May 2014 to October 2014. Mr. Anido has more than 35 years of executive, operational and commercial leadership experience in the pharmaceutical industry. Mr. Anido served as chief executive officer and as a director of NuPathe, Inc. (“NuPathe”), a publicly-traded specialty pharmaceutical company, from July 2012 through March 2014, during which time he led the company through U.S. Food and Drug Administration (“FDA”) approval of its lead product Zecuity®, a transdermal patch for migraines. Prior to joining NuPathe, Mr. Anido served as chief executive officer and president and as a director of Auxilium Pharmaceuticals, Inc. (“Auxilium”), a specialty pharmaceutical company, from July 2006 through December 2011, where he led the company in its commercialization of its lead product, Testim®, a testosterone gel. Additionally, Mr. Anido led the company through the FDA approval and commercialization of Xiaflex®, an injectable collagenase for Dupuytren’s Contracture. Mr. Anido currently serves as a director of Auris Medical, a pharmaceutical company, and has held such position since April 2016, and as a director of Scynexis, Inc. a pharmaceutical company, and has held such position since January 2019. He formerly served as a director of Aviragen Therapeutics, a pharmaceutical company, from October 2015 to March 2018, Respira Therapeutics, Inc., a pharmaceutical company, from May 2012 through September 2014, and Adolor Corporation, a pharmaceutical company, from September 2003 through December 2011. Mr. Anido holds a B.S. in Pharmacy and an MBA, both from West Virginia University.
Skills and Qualifications:   With more than 35 years of experience in the pharmaceutical industry, Mr. Anido brings valuable executive, operational and commercial expertise to our Board.
Terri B. Sebree
Age: 62
Officer Since: 2014
Other Public Directorships: None
Terri B. Sebree has served as our president since October 2014, and served as our treasurer from October 2014 to December 2014. Prior to joining our company, Ms. Sebree served as our business consultant from May 2014 to October 2014. Ms. Sebree has more than 35 years of executive, development and operational experience in the pharmaceutical industry, particularly in central nervous system product development including epilepsy and pain. Ms. Sebree founded and served as president of NuPathe, a specialty pharmaceutical company, from February 2005 until April 2014, where she led the effort to develop, achieve regulatory approval for and complete manufacturing of the company’s lead product, Zecuity, a transdermal patch for migraines. Prior to founding NuPathe, Ms. Sebree served as senior vice president, development of Auxilium, a specialty pharmaceutical company, where she led the development and approval program of Testim, a testosterone gel. Prior to joining Auxilium, Ms. Sebree served as executive vice president, U.S. Operations at IBAH, Inc., a contract research organization. Prior to that, Ms. Sebree served in a variety of management roles with Abbott Laboratories Inc., a global healthcare company, for over nine years. Ms. Sebree currently serves on the board of directors of Serodus ASA, a private Scandinavian pharmaceutical company. Ms. Sebree holds a B.S. from Texas A&M University.
 
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James E. Fickenscher
Age: 56
Officer Since: 2016
Other Public Directorships: None
James E. Fickenscher has served as our chief financial officer, vice president corporate development since September 2016. Mr. Fickenscher has more than 30 years of financial, business development and executive leadership experience in the pharmaceutical industry. Prior to joining our company, he served as the senior vice president, chief financial officer of Antares Pharma, Inc., a specialty pharmaceutical company, from November 2014 to September 2016. Previously, Mr. Fickenscher served as chief financial officer of Auxilium Pharmaceuticals, Inc., a specialty biopharmaceutical company, from May 2005 until August 2014. From January 2000 until April 2004, Mr. Fickenscher served as senior vice president chief financial officer of Aventis Behring L.L.C., a wholly owned subsidiary of Aventis, predecessor to Sanofi S.A. Mr. Fickenscher joined Aventis Behring L.L.C. in 1995 as vice president, business development and strategic planning and, from that time until 2000, also held the positions of general manager, Japan and vice president & general manager, Hemophilia Business Unit. Throughout his tenure at Aventis Behring L.L.C, he was also responsible for strategic planning. Prior to Aventis Behring L.L.C, Mr. Fickenscher worked at Rhone-Poulenc Rorer, predecessor to Sanofi S.A., in its Collegeville, PA and Paris, France offices and at Deloitte & Touche LLP. Mr. Fickenscher received his B.S. at Bloomsburg University of Pennsylvania. He is a member of the American Institute of Certified Public Accountants.
Suzanne M. Hanlon
Age: 63
Officer Since: 2014
Other Public Directorships: None
Suzanne M. Hanlon has served as our secretary, vice president and general counsel since October 2014. Prior to joining our company, Ms. Hanlon served as our legal consultant from May 2014 to October 2014. Ms. Hanlon has more than 25 years of legal experience in the pharmaceutical industry. Ms. Hanlon served as vice president, associate general counsel of NuPathe from July 2005 to April 2014, where she worked with Mr. Anido and Ms. Sebree on the regulatory approval of Zecuity, a transdermal patch for migraines. Prior to joining NuPathe, Ms. Hanlon served as chief development counsel of Auxilium, a specialty pharmaceutical company. Prior to joining Auxilium, Ms. Hanlon served as vice president of global contracts and general counsel at IBAH, Inc. Prior to joining IBAH, Inc., Ms. Hanlon was a partner at Montgomery McCracken Walker & Rhoads LLP. Ms. Hanlon holds a B.A. from Pennsylvania State University and a J.D. from Villanova University School of Law.
 
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Brian Rosenberger
Age: 51
Officer Since: 2017
Other Public Directorships: None
Brian Rosenberger has served as our vice president, commercial and business development, since January 2017. Over his 25-year career in the pharmaceutical industry, Mr. Rosenberger has held several leadership roles in marketing, sales, business development analytics and alliance management. Prior to joining our company, he was vice president, alliance & strategic portfolio management at Cipher Pharmaceuticals, a publicly-traded, Canadian-based dermatology company, from May 2015 to January 2017, where he managed the company’s global portfolio. From 2008 to April 2015, Mr. Rosenberger also held various roles of increasing responsibility at Auxilium, a specialty biopharmaceutical company. In his last role as executive director, corporate development & licensing and alliance management he participated in several transformational M&A, licensing and co-promotion deals through and including Endo International’s acquisition of Auxilium in January 2015. Prior to joining Auxilium, Mr. Rosenberger held sales managerial positions at Neurocrine Biosciences during the initial commercial build-out of the organization and spent over a decade at GlaxoSmithKline in various U.S. and global commercial roles within specialty markets, including neurohealth epilepsy marketing. Mr. Rosenberger holds a B.A. from Dickinson College.
John P. Butler
Age: 55
Board Member Since: 2018
Committee Memberships: Compensation Committee, Member; Nominating and Governance Committee, Member Other Public Directorships: Akebia Therapeutics, Inc.
John P. Butler has served as a member of our Board since April 2018. Mr. Butler has served as the president and chief executive officer and member of the board of directors of Akebia Therapeutics, Inc., a biopharmaceutical company, since September 2013 and July 2013, respectively where he has led the company through its initial public offering, multiple strategic partnering transactions and, most recently, its merger with Keryx Biopharmaceuticals, Inc. Previously Mr. Butler served as the chief executive officer of Inspiration Biopharmaceuticals, Inc., a biopharmaceutical company, that filed for protection under Chapter 11 of the U.S. Bankruptcy Code in October 2012 prior to the successful sale of its hemophilia assets to Cangene Corporation and Baxter International in early 2013. From 1997 to 2011, Mr. Butler held various positions of increasing strategic importance at Genzyme Corporation, a biopharmaceutical company, most recently serving as president of the company’s rare genetic diseases business. Prior to his work at Genzyme, Mr. Butler held sales and marketing positions at Amgen and Hoffmann-La Roche. He was a member of the board of directors of Relypsa, Inc. from September 2013 to September 2016, and chairman of the board of directors of Keryx Biopharmaceuticals, Inc., a commercial stage company developing innovative products for people with renal disease, from December 2015 to September 2017. Mr. Butler received a B.A. in Chemistry from Manhattan College and an M.B.A. degree from Baruch College, City University of New York.
Skills and Qualifications:   Mr. Butler brings significant operational and commercial experience in the biotechnology sector to our Board, including the development and commercialization of products for the treatment of rare and near rare diseases.
 
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Warren D. Cooper, MB, BS, BSc, MFPM
Age: 67
Board Member Since: 2015
Committee Memberships: Audit Committee, Member; Nominating and Corporate Governance Committee, Member
Other Public Directorships: None
Warren D. Cooper, MB, BS, BSc, MFPM has served as a member of our Board since August 2015. Dr. Cooper is a U.K.-trained physician with more than 40 years of experience in the global pharmaceutical industry. Since January 2017, Dr. Cooper has served as chief medical officer and a partner of Healthcare Royalty Partners, a healthcare investment firm. Prior to joining Healthcare Royalty Partners in January 2017, Dr. Cooper served as the president of Coalescence Inc., a healthcare and pharmaceutical development consultancy, where he held various positions since 1999. Dr. Cooper was the chief executive officer of Prism Pharmaceuticals, Inc., a venture-backed, specialty pharmaceutical company that he led from inception in September 2004 until the sale of the company to Baxter International in May 2011. His career in the pharmaceutical industry began with Merck, Sharp and Dohme and spanned 12 years, initially as a clinical research physician in the United Kingdom, then as head of European and, subsequently, Worldwide Clinical Research Operations for Merck Research Laboratories across all therapeutic areas. Moving to AstraMerck (now AstraZeneca PLC, or “AstraZeneca”), in a broad clinical development role, he eventually led that company’s cardiovascular business division, a role with full business lifecycle leadership from in-licensing through development, to P&L responsibility for sales and marketing. Dr. Cooper is a member of the Faculty of Pharmaceutical Medicine of the Royal Colleges of Physicians of the United Kingdom. He has previously served on the boards of directors of Nutrition 21, Inc., Nuron Biotech Inc., Cardiorentis AG and the World Affairs Council of Philadelphia. Dr. Cooper holds a B.Sc. in Physiology, an M.B. and a B.S., each from the London Hospital, University of London.
Skills and Qualifications:   With more than 40 years of experience in the global pharmaceutical industry, Dr. Cooper brings valuable expertise in pharmaceutical company leadership and clinical pharmaceutical research to our Board.
William J. Federici
Age: 60
Board Member Since: 2015
Committee Memberships: Audit Committee, Chair
Other Public Directorships: None
William J. Federici has served as a member of our Board since August 2015. Mr. Federici served as senior vice president and chief financial officer of West Pharmaceutical Services, Inc., a publicly traded global pharmaceutical technology company, from August 2003 until June 2018. He served as a member of the board of directors and chairman of the Audit committee at NuPathe from January 2011 until February 2014. From June 2002 until August 2003, he was national industry director for Pharmaceuticals of KPMG LLP, and prior thereto, he was an audit partner with Arthur Andersen, LLP. Mr. Federici holds a B.A. in Economics and an M.B.A. in Professional Accounting from Rutgers University and is a Certified Public Accountant.
Skills and Qualifications:   With his leadership experience in the global pharmaceutical and accounting industries, Mr. Federici brings valuable expertise in financial and audit-related matters to our Board.
 
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Daniel L. Kisner, MD
Age: 73
Board Member Since: 2015
Committee Memberships: Compensation Committee, Chair Other Public Directorships: Dynavax Technologies Corporation; Conatus Pharmaceuticals Inc.
Daniel L. Kisner, MD has served as a member of our Board since August 2015. Dr. Kisner has served as an independent consultant to the pharmaceutical/biotech industry since 2011. From 2003 until 2011 he served as a venture partner/partner at Aberdare Ventures, a venture firm with a focus on investing in healthcare technology companies. Prior to that he was president and chief executive officer of Caliper Technologies Corp. (“Caliper”) from 1999 until 2003, and served as chairman of Caliper until 2008. He led Caliper from a startup dealing with microfluidic lab-on-a-chip technology to a publically traded commercial company. From 1991 until 1999, he served as chief operating officer and president of Isis Pharmaceuticals, Inc., a biomedical pharmaceutical company. Prior thereto, Dr. Kisner was division vice president of Pharmaceutical Development at Abbott Laboratories and vice president of Clinical Research at SmithKline Beckman Laboratories. In addition, he previously held a tenured position at the University of Texas School of Medicine at San Antonio and is certified by the American Board of Internal Medicine in Internal Medicine and Medical Oncology. Dr. Kisner served on the board of directors of Tekmira Pharmaceuticals from 2010 until March 2015 and Lpath Inc. from July 2012 until December 2016, and he currently serves on the boards of directors of Dynavax Technologies Corporation and Conatus Pharmaceuticals Inc. Dr. Kisner holds a B. A. degree from Rutgers University and an M.D. from Georgetown University.
Skills and Qualifications:   With more than 30 years of healthcare technology experience, Dr. Kisner brings valuable expertise in healthcare technology company leadership and investing, including prior experience in growing a research-stage company to a commercially successful, publicly-traded company, to our Board.
Kenneth I. Moch
Age: 65
Board Member Since: 2015
Committee Memberships: Audit Committee, Member; Compensation Committee, Member Other Public Directorships: Gamida Cell, Ltd
Kenneth I. Moch has served as a member of our Board since August 2015. Mr. Moch has more than 35 years of experience in managing and financing biomedical technologies, and has played a key role in building five life science companies. From October 2016 to March 2020, Mr. Moch served as the president and chief executive officer of Cognition Therapeutics, Inc. He previously was the managing partner of The Salutramed Group, LLC, from September 2015 until October 2016, where he provided strategic and tactical counsel to the biotechnology and pharmaceutical industries. Prior to that, he served as president of Euclidian Life Sciences Advisors, a strategic advisory firm for life sciences companies, from April 2014 until September 2015. From April 2010 to April 2014, he served as president and chief executive officer, and as a director, of Chimerix, Inc., having joined the company as chief operating officer in June 2009. Previously, he was president and chief executive officer of three life science companies — BioMedical Enterprises, Inc., Alteon, Inc., and Biocyte Corporation — and was a co-founder and vice president of The Liposome Company, Inc. He also served as managing director of Healthcare Investment Banking at ThinkEquity Partners and as a management consultant with McKinsey & Company. Mr. Moch has served as a director of Gamida Cell, Ltd, a biopharmaceutical company since September 2016. In the public policy arena, Mr. Moch currently is a member of the board of the Biotechnology Innovation Organization, serving as chair of the Bioethics Committee, and previously served as chairman of BioNJ. Mr. Moch holds an A.B. in Biochemistry from Princeton University and an M.B.A. with emphasis in Finance and Marketing from the Stanford Graduate School of Business.
Skills and Qualifications:   With more than 25 years of experience in the biomedical technology and pharmaceutical industries, Mr. Moch brings valuable expertise in biomedical technology company leadership and financing matters to our Board.
 
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Pamela Stephenson
Age: 52
Board Member Since: 2019
Committee Memberships: Nominating and Corporate Governance Committee, Chair
Other Public Directorships: None
Pamela Stephenson was appointed as a member of our Board of Directors in February 2019. Ms. Stephenson has more than 20 years of experience leading the development and implementation of pharmaceutical marketing plans. Since March 2019, Ms. Stephenson has served as chief commercial officer for Albireo Pharma, Inc., a publicly traded biopharmaceutical company. Prior to that, she served as a vice president at Vertex Pharmaceuticals, Inc. (“Vertex”), a publicly traded global biotechnology company, from July 2008 to March 2019, where she was responsible for leading the global market access and pricing strategy for current and future products. Earlier in her tenure at Vertex, Ms. Stephenson led marketing and sales activities for the company’s hepatitis C and cystic fibrosis lines of business, and oversaw the U.S. launches of Incivek® (telaprevir) and Orkambi® (lumacaftor/ivacaftor). Prior to Vertex, Ms. Stephenson held roles of increasing strategic importance at Pfizer Inc., a publicly traded global pharmaceutical company, from October 1998 to June 2008. Ms. Stephenson received her B.A. from Brown University and M.P.H. from the Boston University School of Public Health.
Skills and Qualifications:   With her extensive experience in the commercialization and marketing of pharmaceutical products, including for the treatment of rare and near rare diseases, Ms. Stephenson brings valuable expertise in commercial planning, market development, product launch and market access to our Board.
Director Skills and Experience
Our Board selected the directors based on their diverse skills, qualifications, backgrounds and expertise, which the Board believes will contribute to effective oversight of the Company. The chart below depicts the current skills, qualifications, and expertise represented on our Board.
Director Skills and Experience
Anido
Butler
Cooper
Federici
Kisner
Moch
Stephenson
Pharmaceutical Industry
Executive Leadership
Finance & Accounting
Corporate Governance
Executive Compensation
Regulatory Risk Management
Commercialization/Sales & Marketing
Corporate Strategy & Business Development
Partnering/Mergers & Acquisitions
No Family Relationships
There are no family relationships between any of our officers and directors.
Corporate Governance Guidelines
Our corporate governance guidelines are designed to help ensure effective corporate governance of our Company. Our corporate governance guidelines cover topics including, but not limited to, director qualification criteria, director responsibilities, director compensation, director orientation and continuing education, succession planning and the annual evaluations of our Board and its committees. Our corporate governance guidelines are reviewed at least annually by the Nominating and Corporate Governance Committee and amended by our Board when appropriate. In March 2020, our Board amended our corporate governance guidelines. The full text of our corporate governance guidelines is available on our website at www.zynerba.com.
 
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Code of Business Conduct and Ethics
Our Board adopted a Code of Business Conduct and Ethics applicable to all of our employees, executive officers and directors. The Code of Business Conduct and Ethics covers fundamental ethical and compliance-related principles and practices such as accurate accounting records and financial reporting, avoiding conflicts of interest, the protection and use of our property and information, compliance with legal and regulatory requirements and commitments to environmental and social issues. The Code of Business Conduct and Ethics is available on our website at www.zynerba.com.
Our Board is responsible for overseeing the Code of Business Conduct and Ethics, and our Board or an appropriate committee thereof must approve any waivers of the Code of Business Conduct and Ethics for employees, executive officers or directors. Our Code of Conduct and Business Ethics is reviewed at least annually by the Audit Committee and amended by our Board when appropriate. Our Board last amended our Code of Business Conduct and Ethics in January 2019. Any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, will be disclosed on our website.
Hedging and Pledging Policies
Our Board has adopted an Insider Trading Policy that prohibits all of our officers, directors and employees from engaging in any speculative transaction designed to decrease risks associated with holding our securities, including hedging or similar transactions. Our Insider Trading Policy also prohibits any pledging of our securities as collateral for loans and holding our securities in margin accounts.
Our Board
Our Board currently consists of seven members. The number of directors on our Board is established by our Board. In the beginning of 2018, our Board was set at seven members and consisted of six members and a vacant position. In April 2018, the Board appointed Mr. Butler to fill the vacancy on the Board, and in February 2019 the Board expanded the number of directors on our Board from seven to eight and appointed Pamela Stephenson as a director. In April 2019, Thomas L. Harrison, LH.D tendered his resignation from the Board and the Board reduced the number of directors on our Board from eight to seven. Dr. Harrison’s resignation did not involve any disagreement with the Company.
During 2019, our Board met nine times. Each director attended at least 75% of the total Board meetings and meetings of committees on which he or she served. Although we do not have a formal policy regarding attendance by members of our Board at our Annual Meeting, we strongly encourage all directors to attend. Each director attended our 2019 Annual Meeting.
Our Board observes all applicable criteria for independence established by the NASDAQ Stock Market Rules and other governing laws and applicable regulations. No director will be deemed to be independent unless our Board determines that the director has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Board has determined that all of our directors with the exception of Mr. Anido are independent as defined under the NASDAQ Stock Market Rules. Our Board has also determined that: (i) Messrs. Federici and Moch and Dr. Cooper, who comprise our Audit Committee; (ii) Messrs. Moch and Butler and Dr. Kisner, who comprise our Compensation Committee; and (iii) Dr. Cooper, Mr. Butler and Ms. Stephenson, who comprise our Nominating and Corporate Governance Committee, each satisfy the independence standards for those committees established by the applicable rules and regulations of the SEC and the NASDAQ Stock Market Rules.
Our Board believes its members collectively have the diversified experience, qualifications, attributes and skills to effectively oversee the management of our Company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing our Company, a willingness to devote the necessary time to their Board and committee duties, a commitment to representing the best interests of the Company and our stockholders and a dedication to enhancing stockholder value.
There are no legal proceedings to which any of our directors is a party adverse to us or any of our subsidiaries or in which any such person has a material interest adverse to us or any of our subsidiaries.
 
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Board Leadership Structure
Mr. Anido currently serves as both chief executive officer and chairman of the Board. The Board does not have a formal policy on whether the roles of chief executive officer and chairman of the Board should be separate, but believes at this time that the Company and its stockholders are best served by its current leadership structure. Combining the roles of chief executive officer and chairman of the Board fosters accountability, effective decision-making and alignment between interests of the Board and management.
Dr. Cooper serves as our Lead Independent Director and presides over regularly scheduled meetings at which only our independent directors are present, serves as liaison between the chairman of the Board and the independent directors, approves meeting agendas and schedules for the Board and performs such additional duties as the Board may determine and delegate. Our Board believes that this structure provides an environment in which the independent directors are fully informed, have significant input into the content of Board meetings, and are able to provide objective and thoughtful oversight of management. Our Board intends to evaluate from time to time whether our chief executive officer and chairman of the Board positions should remain combined based on what our Board determines is best for the Company and its stockholders.
While certain members of the Board may participate on the boards of directors of other public companies, we monitor such participation to ensure it is not excessive and does not interfere with their duties to us.
Board Committees
Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each committee operates under a charter that was approved by our Board and is available on our website, www.zynerba.com, under the “Investor Relations” section.
Audit Committee
Our Audit Committee consists of Messrs. Federici and Moch and Dr. Cooper, and is chaired by Mr. Federici. The primary purpose of our Audit Committee is to assist the Board in the oversight of our accounting and financial reporting processes, the audit and integrity of our financial statements, and the qualifications and independence of our independent auditor, and to prepare any reports required of the Audit Committee under the rules of the SEC. The Audit Committee is responsible for, among other things:

hiring our independent registered public accounting firm and pre-approving the audit and permitted non-audit and tax services to be performed by our independent registered public accounting firm;

reviewing and approving the planned scope of the annual audit and reviewing the results of the annual audit;

reviewing the significant accounting and reporting principles to understand their impact on our financial statements;

reviewing with management, our independent registered public accounting firm and legal counsel, as appropriate, our financial reports, earnings announcements and our compliance with legal and regulatory requirements;

establishing procedures for the treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and confidential submissions by our employees of concerns regarding questionable accounting or auditing matters;

reviewing our policies and procedures with respect to data privacy and security and other cybersecurity measures employed by us in the conduct of our business;

recommending to our Board a Code of Business Conduct and Ethics, and periodically reviewing and recommending appropriate changes thereto;

reviewing and approving related-party transactions in accordance with our related party transactions policy; and

reviewing and evaluating, at least annually, our Audit Committee’s charter.
 
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Both our independent registered public accounting firm and management periodically meet privately with our Audit Committee.
Our Board has determined that all members of the Audit Committee are deemed “independent” and financially literate under the applicable rules and regulations of the SEC and NASDAQ, and all members qualify as an “audit committee financial expert” within the meaning of SEC regulations. In 2019, the Audit Committee met five times.
Compensation Committee
Our Compensation Committee consists of Dr. Kisner and Messrs. Butler and Moch, and is chaired by Dr. Kisner. The primary purpose of our Compensation Committee is to review the performance and development of our management in achieving corporate goals and objectives and to assure that our executive officers are compensated effectively in a manner consistent with the strategy of our company, competitive practice, sound corporate governance guidelines and stockholder interests. In carrying out these responsibilities, this committee oversees, reviews and administers all of our executive compensation, equity and benefit plans and programs. The Compensation Committee is responsible for, among other things:

reviewing and approving the corporate goals and objectives relevant to executive compensation, evaluating performance in light of those goals and objectives and setting the compensation for our executive officers;

reviewing and recommending the terms of employment agreements and other employment-related arrangements with our executive officers;

reviewing and approving our compensation strategy for our management and employees;

reviewing and recommending to our Board the compensation of our directors;

administering our equity compensation plan and benefits plans and approving the grant of equity awards to our employees and directors under these plans;

overseeing and periodically reviewing the operation of all of our employee benefit plans;

when required, reviewing and discussing with management our Compensation Discussion and Analysis and recommending to the full Board its inclusion in our periodic reports and proxy statement to be filed with the SEC;

when required, preparing the report of the Compensation Committee to be included in our annual proxy statement;

engaging compensation consultants or other advisors it deems appropriate to assist with its duties; and

reviewing and evaluating, at least annually, our Compensation Committee’s charter.
Pursuant to its charter, our Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation. As a part of determining compensation for our executive officers and directors, our Compensation Committee engaged Arnosti Consulting, Inc. (“Arnosti Consulting”), an independent compensation consultant. At the request of our Compensation Committee, Arnosti Consulting provided analysis and recommendations regarding:

trends and emerging topics with respect to executive and director compensation;

peer group selection for executive and director compensation benchmarking;

compensation practices of our peer group;

compensation recommendations for our executives, directors and other employees; and

equity compensation metrics.
Our Compensation Committee took into account the recommendations of Arnosti Consulting and utilized information, including industry peer group data, in evaluating, recommending and determining cash compensation levels and equity compensation awards.
 
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Arnosti Consulting provides no services to us other than its advice to our Compensation Committee on the executive and director compensation matters described above. Our Compensation Committee determined Arnosti Consulting to be independent under the NASDAQ and SEC regulations. Our Board has determined that all members of our Compensation Committee are deemed “independent” under the listing standards of NASDAQ, and they are “nonemployee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code, of the Code. In 2019, the Compensation Committee met five times.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Dr. Cooper, Mr. Butler and Ms. Stephenson, and is chaired by Ms. Stephenson. The primary purpose of our Nominating and Corporate Governance Committee is to assist our Board by identifying individuals qualified to become members of our Board, recommending a slate of nominees to be proposed by our Board to stockholders for election to our Board, ensuring that the Board has the appropriate mix of skills and experience, developing and recommending corporate governance principles and guidelines of our company and monitoring compliance therewith, and recommending directors to serve on the committees of our Board. The Nominating and Corporate Governance Committee is responsible for, among other things:

assisting our Board in identifying prospective director nominees and recommending nominees for each annual meeting of stockholders to our Board;

reviewing developments in corporate governance practices and recommending changes to the governance guidelines applicable to our Board;

reviewing independence of our Board;

evaluating and making recommendations as to the size and composition of the Board;

recommending members for each of our committees of the Board;

determining qualifications for service on our Board;

reviewing the adequacy of our certificate of incorporation and bylaws and recommending to our Board, as conditions dictate, amendments thereto for consideration by our Board and, when applicable, by our stockholders; and

reviewing and evaluating, at least annually, our Nominating and Corporate Governance Committee’s charter.
Our Board has determined that all members of the Nominating and Corporate Governance Committee are independent under the listing standards of NASDAQ. In 2019, the Nominating and Corporate Governance Committee met five times.
Board Evaluations
Each year the members of our Board and each Board committee conduct a confidential assessment of their performance. This process is coordinated by our Nominating and Corporate Governance Committee which considers the appropriate approach and approves the form of evaluation on an annual basis. The process for director performance assessments was recently revised to include one on one interviews between the Chair of the Nominating and Governance Committee and each director and member of senior management regarding the contributions and performance of the Board and its committees.
As a direct result of the Board evaluation process, in 2019 the Board added Pamela Stephenson as a director, commenced succession planning for executives and directors and implemented enhanced Company reporting to the Board and Audit Committee with respect to cybersecurity risks, improvements and annual goals.
Role of the Board in Risk Oversight
One of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management committee, but rather administers this oversight function
 
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directly through the Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. Our Audit Committee oversees management of enterprise risks and financial risks, cybersecurity and data protection risks, as well as potential conflicts of interests. Our Compensation Committee is responsible for overseeing management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers. Our Nominating and Corporate Governance Committee is responsible for overseeing management of risks associated with the independence of our Board. Pursuant to our Board’s instruction, our management regularly reports on applicable risks to the relevant committee or the Board, as appropriate, with additional review or reporting on risks conducted as needed or as requested by our Board and its committees.
Executive Sessions
Executive sessions of our independent directors are held at each regularly scheduled meeting of our Board and at other times they deem necessary. Our Board’s policy is to hold executive sessions both with and without the presence of management. Our Board committees also generally meet in executive session at the end of each regularly scheduled committee meeting.
Consideration of Director Nominees
General.   In evaluating nominees for membership on our Board, our Nominating and Corporate Governance Committee applies our Board membership criteria set forth in our Corporate Governance Guidelines. Under these criteria, the Committee takes into account many factors, including an individual’s business experience and skills, as well as independence, judgment, knowledge of our business and industry, professional reputation, leadership, integrity and ability to represent the best interests of the Company’s stockholders. In addition, the Nominating and Corporate Governance Committee will also consider the ability of the nominee to commit sufficient time and attention to the activities of our Board, as well as the absence of any potential conflicts with the Company’s interests. The Nominating and Corporate Governance Committee does not assign specific weight to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. Our Board does not have a formal policy with respect to diversity of nominees. Rather, our Nominating and Corporate Governance Committee considers Board membership criteria as a whole and seeks to achieve diversity of experience, skills and viewpoint on our Board. Our Board is responsible for selecting candidates for election as directors based on the recommendation of the Nominating and Corporate Governance Committee.
Our Nominating and Corporate Governance Committee and Board regularly assess the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential nominees who may come to the attention of the Committee through current Board members, professional search firms, stockholders or other persons. Each potential nominee brought to the attention of the Committee, regardless of who recommended such potential nominee, is considered on the basis of the criteria set forth in our Corporate Governance Guidelines.
In February 2019, our Board determined that the size of the Board should be expanded to eight directors. Our Nominating and Corporate Governance Committee, in consultation with management, our chairman and the other Board members, screened and interviewed candidates who satisfied the criteria set forth in our Corporate Governance Guidelines and otherwise appeared qualified for membership on the Board and made recommendations to our Board. On recommendation of the Nominating and Corporate Governance Committee our Board appointed Pamela Stephenson as a director. In April 2019, following the resignation of Dr. Harrison, our Board reduced the size of the Board to seven directors.
Stockholder Nominees.   The Nominating and Corporate Governance Committee will review any candidates for director recommended by a stockholder of record who is entitled to vote at the Annual Meeting and who satisfies the notice, information and consent provisions set forth in the Bylaws. Our Board will use the same evaluation criteria and process for director nominees recommended by stockholders as it uses for other director nominees. For information concerning stockholder proposals, see “Stockholder Proposals or Nominations for 2021 Annual Meeting” below in this Proxy Statement.
 
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Communications with the Board of Directors
Stockholders wishing to formally communicate with our Board, any Board committee, the independent directors as a group or any individual director may send communications directly to the Company at 80 W. Lancaster Avenue, Suite 300, Devon, PA 19333, Attention: Corporate Secretary. All clearly marked written communications, other than unsolicited advertising or promotional materials, are logged and copied, and forwarded to the director(s) to whom the communication was addressed. Please note that the foregoing communication procedure does not apply to (i) stockholder proposals pursuant to Exchange Act Rule 14a-8 and communications made in connection with such proposals or (ii) service of process or any other notice in a legal proceeding.
Compensation Committee Interlocks and Insider Participation
No member of our Compensation Committee has ever been an executive officer or employee of ours. None of our officers currently serves, or has served during the last completed year, on the board of directors, compensation committee or other committee serving an equivalent function, of any other entity that has one or more officers serving as a member of our Board or Compensation Committee.
Policies and Procedures for Related Party Transactions
Pursuant to the related party transactions policy adopted by our Board, we review all transactions with a dollar value in excess of $120,000 involving us in which any of our directors, director nominees, significant stockholders and executive officers and their immediate family members will be participants, to determine whether such person has a direct or indirect material interest in the transaction. All directors and executive officers are required to promptly notify our chief financial officer of any proposed transaction involving us in which such person has a direct or indirect material interest. Such proposed transaction will then be reviewed by the Audit Committee to determine whether the proposed transaction is a related party transaction under our policy. In reviewing any related party transaction, the Audit Committee will determine whether or not to approve or ratify the transaction based on all relevant facts and circumstances, including the following:

the materiality and character of the related person’s interest in the transaction;

the commercial reasonableness of the terms of the transaction;

the benefit and perceived benefit, or lack thereof, to us;

the opportunity costs of alternate transactions; and

the actual or apparent conflict of interest of the related person.
In the event that any member of the Audit Committee is not a disinterested member with respect to the related person transaction under review, that member will be excluded from the review and approval or rejection of such related party transaction. Whenever practicable, the reporting, review and approval will occur prior to entering into the transaction. If management becomes aware of a related party transaction that has not been previously approved, it will notify the Audit Committee of such transaction. The Audit Committee will review the transaction and, based on its review, will: (i) if the transaction is ongoing, (a) ratify the transaction; (b) direct that we terminate the transaction; or (c) ratify the transaction subject to any changes or modifications that it deems appropriate (taking into consideration our contractual obligations); or (ii) if the proposed transaction has been completed, (a) ratify the transaction; (b) direct that we rescind the transaction (taking into consideration our contractual obligations); and/or (c) direct that we take any other action which it deems appropriate in the circumstances. As further discussed below under the heading “Certain Relationships and Related Party Transactions”, since January 1, 2019, there have not been, nor are there currently proposed, any related party transactions under our policy.
 
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DIRECTOR COMPENSATION
Non-Employee Director Compensation
Our Board has adopted a Non-Employee Director Compensation Policy that is designed to enable us to attract and retain, on a long term basis, highly qualified non-employee directors. The following table summarizes information concerning the compensation awarded to, earned by, or paid for services rendered in all capacities by our non-employee directors during 2019.
Name of Non-Employee Director
Fee Earned
or Paid in
Cash ($)
Option
Awards ($)(1)
Total ($)
Warren D. Cooper, MB, BS, BSc, MFPM(2)
66,500 135,598 202,098
John P. Butler(2)
43,000 135,598 178,598
William J. Federici(2)
55,000 135,598 190,598
Thomas L. Harrison, LH.D(3)
24,250 24,250
Daniel L. Kisner, M.D.(2)
46,875 135,598 182,473
Kenneth I. Moch(2)(4)
24,125 159,723 183,848
Pamela Stephenson(2)(5)
36,792 258,240 295,032
(1)
Reflects the grant date fair value determined in accordance with ASC Topic 718. The assumptions made in these valuations are included in Note 9 of the Notes to the Annual Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.
(2)
As of December 31, 2019, (i) Mr. Butler had stock options to purchase 65,000 shares of our common stock, (ii) each of Drs. Cooper and Kisner had stock options to purchase 95,000 shares of our common stock, (iii) Mr. Federici had stock options to purchase 102,865 shares of our common stock, (iv) Mr. Moch had stock options to purchase 107,055 shares of our common stock, and (v) Ms. Stephenson had stock options to purchase 50,000 shares of our common stock.
(3)
Dr. Harrison resigned from our Board on April 30, 2019.
(4)
Pursuant to our Non-Employee Director Compensation Policy, Mr. Moch elected to receive one-half of his 2019 director compensation in the form of an option award.
(5)
In February 2019, Pamela Stephenson was appointed as a member of our Board.
Pursuant to our Non-Employee Director Compensation Policy, our directors receive annual cash retainers, paid on a quarterly basis, and grants of stock option awards. Each non-employee director receives an annual retainer of $35,000 and an annual grant of 15,000 stock options. The lead independent director receives an additional $20,000. Non-employee directors serving on committees of our Board also receive additional cash retainers. In March, 2019, following consultation with our compensation consultant, the Compensation Committee recommended and our Board adopted changes to our Non-Employee Director
 
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Compensation Policy, effective April 1, 2019, increasing the amounts of certain cash retainers. The following table depicts the additional cash retainers for our non-employee directors who serve on committees of our Board:
Position
Additional Cash
Retainer ($)
2019
Audit Committee
Chair
20,000
Member
7,500
Compensation Committee
Chair
12,500
Member
6,000
Nominating and Corporate Governance Committee
Chair
8,000
Member
4,000
Under our Non-Employee Director Compensation Policy, our non-employee directors may elect to receive stock options in lieu of quarterly cash payments, which will be valued in accordance with Black-Scholes valuation method. Any option granted to our non-employee directors in lieu of cash compensation will vest in full on the date of grant. Our directors are also entitled to reimbursement for reasonable travel and lodging expenses for attending Board and committee meetings.
EXECUTIVE COMPENSATION
Our Compensation Committee is focused on designing a compensation program that attracts, retains, and incentivizes talented executives, motivates them to achieve our key financial, operational, and strategic goals, and rewards them for superior performance. It is also focused on ensuring that our compensation program aligns our executive officers’ interests with those of our stockholders by rewarding their achievement of specific corporate and individual performance goals.
As an emerging growth company, we have elected to comply with reduced compensation disclosure requirements permitted under the JOBS Act. As a result, we have not included a compensation discussion and analysis section discussing the compensation of our executive officers or proxy proposals seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which such votes must be conducted.
The following tables summarize information concerning the compensation awarded to, earned by, or paid for services rendered in all capacities by our named executive officers during 2019 and 2018. Our named executive officers include Armando Anido, our chief executive officer, Terri B. Sebree, our president, and James E. Fickenscher, our chief financial officer and vice president, corporate development.
 
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Summary Compensation Table
The following table summarizes the total compensation paid to or earned by each named executive officer for 2019 and 2018.
Name and Principal Position
Year
Salary
($)
Non-equity
incentive plan
compensation
($)(1)
Stock
Awards
($)(2)
Option
Awards
($)(3)
All Other
Compensation
($)(6)
Total ($)
Armando Anido
Chairman of the Board and Chief Executive Officer
2019 568,218 334,112 413,149 54,092 1,369,571
2018 568,218 289,791 1,089,232(4) 53,855 2,001,096
Terri B. Sebree
President
2019 437,750 252,144 13,140 309,861 25,985 1,038,880
2018 437,750 227,849 590,606(5) 24,826 1,281,031
James E. Fickenscher
Chief Financial Officer and Vice President, Corporate Development
2019 390,411 158,347 227,487 47,862 824,107
2018 379,040 131,527 549,183 46,335 1,106,085
(1)
The 2019 amount represents performance cash bonuses earned in 2019 and paid in February 2020. The 2018 amount represents performance cash bonuses earned in 2018 and paid in February 2019.
(2)
This amount reflects the aggregate grant date fair value of restricted stock awards computed in accordance with FASB accounting standards codification (“ASC Topic 718”).
(3)
This amount reflects the aggregate grant date fair value of stock options computed in accordance with ASC Topic 718.
(4)
This amount includes $430,213 related to a grant of 54,000 performance-based vesting options that will vest upon meeting certain performance criteria relating to the achievement of development and financial goals and subject to continued employment with us. While such options have not yet been earned, the grant date value of the performance options reflects the maximum level of performance and full vesting of the award.
(5)
This amount includes $233,271 related to a grant of 29,280 performance-based vesting options that will vest upon meeting certain performance criteria relating to the achievement of certain development and financial goals and subject to continued employment with us. While such options have not yet been earned, the grant date value of the performance options reflects the maximum level of performance and full vesting of the award.
(6)
This amount reflects (a) for the year ended December 31, 2019, (i) payment for 90% of the premiums for medical and dental insurance for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $43,977, $15,870, and $37,786, respectively, (ii) payments for life and long term disability insurance for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $4,571, $4,571, and $4,532, respectively, and (iii) contributions to 401(k) plans for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $5,544 each and (b) for the year ended December 31, 2018, (i) payment for 90% of the premiums for medical and dental insurance for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $44,530, $15,501, and $37,082, respectively, (ii) payments for life and long term disability insurance for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $3,880, $3,880, and $3,808, respectively, and (iii) contributions to 401(k) plans for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher in the amounts of $5,445 each.
Elements of Compensation
2019 Base Salaries
In January 2019, our Compensation Committee set the 2019 annual base salaries for each of Mr. Anido, Ms. Sebree and Mr. Fickenscher, which represented no increase, above the 2018 base salary for Mr. Anido
 
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and Ms. Sebree, and an increase of 3% above Mr. Fickenscher’s 2018 base salary. The 2019 annual base salaries for each of Mr. Anido, Mr. Fickenscher and Ms. Sebree are set forth in the “Summary Compensation Table” above.
Performance Cash Awards
Each named executive officer is eligible for a non-equity incentive compensation award (or performance bonus) based upon the achievement of certain corporate performance goals and objectives and individual performance, with the exception of our chief executive officer, whose performance bonus is based solely on the achievement of corporate goals and objectives.
Annual performance bonuses to executive officers are set based on the executive officer’s base salary as of the end of the bonus year and are generally paid out in the first quarter of the following year. Target levels for executive performance bonuses are based on the employment agreements with those executives as discussed in “Employment Agreements” below. At the beginning of each year, our Compensation Committee together with our Board establishes corporate goals and objectives for the following year. These goals and objectives and the proportional weight given to each are determined after considering management input and our overall strategic objectives. The goals generally focus on clinical development, business development and financial and operational goals. In addition, our Compensation Committee takes into consideration, the recommendations of and industry peer data provided by its independent compensation consultant. With respect to our chief executive officer, 100% of any annual performance bonus is based on the achievement of corporate goals and objectives. Annual performance bonuses to our other named executive officers are based 75% upon the achievement of corporate goals and objectives and 25% upon the achievement of individual goals and objectives.
In determining the amount of performance bonus awards, our Compensation Committee determines the level of achievement of the corporate goals for each year. In determining the individual component of each named executive’s bonus award, our Compensation Committee will consider a number of factors, including an assessment of each of the named executive officer individual goals, an analysis of the officer’s overall performance of his or her duties during the year and input and specific recommendations from our chief executive officer regarding the performance of each executive officer other than himself. These achievement levels are used to determine each named executive officer’s bonus. The bonuses paid to our named executive officers for 2019 are set forth in the “Summary Compensation Table” above.
Equity Compensation
We offer stock options to our employees, including our named executive officers, as a long-term incentive component of our compensation program. In January 2020, our Compensation Committee awarded stock options to Mr. Anido, Ms. Sebree and Mr. Fickenscher for 162,480 shares, 120,000 shares and 85,000 shares, respectively. All of these stock options vest as to 25% of the total number of option shares on the first anniversary of the date of grant and in equal quarterly installments over the ensuing twelve quarters, subject to the executive officer’s continued employment or service with us on the vesting date. The stock options are also subject to accelerated vesting in certain circumstances.
In January 2019, our Compensation Committee awarded stock options to Mr. Anido, Ms. Sebree and Mr. Fickenscher for 160,000 shares, 120,000 shares and 88,099 shares, respectively. All of these stock options vest as to 25% of the total number of option shares on the first anniversary of the date of grant and in equal quarterly installments over the ensuing twelve quarters, subject to the executive officer’s continued employment or service with us on the vesting date. The stock options are also subject to accelerated vesting in certain circumstances.
In January 2019, our Compensation Committee also awarded 3,600 restricted shares to Ms. Sebree, of which 1,800 vested in January 2020 and the remaining 1,800 will vest in January 2021, subject to Ms. Sebree’s continued employment or service with us on the vesting date. The restricted shares are also subject to accelerated vesting in certain circumstances.
For additional discussion, please see “Potential Payments upon Termination or Change of Control” below.
 
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Employee Benefits and Perquisites
Our named executive officers are eligible to participate in our health and welfare plans to the same extent as all full-time employees generally. We also provide our named executive officers and other employees with term life insurance and disability insurance at our expense. Our named executive officers are also eligible to participate in our 401(k) retirement plan, under which we match 33% of employee (including executive officer) contributions up to 6% of salary, subject to IRS limits. We do not provide our named executive officers with any other perquisites or other personal benefits.
No Tax Gross-Ups
We do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation paid or provided by our company.
Employment Agreements
We have entered into employment agreements with each of our named executive officers. The employment agreements entered into with each of our named executive officers provide for a base salary, an annual performance bonus and certain separation benefits described under the heading “Potential Payments upon Termination or Change of Control.” On August 30, 2019, we entered into amendments to the employment agreements (the “2019 Amendments”) with each of our named executive officers to, among other things, change from “single-trigger” to “double-trigger” change of control severance benefits. Prior to the 2019 Amendments, each executive was entitled to certain “single-trigger” severance benefits in connection with a “change of control”, as defined in their respective employment agreement, or in the event of his or her (i) resignation within thirty days of a “change of control”, or (ii) termination without “cause” or resignation for “good reason”, as defined in their respective employment agreement, within the ninety day period preceding a “change of control” or on or within twelve months following a “change of control”. As a result of the 2019 Amendments, each employment agreement now provides for “double-trigger” severance benefits in connection with a “change of control”, as further described under the heading “Potential Payments upon Termination or Change of Control.”
Each of our named executive officers is eligible for an annual performance bonus which is set as a percentage of base salary based upon the achievement of certain individual and/or corporate performance goals. The target bonus for each of Mr. Anido and Ms. Sebree is 60% of base salary, and for Mr. Fickenscher is 40% of base salary.
Our named executive officers are entitled to participate in all of our retirement and group welfare plans available to our senior level executives as a group or our employees generally, subject to the terms and conditions applicable to such plans. Further, each such person’s employment agreement contains standard confidentiality and assignment of inventions provisions and post-employment non-compete provisions for, in the case of Mr. Anido 18 months, and in the case of Ms. Sebree and Mr. Fickenscher 12 months.
Potential Payments upon Termination or Change of Control
If any of our named executive officers’ employment is terminated by us without “cause” or a named executive officer resigns for “good reason,” as such terms are defined in their respective employment agreements, then, subject to his or her execution and delivery of a general release of claims and compliance with all the terms and provisions of his or her employment agreement that survive the executive’s termination of employment, such person shall be entitled to (i) receive continuation of his or her then current base salary for a period of, in the case of Mr. Anido, 18 months, and in the case of Ms. Sebree and Mr. Fickenscher, 12 months; (ii) continued medical and dental benefits for, in the case of Mr. Anido, 18 months, and in the case of Ms Sebree and Mr. Fickenscher, 12 months, in each case at the same premium rates charged to active employees; and (iii) a pro rata vesting of all outstanding unvested stock options and other equity-based awards that would have vested had the named executive officer remained employed for 12 months following the date of termination of employment shall become fully vested and exercisable (to the extent applicable) as of the date of such termination of employment.
If any of our named executive officers’ employment is terminated by us without “cause” or a named executive officer resigns for “good reason,” as such terms are defined in their respective employment
 
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agreements, within the 90 day period preceding a “change of control,” as such term is defined in their respective employment agreements, or on or within 12 months following a “change of control,” then, subject to his or her execution and delivery of a general release of claims and compliance with all the terms and provisions of his or her employment agreement that survive the executive’s termination of employment, such person shall be entitled to: (i) receive continuation of his or her base salary for a period of, in the case of Mr. Anido, 24 months, and in the case of Ms. Sebree and Mr. Fickenscher, 18 months; (ii) continued medical and dental benefits for, in the case of Mr. Anido, 24 months, and in the case of Ms. Sebree and Mr. Fickenscher, 18 months, in each case at the same premium rates charged to active employees; and (iii) 100% of all outstanding unvested stock options and other equity-based awards shall become fully vested and exercisable (to the extent applicable) as of the date of such termination of employment.
In addition, (i) such person’s outstanding vested stock options and other equity-based awards (after giving effect to the vesting acceleration described in the preceding clause) shall remain exercisable until the earlier of (x) three years following such termination of employment or, if earlier, (y) until the stated expiration of the stock option or other equity-based award; and (ii) (A) in the case of Mr. Anido and Ms. Sebree, if such change in control results in net proceeds per share of capital stock to investors in excess of $4.24, such person shall receive a payment equal to such person’s target annual bonus, or (B) in the case of Mr. Fickenscher, he shall receive a payment equal to his target annual bonus.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information concerning unexercised stock options and stock options that have not vested for each of the named executive officers as of December 31, 2019:
Option Award
Name
Number of Securities
Underlying
Unexercised Options
(#) (Exercisable)
Number of
Securities
Underlying
Unexercised
Options (#)
(Unexercisable)
Number of Securities
Underlying
Unexercised Unearned
Options(#)
Option
Exercise
Price ($)
Option
Expiration Date
Armando Anido 292,553 3.98 10/02/2024
396,678 14.00 08/04/2025
85,938 39,062(1) 18.22 01/25/2027
35,438 45,562(2) 11.71 1/11/2028
54,000(5) 11.71 1/11/2028
160,000(3) 3.65 1/24/2029
Terri B. Sebree 146,276 3.98 10/02/2024
201,981 14.00 08/04/2025
51,563 23,437(1) 18.22 01/25/2027
19,215 24,705(2) 11.71 01/11/2028
29,280(5) 11.71 01/11/2028
120,000(3) 3.65 01/24/2029
James E. Fickenscher 121,875 28,125(4) 10.23 09/13/2026
21,553 9,797(1) 18.22 01/25/2027
29,531 37,969(2) 11.71 01/11/2028
88,099(3) 3.65 01/24/2029
(1)
25% of the option vests upon the first anniversary of the grant date of January 25, 2017. The remainder of the option vests in 12 equal quarterly installments thereafter, subject to continued employment with us.
(2)
25% of the option vests upon the first anniversary of the grant date of January 11, 2018. The remainder of the option vests in 12 equal quarterly installments thereafter, subject to continued employment with us.
 
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(3)
25% of the option vests upon the first anniversary of the grant date of January 24, 2019. The remainder of the option vests in 12 equal quarterly installments thereafter, subject to continued employment with us.
(4)
25% of the option vests upon the first anniversary of the grant date of September 13, 2016. The remainder of the option vests in 12 equal quarterly installments thereafter, subject to continued employment with us.
(5)
The performance-based vesting options vest upon meeting certain performance criteria relating to the achievement of certain development and financial goals and subject to continued employment with us. While no amount has yet been earned, the performance options are shown here at maximum level of performance.
 
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information about the beneficial ownership of our common stock by (i) each of our directors and director nominees, (ii) each of our named executive officers named in the Summary Compensation Table under “Executive Compensation,” (iii) all our directors, director nominees and executive officers as a group, and (iv) each person or group known by us to own more than 5% of our common stock. The percentages reflect beneficial ownership, as determined in accordance with the SEC’s rules, as of April 1, 2020 and are based on 23,572,391 shares of common stock outstanding as of April 1, 2020. Except as noted below, the address for all beneficial owners in the table below is 80 W. Lancaster Avenue, Suite 300, Devon, PA 19333.
Name of Beneficial Owner
Amount and
Nature
of Beneficial
Ownership(1)
Percent of
Class
Directors and Executive Officers:
Armando Anido(2)
1,278,761 5.23%
Terri B. Sebree(3)
657,546 2.73%
James E. Fickenscher(4)
242,940 1.02%
John P. Butler(5)
43,333 *
Warren D. Cooper, MB, BS, BSc, MFPM(6)
80,000 *
William J. Federici(7)
87,865 *
Daniel L. Kisner, MD(8)
80,000 *
Kenneth I. Moch(9)
92,055 *
Pamela Stephenson(10)
11,667 *
All directors, director nominees and executive officers as a group (11 persons)(11)
2,863,625 11.10%
5% or more Stockholders (not disclosed above):
Michael D. Rapp(12)
1,490,000 6.32%
The Vanguard Group(13)
1,673,962 7.10%
BlackRock, Inc.(14)
1,513,605 6.42%
ETF Managers Group, LLC(15)
2,683,403 11.38%
*
Represents less than 1% of the number of shares of our common stock outstanding as of April 1, 2020.
(1)
Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting and investment power with respect to shares. Unless otherwise indicated below, to our knowledge, all persons listed in the table have sole voting and dispositive power with respect to their shares of common stock, except to the extent authority is shared by spouses under applicable law. Pursuant to the rules of the SEC, the number of shares of common stock deemed outstanding includes shares issuable upon vesting of shares of restricted stock held by the respective person or group that will vest within 60 days of April 1, 2020 and pursuant to options held by the respective person or group that are currently exercisable or may be exercised within 60 days of April 1, 2020.
(2)
Includes (a) 352,512 shares of common stock, (b) 886,357 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 385,354 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020), (c) 26,595 shares of common stock held by TUA of Armando Anido, and (d) 13,297 shares of common stock held by Nancy J. Anido Trust. TUA of Armando Anido and Nancy J. Anido Trust are controlled by Armando Anido, who has voting and dispositive power with respect to the shares of common stock held by the trusts.
(3)
Includes (a) 184,346 shares of common stock, (b) 471,400 shares of common stock issuable upon the
 
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exercise of options to purchase common stock (and excludes 265,057 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020) and (c) 1,800 shares of restricted stock, all of which have voting rights and none of which are vested or will vest within 60 days of April 1, 2020.
(4)
Includes (a) 20,718 shares of common stock and (b) 222,222 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 199,727 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(5)
Includes (a) 5,000 shares of common stock and (b) 38,333 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 26,667 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(6)
Includes 80,000 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 15,000 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(7)
Includes 87,865 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 15,000 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(8)
Includes 80,000 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 15,000 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(9)
Includes 92,055 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 15,000 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(10)
Includes 11,667 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 38,333 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020).
(11)
Includes (a) 646,161 shares of common stock; (b) 2,215,664 shares of common stock issuable upon the exercise of options to purchase common stock (and excludes 1,213,888 shares of common stock issuable upon the exercise of options to purchase common stock that will not be vested within 60 days of April 1, 2020); and (c) 1,800 shares of restricted stock, all of which have voting rights and will not be vested within 60 days of April 1, 2020.
(12)
Based on information reported by Mr. Rapp on Schedule 13G/A filed with the SEC on January 15, 2019. The address of Mr. Rapp is c/o Broadband Capital Investments LLC, 1110 Brickell Avenue, Suite 430, Miami, Florida 33131.
(13)
Based solely on information reported by The Vanguard Group on a Schedule 13G filed with the SEC on February 11, 2020, which reported aggregate beneficial ownership of 1,673,962 shares of our common stock as of December 31, 2019. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The Vanguard Group reported that it possessed sole voting power and shared dispositive power of 45,568 shares and that it possessed sole dispositive power of 1,628,394 shares. Vanguard also reported that it did not possess sole voting power over any shares beneficially owned.
(14)
Based solely on information reported by BlackRock, Inc. on a Schedule 13G filed with the SEC on February 7, 2020, which reported aggregate beneficial ownership of 1,513,605 shares of our common stock as of December 31, 2019. The address of BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055. BlackRock reported that it possessed, directly or through one or more subsidiaries, sole voting power of 1,495,872 shares and sole dispositive power of 1,513,605 shares. BlackRock also reported that it did not possess shared voting or dispositive power over any shares beneficially owned.
(15)
Based solely on information reported by ETF Managers Group LLC on Schedule 13G/A with the SEC on December 2, 2019. The address of ETF Managers Group LLC is 30 Maple Street, Suite 2, Summit, New Jersey 07091. ETF Managers Group reported that it possessed sole voting and dispositive power of 2,683,403 shares. ETF Managers Group also reported that it did not possess shared voting or dispositive power over any shares beneficially owned.
 
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Changes in Control
We are not aware of or a party to any arrangements, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change of control.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Other than equity and other compensation, termination, change of control and other arrangements, which are described under “Executive Compensation” and “Director Compensation,” respectively, since January 1, 2019, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party in which the amount involved in the transaction exceeded $120,000, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.
INDEPENDENT AUDITORS AND RELATED FEES
Policy on Audit Committee Pre-Approval of Audit and Permitted Non-Audit Services of Independent Auditors
Our Audit Committee is responsible for appointing, approving fees and overseeing the working of the Company’s independent registered public accounting firm. As part of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered accounting firm for the purpose of maintaining the independence of our independent auditor. We may not engage our independent auditor to render any audit or non-audit service unless either the service is approved in advance by the Audit Committee, or the engagement to render the service is entered into pursuant to the Audit Committee’s pre-approval policies and procedures.
Principal Accountant Fees and Services
The following table shows the aggregate fees paid or accrued by the Company to our independent auditor, KPMG LLP for the audit and other services provided in 2019 and 2018:
2019
2018
Audit Fees
$ 387,000 $ 375,000
Audit-related Fees
Tax Fees
All Other fees
1,780
Total
$ 388,780 $ 375,000
Audit Fees.   Audit fees in 2019 and 2018 consist of $277,000 and $233,000, respectively, for fees billed for the audit of our annual financial statements and the review of the interim financial statements, as well as $110,000 and $145,000, respectively, for fees associated with registration statements, including our registration statement on Form S-3 used in connection with our underwritten public offering in July 2018, as well as comfort letters, consents and review of documents filed with the SEC.
Audit-Related Fees.   We did not incur any audit-related fees from our independent auditors in 2019 or 2018.
Tax Fees.   We did not incur any tax fees by our independent auditor in 2019 or 2018.
All Other Fees.   Other fees in 2019 consist of fees paid to access an online accounting research tool provided by our independent auditors. We did not incur any other fees in 2018.
REPORT OF THE AUDIT COMMITTEE
The following is the report of our Audit Committee with respect to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on or about March 10, 2020 (the “Annual Report’). The information contained in this report shall not
 
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be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
Our Audit Committee oversees our financial reporting process on behalf of our Board. Management has the responsibility for the financial statements and the reporting process, including internal control systems. Our independent registered public accounting firm, KPMG LLP, is responsible for expressing an opinion as to the conformity of our audited financial statements with accounting principles generally accepted in the United States of America.
Review and Discussions with Management and Independent Accountants
The Audit Committee reviewed and discussed the audited financial statements with management of the Company. The Audit Committee also met with KPMG LLP to review the financial statements included in the Annual Report. The Audit Committee discussed with a representative of KPMG LLP the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301, as amended, “Communication with Audit Committees.” In addition, the Audit Committee met with KPMG LLP, with and without management present, to discuss the overall scope of KPMG LLP’s audit, the results of its examinations and the overall quality of the Company’s financial reporting. The Audit Committee received the written disclosures and the letter from KPMG LLP required by Rule 3526 of the PCAOB, Communication with Audit Committee Concerning Independence, and has discussed with KPMG LLP its independence, and satisfied itself as to the independence of KPMG LLP.
Based on the above review, discussions, and representations received, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended December 31, 2019 be included in the Company’s Annual Report and filed with the SEC.
Audit Committee:
William J. Federici, Chair
Warren D. Cooper
Kenneth I. Moch
 
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PROPOSALS TO BE VOTED ON
PROPOSAL ONE: ELECTION OF DIRECTORS
At the Annual Meeting, our stockholders will vote on the election of seven (7) director nominees named in this Proxy Statement as directors, each to serve until our 2021 Annual Meeting and until their respective successors are elected and qualified. Our Board has unanimously nominated each of our seven (7) existing directors for election to our Board at the Annual Meeting.
All of our nominees have indicated their willingness to serve if elected, but if any should be unable or unwilling to stand for election, the shares represented by proxies may be voted for a substitute as the Company may designate, unless a contrary instruction is indicated in the proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF OUR DIRECTOR NOMINEES.
 
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PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected KPMG LLP as the Company’s independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2020. Although stockholder approval for this appointment is not required, the Audit Committee and our Board are submitting the selection of KPMG LLP for ratification to obtain the views of stockholders and as a matter of good corporate governance. If the appointment is not ratified, the Audit Committee will reconsider whether or not to retain KPMG.
Representatives of KPMG LLP are expected to be present at the Annual Meeting, and will have the opportunity to make statements if they desire to do so and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF KPMG LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020.
 
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OTHER MATTERS
The Company is not aware of any matter to be acted upon at the Annual Meeting other than the matters described in this proxy statement. However, if any other matter properly comes before the Annual Meeting, the proxy holders will vote the proxies thereon in accordance with their best judgment on such matter.
PROXY SOLICITATION
The Company will bear the expenses of calling and holding the Annual Meeting and the soliciting of proxies therefor. This Proxy Statement and the accompanying materials, in addition to being mailed directly to stockholders, will be distributed through brokers, custodians, nominees and other like parties to beneficial owners of shares of common stock. The Company will pay reasonable expenses incurred in forwarding the proxy materials to the beneficial owners of shares and in obtaining the written instructions of such beneficial owners.
STOCKHOLDER PROPOSALS AND NOMINEES FOR 2021 ANNUAL MEETING
Stockholders interested in submitting a proposal for consideration at our 2021 Annual Meeting must do so by sending the proposal to our Corporate Secretary at Zynerba Pharmaceuticals, Inc., 80 W. Lancaster Avenue, Suite 300, Devon, PA 19333. Under the SEC’s proxy rules, the deadline for submission of proposals to be included in our proxy materials for the 2021 Annual Meeting is December 25, 2020. Accordingly, in order for a stockholder proposal to be considered for inclusion in our proxy materials for the 2021 Annual Meeting, any such stockholder proposal must be received by our Corporate Secretary on or before December 25, 2020, and comply with the procedures and requirements set forth in Rule 14a-8 under the Securities Exchange Act of 1934, as well as the applicable requirements of our Bylaws. Any stockholder proposal received after December 25, 2020, will be considered untimely, and will not be included in our proxy materials. In addition, stockholders interested in submitting a proposal outside of Rule 14a-8 must properly submit such a proposal in accordance with our Bylaws.
Our Bylaws require advance notice of business to be brought before a stockholders’ meeting, including nominations of persons for election as directors. To be timely, a nomination for director nominee(s) and/or notice of an item of business to be introduced at a stockholders’ meeting must be received by our Corporate Secretary at our principal executive offices not less than 90 days but not more than 120 days prior to the one-year anniversary of the date of the 2020 Annual Meeting (i.e., June 10, 2020) and must contain specified information concerning the director nominee(s) and/or the matters to be brought before such meeting and concerning the stockholder proposing such matters. Therefore, to be presented at our 2021 Annual Meeting, such a proposal must be received by the Company on or after February 10, 2020 but no later than March 12, 2020. If the date of the 2021 Annual Meeting is advanced or delayed by more than 25 days from the anniversary date of the 2020 Annual Meeting, notice must be received no later than the close of business on the 10th day following the day on which the public announcement of the date of such Annual Meeting is first made.
ANNUAL REPORT ON FORM 10-K
We filed an Annual Report on Form 10-K for the year ended December 31, 2019 on March 10, 2020 with the SEC. A copy of our Annual Report on Form 10-K will also be made available (without exhibits), free of charge, to interested stockholders upon written request to Zynerba Pharmaceuticals, Inc., 80 W. Lancaster Avenue, Suite 300, Devon, PA 19333, Attn: Corporate Secretary.
 
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aNNUal meeTiNG oF sTocKholdeRs oFZYNeRBa PhaRmaceUTicals, iNc.June 10, 2020NoTice oF iNTeRNeT availaBiliTY oF PRoXY maTeRial:The Notice of Meeting, proxy statement and proxy cardare available at http://www.astproxyportal.com/ast/20275/Please sign, date and mailyour proxy card in theenvelope provided as soonas possible.Signature of Stockholder Date: Signature of Stockholder Date:Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give fulltitle as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.To change the address on your account, please check the box at right andindicate your new address in the address space above. Please note thatchanges to the registered name(s) on the account may not be submitted viathis method.INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here:The BoaRd oF diRecToRs RecommeNds a voTe "FoR" The elecTioN oF diRecToRs aNd "FoR" PRoPosal 2.Please siGN, daTe aNd ReTURN PRomPTlY iN The eNclosed eNveloPe. Please maRK YoUR voTe iN BlUe oR BlacK iNK as shoWN heRe xPlease detach along perforated line and mail in the envelope provided.20730000000000000000 5 061020Go GReeNe-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxymaterial, statements and other eligible documents online, while reducing costs, clutter andpaper waste. Enroll today via www.astfinancial.com to enjoy online access.1. Election of Directors:O Armando AnidoO John P. ButlerO Dr. Warren D. CooperO William J. FedericiO Daniel L. Kisner, M.D.O Kenneth I. MochO Pamela Stephenson2. Ratification of appointment of KPMG LLP as Independent RegisteredPublic Accounting Firm for the 2020 Fiscal Year.This Proxy, when properly executed, will be voted in the manner directed herein bythe undersigned stockholder. if no direction is made, this Proxy will be voted FoRthe election of each director nominee in proposal 1 and FoR proposal 2.FOR AGAINST ABSTAINFOR ALL NOMINEESWITHHOLD AUTHORITYFOR ALL NOMINEESFOR ALL EXCEPT(See instructions below)NomiNees:

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ZYNERBA PHARMACEUTICALS, INC.Proxy for annual meeting of stockholders on June 10, 2020solicited on Behalf of the Board of directorsThe undersigned hereby appoints James Fickenscher and Suzanne M. Hanlon asproxies, each with the power to appoint his or her substitute, and hereby authorizes them torepresent and vote, as designated on the reverse side, all shares of common stock ofZynerba Pharmaceuticals, Inc., held of record by the undersigned on April 14, 2020, at theAnnual Meeting of Stockholders to be held on June 10, 2020 or any postponement oradjournment thereof.(continued and to be signed on the reverse side.)

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