ITEM
10. |
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Board
of Directors
The
Board of Directors (the “Board”) currently consists of seven members, divided into three classes with two directors in Class
I, three directors in Class II and two directors in Class III. Directors serve for three-year terms with one class of directors being
elected by the Company’s stockholders at each annual meeting. The terms of our Class I directors, Messrs. Aggarwal and Sullivan,
will expire at the 2025 annual meeting, and the term of our Class III directors, Messrs. Burnell and Keegan, will expire at the 2023
Annual Meeting. The terms of our Class II directors, Messrs. Chan, Gorman, and Rocca, will expire at the 2024 annual meeting.
NAME |
|
CLASS |
|
AGE |
|
PRINCIPAL
OCCUPATION OR EMPLOYMENT |
Vijay
Aggarwal |
|
I |
|
74 |
|
CEO of Phase Forward Technologies |
Thomas
W. Burnell |
|
III |
|
61 |
|
President
and Chief Executive Officer of Interpace Biosciences, Inc. |
Edward
Chan |
|
II |
|
40 |
|
Partner
of 1315 Capital Management, LLC |
Robert
Gorman |
|
II |
|
65 |
|
Managing
Partner of MLC, LLC |
Joseph
Keegan, Ph.D. |
|
III |
|
69 |
|
Independent
Investor |
Fortunato
Ron Rocca |
|
II |
|
61 |
|
Former
President and Chief Executive Officer of Exagen Inc. |
Stephen
J. Sullivan |
|
I |
|
76 |
|
Founder,
CRO Advisors LLC |
The
biographies and qualifications of the members of the Board are set forth below. No director is related to any of our other directors,
executive officers, or persons nominated or chosen by the Company to become a director or executive officer that would require disclosure
pursuant to Item 401(d) of Regulation S-K. Likewise, there are no family relationships between any director, executive officer, or person
nominated or chosen by the Company to become a director or executive officer that would require disclosure pursuant to Item 401(d) of
Regulation S-K.
Vijay
Aggarwal, Class I Director and Ampersand Designee. Dr. Vijay Aggarwal was designated as a director by Ampersand 2018 Limited
Partnership, a fund managed by Ampersand Capital Partners (“Ampersand”), as a holder of the Company’s
Series B Preferred Stock, and thereby appointed and elected as a director effective February 1, 2022, replacing Eric B. Lev as
designee of Ampersand. Dr. Aggarwal serves as Chair of the Board’s Compliance and Regulatory Committee (“Regulatory
Compliance Committee”) which was formerly part of the Company’s Audit Committee and was formed in January 2020 and
as a member of the Board’s Nominating Committee. Currently CEO of Phase Forward Technologies, and formerly a Managing Partner
of The Channel Group, Dr. Aggarwal provides strategic advisory and capital formation services to companies with operations or
investments in the clinical diagnostics, molecular diagnostic, and anatomic pathology sectors. He is also an active investor in
early-stage medical technology companies. Prior to The Channel Group, he served as CEO of Vaxigenix, a pharmaceutical company
developing vaccine treatments for colorectal cancer. From 2004-2009, Dr. Aggarwal was President and CEO of Aureon Laboratories,
Inc., a predictive pathology company offering advanced tissue analysis services to practicing physicians and the pharmaceutical
industry. From 2001 to 2004, he served as President of AAI Development Services, Inc., a global contract research and development
services company serving the pharmaceutical and biotech industries. In 1999, following the acquisition of SmithKline Beecham
Clinical Laboratories by Quest Diagnostics, Dr. Aggarwal led the team that planned the integration of the two companies and served
on the Chairman’s Council. In addition, he served as President of Quest Diagnostic Ventures, where his responsibilities
included new technology, new business models, clinical trials testing, and direct–to-consumer strategies.
Dr.
Aggarwal spent 14 years with SmithKline Beecham Clinical Laboratories (“SBCL”), the clinical laboratory operations
of SmithKline Beecham plc. During his tenure with the company, he held many positions, including Director of Business Development, Executive
Vice President of Laboratories, having direct responsibility for all of SBCL’s U.S.-based laboratories, and as Vice President of
Managed Care, responsible for third party reimbursement.
Early
in his career, Dr. Aggarwal spent 8 years at Bio Science Laboratories, finishing his time with the company as Manager of Toxicology and
Special Chemistry. He currently holds Board positions at Accugenomics, Allergenis, Moleculera and Slone Partners. Previous Board positions
include Hycor Biomedical, Targeted Diagnostics and Therapeutics and ViraCor IBT Laboratories. He earned a BA in Chemistry from Case Western
Reserve University and a Ph.D. in Pharmacology/Toxicology from the Medical College of Virginia.
Dr.
Aggarwal brings extensive leadership in clinical diagnostic services as well as institutional and individual investment experience.
Thomas
W. Burnell, Class III Director. Effective December 1, 2020, Mr. Burnell was named President, Chief Executive Officer and a director
of the Company. From October 15, 2019 until November 30, 2020, he served as President and Chief Executive Officer of Cardiovascular Clinic
of Nebraska LLC, a medical treatment facility focused on diagnosis and treatment of cardiac and vascular disorders, and from October
2, 2017 until November 29, 2017 he served as Chief Executive Officer and a director of True Nature Holding, Inc., a public company now
known as Mitesco, Inc. that focuses on development and acquisition of innovative technologies. From July 16, 2016 until March 31, 2017,
Mr. Burnell was the President of Boston Heart Diagnostics Corporation, a diagnostics subsidiary of Eurofins Scientific, Inc. (“Eurofins”).
From January 2014 to December 2016, Mr. Burnell was an Operating Partner of Ampersand , a private equity firm and the manager of private
equity fund that are a major stockholder of the Company, where he represented Ampersand’s investment in a dietary supplement manufacturer,
Elite One Source Nutrisciences, Inc., as its President and Chief Executive Officer. From October 2014 until May 2016, Mr. Burnell served
as Executive Chairman of Accuratus Lab Services, Inc., a provider of laboratory testing services, and from September 2012 until July
2014 he was President and Chief Executive Officer of Viracor-IBT Laboratories, Inc., a specialty testing laboratory with an emphasis
on the transplant market, during which time it was majority-owned by Ampersand prior to its sale to Eurofins. Mr. Burnell performed the
above-described services, except for his services to us, as the Co-Owner, General Partner, and Chief Executive Officer of Milestone Business
Management, a consulting firm focused on strategic, financial, and organizational performance of food, pharmaceutical, and life science
companies.
In
addition, from September 2005 until August 2010, Mr. Burnell served as President and Chief Executive Officer of Nebraska Heart Institute
Heart Hospital, a hospital which was acquired during his tenure by Catholic Health Initiatives. From February 2001 until August 2005,
he was President and Chief Executive Officer of Eurofins, a U.S. wholly owned subsidiary of Eurofins Scientific Group, a publicly held
international laboratory company (“Eurofins Group”). From September 2000 until June 2002, he was President and Chief
Executive Officer of GenomicFX, Inc., a leader in livestock and aquaculture genomics. From June 1989 until July 2000, Mr. Burnell held
various senior management positions at ContiGroup Companies, Inc., a global agriculture, food and nutrition company. Mr. Burnell holds
a PhD in Nutrition from the University of Kentucky and a BS and MS in animal sciences and nutrition, respectively, from the University
of Nebraska-Lincoln.
Mr.
Burnell has extensive leadership experience in the healthcare, biotechnology, laboratory sciences and manufacturing sectors, which has
led the Board to conclude that Mr. Burnell should serve as a director of the Company.
Edward
Chan, Class II Director and 1315 Capital Designee. Edward Chan was designated as a director by 1315 Capital as a holder of the Company’s
Series B Preferred Stock and thereby appointed and elected to the Board effective January 15, 2020 and was subsequently named to the
Board’s Compensation & Management Development Committee (the “Compensation Committee”), Nominating Committee,
and Regulatory Compliance Committee. From June 2021 through the present, Mr. Chan has been a partner of 1315 Capital Management, LLC,
a Philadelphia-based firm that provides expansion and growth capital to healthcare companies. From October 2016 through June 2021, Mr.
Chan served as a principal of 1315 Capital Management, LLC. Mr. Chan has over [17] years of experience in healthcare investing. From
2012 to 2016, Mr. Chan was a vice president at NaviMed Capital Advisors, LLC, a lower middle-market healthcare investment firm and an
associate at Siemens Venture Capital, the investment arm of Siemens. Mr. Chan started his career developing and commercializing a molecular
diagnostic product at a venture backed company and has been involved in several diagnostics and biopharma services investments including
China Diagnostics Medical Corporation (acquired by Actis Capital), BioImagene, Inc. (acquired by Roche Holding AG), RadPharm, Inc. (acquired
by JLL Partners), Cylex, Inc. (acquired by Viracor-IBT Laboratories, Inc.), Sequenom, Inc. (acquired by Laboratory Corporation of America
Holdings) and Genoptix, Inc. (acquired by NeoGenomics, Inc.). He currently serves on the board of the private company Homestead Smart
Health Plans LLC and the board of Integration Health Holdings, LLC. Mr. Chan received a BSc in Biomedical Engineering from Johns Hopkins
University and an M.B.A. from the Wharton School at the University of Pennsylvania.
Mr.
Chan’s designation as director brings to the Board experience in expanding healthcare companies and biomedical engineering and
business backgrounds.
Robert
Gorman, Class II Director and Ampersand Designee. Robert Gorman was initially designated as director on October 17, 2019 by Ampersand
as holder of the Company’s Series A Convertible Preferred Stock, which is no longer outstanding, and thereby appointed and elected
to the Board and was re-designated as director by Ampersand as holder of Series B Preferred Stock and thereby re-appointed and re-elected
to the Board effective January 15, 2020. On January 22, 2020, the Company named Mr. Gorman to the Compensation Committee and the Regulatory
Compliance Committees. On April 16, 2020, Mr. Gorman resigned as a member of the Compensation Committee and was appointed as Chairman
of the Board. Mr. Gorman’s experience includes over 30 years in healthcare leadership positions. The majority of his career has
been in the laboratory services industry with both public and private companies. After leaving public accounting, he served as Operations
Controller for Home Medical Systems, Inc., a company focused on the roll-up of the durable medical equipment business in the United States
and sold to Beverly Enterprises. He joined Central Diagnostic Laboratory, the largest independent laboratory at the time, as East Coast
Controller, which was acquired by Corning Clinical Laboratory (now known as Quest Diagnostics Incorporated). He spent over 20 years at
Quest Diagnostics Incorporated. While at Quest Diagnostics Incorporated, he held various leadership roles including responsibility for
the New York and New England laboratories and the East Region, and he ultimately became the Vice President of U.S. operations. After
retiring from Quest Diagnostics Incorporated, Mr. Gorman along with WaterStreet Healthcare Partners acquired Converge Diagnostic Services
LLC in 2009, where he served as Chief Executive Officer. He helped transform Converge Diagnostic Services LLC into a full-service regional
laboratory services company servicing the New England market. After approximately four and a half years, Converge Diagnostics Services
LLC was acquired by Quest Diagnostics Incorporated. Mr. Gorman served as Senior Vice President of U.S. Clinical Diagnostics for Eurofins
Group, , with responsibility for clinical diagnostic businesses in the U.S. from January 2017 to July 2018. Since July 2018, Mr. Gorman
serves as a consultant for MLC, LLC, for which he is also the managing partner. Mr. Gorman has served on several for profit and not for
profit boards, including for Eurofins’s subsidiary Boston Heart Diagnostics Corporation from January 2017 to July 2018. Mr. Gorman
earned his B.S. in Accounting from Villanova University.
Mr.
Gorman brings leadership in the laboratory services industry in public and private companies, including clinical diagnostic businesses,
to the Board.
Joseph
Keegan, Class III Director. Joseph Keegan, Ph.D. was appointed to the Board effective January 1, 2016 and was subsequently appointed
Chairman of our Audit Committee and our Nominating Committee. Dr. Keegan has more than 30 years of experience in life science businesses.
From 2007 to 2012, when it was sold to Pall Corporation, Dr. Keegan was chief executive officer at ForteBio, Inc., a life science tool
company, where he helped to lead a financing round and established product development and sales strategies for that company. From 1998
to 2007, Dr. Keegan was chief executive officer at Molecular Devices Corporation (NASDAQ: MDCC), a provider of bioanalytical measurement
systems, software and consumables, where Dr. Keegan helped grow the company both internally and through acquisitions. From 1992 to 1998,
Dr. Keegan worked at Becton Dickinson and Company, a medical technology company that manufactures and sells medical devices and instrument
systems, where he served as President of Worldwide Tissue Culture and Vice President, General Manager of Worldwide Flow Cytometry. From
1988 to 1992, Dr. Keegan was Vice President of the Microscopy and Scientific Instruments Division of Leica, Inc., a life science tool
and semiconductor equipment provider. He currently serves on the boards of directors as the chairman of the board for the following privately
held companies: Halo Labs (formerly known as Optofluidics, Inc.), Carterra (formerly known as Wasatch Microfluidics, Inc.), and Fluidic
Analytics and currently serves on the board of directors of Nuclera Nucleics. In April 2017, he joined the board of ArrayJet Ltd., a
privately held Scottish company and is currently chairman of the board. During 2022, Dr. Keegan joined the board of Hayward, CA based
Biolog, Inc. Dr. Keegan is a member of the board of directors of Bio-Techne Corporation (NASDAQ: TECH), a publicly held biotech company.
Dr. Keegan holds a B.A. in Chemistry from Boston University and a Ph.D. in Physical Chemistry from Stanford University.
Dr.
Keegan’s specific qualifications and skills in the areas of life science businesses, product development and sales strategies led
the Board to conclude that Dr. Keegan should serve as a director.
Fortunato
Ron Rocca, Class II Director and 1315 Capital Designee. Ron Rocca was elected to the Board as a Class II director on January 22,
2020 following his designation by 1315 Capital as a holder of Series B Preferred Stock. Mr. Rocca was concurrently appointed to the Audit
and Compensation Committees. From October 2011 through October 2022, Mr. Rocca
served as President, Chief Executive Officer and Director of Exagen Inc. (NASDAQ: XGN), a company dedicated to transforming the
care continuum for patients suffering from debilitating and chronic autoimmune diseases. From 2005
to October 2011, Mr. Rocca served as Vice President, Sales and Marketing, and as General Manager at Prometheus, a specialty pharmaceutical
and diagnostic company which was acquired by Nestlé SA in 2011, where he was responsible for leading the commercial organization,
strategic planning and implementation of projects designed to maximize brand sales. Prior to joining Prometheus, Mr. Rocca served as
the General Manager of Alpharma Inc., a specialty pharmaceutical company. Earlier in his career, Mr. Rocca served in senior sales and
marketing management positions for Elan Pharmaceuticals, Inc., a neuroscience-focused biotechnology company and Janssen Pharmaceuticals,
Inc., a pharmaceutical subsidiary of Johnson & Johnson. Mr. Rocca received a B.S. in Marketing and Personnel Management from Towson
State University. Mr. Rocca’s extensive knowledge of our business, as well as his over 25 years of experience in the diagnostic
and pharmaceutical industries, contributed to our board of directors’ conclusion that he should serve as a director of our Company.
Mr.
Rocca brings to the Board extensive experience as an officer at public companies developing healthcare tests.
Stephen
J. Sullivan, Class I Director. Stephen J. Sullivan is currently a director and served as Chairman of the Board from June 21, 2016
until April 16, 2020. Mr. Sullivan served as Interim Chairman of the Board from January 1, 2016 to June 20, 2016. Mr. Sullivan joined
Interpace as a director in September 2004 and has served as Chairman of various committees of the Board. Mr. Sullivan currently serves
as Chairman of the Compensation Committee and a member of the Audit and Nominating Committees. In early 2010, Mr. Sullivan founded CRO
Advisors LLC, a specialty consulting firm he continues to head. Previously, Mr. Sullivan was the president and chief executive officer
and a member of the board of directors of Harlan Laboratories, Inc. (“Harlan”) (acquired by Huntingdon Life Sciences
Inc.), a privately held global provider of preclinical research tools and services, from February 2006 through January 2010, when he
retired from that position. Prior to joining Harlan in 2006, Mr. Sullivan was a senior vice president of Covance, Inc. (“Covance”)
and the president of Covance Central Laboratories, Inc., a major division of Covance. Prior to joining Covance, Mr. Sullivan was chairman
and chief executive officer of Xenometrix, Inc. (“Xenometrix”), a biotechnology company with proprietary gene expression
technology. He assisted with the merger of Xenometrix with Discovery Partners International. Prior to Xenometrix, Mr. Sullivan was vice
president and general manager of a global diagnostic sector of Abbott Laboratories.
Mr.
Sullivan has extensive experience as a director. In 2019, Mr. Sullivan became a director of The Emmes Company, LLC, a clinical research
collaborator within the contract research organization industry. In July of 2022, The Emmes Company LLC was sold to New Mountain Capital,
at which time Mr. Sullivan resigned from the board. Since April 2018, Mr. Sullivan has been a member of the board of Transnetyx, Inc.,
a privately held genotyping company. Since May 2015, Mr. Sullivan has been chairman of the board of Analytical Lab Group (formerly known
as Microbiology Research Associates), a privately held microbiology services company. In May of 2020, Analytical Lab group was sold to
Element, a UK company, at which time Mr. resigned as Chairman and left the board. From April 2011 through March 2019, Mr. Sullivan was
chairman of the board of MI Bioresearch, Inc. (formerly known as Molecular Imaging, Inc.), a privately held venture-backed drug discovery
services company. In February of 2020, MI Bioresearch was sold to LabCorp, at which time Mr. Sullivan resigned as Chairman and left the
board. In January 2016, Mr. Sullivan became chairman of the board of H2O Clinical (acquired by Pharma Start LLC). In July 2016, Mr. Sullivan
became chairman of the board of PharmaStart, LLC. As of June 2017, both H20 Clinical and PharmaStart are doing business as Firma Clinical
Research, a privately held specialty contract research organization. As of July 2018, Firma Clinical Research has been sold and Mr. Sullivan
is no longer a member of its board. From November 2015 until August 2017, Mr. Sullivan was a member of the board of Accel Clinical Research,
a phase 1 contract research organization. From June 2013 through January 2016, when the company was sold, Mr. Sullivan was the chairman
of the board of BioreclamationIVT, LLC, a privately-owned bio-materials company. From May 2013 through March 2015, when the company was
sold, Mr. Sullivan was a member of the board of directors of PHT Corporation (acquired by eResearchTechnology, Inc.), a privately-owned
leader in electronic patient recorded outcomes in clinical trials.
Mr.
Sullivan graduated from the University of Dayton, was a commissioned officer in the Marine Corps, and completed his M.B.A. in Marketing
and Finance at Rutgers University. Mr. Sullivan is currently an adjunct Professor of Management at Georgetown University.
Mr.
Sullivan has held senior leadership positions in companies in the life sciences and healthcare services industries. His specific qualifications
and skills in the areas of general operations, financial operations and administration, and mergers and acquisitions led the Board to
conclude that Mr. Sullivan should serve as a director of the Company.
Executive
Officers
The
following table sets forth the names, ages and principal position of our executive officers as of the date of this Amendment:
Name |
|
Age |
|
Position |
Thomas
W. Burnell |
|
61 |
|
President,
Chief Executive Officer and Director |
Christopher McCarthy |
|
31 |
|
Vice President of Finance and Enterprise
Systems and Principal Financial Officer |
Thomas W. Burnell. The
principal occupation and business experience for at least the last five years for Mr. Burnell is discussed in this Amendment under the
heading “Board of Directors” in this Item 10.
There
are no arrangements or understandings between Mr. Burnell and any other persons pursuant to which he was selected as an officer. In addition,
there is no family relationship between Mr. Burnell and any director, executive officer or person nominated or chosen by the Company
to become a director or executive officer that would require disclosure pursuant to Item 401(d) of Regulation S-K. There is no related
party transaction as of the date hereof between Mr. Burnell and the Company that would require disclosure under Item 404(a) of Regulation
S-K.
Christopher
McCarthy. Christopher McCarthy has served as the Company’s Vice President of Finance and Enterprise Systems since August 2022,
and was appointed Principal Financial Officer in April 2023. Prior to serving as the Company’s Vice President of Finance and Enterprise
Systems, Mr. McCarthy served as the Company’s Senior Director of Operations Finance from August 2020 to August 2022 and the Company’s
Senior Financial Analyst from June 2019 to August 2020. Prior to joining the Company, Mr. McCarthy served as a Senior Financial Systems
Analyst at Simon & Schuster, Inc. from January 2016 to June 2019.
Except as described above, Mr. McCarthy
has served in no other Company positions and there is no arrangement or understanding between Mr. McCarthy and any other person pursuant
to which he was selected to serve as Principal Financial Officer. Mr. McCarthy has no family relationship with any director or executive
officer or person nominated or chosen by the Company to become a director or executive officer of the Company. There are no related party
transactions as of the date hereof between Mr. McCarthy and the Company that would require disclosure under Item 404(a) of Regulation
S-K.
Governance
of the Company
Corporate
Governance and Code of Business Conduct
Our
Board has adopted a written Code of Business Conduct that applies to our directors, officers, and employees, as well as Guidelines on
Corporate Governance applicable specifically to our Board. You can find links to these documents in the “Investors-Corporate Governance”
section of our website page at www.interpace.com. The content contained in, or that can be accessed through, our website is not incorporated
into this Amendment. Disclosure regarding any amendments to, or any waivers from, a provision of our Code of Business Conduct that applies
to one or more of our directors, our principal executive officer, our principal financial or our principal accounting officer will be
included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, or posted on our website
(www.interpace.com). Our common stock is quoted on the OTCQX, which is operated by OTC Markets Group, Inc. (“OTC Markets”).
Audit
Committee
The
Audit Committee is currently comprised of Dr. Keegan (Chairperson), Mr. Sullivan and Mr. Rocca. The primary purposes of our Audit Committee
are to assist the Board in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing,
financial reporting, internal control, legal compliance and risk management functions of the Company, including, without limitation,
assisting the Board’s oversight of: (i) the integrity of our financial statements; (ii) the effectiveness of our internal control
over financial reporting; (iii) our compliance with legal and regulatory requirements; (iv) the qualifications and independence of our
independent registered public accounting firm; (v) the selection, retention and termination of our independent registered public accounting
firm; and (vi) the performance of our internal audit function and independent registered public accounting firm. The Audit Committee
is also responsible for preparing the report of the Audit Committee required by the rules and regulations of the SEC for inclusion in
our annual proxy statement.
Our
Board has determined that each member of our Audit Committee is independent within the meaning of the rules of OTC Markets and as required
by the Audit Committee charter. Our Board has determined that the chairperson of the Audit Committee, Dr. Keegan, is an “audit
committee financial expert,” as that term is defined in Item 407(d) of Regulation S-K under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”).
Our
Audit Committee charter is posted and can be viewed in the “Investors-Corporate Governance” section of our website at www.interpace.com.
Involvement
in Certain Legal Proceedings
To
the best of our knowledge, none of our directors or executive officers has been involved in any material legal proceeding during the
past ten years.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent (10%) of our common
stock, to file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater than ten percent
(10%) stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
To
the best of our knowledge, based solely on our review of the copies of such forms furnished to us, or written representations that no
other forms were required, we believe that all Section 16(a) filing requirements applicable to our executive officers, directors and
greater than ten percent (10%) stockholders were complied with during the fiscal year ended December 31, 2022.
ITEM
11. |
EXECUTIVE
COMPENSATION |
Summary
Compensation Table
The
following table sets forth certain information concerning compensation for 2022 and 2021 earned by our Chief Executive Officer and our
former Chief Financial Officers during 2022 and 2021.
SUMMARY COMPENSATION TABLE FOR 2022 AND 2021 | |
Name and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($)(1) | | |
Stock Awards ($)(2) | | |
Option Awards ($)(2) | | |
Non-Equity Incentive Compensation | | |
All Other Compen-sation (3) | | |
Total | |
Thomas W. Burnell | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
CEO | |
| 2022 | | |
$ | 433,854 | | |
$ | 185,000 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 15,315 | | |
$ | 634,169 | |
| |
| 2021 | | |
| 425,000 | | |
| 160,000 | | |
| - | | |
| - | | |
| - | | |
| 3,352 | | |
| 588,352 | |
Thomas Freeburg (4) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
CFO | |
| 2022 | | |
| 190,417 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 159,008 | | |
| 349,425 | |
| |
| 2021 | | |
| 231,254 | | |
| 60,000 | | |
| 250,000 | | |
| 229,000 | | |
| - | | |
| 502 | | |
| 770,756 | |
Fred Knechtel (5) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
CFO | |
| 2021 | | |
| 25,833 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 173,737 | | |
| 199,570 | |
|
(1) |
The
amount set forth in this column represents an annual cash incentive bonus. |
|
|
|
|
(2) |
The
dollar amounts set forth under the headings “Stock Awards” and “Option Awards” represent aggregate grant
date fair value computed in accordance with FASB ASC Topic 718. For purposes of computing such amounts, we disregarded estimates
of forfeitures related to service-based vesting conditions. For additional information regarding our valuation assumptions, please
refer to Note 15 – “Stock-Based Compensation” to our consolidated financial statements included in our Original
Filing. |
|
|
|
|
(3) |
For
the named executive officers, this column includes the following amounts in 2022: |
|
|
401(k) Company Match ($) |
|
|
Term Life/Disability Insurance Payment ($) |
|
|
Other ($) (1) |
|
|
Totals ($) |
|
Thomas Burnell |
|
$ |
12,272 |
|
|
$ |
3,043 |
|
|
$ |
- |
|
|
$ |
15,315 |
|
Thomas Freeburg (1) |
|
|
- |
|
|
|
790 |
|
|
|
158,218 |
|
|
|
159,008 |
|
(1) |
The
amounts set forth in this column for Mr. Freeburg represent severance of $127,500, continuation of health benefits of $11,218 and
consulting fees of $19,500. |
|
(4) |
Mr.
Freeburg no longer served as Chief Financial Officer effective September 30, 2022. |
|
|
|
|
(5) |
Mr.
Knechtel no longer served as Chief Financial Officer effective January 31, 2021. |
Narrative
Disclosure to Summary Compensation Table
The
following narrative discusses the base salary, annual cash incentives, long-term equity incentives, and perquisites of the Company with
respect to Messrs. Burnell, Freeburg and Knechtel during 2022.
Base
Salary
Initially,
base salaries are generally set according to the executive officer’s employment agreement with the Company and adjusted based on
the individual’s current and historical performance. The base salary levels and any changes to those levels for each executive
are reviewed each year by the Compensation Committee and adjustments may be based on factors such as new roles and/or responsibilities
assumed by the executive and the executive’s impact on our strategic goals and financial performance.
Tom
Burnell. Upon appointment as Chief Executive Officer on December 1, 2020, Mr. Burnell’s annual base salary was set at $425,000.
There was a 2.5% increase to Mr. Burnell’s salary in 2022.
Thomas
Freeburg. Upon appointment as Chief Financial Officer on February 1, 2021, Mr. Freeburg’s annual base salary was set at $225,000.
Pursuant to the terms of his employment agreement, his base salary was increased to $250,000 on August 1, 2021. There was a 2% increase
to Mr. Freeburg’s salary in 2022.
Annual
Cash Incentives
The
annual cash incentive program provides our executive officers with an opportunity to receive a cash award at the discretion of the Compensation
Committee (and the full Board, in the case of the Chief Executive Officer). Annual cash incentive targets and performance metrics are
usually determined by the Compensation Committee during the first quarter of each fiscal year, based on competitive market data generally
available to the Compensation Committee as well as consideration based upon the financial condition of the Company, including revenue
and adjusted EBITDA.
Long-Term
Equity Incentives
Our
executives are also eligible to participate in a long-term equity incentive program, which is currently administered under the 2019 Equity
Incentive Plan. The long-term equity incentive component of our compensation program is used to promote alignment with stockholders and
to balance the short-term focus of the annual cash incentive component by linking a substantial part of compensation to our long-term
stockholder returns. The Compensation Committee believes that long-term stock-based compensation enhances our ability to attract and
retain high quality talent, provides motivation to improve our long-term financial performance, and increase stockholder value.
No
stock awards or stock options were granted to our executive officers in 2022 as the awards issued in 2021 were to cover a two-year period.
In March 2021, Mr. Freeburg was awarded 50,000 RSUs and 50,000 stock options, which became fully vested pursuant to the terms of the
Consulting Agreement described below.
Perquisites
As
a matter of practice, we provide only limited perquisites to our executive officers that are not generally provided to all employees.
Executives are eligible for the standard benefits and programs generally available to all of our employees. The value of special perquisites,
as well as additional benefits that are available generally to all of our employees, that were provided to each named executive officer
in 2022 are set forth in footnote 3 to the Summary Compensation Table.
Qualified
Plan
The
Company maintains a tax-qualified savings plan under Section 401(k) of the Code. Employees who participate in the plan may make elective
deferrals to the plan, subject to the limitations imposed by the Code. In addition, the Company currently offers a safe harbor matching
contribution equal to 100% of the first 3% of an employee’s contributed base salary plus 50% of the employee’s base salary
contributed exceeding 3% but not more than 5%.
Employment
Agreements and Severance Arrangements
Tom
Burnell
On
December 1, 2020, the Company appointed Mr. Burnell as Chief Executive Officer and President and entered into an employment agreement
with Mr. Burnell (the “Burnell Employment Agreement”). Under the Burnell Employment Agreement, Mr. Burnell is to receive
an annual base salary of at least $425,000, a target annual bonus opportunity of up to 50% of such base salary, and certain other benefits
such as housing and participation in the benefit plans and programs maintained by the Company.
In
the event that Mr. Burnell’s employment is terminated by the Company without Cause or by Mr. Burnell for Good Reason (in each case,
as defined in the Burnell Employment Agreement), then subject to, among other things, Mr. Burnell’s execution and non-revocation
of a release agreement in favor of the Company, Mr. Burnell would be entitled to: (i) salary continuation payments for a period of (a)
six (6) months, if such termination of employment occurs on or after the first anniversary of employment but prior to the second anniversary
of employment, or (b) twelve (12) months, if such termination of employment occurs on or after the second anniversary of employment;
provided, however, that there will be no salary continuation payments in the event such termination of employment occurs prior to the
first anniversary of employment; (ii) all outstanding equity awards that were scheduled to vest during the 24-month period following
the termination date, but for the termination, would become fully vested and exercisable (including any such awards that vest in whole
or in part based on the attainment of performance-vesting conditions that would be deemed achieved at the target level of the applicable
award agreement); and, (iii) continuation of health and welfare benefits for the applicable salary continuation period.
Thomas
Freeburg
On
February 1, 2021, the Company appointed Mr. Freeburg as Chief Financial Officer, Treasurer, and Secretary of the Company, effective as
of February 1, 2021 and entered into an employment agreement with Mr. Freeburg (the “Freeburg Employment Agreement”).
Under the Freeburg Employment Agreement, Mr. Freeburg received an annual base salary of $225,000 and a target annual bonus opportunity
of up to 40% of such base salary. Effective as of the date six (6) months after the Effective Date, the Base Salary increased to $250,000.
On March 10, 2021 Mr. Freeburg, was awarded 50,000 RSUs and 50,000 stock options vesting in equal installments on each of the first three
anniversaries of the grant date, subject to Mr. Freeburg’s continued employment with the Company through the applicable vesting
date, with accelerated vesting upon a Change in Control, as defined in the applicable equity incentive plan, subject to Mr. Freeburg’s
continuous employment through such Change in Control.
On
September 30, 2022, Mr. Freeburg resigned from his position as Chief Financial Officer and as an employee of the Company. In
connection with his resignation the Company entered into a severance and consulting agreement, (the “Consulting Agreement”).
Pursuant to the Consulting Agreement, the Company agreed to provide Mr. Freeburg with the following payments and benefits: (i) a cash
amount equal to $127,500 payable in semi-monthly installments over a six-month period, (ii) payment for the cost of COBRA premiums for
six months, and (iii) the accelerated vesting of all outstanding equity grants on September 30, 2022. Mr. Freeburg has consulted and
remained the Company’s principal financial officer through March 31, 2023.Mr. Freeburg earned approximately $61,000 for consulting
in 2023.
Confidential
Information, Non-Disclosure, Non-Solicitation, Non-Compete and Rights to Intellectual Property Agreement (“Restrictive Covenants
Agreement”)
Each
of Messrs. Freeburg and Burnell also entered into a Restrictive Covenants Agreement with the Company that includes customary provisions
regarding confidentiality and non-disclosure, customary non-competition and non-solicitation provisions that extend for up to one (1)
year following termination of employment, and a customary invention assignment regarding ownership of intellectual property. The payment
of any severance benefits under each executive’s employment agreement and/or severance agreement is conditioned on continued compliance
with his Restrictive Covenants Agreement. Mr. Freeburg remains subject to the Restrictive Covenants Agreement pursuant to the terms of
the Consulting Agreement.
Treatment
of Outstanding Equity on a Change in Control
Pursuant
to the terms of our 2004 Stock Award and Incentive Plan, awards outstanding under that plan will generally become fully vested and exercisable
upon a change in control of the Company. There is no similar automatic vesting provision upon a change in control for awards granted
under the Interpace Biosciences, Inc. 2019 Equity Incentive Plan.
Outstanding
Equity Awards as of December 31, 2022
The
following table provides information concerning the number and value of unexercised stock options and RSUs for the named executive officers
outstanding as of the year ended December 31, 2022:
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2022 | |
Option Awards | | |
Stock Awards | |
Name | |
Number of Securities Underlying Unexercised Options (#) Exercisable | | |
Number of Securities Underlying Unexercised Options (#) Unexercisable | | |
Option Exercise Price ($) | | |
Option Expiration Date | | |
Number of Shares/RSUs that have not Vested (#) | | |
Market
Value of Shares/RSUs that have not Vested ($)(1) | |
Thomas W. Burnell | |
| - | | |
| - | | |
| - | | |
| | | |
| 125,000 | (2) | |
| 130,000 | |
| |
| - | | |
| - | | |
| - | | |
| | | |
| 33,333 | (3) | |
| 34,666 | |
|
(1) |
The
market value is based on the closing price of $1.04 on December 30, 2022, the last day of trading in 2022. |
|
(2) |
Consists
of 125,000 performance based RSUs which will be eligible to vest on the day following a 30 calendar day period in which, for each
trading day of such period, a share of Common Stock has a closing per share price of at least $11.34. |
|
(3) |
Includes
33,333 time based RSUs which will fully vest on December 1, 2023. |
Director
Compensation in 2022
The
following table presents information relating to total compensation for our non-employee directors for the year ended December 31, 2022.
Mr. Burnell, our Chief Executive Officer, does not receive compensation for his services on the Board. Information regarding the compensation
of Mr. Burnell can be found above, under the heading “Narrative Disclosure to Summary Compensation Table”.
DIRECTOR COMPENSATION IN 2022 | |
Name | |
Fees earned or paid in cash ($) | | |
Stock
awards ($) (1) (2) | | |
Option awards ($) (1) | | |
Total ($) | |
Vijay Aggarwal (3) | |
| 45,695 | | |
| - | | |
| 126,195 | | |
| 171,890 | |
Edward Chan (4) | |
| 40,000 | | |
| - | | |
| - | | |
| 40,000 | |
Robert Gorman | |
| 170,000 | | |
| - | | |
| - | | |
| 170,000 | |
Joseph Keegan | |
| 50,000 | | |
| - | | |
| - | | |
| 50,000 | |
Fortunato Ron Rocca | |
| 40,000 | | |
| - | | |
| - | | |
| 40,000 | |
Stephen J. Sullivan | |
| 50,000 | | |
| - | | |
| - | | |
| 50,000 | |
|
(1) |
Outstanding
option awards held by the non-employee directors as of December 31, 2022 consist of the following outstanding stock option amounts:
Mr. Aggarwal – 28,000; Mr. Gorman -168,000; Dr. Keegan – 32,920; Mr. Rocca – 28,000; Mr. Sullivan – 33,820. |
|
(2) |
The
dollar amounts set forth under the headings “Stock Awards” and “Option Awards” represent aggregate grant
date fair value computed in accordance with FASB ASC Topic 718. For purposes of computing such amounts, we disregarded estimates
of forfeitures related to service-based vesting conditions. For additional information regarding our valuation assumptions, please
refer to Note 15 – “Stock-Based Compensation” to our consolidated financial statements included in our Original
Filing. |
|
(3) |
Dr.
Aggarwal received 28,000 stock options upon his appointment to the Board on February 1, 2022. |
|
(4) |
Mr,
Chan’s director compensation is payable to 1315 Capital. |
Director
Compensation
The
Compensation Committee is responsible for reviewing and making recommendations to the Board regarding all matters pertaining to compensation
paid to directors for Board and committee chair services. Directors who also serve as employees of the Company do not receive payment
for services as directors. The current compensation program for non-employee directors has been in effect since April 29, 2020 when it
was approved by Board resolution, and is described further below.
Cash
Compensation Policy
In
2022, each of our non-employee directors received an annual director’s fee of $40,000, payable quarterly in arrears. Additionally,
any non-employee director (except Mr. Gorman as Chairman) serving as Chairperson of a Board Committee received an annual fee of $10,000
(regardless of the number of Committees chaired.) For his roles as a director and Chairman of the Board, Mr. Gorman received a total
annual fee of $170,000.
From
time to time, the Board may form special committees to address discrete issues and the non-employee directors sitting on such special
committees may receive additional compensation. In addition, our non-employee directors are entitled to reimbursement for travel and
related expenses incurred in connection with attendance at Board and committee meetings.
Equity
Compensation Policy
Commencing
in 2020, each new appointee to the Board receives a grant of 28,000 stock options which vest in equal annual installments over a three-year
period. Director equity compensation is reviewed on a regular basis with the assistance of Radford from time to time.