Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid: $            

Amount Previously Paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

to elect three Class I director nominees named in the accompanying proxy statement to serve on the Board of Directors for three-year terms expiring at the Annual Meeting of Stockholders to be held in 2023 or until their successors are duly elected and qualified;

to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020;

to approve, on an advisory basis, the compensation of our named executive officers as disclosed in the accompanying proxy statement, pursuant to the compensation disclosure rules of the Securities and Exchange Commission; and

to transact such other business that is properly presented at the meeting and any adjournments or postponements thereof.

QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING

1

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

7

MANAGEMENT AND CORPORATE GOVERNANCE

10

The Board of Directors

10

Director Independence

15

Committees of the Board of Directors and Meetings

15

Board Leadership Structure

19

Our Board of Directors’ Role in Risk Oversight

19

Stockholder Communications to the Board

20

Information About Our Executive Officers

21

COMPENSATION DISCUSSION AND ANALYSIS

22

Madrigal’s Focus and its Achievements in 2019

22

2019 Executive Compensation Highlights

24

Overview of Our Executive Compensation Program

24

Direct Compensation Components

26

Executive Compensation and Risk-Taking

30

Advisory Vote on Executive Compensation

30

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

31

Summary Compensation Table

31

Grants of Plan-Based Awards

32

Outstanding Equity Awards at Fiscal Year End

33

Pay Ratio

33

Option Exercises and Stock Vested

34

Employment Agreements, Severance and Change in Control Arrangements

35

Potential Qualifying Separation and Change of Control Payments

38

Director Compensation

39

Director Compensation Tables

40

Report of the Compensation Committee of the Board of Directors

41

EQUITY COMPENSATION PLAN INFORMATION

42

DELINQUENT SECTION 16(a) REPORTS

43

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

43

PROPOSAL NO. 1: ELECTION OF DIRECTORS

45

PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

46

PROPOSAL NO. 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION

49

CODE OF CONDUCT AND ETHICS

50

OTHER MATTERS

50

STOCKHOLDER PROPOSALS AT FUTURE ANNUAL MEETINGS

50

HOUSEHOLDING OF PROXY MATERIALS

51

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

51

election of three Class I directors (Proposal No. 1);

ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2020 (Proposal No. 2); and

approval, on an advisory basis, of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, or SEC (Proposal No. 3).

To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.

To vote over the telephone, dial toll-free 1-866-249-5094 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the company number and control number from the Notice. We recommend that you cast your telephone by 11:59 p.m. Eastern Time on June 16, 2020.

To vote through the Internet, go to www.proxypush.com/MDGL to complete an electronic proxy card. You will be asked to provide the company number and control number from the Notice. We recommend that you cast your Internet vote by 11:59 p.m. Eastern Time on June 16, 2020.

You may grant a subsequent proxy by telephone or through the Internet.

You may submit another properly completed proxy card with a later date.

You may send a timely written notice that you are revoking your proxy to our Secretary at 200 Barr Harbor Drive, Suite 200, West Conshohocken, Pennsylvania 19428. Such notice will be considered timely if it is received at the indicated address by the close of business on Tuesday, June 16, 2020.

The nominees for director who receive the most votes (also known as a “plurality” of the votes cast) will be elected. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. WITHHOLD votes will not be included in the vote tally for the election of the directors. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name for the election of directors. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.

The vote of a majority of the shares of our common stock cast affirmatively at the Annual Meeting is required to ratify the appointment of our independent registered public accounting firm. Abstentions are not considered votes cast and will have no effect on the results of this vote. Brokerage firms have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. If a broker does not exercise this authority, such broker non-votes will have no effect on the results of this vote. We are not required to obtain the approval of our stockholders to select our independent registered public accounting firm. However, if our stockholders do not ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2020 fiscal year, our Audit Committee will reconsider its selection.

The vote of a majority of the shares of our common stock cast affirmatively at the Annual Meeting is required to approve on an advisory basis the compensation of our named executive officers, as described in this proxy statement. Abstentions are not considered votes cast and will have no effect on the results of this vote. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. Although the advisory vote is non-binding, the Compensation Committee and the Board of Directors will review the voting results and take them into consideration when making future decisions regarding executive compensation.

Proposal

Effect of

Abstentions/

Withhold

Votes ⁽¹⁾

Uninstructed Shares/
Effect of Broker

Non-Votes ⁽¹⁾

Signed but

Unmarked

Proxy Cards ⁽²⁾

1. Election of Directors

Plurality of Votes Cast

No effect

Not voted /

no effect

Voted “For”

each nominee

2. Ratification of selection of independent registered public accounting firm

The vote of a majority of the shares of our common stock cast affirmatively or negatively

No effect

Not

applicable—

discretionary

vote by

broker

Voted “For”

3. Advisory Vote on Compensation of Our Named Executive Officers

The vote of a majority of the shares of our common stock cast affirmatively or negatively

No effect

Not voted /

no effect

Voted “For”

Abstentions and broker non-votes are included for purposes of determining whether a quorum is present.

If you sign and return your proxy card properly, but do not provide instructions on your proxy card as to how to vote your shares, your shares will be voted as shown in this column, and in accordance with the judgment of the individuals named as proxies on the proxy card as to any other matter properly brought before the Annual Meeting.

each of our executive officers listed in this proxy statement;

each of our directors and director nominees;

all of our current directors and executive officers as a group; and

each stockholder known by us to own beneficially more than 5% of our common stock.

Beneficial Owner

Number of Shares

Beneficially Owned

Percentage of

Common Stock

Beneficially Owned

Directors and Executive Officers

Paul A. Friedman, M.D. ⁽¹⁾

1,845,303

11.67

%        

Rebecca Taub, M.D. ⁽²⁾

1,845,303

11.67

%

Marc R. Schneebaum ⁽³⁾

185,739

1.19

%

Brian J. Lynch ⁽⁴⁾

18,813

*

Remy Sukhija

-0-

*

Kenneth M. Bate ⁽⁵⁾

40,000

*

Fred B. Craves, Ph.D. ⁽⁶⁾

4,513,921

29.18

%

James M. Daly ⁽⁷⁾

500

*

Keith R. Gollust ⁽⁸⁾

100,452

*

Richard S. Levy, M.D. ⁽⁹⁾

49,100

*

David Milligan Ph.D. ⁽¹⁰⁾

10,000

*

All current executive officers and directors as a group (11 persons) ⁽¹¹⁾

6,763,828

41.89

%

Five Percent Stockholders

Entities Affiliated with Bay City Capital LLC ⁽¹²⁾

4,177,854

27.08

%

Entities Affiliated with HealthCor Management, L.P. ⁽¹³⁾

1,088,310

7.05

%

Capital Research Global Investors ⁽¹⁴⁾

1,697,119

10.99

%

Entities Affiliated with Wellington Management Group LLP ⁽¹⁵⁾

957,146

6.20

%

Entities Affiliated with The Vanguard Group ⁽¹⁶⁾

785,441

5.09

%

Entities Affiliated with Baker Bros. Advisors LP ⁽¹⁷⁾

1,169,278

7.58

%

Represents beneficial ownership of less than 1% of the shares of common stock.

Includes: 384,081 shares of common stock issuable upon the exercise of Dr. Friedman’s options that are exercisable within sixty days of April 1, 2020; 655,540 shares of common stock owned and held by SQN, LLC, or SQN; shares held of record or in street name by Dr. Friedman; 8,000 shares held in a grantor retained annuity trust (the “GRAT”); and the deemed beneficial ownership of shares not reflected in the foregoing clauses that are beneficially owned by his spouse, Dr. Taub. See footnote 2 below for Dr. Taub’s beneficial ownership information, but note that the shares described therein should not be double-counted with Dr. Freidman’s shares described herein. Dr. Friedman is a managing member of SQN and may be deemed to share voting and investment power over our common stock that is owned and held by SQN. Dr. Friedman disclaims beneficial ownership of our common stock held by SQN and the GRAT and shares of our common stock beneficially owned by Dr. Taub, except to the extent of his pecuniary interest therein.

Includes: 211,978 shares of common stock issuable upon the exercise of Dr. Taub’s options that are exercisable within sixty days of April 1, 2020; 655,540 shares of common stock held by SQN; shares held of record or in street name by Dr. Taub; 8,000 shares held in the GRAT; and the deemed beneficial ownership of shares not reflected in the foregoing clauses that are beneficially owned by her spouse, Dr. Friedman. See footnote 1 above for Dr. Freidman’s beneficial ownership information, but note that the shares described therein should not be double-counted with Dr. Taub’s shares described herein. Dr. Taub is a managing member of SQN and may be deemed to share voting and investment power over our common stock that is owned and held by SQN. The 655,540 shares held by SQN and the 8,000 shares held by the GRAT are the same shares of our common stock as are listed in footnote 1. Dr. Taub disclaims beneficial ownership of our common stock held by SQN and the GRAT and shares of our common stock beneficially owned by Dr. Friedman, except to the extent of her pecuniary interest therein.

Includes 144,072 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020.

Includes 18,313 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020.

Consists of 40,000 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020.

Includes 4,177,854 shares of common stock held by investment entities affiliated with Bay City Capital LLC, or BCC, as set forth in footnote 12 below, and 40,000 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020 issued to Dr. Craves, a director of the Issuer, in connection with his service as a director of the Issuer. Dr. Craves is a party to an agreement whereby he must transfer such stock options to BCC upon receipt. Dr. Craves is a managing director of BCC and thus may be deemed to share voting and investment power and therefore beneficially own shares held by the entities listed in footnote 12. Dr. Craves disclaims beneficial ownership of the shares beneficially owned by the entities listed in footnote 12 except to the extent of his pecuniary interest therein.

Includes 500 shares of common stock issuable upon the exercise of outstanding options exercisable within sixty days of April 1, 2020.

Includes 40,000 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020, 43,975 shares of common stock owned of record by Wyandanch Partners, L.P., 11,477 shares held directly and 5,000 shares of common stock owned of record by Keith R. Gollust Roth IRA. Mr. Gollust is the president and sole stockholder of Gollust Management, Inc., which is the general partner of Wyandanch Partners, L.P.

Includes 40,000 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020.

Includes 10,000 shares of common stock issuable upon the exercise of options exercisable within sixty days of April 1, 2020.

Percentage calculation includes common stock issuable upon the exercise of options as set forth in footnotes 1 through 10. Common stock beneficially owned by Drs. Friedman and Taub and referenced in footnotes 1 and 2 above have not been double-counted in the number of shares beneficially owned on this line.

Information in the table and this footnote is based on disclosures made in Schedule 13D, Amendment No. 2 filed with the SEC on December 13, 2019. Of the 4,177,854 shares listed above, 4,089,702 shares of common stock are held by Bay City Capital Fund IV, L.P., or Fund IV, and 88,152 shares of common stock are held by Bay City Capital Fund IV Co-Investment Fund, L.P., or Co-Invest Fund. Bay City Capital Management IV LLC, or BCC Management IV, is the general partner of Fund IV and Co-Invest Fund. BCC Management IV holds no shares of common stock directly, but is deemed to have beneficial ownership of common stock owned by Fund IV and Co-Invest Fund due to its role as general partner of such funds. Investment and voting decisions by BCC Management IV are exercised by BCC as manager. BCC holds no shares of common stock directly. Due to its role as manager of BCC Management IV, BCC is deemed to have beneficial ownership of common stock deemed to be beneficially owned by BCC Management IV. Dr. Craves is a managing director of BCC and thus may be deemed to share investment and voting power and therefore beneficially own shares held by these entities. Dr. Craves disclaims beneficial ownership of the shares beneficially owned by these entities except to the extent of his pecuniary interest therein. The address for BCC and the entities affiliated with BCC is 750 Battery Street, Suite 400, San Francisco, California 94111.

Number of shares beneficially owned is based solely upon information disclosed by the entities listed above via Amendment No.1 to Schedule 13G filed with the SEC on February 14, 2020. The address for the entities listed above is 55 Hudson Yards, 28 ^th Floor, New York, New York 10001.

Number of shares beneficially owned is based solely upon information disclosed via Amendment No. 2 to Schedule 13G filed with the SEC on February 14, 2020. The address for the entities listed above is 333 South Hope Street, Los Angeles, CA 90071.

Number of shares beneficially owned is based solely upon information disclosed via Schedule 13G filed with the SEC on January 28, 2020. The address for the entities listed above is c/o Wellington Management Company, 280 Congress Street, Boston, MA 02210.

Number of shares beneficially owned is based solely upon information disclosed via Schedule 13G filed with the SEC February 11, 2020. The address for the entities listed above is 100 Vanguard Blvd., Malvern, PA 19355.

Based upon information disclosed via Schedule 13G filed with the SEC on February 13, 2019 (the “Baker Bros. 13G”), the number of shares in the table reflects common stock of Madrigal directly held by certain affiliated funds. The shares described in the table do not include 1,969,797 shares of Common Stock that may be acquired upon conversion of convertible preferred stock of Madrigal, subject to the limitation on conversion described in the Baker Bros. 13G. Assuming Baker Bros. Advisors LP took action to remove such conversion limitation completely, Baker Bros. Advisors LP would be deemed to beneficially own 3,139,075 shares, or 18.04%, of Madrigal common stock. The address for the entities listed above and additional reporting persons described in the Baker Bros. 13G is c/o Baker Bros. Advisors LP, 860 Washington Street, 3rd Floor, New York, NY 10014.

the Class I directors are Paul A. Friedman, M.D., Kenneth M. Bate and James M. Daly, and their terms will expire at the Annual Meeting of Stockholders to be held in 2020;

the Class II directors are Rebecca Taub, M.D. and Fred B. Craves, Ph.D., and their terms will expire at the Annual Meeting of Stockholders to be held in 2021; and

the Class III directors are Keith R. Gollust, David Milligan, Ph.D. and Richard S. Levy, M.D., and their terms are scheduled to expire at the at the Annual Meeting of Stockholders to be held in 2022.

Name

Age

Position

Kenneth M. Bate ⁽¹⁾⁽²⁾

69

Class I Director

Fred B. Craves, Ph.D. ⁽²⁾⁽³⁾

74

Lead Director and Class II Director

James M. Daly ⁽¹⁾⁽³⁾

58

Class I Director

Paul A. Friedman, M.D.

77

Chairman of the Board of Directors, Chief Executive Officer and Class I Director

Keith R. Gollust ⁽¹⁾⁽³⁾

74

Class III Director

Richard S. Levy, M.D. ⁽²⁾⁽³⁾

62

Class III Director

David Milligan, Ph.D. ⁽¹⁾⁽²⁾

79

Class III Director

Rebecca Taub, M.D.

68

President, Research & Development, Chief Medical Officer and Class II Director

Member of our Audit Committee.

Member of our Compensation Committee.

Member of our Nominating and Governance Committee.

Kenneth M. Bate

Age: 69

Director Since: July 2016

Biographical Information

Mr. Bate currently works as an independent consultant. Previously, Mr. Bate was the President and Chief Executive Officer of Archemix Corp., a privately-held biopharmaceutical company, a position he held from April 2009 through December 2011. From 2006 to April 2009, he served in various positions at NitroMed, Inc., a publicly-held pharmaceutical company, most recently as President and Chief Executive Officer. From 2002 to 2005, Mr. Bate served as Head of Commercial Operations and Chief Financial Officer at Millennium Pharmaceuticals, Inc., a biopharmaceutical company. Prior to joining Millennium Pharmaceuticals, Mr. Bate co-founded JSB Partners, LLC, a banking and advisory services firm for biopharmaceutical and life sciences companies. From 1990 to 1996, Mr. Bate was employed with Biogen, Inc., a publicly-held biotechnology company, first as its Chief Financial Officer and then as head of the commercial organization responsible for launching its multiple sclerosis business. Mr. Bate currently serves as chairman of the board of directors of the following publicly-held biopharmaceutical companies: AVEO Pharmaceuticals, Inc., Genocea Biosciences, Inc. and Catabasis Pharmaceuticals, Inc. In addition, Mr. Bate currently serves on the board of directors of Epizyme, Inc., a publicly-held biopharmaceutical company. During the last five years, Mr. Bate also served as chairman of the board of directors of Cubist Pharmaceuticals, Inc. and as a director of BioMarin Pharmaceuticals, Inc. and Vanda Pharmaceuticals Inc., each a publicly-held biopharmaceutical company. Mr. Bate holds a B.A. in Chemistry from Williams College and an M.B.A. from The Wharton School of the University of Pennsylvania.

Qualifications

We believe that Mr. Bate’s qualifications to serve on our board of directors include his operating, finance, commercial, transactional and senior management experience in the industry, such as his experience as chief executive officer of Archemix and NitroMed, as head of commercial operations and chief financial officer at Millennium Pharmaceuticals, and as chief financial officer and vice president of sales and marketing at Biogen, as well as his experience serving on the board of directors of other public companies in the life sciences industry.

Fred B. Craves, Ph.D.

Age: 74

Director Since: July 2016

Biographical Information

Dr. Craves co-founded and served as Chairman of the Board of Private Madrigal, a privately-held biopharmaceutical company, from its inception in September 2011 through the Merger involving Synta, in July of 2016. Dr. Craves is a Managing Director and co-founder of Bay City Capital. In the course of his career, Dr. Craves has founded and managed several biotechnology companies. Dr. Craves previously served on the boards of directors of several privately-held and publicly-held companies. Dr. Craves currently serves as a member of the board of directors of Synchronicity Pharma, Inc., Imidomics, Inc., and KBP Pharmaceuticals, Inc., each a privately-held life science company. During the past five years, Dr. Craves served as a member of the board of directors of Dermira, Inc. and Twist Bioscience, Inc., each a publicly-held life science company. Dr. Craves earned a B.S. degree in biology from Georgetown University, an M.S. in biochemical pharmacology from Wayne State University and a Ph.D. in pharmacology and experimental toxicology from the University of California, San Francisco.

Qualifications

We believe that Dr. Craves is qualified to serve on our board of directors due to his extensive experience with founding, managing and serving on the boards of directors of life sciences companies, both public and private, and his extensive knowledge of the life sciences industry.

James M. Daly

Age: 58

Director Since: July 2016

Biographical Information

On June 27, 2019, our Board of Directors appointed James M. Daly as a member of our Board of Directors. Mr. Daly has over 30 years of experience leading U.S. and global businesses in the biopharmaceutical industry and also currently serves as a Director of Acadia Pharmaceuticals, argenx SE, Bellicum Pharmaceuticals, and Halozyme Therapeutics. He previously served on the board of directors of Chimerix, Inc. Most recently, Mr. Daly served as Executive Vice President and Chief Commercial Officer at Incyte Corporation from 2012 to 2015. Previously, Mr. Daly worked for Amgen, Inc. and held various leadership positions over a 10-year period, including his last role as Senior Vice President, North America Commercial Operations, Global Marketing and Commercial Development. Earlier in his career, he spent over 16 years with Glaxo Wellcome/GlaxoSmithKline (GSK), where he held roles of increasing responsibility, including his last role as Senior Vice President, General Manager of the Respiratory and Anti-Infective Business Unit. He earned a B.S. in Pharmacy and an M.B.A. from the University at Buffalo, The State University of New York.

Qualifications

We believe that Mr. Daly is qualified to serve as a member of our board of directors due to his extensive experience as a pharmaceutical executive heading up major commercialization programs and given his extensive experience as a director with public biopharmaceutical companies.

Paul A. Friedman, M.D.

Age: 77

Director Since: July 2016

Biographical Information

Dr. Friedman has served as our Chairman and Chief Executive Officer since July 22, 2016. Dr. Friedman served as the Chief Executive Officer of Incyte Corporation, a publicly-held biopharmaceutical company, or Incyte, from November 2001 until his retirement in January 2014 and has continuously served on the Incyte board since November 2001. Dr. Friedman also serves on the Board at Alexion Pharmaceuticals, a public company. Dr. Friedman served from 1994 to 1998, as President of Research & Development for the DuPont-Merck Pharmaceutical Company and from 1998 to 2001 as President of DuPont Pharmaceuticals Research Laboratories, a wholly-owned subsidiary of the DuPont Company. From 1991 to 1994, he served as Senior Vice President at Merck Research Laboratories. Prior to his tenures at Merck and DuPont, Dr. Friedman was an Associate Professor of Medicine and Pharmacology at Harvard Medical School. Dr. Friedman is a diplomat of the American Board of Internal Medicine and a member of the American Society of Clinical Investigation. He previously served on the board of directors of the following publicly-held pharmaceutical companies in the last five years: Cerulean Pharma Inc. (now Daré Bioscience, Inc.) (through January of 2017); Synta Pharmaceuticals Corp. (through April of 2016); and Verastem, Inc. (through April of 2017). Dr. Friedman received his A.B. in Biology from Princeton University and his M.D. from Harvard Medical School. Dr. Friedman and Dr. Taub, our Chief Medical Officer, President, Research & Development, and a director, are married.

Qualifications

We believe that Dr. Friedman is qualified to serve as Chief Executive Officer and as Chairman of our board of directors due to his: more than 40 years of experience in the biopharmaceutical industry; deep experience in research and both early and late stage clinical development; extensive experience building and leading R&D organizations, expanding company pipelines of assets, and overseeing the commercial development of innovative therapeutic products across a range of areas; and valuable perspectives to the Board as Madrigal’s Chief Executive Officer.

Keith R. Gollust

Age: 74

Director Since: July 2016

Biographical Information

Mr. Gollust served on our Board since July of 2016, on the board of directors of Synta from July 2002 through the Merger in July 2016 and as Chairman of the Synta board of directors from September 2002 through the Merger in July 2016. Mr. Gollust is a private investor and President of Gollust Management, Inc., the general partner of Wyandanch Partners, an investment partnership. In the past, Mr. Gollust has is served as a director of numerous public and private companies, and he currently serves on the board of VINDEX, LLC, a private company. Mr. Gollust received a B.A. from Princeton University and an M.S.I.A. from Carnegie Mellon University.

Qualifications

We believe that Mr. Gollust is qualified to serve as a member of our board of directors due to his experience as managing general partner of various investment partnerships which have given him the responsibility for investing over $1 billion as a fiduciary.

Richard S. Levy, M.D.

Age: 62

Director Since: August 2016

Biographical Information

Dr. Levy has served on Madrigal’s board of directors since August of 2016. Dr. Levy also serves on the board of directors of Artara Therapeutics, Inc., Kodiak Sciences Inc., and Kiniksa Pharmaceuticals, Ltd., each a publicly-held pharmaceutical company. Dr. Levy previously served on the board of Aquinox Pharmaceuticals, Inc. Previously, from December 2016 to May 2019, Dr. Levy was a part-time Senior Advisor for Baker Bros. Advisors, L.P., a firm that primarily manages long-term investment funds focused on publicly traded life sciences companies. Dr. Levy served as Executive Vice President and Chief Drug Development Officer at Incyte from January 2009 until his retirement in April 2016, and as Senior Vice President of Drug Development at Incyte from August 2003 to January 2009. Prior to joining Incyte, Dr. Levy served as Vice President, Biologic Therapies, at Celgene Corporation, a publicly-held biopharmaceutical company, from 2002 to 2003. From 1997 to 2002, Dr. Levy served in various executive positions with DuPont Pharmaceuticals Company, first as Vice President, Regulatory Affairs and Pharmacovigilence, and thereafter as Vice President, Medical and Commercial Strategy. Dr. Levy served at Novartis, and its predecessor company Sandoz, from 1991 to 1997 in positions of increasing responsibility in clinical research and regulatory affairs. Dr. Levy has more than 25 years’ experience in the pharmaceutical and biotechnology industries through his prior positions at Incyte, Celgene, DuPont Pharmaceuticals and Novartis, has extensive clinical research, regulatory and product development skills and has worked in multiple therapeutic areas. Prior to joining the pharmaceutical industry, Dr. Levy served as an Assistant Professor of Medicine at the UCLA School of Medicine. Dr. Levy is Board Certified in Internal Medicine and Gastroenterology and received his A.B. in Biology from Brown University, his M.D. from the University of Pennsylvania School of Medicine, and completed his training in Internal Medicine at the Hospital of the University of Pennsylvania and a fellowship in Gastroenterology and Hepatology at UCLA.

Qualifications

We believe that Dr. Levy is qualified to serve on our board of directors due to his extensive and diverse experience in the pharmaceutical and biotechnology industries.

David Milligan, Ph.D.

Age: 79

Director Since: July 2016

Biographical Information

Dr. Milligan currently works as an independent consultant. Previously, Dr. Milligan was a partner at Bay City Capital LLC, a life sciences investment firm, a position he held from 1997 through 2013. From 1979 to 1996, Dr. Milligan served in a variety of roles retiring as Senior Vice President and Chief Scientific Officer at Abbott Laboratories, a publicly-held healthcare products company. Dr. Milligan currently serves as a director of Inspirotech and Minute Molecular Diagnostics, which are privately-held life sciences companies. He is also on the Board of Xoult, a life sciences software company, as well as Ekatra Inc., a company utilizing information technology to monitor and protect valuable assets. From 2016 to 2018 he was a board member for WebLoq Inc, a privately-held information technology security company that is no longer in business. Starting in 1995, Dr. Milligan served as a director of Caliper Life Sciences, a publicly-held pharmaceutical and biotechnology company that was acquired by PerkinElmer Company in 2011, as well as ICOS, a publicly-held pharmaceutical company where he was a board member and later lead director before it was acquired by Eli Lilly in 2008. Dr. Milligan also served as Chairman and a director at Vicuron Pharmaceuticals, Inc., a privately-held biopharmaceutical company from 1997 to 2005 when it was acquired by Pfizer. He was also a director of Reliant Pharmaceuticals, Inc., a privately-held pharmaceutical company from 1999 until acquired by GlaxoSmithKline, in 2007. In addition, he was a director of Pathway Diagnostics Corporation, a privately-held diagnostics company acquired by Quest Diagnostics, Inc., and a director of Maxia Pharmaceuticals, Inc., a privately-held pharmaceutical company acquired by Incyte Corporation, from 1999 to 2003. Dr. Milligan received an A.B. in Chemistry from Princeton University and an M.S. and Ph.D. in Organic Chemistry from the University of Illinois.

Qualifications

We believe that Dr. Milligan’s qualifications to serve on our board of directors include his operating, finance, commercial, transactional and senior management experience in the life sciences industry, as well as his experience serving on the boards of directors of publicly- and privately-held companies in the life sciences industry.

Rebecca Taub, M.D.

Age: 68

Director Since: July 2016

Biographical Information

Dr. Taub has been a member of our Board of Directors since July 2016 and has served as our President, Research & Development since June 2019 and our Chief Medical Officer since July 2016. She also served as Executive Vice President, Research & Development, from July 2016 through June 2019. Dr. Taub served on the board of directors of Private Madrigal and as Chief Executive Officer of Private Madrigal from its inception in September 2011 through the Merger in July 2016. Prior to joining Private Madrigal, Dr. Taub served as Senior Vice President, Research and Development of VIA Pharmaceuticals from 2008 to 2011 and as Vice President, Research, Metabolic Diseases at Hoffmann-La Roche from 2004 to 2008. In those positions, Dr. Taub oversaw clinical development and drug discovery programs in cardiovascular and metabolic diseases including the conduct of a series of Phase I and II proof of conduct clinical trials. Dr. Taub led drug discovery including target identification, lead optimization and advancement of preclinical candidates into clinical development. From 2000 through 2003, Dr. Taub worked at Bristol-Myers Squibb Co. and DuPont Pharmaceutical Company, in a variety of positions, including Executive Director of CNS and metabolic diseases research. Before becoming a pharmaceutical executive, Dr. Taub was a tenured Professor of Genetics and Medicine at the University of Pennsylvania, and remains an adjunct professor. Dr. Taub is the author of more than 120 research articles. Before joining the faculty of the University of Pennsylvania, Dr. Taub served as an Assistant Professor at the Joslin Diabetes Center of Harvard Medical School, Harvard University and an associate investigator with the Howard Hughes Medical Institute. Dr. Taub received her M.D. from Yale University School of Medicine and B.A. from Yale College. Dr. Taub and Dr. Friedman, our Chief Executive Officer and Chairman of the Board of Directors, are married.

Qualifications

We believe that Dr. Taub is qualified to serve as Chief Medical Officer, President, Research and Development and a member of our board of directors due to her extensive experience as a pharmaceutical executive heading up major development programs in non-alcoholic steatohepatitis, or NASH.

approve and retain the independent auditors to conduct the annual audit of our consolidated financial statements;

review the proposed scope and results of the audit;

review and pre-approve the independent auditor’s audit and non-audit services rendered;

approve the audit fees to be paid;

review accounting and financial controls with the independent auditors and our financial and accounting staff;

review and approve transactions between us and our directors, officers and affiliates;

recognize and prevent prohibited non-audit services;

establish procedures for complaints received by us regarding accounting matters;

oversee internal audit functions, if any; and

prepare the report of the Audit Committee that the rules of the SEC require to be included in our Annual Meeting proxy statement.

review and establish the compensation arrangements for management, including the compensation for our Chief Executive Officer;

establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals;

administer our stock incentive plan;

review the Compensation Discussion and Analysis, or CD&A, discuss the CD&A with management and, based on such review and discussions, recommend to our Board of Directors that the CD&A be included in our Annual Report on Form 10-K, Annual Meeting proxy statement, or any other applicable filing as required by the SEC; and

prepare the report of the Compensation Committee that SEC rules require to be included in our Annual Meeting proxy statement.

identify and nominate members of the Board of Directors;

develop and recommend to the Board of Directors a set of corporate governance principles applicable to our company; and

oversee the evaluation of the Board of Directors and management.

name, address and telephone number of the recommending stockholder;

the number of shares of our common stock owned by the recommending stockholder and the time period for which such shares have been held;

if the recommending stockholder is not a stockholder of record, a statement from the record holder verifying the holdings of the recommending stockholder and a statement from the recommending stockholder of the length of time such shares have been held (alternatively the recommending stockholder may furnish a current Schedule 13D, Schedule 13G, Form 3, Form 4 or Form 5 filed with the SEC, together with a statement of the length of time that the shares have been held); and

a statement from the recommending stockholder as to a good faith intention to continue to hold such shares through the date of the next Annual Meeting.

the information required by Items 401, 403 and 404 of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act;

a description of all relationships between the proposed nominee and the recommending stockholder, including any agreements or understandings regarding the nomination;

a description of all relationships between the proposed nominee and any of our competitors, customers, suppliers, labor unions or other persons with special interests regarding our company; and

the contact information of the proposed nominee.

candidates should possess the highest personal and professional standards of integrity and ethical values;

candidates must be committed to promoting and enhancing the long-term value of our company for our stockholders;

candidates must be able to represent fairly and equally all stockholders without favoring or advancing any particular stockholder or other constituency of our company;

candidates must have demonstrated achievement in one or more fields of business, professional, governmental, community, scientific or educational endeavor, and possess mature and objective business judgment and expertise;

candidates are expected to have sound judgment, derived from management or policy making experience that demonstrates an ability to function effectively in an oversight role; and

candidates must have, and be prepared to devote, adequate time to the Board of Directors and its committees.

a statement of the type and amount of the securities of our company that the person holds;

any special interest, meaning an interest not in the capacity as a stockholder of our company, that the person has in the subject matter of the communication; and

the address, telephone number and e-mail address, if any, of the person submitting the communication.

communications regarding individual grievances or other interests that are personal to the party submitting the communication and could not reasonably be construed to be of concern to security holders or other constituencies of our company (such as employees, members of the communities in which we operate our businesses, customers and suppliers) generally;

communications that advocate engaging in illegal activities;

communications that, under community standards, contain offensive, scurrilous or abusive content; and

communications that have no rational relevance to the business or operations of our company.

junk mail and mass mailings;

résumés and other forms of job inquiries;

surveys; and

solicitations or advertisements.

Name

Age

Position

Paul A. Friedman, M.D.

77

Chairman of the Board and Chief Executive Officer

Rebecca Taub, M.D.

68

President, Research & Development, and Chief Medical Officer

Remy Sukhija

48

Senior Vice President, Chief Commercial Officer

Marc R. Schneebaum

65

Senior Vice President, Chief Financial Officer

Brian J. Lynch

58

Senior Vice President and General Counsel

Page

COMPENSATION DISCUSSION AND ANALYSIS

22

Madrigal’s Focus and its Achievements in 2019

22

2019 Executive Compensation Highlights

24

Overview of Our Executive Compensation Program

24

Direct Compensation Components

26

Executive Compensation and Risk-Taking

30

Advisory Vote on Executive Compensation

30

  Name

Position

Paul A. Friedman, M.D.

Chief Executive Officer

Rebecca Taub, M.D.

President, Research & Development, and Chief Medical Officer

Marc R. Schneebaum

Senior Vice President, Chief Financial Officer

Brian J. Lynch

Senior Vice President and General Counsel

Our Focus . We are a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapeutic candidates for the treatment of cardiovascular, metabolic, and liver diseases. Our lead product candidate, resmetirom, is a proprietary, liver-directed, selective thyroid hormone receptor-ß, or THR-ß, agonist being developed as a once-daily oral pill that can potentially be used to treat a number of disease states with high unmet medical need, including non-alcoholic steatohepatitis, or NASH.

Our Patient Market Opportunity. NASH is a serious inflammatory form of nonalcoholic fatty liver disease, or NAFLD. NAFLD has become the most common liver disease in the United States and other developed countries and is characterized by an accumulation of fat in the liver with no other apparent causes. NASH can progress to cirrhosis or liver failure, require liver transplantation and can also result in liver cancer. Progression of NASH to end stage liver disease will soon surpass all other causes of liver failure requiring liver transplantation. Importantly, beyond these critical conditions, NASH and NAFLD patients additionally suffer heightened cardiovascular risk and, in fact, die more frequently from cardiovascular events than from liver disease. NASH and NAFLD have grown as a consequence of rising worldwide obesity-related disorders. In the United States alone, NAFLD is estimated to affect approximately 27% to 34% of the population, or an estimated 86 million to 108 million people, and approximately 10% to 20% of this population is projected to progress from NAFLD to NASH. Current estimates place NASH prevalence at approximately nine million to 15 million people in the United States, or three percent to five percent of the population, with similar prevalence in Europe and Asia.

Our Completed Studies . For NASH, we enrolled 125 patients in a Phase 2 clinical trial with resmetirom. We achieved the 12-week primary endpoint for this Phase 2 clinical trial and reported the results in December 2017, and we reported positive topline 36-week results at the conclusion of the Phase 2 clinical trial in May 2018. We

Our MAESTRO-NASH Phase 3 Clinical Trial . On March 28, 2019, the Company announced that it had initiated MAESTRO-NASH, a Phase 3 trial in NASH with its once daily, oral thyroid hormone receptor beta selective agonist, resmetirom. This double-blind, placebo-controlled study will be conducted at more than 150 sites in the United States and the rest of the world. Patients with liver biopsy confirmed NASH with stage 2 or 3 fibrosis will be randomized 1:1:1 to receive a single oral daily dose of placebo, resmetirom 80 mg or resmetirom 100 mg. A second liver biopsy at week 52 in the first 900 patients will be the basis of filing for subpart H-accelerated approval; the primary endpoint will be the percent of patients treated with either dose of resmetirom as compared with placebo who achieve NASH resolution on the week 52 liver biopsy, defined as the absence of hepatocyte ballooning (score=0), and minimal lobular inflammation (score 0-1), associated with at least a 2-point reduction in NAS, and no worsening of fibrosis stage. Two key secondary endpoints are reduction in LDL-cholesterol and a 1-point or more improvement in fibrosis stage on the week 52 biopsy with no worsening of NASH. Patients will continue in the study for a total of approximately 54 months, and will be evaluated for a composite clinical outcome including cirrhosis on liver biopsy, or a liver related event such a hepatic decompensation. The total anticipated enrollment is approximately 2,000 patients, and will include up to 15% high risk F1 fibrosis stage NASH patients whose efficacy responses will be evaluated as exploratory endpoints.

FDA Track designation for resmetirom in NASH . In October 2019, FDA granted Fast Track designation to resmetirom for NASH.

Our MAESTRO-NAFLD-1 Phase 3 Clinical Trial . On December 10, 2019 the Company announced it had opened for enrollment MAESTRO-NAFLD-1, a 52-week, double-blind, placebo controlled Phase 3 clinical study in 700 patients with biopsy-confirmed or presumed NASH recruited from sites in the U.S. Key endpoints are safety, including safety biomarkers, LDL cholesterol, lipid biomarkers, and fibrosis biomarkers. Except for serial liver biopsies, the study protocol is similar to the MAESTRO-NASH study with resmetirom doses of 80 mg or 100 mg or placebo and includes key secondary lipid, MRI-PDFF and NASH biomarker endpoints. MAESTRO-NAFLD-1 also includes a 100 mg resmetirom open label arm in up to 100 patients. Unlike MAESTRO-NASH, MAESTRO-NAFLD-1 is a non-biopsy study and represents a “real-life” NASH study. NASH or presumed NASH is documented using historical liver biopsy or non-invasive techniques including fibroscan and MRI-PDFF. Using non-invasive measures, MAESTRO-NAFLD-1 is designed to provide incremental safety information to support the NASH indication as well as provide additional data regarding clinically relevant key secondary efficacy endpoints to better characterize the potential clinical benefits of resmetirom on cardiovascular and liver related endpoints. These key secondary endpoints include LDL-cholesterol, apolipoprotein B and triglyceride (TG) lowering; reduction of liver fat as determined by magnetic resonance imaging, proton density fat fraction (MRI-PDFF); and reduction of PRO-C3, a NASH fibrosis biomarker. Additional secondary and exploratory endpoints will be assessed including reduction in liver enzymes, fibroscan scores and other fibrosis and inflammatory biomarkers. The MAESTRO-NAFLD-1 study will help support the adequacy of the safety database at the time of NDA submission for subpart H approval for treatment of NASH in patients with F2 or F3 fibrosis (MAESTRO-NASH, NASH resolution surrogate endpoint).

In order to assure that the compensation programs for our executive officers remain competitive with peer companies, accomplish our pay-for-performance objectives, and create rewards for the realization of our long-term strategic objectives, the Compensation Committee works with a compensation consultant, Compensia, to obtain the advice and market data needed to structure compensation programs consistent with these goals.

The Compensation Committee approved an increase in base salaries for executive officers in 2019 to bring executive salaries in line with peer companies; as discussed in greater detail below.

The Compensation Committee continued the Company’s cash bonus program in 2019 to provide our executive officers with a direct financial incentive in the form of a cash bonus award tied to our achievement of pre-established objectives, including clinical, research and development, business, finance and investor relations, commercial and hiring objectives for the 2019 year. The performance goals had to be attained at a minimum threshold of 75% in order for a bonus to be paid.

We do not offer a defined benefit pension plan, deferred compensation plan or supplemental executive retirement plan. Instead, in 2019 we relied on equity compensation in the form of stock options in order to attract and retain key employees, align the interests of our executive officers with those of our stockholders and to provide our executive officers and other employees with the opportunity to accumulate retirement income.

The Compensation Committee annually assesses whether our compensation programs have potential risks that are reasonably likely to have a material adverse effect on the Company.

We do not offer any significant perquisites or personal benefits to our executive officers.

Enable us to attract and retain highly qualified executives with extensive industry or scientific experience by providing a competitive compensation package that includes long-term incentives that provide significant retentive value;

Reward our executives for our success in achieving significant operational goals; and

Align the interests of our executives with those of our stockholders.

Reflects new additions to peer group for 2019.

   Element

Fixed or

Variable

Compensation Objective

Base Salary

Annual Cash Incentive Bonus

Equity Awards

2018

Base Salary

Percent  

Increase  

Paul A. Friedman, M.D.

Rebecca Taub, M.D.

Marc R. Schneebaum

Brian J. Lynch

Effective as of January 1, 2019.

Represents annual salary rate. The actual salary amount paid in 2019, as disclosed in the Summary Compensation Table, was prorated from the February 19, 2019 hire date:

In July of 2019, Dr. Taub was promoted to President, R&D, and she retained the position of Chief Medical Officer. In connection with such promotion, her annual salary rate increased from $454,000 to $475,000.

2019 Corporate Performance Objectives

Research and Development Objectives

Includes Goals Based on Clinical Objectives, such as:

Phase 3 NASH clinical trial initiation, site activation and patient randomization goals

Phase 3 NAFLD FDA interaction and study initiation goals

Achievement of peer-reviewed publication objectives

Advancement of preclinical and clinical pharmacology studies

Achievement of manufacturing and supply inventory development goals concerning drug product for Phase 3 clinical trials

Submission of study plans to FDA

Finance and Investor Relations Objectives

Includes Goals Based on Finance and Investor Relations Objectives, such as:

Achievement of expenditure control objectives

Completion of objectives relating to investor and analyst meetings

Achievement of objectives relating to website content update

Commercial Objectives

Includes Goals Based on Commercial Objectives, such as:

Developing dynamic market model for multiple commercialization opportunities

Advancing health economics planning for future market access for resmetirom

Hiring Plan Objectives for 2019

Total

Actual

Award

Paul A. Friedman, M.D.

Rebecca Taub, M.D.

Marc R. Schneebaum

Brian J. Lynch

Reflects pro rata bonus target and payment, respectively, for applicable salary and target amounts before and after July 2019 promotion to President, R&D.

Reflects pro rata bonus target and payment, respectively, from February 2019 hire date.

focus all employees, including our named executive officers, on our long-term performance by aligning their interests with those of our stockholders;

retain our key employees and executives and maintain management continuity through longer-term vesting of our equity-based awards; and

promote an ownership culture through participation in equity-based compensation programs.

Salary

($)

Option

Awards

($) ⁽¹⁾

Non-Equity

Incentive Plan

Compensation

($)

All Other

Compensation

($) ⁽²⁾

Total

($)

Paul A. Friedman, M.D.

Chairman and Chief Executive Officer

2019

$

584,000

$

5,122,000

$

387,192

—

$

6,093,192

2018

416,666

4,907,500

304,500

—

5,628,666

2017

400,000

629,424

335,000

558

1,364,982

Rebecca Taub, M.D.

President, Research & Development

and Chief Medical Officer,

2019

463,948

4,531,120

274,775

—

5,269,843

2018

385,416

3,729,700

225,330

—

4,340,446

2017

370,000

473,337

247,900

558

1,091,795

Marc R. Schneebaum

Senior Vice President,

Chief Financial Officer

2019

421,000

2,868,320

223,298

20,034

⁽²⁾   

3,532,652

2018

380,250

2,748,200

222,314

15,336

3,366,100

2017

365,000

346,437

244,550

14,307

970,294

Brian J Lynch

Senior Vice President and General Counsel ⁽³⁾

2019

358,602

3,506,859

192,602

10,574

⁽²⁾  

4,068,568

These amounts represent the aggregate grant date fair value of option awards, granted in each year presented calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification, or FASB ASC, Topic 718, Compensation—Stock Compensation . See our discussion of “Stock-Based Compensation” under Notes 2, 3 and 9 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 26, 2020 or the Annual Report, for a discussion of all assumptions made by us in determining the grant date fair values of our equity awards. See also our discussion of stock-based compensation under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” of the Annual Report.

All Other Compensation for Mr. Schneebaum in 2019 includes $11,933 in life and disability insurance premiums paid, and matching contributions of $8,100 made under our 401(k) plan. For Mr. Lynch All Other Compensation for 2019 includes $2,474 in life insurance premiums paid, and matching contributions of $8,100 made under our 401(k) plan.

Mr. Lynch became an employee and was appointed our Senior Vice President and General Counsel on February 19, 2019, and salary bonus data in the table reflect pro rata amounts for the year, as paid from February 19, 2019.

Estimated future payouts under non-

equity incentive plan awards target

($) ⁽¹⁾

All other

stock

awards:

Number

of shares

of stock

or units

(#)

All other

stock and

option

awards:

Number of

securities

underlying

options (#)

Exercise or

base price

of stock

and option

awards

($/share)
⁽²⁾

Grant date

fair value of

stock and

option

award ⁽³⁾

Paul A. Friedman, M.D.

Chairman and Chief

Executive Officer

March 7, 2019

$

219,000

$

292,000

$

475,960

-0-

50,000

$127.96

$

5,122,000

Rebecca Taub, M.D.

Chief Medical Officer, President, R&D

March 7, 2019

July 10, 2019

$

156,750

⁽⁴⁾  

$

209,000

⁽⁴⁾  

$

340,670

⁽⁴⁾  

-0-

-0-

38,000

8,000

$127.96

$101.30

$

3,892,728

638,392

Marc R. Schneebaum

Senior Vice President,

Chief Financial Officer

March 7, 2019

$

126,300

$

168,400

$

274,429

-0-

28,000

$127.96

$

2,868,320

Brian J. Lynch

Senior Vice President,

And General Counsel

February 5, 2019

February 19, 2019

$

—

124,500

⁽⁵⁾   

$

—

143,440

⁽⁵⁾  

$

—

233,742

⁽⁵⁾  

-0-

-0-

16,000

18,000

$114.27

$134.25

$

$

1,464,503

2,042,356

The material terms of the 2019 non-equity incentive awards are described above in the Compensation Discussion and Analysis in the section entitled “Annual Cash Incentive Bonus.” The threshold value above represents performance at 75% of target without achievement of bonus points or outperformance objectives. The target value above represents performance at 100% of target without achievement of bonus points or outperformance objectives. If bonus points or outperformance objectives are earned, the threshold and target amounts could increase. The maximum value above represents performance at 163% of target, including full achievement of bonus points and/or outperformance objectives.

The exercise price of these stock options is determined by the Company based on the closing price of its common stock on the Nasdaq Stock Market on the grant date.

Amounts represent the grant date fair value of the executive officer’s stock options and awards, calculated in accordance with FASB ASC Topic 718, using a Black-Scholes valuation model for stock options. See Note 1 under “—Summary Compensation Table” for a discussion of the assumptions made by the Company in determining the grant date fair value of our option awards for the fiscal year ended December 31, 2019. Option awarded with time-based vesting criteria established by the Compensation Committee and described in Compensation Discussion and Analysis above.

Includes mean values for estimated payments based on pro rata adjustment to salary and target bonuses established for July 2019 promotion to President, R&D.

Represents pro rata value derived from February 19, 2019 hire date.

Date of

Grant

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

Number of

Securities

Underlying

Unexercised

Options (#)

Unexercisable

Option

Exercise

Price ($)

Option

Expiration

Date

Paul A. Friedman, M.D.

Chief Executive Officer

3/7/2019

-0-

50,000

⁽¹⁾  

$

127.96

3/7/2029

3/1/2018

21,875

28,125

⁽¹⁾

124.45

3/1/2028

3/2/2017

34,100

15,500

⁽¹⁾

15.80

3/2/2027

7/22/2016

306,256

-0-

9.45

7/22/2026

Rebecca Taub, M.D.

President, Research & Development, Chief Medical Officer

7/10/2019

-0-

8,000

⁽¹⁾  

$

101.30

7/10/2029

3/7/2019

-0-

38,000

⁽¹⁾  

127.96

3/7/2029

3/1/2018

16,625

21,375

⁽¹⁾

124.45

3/1/2028

3/2/2017

25,644

11,656

⁽¹⁾

15.80

3/2/2027

7/22/2016

153,128

-0-

9.45

7/22/2026

Marc R. Schneebaum

Senior Vice President, Chief Financial Officer

3/7/2019

-0-

28,000

⁽¹⁾  

$

127.96

3/7/2029

3/1/2018

12,250

15,750

⁽¹⁾

124.45

3/1/2028

3/2/2017

18,769

8,531

⁽¹⁾

15.80

3/2/2027

7/22/2016

98,002

-0-

9.45

7/22/2026

10/2/2015

1,640

-0-

61.60

10/2/2025

12/8/2014

1,205

-0-

99.75

12/8/2024

Brian J. Lynch

Senior Vice President and General Counsel

2/19/2019

-0-

19,000

⁽¹⁾  

$

134.25

2/19/2029

2/5/2019

-0-

16,000

⁽¹⁾  

114.27

2/5/2029

1/14/2019

2,250

750

114.55

1/14/2029

7/1/2018

3,125

1,875

279.69

7/1/2028

These stock options vest as to 25% of the underlying shares on the first anniversary of the grant date and, thereafter, as to 6.25% of the underlying shares on the last day of each successive three-month period.

Name

number of shares

acquired on

exercise (#)

value realized on

exercise ($)

number of shares

acquired on

vesting (#)

value realized

on vesting ($)
⁽¹⁾

Paul A. Friedman, M.D.

Chief Executive Officer

Rebecca Taub, M.D.

Chief Medical Officer and President,

Research & Development

Marc R. Schneebaum

Senior Vice President, Chief Financial Officer

Brian J. Lynch

Senior Vice President and General Counsel

Represents value realized solely for SEC disclosure requirements based upon fair market value per share ($89.07) of restricted stock vesting on the applicable vesting date (July 22, 2019). In fact, no value was actually realized by each named executive officer on such vesting date or during 2019 either (a) for tax purposes, as Internal Revenue Code Section 83(b) elections previously were taken by each named executive officer, or (b) for financial purposes, since such shares continued to be owned as of December 31, 2019.

a severance payment equal to 12 months of Dr. Friedman’s then-current base salary and target bonus, payable (i) in a lump sum for a Qualifying Separation, if such Qualifying Separation occurs following a change of control of our company and (ii) in 12 equal monthly payments if such Qualifying Separation does not occur following a change of control of our company;

full vesting of restricted stock and stock options held by Dr. Friedman if a Qualifying Separation occurs following a change of control of our company; and

reimbursement of continuation of medical benefits for 12 months following a Qualifying Separation.

a severance payment equal to 12 months of Dr. Taub’s then-current base salary and target bonus, payable (i) in a lump sum for a Qualifying Separation, if such Qualifying Separation occurs following a change of control of our company and (ii) in 12 equal monthly payments if such Qualifying Separation does not occur following a change of control of our company;

full vesting of restricted stock and stock options held by Dr. Taub if a Qualifying Separation occurs following a change of control of our company; and

reimbursement of continuation of medical benefits for 12 months following a Qualifying Separation.

a severance payment equal to 12 months of Mr. Schneebaum’s then-current base salary and target bonus, payable (i) in a lump sum if such Qualifying Separation occurs following a change of control of our company, and (ii) in 12 equal monthly payments if such Qualifying Separation does not occur following a change of control of our company;

(i) full vesting of restricted stock and stock options held by Mr. Schneebaum upon a Qualifying Separation, if such Qualifying Separation occurs following a change in control of our company, and (ii) six months’ vesting of restricted stock and stock options held by Mr. Schneebaum upon a Qualifying Separation, if such Qualifying Separation does not occur following a change of control of our company; and

reimbursement of continuation of medical benefits for 12 months following a Qualifying Separation.

a severance payment equal to 12 months of Mr. Lynch’s then-current base salary and target bonus, payable (i) in a lump sum if such Qualifying Separation occurs following a change of control of our company, and (ii) in 12 equal monthly payments if such Qualifying Separation does not occur following a change of control of our company;

(i) full vesting of restricted stock, if any, and stock options held by Mr. Lynch upon a Qualifying Separation, if such Qualifying Separation occurs following a change in control of our company, and (ii) six months’ vesting of restricted stock and stock options held by Mr. Lynch upon a Qualifying Separation, if such Qualifying Separation does not occur following a change of control of our company; and

reimbursement of continuation of medical benefits for 12 months following a Qualifying Separation.

a severance payment equal to 12 months of Mr. Sukhija’s then-current base salary and target bonus, payable (i) in a lump sum if such Qualifying Separation occurs following a change of control of our company, and (ii) in 12 equal monthly payments if such Qualifying Separation does not occur following a change of control of our company;

(i) full vesting of restricted stock, if any, and stock options held by Mr. Sukhija upon a Qualifying Separation, if such Qualifying Separation occurs following a change in control of our company, and (ii) six months’ vesting of restricted stock and stock options held by Mr. Sukhija upon a Qualifying Separation, if such Qualifying Separation does not occur following a change of control of our company; and

reimbursement of continuation of medical benefits for 12 months following a Qualifying Separation.

Qualifying

Separation Only

Qualifying

Separation

within 12 months

after a Change of

Control

Paul A. Friedman, M.D.

Chairman and Chief Executive Officer

Rebecca Taub, M.D.

Chief Medical Officer, President, R & D,

Marc R. Schneebaum

Senior Vice President, Chief Financial Officer

Brian J. Lynch

Senior Vice President and General Counsel

Upon such Qualifying Separation, each named executive officer is entitled to 12 months’ base salary and target bonus, payable over 12 months.

Upon such Qualifying Separation, each named executive officer is entitled to 12 months’ base salary and target bonus, payable in a lump sum.

Represents value associated with an acceleration and cancellation of unvested stock option awards assuming cancellation occurred at December 31, 2019 and involved a payment equal to the difference between the closing price on such date ($91.11) and the exercise price of all unvested in-the-money stock options.

Upon Qualifying Separation, such named executive officer is eligible for the Company to continue to pay the employer-paid portion of health benefits for 12 months.

Position

Retainer ($)

Board Member

40,000

Audit Committee Chair

20,000

Compensation Committee Chair

12,500

Nominating and Governance Committee Chair

12,500

Audit Committee Member

7,500

Compensation Committee Member

7,500

Nominating and Governance Committee Member

7,500

Fees

Earned or

Paid in Cash

($) ⁽¹⁾

Option

Awards

($) ⁽²⁾⁽³⁾

All Other

Compensation

($) ⁽⁴⁾

Kenneth M. Bate

67,500

602,500

—

670,000

James M. Daly

20,000

1,289,495

—

1,309,495

Fred B. Craves, Ph.D.

55,000

602,500

—

657,500

Keith R. Gollust

60,000

602,500

—

662,500

Richard S. Levy, M.D.

60,000

602,500