Revised Proxy Soliciting Materials (Form DEFR14A)
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material
under § 240.14a-12
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and 0-11 |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
Dear Stockholder:
The Annual Meeting of Stockholders of
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To elect the Board's nominees, |
| 2. |
To approve, on an advisory basis, the compensation of the Company's named executive officers, as disclosed in the proxy statement accompanying this Notice. |
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To ratify the selection by the Audit Committee of the Board of Directors of |
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To approve a series of alternate amendments to the Company's Amended and Restated Certificate of Incorporation to effect, at the option of the Board of Directors, a reverse stock split of the Company's common stock at a reverse stock split ratio ranging from 1-for-10to 1-for-30,inclusive, with the effectiveness of one of such amendments and the abandonment of the other amendments, or the abandonment of all amendments, to be determined by the Board of Directors, in its sole discretion, prior to the date of the 2026 Annual Meeting of Stockholders. |
| 5. |
To conduct any other business properly brought before the meeting. |
These items of business are more fully described in the Proxy Statement accompanying this Notice. All stockholders are invited to attend the meeting in person. The record date for the Annual Meeting is
| By Order of the Board of Directors, |
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/s/ |
| Secretary |
We are primarily providing access to our proxy materials over the internet pursuant to the
Whether or not you expect to attend the meeting in person, please submit voting instructions for your shares promptly using the directions on your Notice, or, if you elected to receive printed proxy materials by mail, your proxy card, to vote by one of the following methods: 1) over the internet at www.proxyvote.com, 2) by telephone by calling the toll-free number 1-800-690-6903, or 3)if you elected to receive printed proxy materials by mail, by marking, dating and signing your proxy card and returning it in the accompanying postage-paidenvelope. Even if you have voted by proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
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PROXY STATEMENT
FOR THE 2025 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the internet?
Pursuant to rules adopted by the
We intend to mail the Notice on or about
How do I attend the annual meeting?
The meeting will be held on
Who can vote at the annual meeting?
Only stockholders of record at the close of business on
Stockholder of Record: Shares Registered in Your Name
If on
Beneficial Owner: Shares Registered in the
If on
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What am I voting on?
There are four matters scheduled for a vote:
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Proposal No.1- Election of three directors; |
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Proposal No. 2- Approval, on an advisory basis, of the compensation of the Company's named executive officers, as disclosed in the proxy statement accompanying this Notice; |
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Proposal No. 3- Ratification of selection by the Audit Committee of the Board of Directors of |
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Proposal No. 4- Approval of a series of alternate amendments to the Company's Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company's common stock at a reverse stock split ratio ranging from 1-for-10to 1-for-30,inclusive (the "Reverse Stock Split"), with the effectiveness of one of such amendments and the abandonment of the other amendments, or the abandonment of all amendments, to be determined by the Board of Directors, in its sole discretion, prior to the date of the 2026 Annual Meeting of Stockholders. |
What if another matter is properly brought before the meeting?
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
How do I vote?
You may either vote "For" all of the nominees to the Board of Directors or you may "Withhold" your vote for any nominee you specify. For the other matters to be voted on, you may vote "For" or "Against" or abstain from voting.
The procedures for voting are:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy in one of three ways: online, by telephone or using a proxy card that you may request. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote in person even if you have already voted by proxy.
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To vote online, go to www.proxyvote.com. You will be asked to provide the Company number and control number from the Notice. Your vote must be received by |
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To vote over the telephone, dial toll-free 1-800-690-6903.You will be asked to provide the Company number and control number from the Notice. Your vote must be received by |
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To vote by mail if you requested printed proxy materials, you can vote by promptly completing and returning your signed proxy card in the envelope provided. You should mail your signed proxy card sufficiently in advance for it to be received by |
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To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive. |
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Beneficial Owner: Shares Registered in the
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a notice containing voting instructions from that organization rather than from us. Please follow the voting instructions in the notice to ensure that your vote is counted. To vote in person at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker or bank included with the proxy materials, or contact your broker or bank to request a proxy form.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet or in person at the annual meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the
If you are a beneficial owner of shares held in street name and you do not instruct your broker, bank or other agent how to vote your shares, your broker, bank or other agent may still be able to vote your shares in its discretion. In this regard, under stock exchange rules, brokers, banks and other securities intermediaries may use their discretion to vote your "uninstructed" shares with respect to matters considered to be "routine" under such rules, but not with respect to "non-routine"matters. Proposals 1 and 2 are considered to be "non-routine"under such rules, meaning that your broker may not vote your shares on this proposal in the absence of your voting instructions. However, Proposals 3 and 4 are considered to be "routine" under such rules, meaning that if you do not retuvoting instructions to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposals 3 and 4.
What if I retua proxy card or otherwise vote but do not make specific choices?
If you retua signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable:
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"For" the election of all nominees for director; |
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"For" the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement; |
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"For" the ratification of |
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"For" the approval of a series of alternate amendments to the Company's Amended and Restated Certificate of Incorporation to effect, at the option of the Board of Directors, a Reverse Stock Split at a ratio between 1-for-10and 1-for-30,inclusive, as determined by the Board of Directors in its sole discretion. |
If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
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Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We will also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the Notices to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
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You may submit another properly completed proxy card with a later date. |
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You may grant a subsequent proxy by telephone or through the internet. |
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You may send a timely written notice that you are revoking your proxy to our Corporate Secretary at |
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You may attend the annual meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy. |
Your most current proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals and director nominations due for next year's Annual Meeting?
To be considered for inclusion in next year's proxy materials, your proposal must be submitted in writing by
If you propose to bring business before an annual meeting other than a director nomination, your notice must also include, as to each matter proposed, the following: (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting that business at the annual meeting and (2) any material interest you have in that business. If you propose to nominate an individual for election as a director, your notice must also include, as to each person you propose to nominate for election as a director, the following: (1) the name, age, business address and residence address of the person, (2) the principal occupation or employment of the person, (3) the class and number of shares of our stock that are owned of record and beneficially owned by the person, (4) the date or dates on which the shares were acquired and the investment intent of the acquisition and (5) any other information concerning the person as would be required to be disclosed in a proxy statement
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soliciting proxies for the election of that person as a director in an election contest (even if an election contest is not involved), or that is otherwise required to be disclosed pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated under the Exchange Act, including the person's written consent to being named as a nominee and to serving as a director if elected. We may require any proposed nominee to furnish other information as we may reasonably require to determine the eligibility of the proposed nominee to serve as an independent director or that could be material to a reasonable stockholder's understanding of the independence, or lack of independence, of the proposed nominee.
In addition, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide in their notice any additional information required by Rule 14a-19(b)under the Exchange Act.
For more information, and for more detailed requirements, please refer to our Amended and Restated Bylaws, filed as Exhibit 3.4 to our Registration Statement on Form S-1,filed with the
What are "broker non-votes"?
As discussed above, when a beneficial owner of shares held in "street name" does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be "non-routine,"the broker or nominee cannot vote the shares. These unvoted shares are counted as "broker non-votes."
How many votes are needed to approve each proposal and how are votes counted?
The following table summarizes the minimum vote needed to approve each proposal and the effect of abstentions and broker non-votes.Votes will be counted by the inspection of elections appointed for the Annual Meeting.
| Proposal Number |
Proposal Description | Vote Required for Approval | Effect of Abstentions |
Effect of Votes |
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1. |
Election of Directors | Nominees receiving the most "For" votes; withheld votes will have no effect. | Not applicable | No effect | ||||
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2. |
Non-bindingadvisory approval of the compensation of our named executive officers(1) | "For" votes from the holders of a majority of shares present at the Annual Meeting or represented by proxy and entitled to vote on the matter. | Against | No effect | ||||
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3. |
Ratification of the appointment of 2024 |
"For" votes from holders of a majority of shares present at the Annual Meeting or represented by proxy and entitled to vote on the matter. | Against | Brokers have discretion to vote(2) | ||||
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4. |
Reverse Stock Split | "For" votes from the holders of a majority of the total votes cast on the proposal. | No effect | Brokers have discretion to vote(2) | ||||
| (1) |
As this is an advisory vote, the result will not be binding on our Board. However, our Board values our stockholders' opinions, and our Board and the Compensation Committee will take into account the outcome of the advisory vote when considering future named executive officer compensation decisions. |
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| (2) |
This proposal is considered a "routine" matter under NYSE rules. Accordingly, if you hold your shares in street name and do not provide voting instructions to your broker, bank or other agent that holds your shares, your broker, bank or other agent has discretionary authority under NYSE rules to vote your shares on this proposal. We do not expect there to be broker-nonvotes on this matter. |
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum is present if stockholders holding at least a majority of the outstanding shares entitled to vote are present at the Annual Meeting in person or represented by proxy. On the record date, there were 92,490,993 shares outstanding and entitled to vote. Thus, the holders of 46,245,497 shares must be present in person or represented by proxy at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the meeting. Abstentions and broker non-voteswill be counted towards the quorum requirement. If there is no quorum, either the chairman of the Annual Meeting or the holders of a majority of shares present at the Annual Meeting in person or represented by proxy may adjouthe meeting to another date.
Will a list of record stockholders as of the record date be available?
For the ten days ending the day prior to the Annual Meeting, the list will be available at our corporate headquarters,
How can I find out the results of the voting at the annual meeting?
Preliminary voting results will be announced at the annual meeting. In addition, final voting results will be published in a current report on Form 8-Kthat we expect to file within four business days after the annual meeting.
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PROPOSAL NO. 1 - ELECTION OF DIRECTORS
Our Board of Directors is divided into three classes and currently has seven members. Each class consists, as nearly as possible, of one-thirdof the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director's successor is duly elected and qualified.
There are three directors in the class whose term of office expires in 2025:
Directors are elected by a plurality of the votes of the holders of shares present in person or represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. If any of the nominees becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee may instead be voted for the election of a substitute nominee that we propose. Each person nominated for election has agreed to serve if elected. We have no reason to believe that any of the nominees will be unable to serve.
Class I Director Nominees for Election for a Three-Year Term Expiring at the 2028 Annual Meeting
The following is a brief biography of each nominee for director and a discussion of the specific experience, qualifications, attributes or skills of each nominee that led the
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healthcare and life-science related companies, which was founded in 2010. Prior to that,
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" EACH NAMED NOMINEE.
Class II Directors Continuing in Office Until the 2026 Annual Meeting
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private companies.
Class III Directors Continuing in Office Until the 2027 Annual Meeting
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consultant to
Information Regarding the Board of Directors and Corporate Governance
Independence of the Board of Directors
Our Board of Directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning such director's background, employment and affiliations, including family relationships, our Board of Directors determined that
Board Leadership Structure
The Board of Directors of the Company has a Chairman,
Role of the Board in Risk Oversight
Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, cybersecurity and reputational. One of the key functions of our Board of Directors is informed oversight of our risk management process. Our Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through various standing committees of our Board of Directors that address risks inherent in their respective areas of oversight. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure and our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govethe process by which risk assessment and management is undertaken. Our
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potential to encourage excessive risk-taking. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible. The Board Chairman coordinates between the Board and management with regard to the determination and implementation of responses to any problematic risk management issues.
Meetings of the Board of Directors
The Board of Directors met nine times during the last fiscal year. Each Board member attended 75% or more of the aggregate number of meetings of the Board and of the committees on which he or she served, held during the portion of the last fiscal year for which he or she was a director or committee member.
As required under applicable Nasdaq listing standards, during the last fiscal year, the Company's independent directors met five times in regularly scheduled executive sessions at which only independent directors were present.
Information Regarding Committees of the Board of Directors
The Board has three committees: an Audit Committee, a Compensation Committee and a
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Audit Committee |
Compensation Committee |
Nominating and Corporate Governance Committee |
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X* | X | X |
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Committee chair. |
Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board of Directors has determined that each current member of each committee meets the applicable Nasdaq rules and regulations regarding "independence" and each current member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company.
Audit Committee
The Audit Committee of the Board of Directors was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee the Company's corporate accounting, disclosure controls and procedures and financial reporting processes and audits of its financial statements. The Audit Committee is currently composed of three directors:
The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of our Audit Committee are independent, as independence is currently defined in Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards. The Board of Directors has also determined that
The principal duties and responsibilities of our Audit Committee include:
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evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors; |
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reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-auditservices; |
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reviewing related party transactions; |
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters and other matter; |
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reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," and discussing the statements and reports with our independent auditors and management; |
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters; |
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reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls; |
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reviewing and evaluating on an annual basis the performance of the Audit Committee and the Audit Committee charter; and |
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overseeing our cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. |
Report of the Audit Committee of the Board of Directors
The Audit Committee has reviewed and discussed the audited financial statements for the year ended
* The material in this report is not "soliciting material," is not deemed "filed" with the Commission and is not to be incorporated by reference in any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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Compensation Committee
The Compensation Committee is composed of three directors:
The principal duties and responsibilities of our Compensation Committee include:
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reviewing and making recommendations to the full Board of Directors regarding the type and amount of compensation to be paid or awarded to our non-employeeboard members; |
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setting the compensation and other terms of employment of our Chief Executive Officer and our other executive officers; |
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reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full Board of Directors regarding) our overall compensation strategy and policies; |
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reviewing and approving (or if it deems it appropriate, making recommendations to the full Board of Directors regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs; |
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establishing, approving, modifying and overseeing our compensation clawback or similar policies and any required recoupment and disclosure; and |
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reviewing and evaluating on an annual basis the performance of the Compensation Committee and the Compensation Committee charter. |
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets at least twice every year and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with our Chief Executive Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. Our Compensation Committee typically reviews and discusses management's proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. The Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant's reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, independent legal counsel or other adviser to the Compensation Committee, other than in-houselegal counsel and certain other types of advisers, only after taking into consideration
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six factors, prescribed by the
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assist in providing competitive compensation data for all of the Company's executive positions and its Board of Directors; |
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propose go-forwardchanges relating to executive cash and equity compensation; and |
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review our non-employeedirector compensation policy and recommend changes as deemed appropriate to maintain or improve competitiveness. |
The Compensation Committee has analyzed whether the work of Alpine as compensation consultant raises any conflict of interest, taking into account relevant factors in accordance with
Nominating and Corporate Governance Committee
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identifying, reviewing, evaluating and recommending candidates to serve on our Board of Directors; |
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determining the minimum qualifications for service on our board of director; |
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evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate; |
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evaluating nominations by stockholders of candidates for election to our Board of Directors; |
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considering and assessing the independence of members of our Board of Directors; |
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evaluating our set of corporate governance policies and principles and recommending to our Board of Directors any changes to such policies and principles; |
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reviewing and making recommendations to the Board of Directors with respect to management succession planning; |
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considering questions of possible conflicts of interest of directors as such questions arise; and |
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reviewing and evaluating on an annual basis the performance of the |
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commitment to rigorously represent the long-term interests of the Company's stockholders. However, the
In the case of incumbent directors whose terms of office are set to expire, the
The Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders who wish to communicate with the Board may do so by sending written communications addressed to the Board or the director in care of
These communications will be reviewed by our Secretary, who will determine whether they should be presented to the Board. The purpose of this screening is to allow the Board to avoid having to consider communications that contain advertisements or solicitations or are unduly hostile, threatening or similarly inappropriate. All
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communications directed to the audit committee in accordance with our Open Door Policy for Reporting Complaints Regarding Accounting and Auditing Matters that relate to questionable accounting or auditing matters involving the Company will be promptly and directly forwarded to the Audit Committee.
Any interested person may communicate directly with the non-managementdirectors. Persons interested in communicating directly with the non-managementdirectors regarding their concerns or issues may do so by addressing correspondence to a particular director, or to the non-managementdirectors generally, in care of
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics (the "Code of Conduct") applicable to all of our employees, executive officers and directors. The Code of Conduct is available on our website at www.verrica.com.
Corporate Governance Guidelines
In connection with our initial public offering, the Board documented the governance practices followed by the Company by adopting Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The Corporate Governance Guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to board composition and selection, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation.
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purposes. A copy of our insider trading policy is filed as an exhibit to our Annual Report on
for our fiscal year ended
from the Clearing Officer. Pursuant to the Insider Trading Policy, our company must also comply with applicable laws and regulations relating to insider trading when engaging in transactions in our securities.
clawback policy, as required by
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PROPOSAL NO. 2 - ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), and Section 14A of the Exchange Act, the Company's stockholders are entitled to vote to approve, on an advisory (non-binding)basis, the compensation of the Company's named executive officers as disclosed in this proxy statement in accordance with
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company's named executive officers and the policies and practices described in this proxy statement. The compensation of the Company's named executive officers subject to the say-on-payvote is disclosed in the compensation tables and the related narrative disclosures that accompany the compensation tables contained in the "Executive Compensation" section of this proxy statement. As described in those disclosures, the Company believes that its compensation policies and decisions are strongly aligned with our stockholders' interests and consistent with current market practices. Compensation of the Company's named executive officers is designed to enable the Company to attract and retain talented and experienced executives to lead the Company successfully in a competitive environment.
Accordingly, the Board of Directors is asking the stockholders to indicate their support for the compensation of the Company's named executive officers as described in this proxy statement by casting a non-bindingadvisory vote "FOR" the following resolution:
"RESOLVED, that the compensation paid to the Company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K,including the compensation tables and any related narrative disclosures that accompany the compensation tables in the Company's proxy statement for its 2024 Annual Meeting of Stockholders, is hereby APPROVED."
Because the vote is advisory, it is not binding on the Board of Directors or the Company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the Board and, accordingly, the Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding executive compensation arrangements.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSAL NO. 2.
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PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected
Neither the Company's Bylaws nor other governing documents or law require stockholder ratification of the selection of
The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the annual meeting will be required to ratify the selection of
Fees for Services Provided by the Independent Registered Public Accounting Firm
The following table represents aggregate fees for professional services rendered to the Company for the years ended
| Years Ended |
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| 2024 | 2023 | |||||||
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Audit Fees(1) |
$ | 684,000 | $ | 475,019 | ||||
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Tax Fees(2) |
89,861 | 126,151 | ||||||
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Total Fees |
$ | 773,861 | $ | 601,170 | ||||
| (1) |
Audit fees for the fiscal years ended |
| (2) |
Tax fees for the fiscal years ended |
There were no audit-related, tax or other fees for the years ended
Pre-ApprovalPolicies and Procedures
The Audit Committee has adopted a policy and procedures for the pre-approvalof audit and non-auditservices rendered by the Company's independent auditors,
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All of the services of
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSAL NO. 3.
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PROPOSAL NO. 4 - APPROVAL OF A SERIES OF ALTERNATE AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF OUR COMMON STOCK IN THE RANGE OF 1-FOR-10TO 1-FOR-30,INCLUSIVE
Background
The Board has unanimously approved a series of alternate amendments to our Amended and Restated Certificate of Incorporation that would effect a Reverse Stock Split of all issued and outstanding shares of our common stock, at a ratio ranging from 1-for-10to 1-for-30,inclusive. The text of the proposed form of amendment to our Amended and Restated Certificate of Incorporation, which we refer to as the Certificate of Amendment, is attached hereto as Appendix A.
Accordingly, effecting a Reverse Stock Split would reduce the number of outstanding shares of our common stock. The effectiveness of any one of these amendments and the abandonment of the other amendments, or the abandonment of all of these amendments, will be determined by our Board following the Annual Meeting and prior to the one-yearanniversary of the Annual Meeting, or
Our stockholders are being asked to approve these proposed amendments pursuant to Proposal 4, and to grant authorization to our Board to determine, at its option, whether to implement a Reverse Stock Split, including its specific timing and ratio.
Should we receive the required stockholder approval for Proposal 4, our Board will have the sole authority to elect, at any time on or prior to the one-yearanniversary of the Annual Meeting and without the need for any further action on the part of our stockholders, whether to effect a Reverse Stock Split and the number of whole shares of our common stock, between and including ten (10) and thirty (30), that will be combined into one share of our common stock.
Notwithstanding approval of Proposal 4 by our stockholders, our Board may, at its sole option, abandon the proposed amendments and determine prior to the effectiveness of any filing with the Secretary of State of the
By approving Proposal 4, our stockholders will: (a) approve a series of alternate amendments to our Amended and Restated Certificate of Incorporation pursuant to which any whole number of outstanding shares of common stock between and including ten (10) and thirty (30) could be combined into one share of common stock; and (b) authorize our Board to file only one such amendment, as determined by the Board at its sole option, and to abandon each amendment not selected by the Board. Our Board may also elect not to undertake any Reverse Stock Split and therefore abandon all amendments.
Board Discretion to Implement the Reverse Stock Split
We are proposing that our Board have the discretion to select the Reverse Stock Split ratio from within a range between and including 1-for-10and 1-for-30,rather than proposing that stockholders approve a specific ratio at this time, in order to give our Board the flexibility to implement a Reverse Stock Split at a ratio that reflects the Board's then-current assessment of the factors described below under "Criteria to be Used for Determining Whether to Implement the Reverse Stock Split." If the Board decides to implement a Reverse Stock Split, we will file the Certificate of Amendment with the Secretary of State of the
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result from the treatment of fractional shares as described below, each of our stockholders will hold the same percentage of our outstanding common stock immediately following the Reverse Stock Split as such stockholder holds immediately prior to the Reverse Stock Split.
Reasons for Reverse Stock Split
To maintain our listing on The Nasdaq Global Market.
On
By potentially increasing our stock price, the Reverse Stock Split would reduce the risk that our common stock could be delisted from
The Board has considered the potential harm to us and our stockholders should Nasdaq delist our common stock from
The Board believes that the proposed Reverse Stock Split is a potentially effective means for us to maintain compliance with the Minimum Bid Price Requirement and to avoid, or at least mitigate, the likely adverse consequences of our common stock being delisted from
To potentially improve the marketability and liquidity of our common stock.
Our Board believes that the increased market price per share of our common stock expected as a result of implementing a Reverse Stock Split could improve the marketability and liquidity of our common stock and encourage interest and trading in our common stock.
| • |
Investor Stock Price Requirements: We understand that many brokerage houses, institutional investors and funds have internal policies and practices that either prohibit them from investing in low-pricedstocks or tend to discourage individual brokers from recommending low-pricedstocks to their customers or by restricting or limiting the ability to purchase such stocks on margin. Additionally, a Reverse Stock Split could help increase analyst and broker interest in our common stock as their internal policies might discourage them from following or recommending companies with low stock prices. |
| • |
Stock Price Volatility: Because of the trading volatility often associated with low-pricedstocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit |
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|
them from investing in low-pricedstocks or tend to discourage individual brokers from recommending low-pricedstocks to their customers. Some of those policies and practices may make the processing of trades in low-pricedstocks economically unattractive to brokers. |
| • |
Transaction Costs: Investors may be dissuaded from purchasing stocks below certain prices because brokers' commissions, as a percentage of the total transaction value, can be higher for low-pricedstocks. |
To increase the number of shares of common stock available to provide flexibility for business and/or financial purposes.
The implementation of a Reverse Stock Split will result in an effective increase in the authorized number of shares of our common stock relative to the number of shares outstanding. The Board believes that the availability of additional shares of common stock would provide us with the flexibility to consider and respond to future business opportunities and needs as they arise, including equity offerings and other issuances, mergers, business combinations or other strategic transactions, asset acquisitions, stock dividends, other stock splits and other corporate purposes, although we have no current plans to issue additional securities. The effective increase in the authorized shares of common stock would also accommodate increases to the number of shares of our common stock to be authorized and reserved for future equity awards. The Board believes that having such additional authorized shares of common stock available for issuance under the certificate of incorporation will give us increased flexibility and would allow such shares to be issued without the expense and delay of a special stockholders' meeting unless such approval is expressly required by applicable law.
Criteria to be Used for Determining Whether to Implement Reverse Stock Split
In determining whether to implement the Reverse Stock Split and which Reverse Stock Split ratio to implement, if any, following receipt of stockholder approval of Proposal 4, our Board may consider, among other things, various factors such as:
| • |
the historical trading price and trading volume of our common stock; |
| • |
the then-prevailing trading price and trading volume of our common stock and the expected impact of the Reverse Stock Split on the trading market for our common stock in the short- and long-term; |
| • |
our ability to maintain our listing on |
| • |
which Reverse Stock Split ratio would result in the least administrative cost to us; |
| • |
prevailing general market and economic conditions; and |
| • |
whether and when our Board desires to have the additional authorized but unissued shares of common stock that will result from the implementation of a Reverse Stock Split available for issuance. |
Certain Risks and Potential Disadvantages Associated with Reverse Stock Split
We cannot assure you that the proposed Reverse Stock Split will increase our stock price for a sustained period or have the desired effect of maintaining compliance with Nasdaq Marketplace Rules.
The Board expects that the Reverse Stock Split will increase the market price of our common stock so that we may be able to regain and maintain compliance with the Minimum Bid Requirement. However, the effect of the Reverse Stock Split upon the market price of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in like circumstances is varied, particularly since some investors may view a reverse stock split negatively. It is possible that the per share price of our common stock after the Reverse Stock Split will not rise in proportion to the reduction in the number of shares of our common stock outstanding resulting from the Reverse Stock Split, and the Reverse Stock Split may not result in a per share price that would attract brokers and investors who do not trade in lower priced stocks. In addition, although
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we believe the Reverse Stock Split may enhance the desirability of our common stock to certain potential investors, we cannot assure you that, if implemented, our common stock will be more attractive to institutional and other long-term investors. Even if we implement the Reverse Stock Split, the market price of our common stock may decrease due to factors unrelated to the Reverse Stock Split. In any case, the market price of our common stock may also be based on other factors which may be unrelated to the number of shares outstanding, including our future performance. If the Reverse Stock Split is consummated and the trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split.
We cannot assure you that our common stock will regain compliance with the Minimum Bid Price Requirement by the Compliance Date. Even if the market price per post-Reverse Stock Split share of our common stock remains in excess of
The proposed Reverse Stock Split may decrease the liquidity of our common stock and result in higher transaction costs.
The liquidity of our common stock may be negatively impacted by a Reverse Stock Split, given the reduced number of shares that would be outstanding after the Reverse Stock Split, particularly if the stock price does not increase as a result of the Reverse Stock Split. In addition, if a Reverse Stock Split is implemented, it will increase the number of our stockholders who own "odd lots" of fewer than 100 shares of common stock. Brokerage commission and other costs of transactions in odd lots are generally higher than the costs of transactions of more than 100 shares of common stock. Accordingly, a Reverse Stock Split may not achieve the desired results of increasing marketability and liquidity of our common stock described above.
The effective increase in the authorized number of shares of our common stock as a result of the Reverse Stock Split could have anti-takeover implications.
The implementation of a Reverse Stock Split will result in an effective increase in the authorized number of shares of our common stock relative to the number of shares outstanding, which could, under certain circumstances, have anti-takeover implications. The additional shares of common stock that would become available for issuance if this Proposal 4 is approved and a Reverse Stock Split is implemented could be used by us to oppose a hostile takeover attempt or to delay or prevent changes in control or our management. While the Board has not adopted a stockholder rights plan which, under certain circumstances related to an acquisition of our securities that is not approved by the Board, would give certain holders the right to acquire additional shares of our common stock at a low price, the Board may elect to adopt a rights plan in the future. The Board also could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board. Although this Proposal 4 has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at us), stockholders should be aware that approval of this Proposal 4 could facilitate future efforts by us to deter or prevent changes in control, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices.
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Principal Effects of Reverse Stock Split
After the effective date of any Reverse Stock Split that our Board elects to implement, each stockholder will own a reduced number of shares of common stock. However, any Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder's percentage ownership interests in the Company, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share as described below. Voting rights and other rights and preferences of the holders of our common stock will not be affected by a Reverse Stock Split (other than as a result of the payment of cash in lieu of fractional shares). For example, a holder of 2% of the voting power of the outstanding shares of our common stock immediately prior to a Reverse Stock Split would continue to hold 2% (assuming there is no impact as a result of the payment of cash in lieu of issuing fractional shares) of the voting power of the outstanding shares of our common stock immediately after such Reverse Stock Split. The number of stockholders of record will not be affected by a Reverse Stock Split (except to the extent that any stockholder holds only a fractional share interest and receives cash for such interest after such Reverse Stock Split).
The principal effects of a Reverse Stock Split will be that:
| • |
depending on the Reverse Stock Split ratio selected by the Board, each ten (10) to thirty (30) shares of our common stock owned by a stockholder will be combined into one new share of our common stock; |
| • |
no fractional shares of common stock will be issued in connection with any Reverse Stock Split; instead, holders of common stock who would otherwise receive a fractional share of common stock pursuant to the Reverse Stock Split will receive cash in lieu of the fractional share as explained more fully below; |
| • |
the total number of authorized shares of our common stock will not be reduced proportionally to the Reverse Stock Split and, therefore, the Reverse Stock Split will result in an effective increase in the authorized number of shares of our common stock relative to the number of shares outstanding; |
| • |
based upon the Reverse Stock Split ratio selected by the Board, proportionate adjustments will be made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all then outstanding stock options, restricted stock units (if any) and warrants, which will result in a proportional decrease in the number of shares of our common stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants, and, in the case of stock options and warrants, a proportional increase in the exercise price of all such stock options and warrants; and |
| • |
the number of shares then reserved for issuance under our equity compensation plans will be reduced proportionately based upon the Reverse Stock Split ratio selected by the Board. |
The following table illustrates the effects of a 1-for-10,1-for-20and 1-for-30Reverse Stock Split on our outstanding common stock as of
|
Status |
Number of Shares of Common Stock Authorized |
Number of Shares of Common Stock Issued and Outstanding |
Number of Shares of Common Stock Reserved for Future Issuance |
Number of Shares of Common Stock Authorized but Unissued and Unreserved |
||||||||||||
| Pre-ReverseStock Split | 200,000,000 | 91,789,993 | 74,112,314 | 34,097,693 | ||||||||||||
| Post-Reverse Stock Split 1:10 | 200,000,000 | 9,178,999 | 7,411,231 | 183,409,769 | ||||||||||||
| Post-Reverse Stock Split 1:20 | 200,000,000 | 4,589,500 | 3,705,616 | 191,704,885 | ||||||||||||
| Post-Reverse Stock Split 1:30 | 200,000,000 | 3,059,666 | 2,470,410 | 194,469,923 | ||||||||||||
After the effective date of any Reverse Stock Split that our Board elects to implement, our common stock would have a new
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Our common stock is currently registered under Section 12(b) of the Exchange Act, and we are subject to the periodic reporting and other requirements of the Exchange Act. The implementation of any proposed Reverse Stock Split will not affect the registration of our common stock under the Exchange Act. Our common stock would continue to be listed on the Nasdaq Global Market under the symbol "VRCA" immediately following the Reverse Stock Split, although Nasdaq will likely add the letter "D" to the end of the trading symbol for a period of twenty trading days after the effective date of the Reverse Stock Split to indicate that a reverse stock split has occurred.
Effective Time
The proposed Reverse Stock Split would become effective at
Cash Payment In Lieu of Fractional Shares
No fractional shares of common stock will be issued as a result of any Reverse Stock Split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the Reverse Stock Split, we will pay cash (without interest) equal to such fraction multiplied by the average of the closing sales prices of the common stock on the Nasdaq Global Market during regular trading hours for the five consecutive trading days immediately preceding the Effective Time (with such average closing sales prices being adjusted to give effect to the Reverse Stock Split). After the Reverse Stock Split, a stockholder otherwise entitled to a fractional interest will not have any voting, dividend or other rights with respect to such fractional interest except to receive payment as described above.
As of
Record and Beneficial Stockholders
If this Proposal 4 is approved by our stockholders and our Board elects to implement a Reverse Stock Split, stockholders of record holding all of their shares of our common stock electronically in book-entry form under the direct registration system for securities will be automatically exchanged by the exchange agent and will receive a transaction statement at their address of record indicating the number of new post-split shares of our common stock they hold after the Reverse Stock Split along with payment in lieu of any fractional shares. Non-registeredstockholders holding common stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the Reverse Stock Split than those that would be put in place by us for registered stockholders. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.
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If this Proposal 4 is approved by our stockholders and our Board elects to implement a Reverse Stock Split, stockholders of record holding some or all of their shares in certificate form will receive a letter of transmittal from us or our exchange agent, as soon as practicable after the effective date of the Reverse Stock Split. Our transfer agent is expected to act as "exchange agent" for the purpose of implementing the exchange of stock certificates. Holders of pre-ReverseStock Split shares will be asked to surrender to the exchange agent certificates representing pre-ReverseStock Split shares in exchange for post-Reverse Stock Split shares and payment in lieu of fractional shares (if any) in accordance with the procedures to be set forth in the letter of transmittal. No new post-Reverse Stock Split share certificates will be issued to a stockholder until such stockholder has surrendered such stockholder's outstanding certificate(s) together with the properly completed and executed letter of transmittal to the exchange agent.
STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLITSTOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.
Accounting Consequences
The par value per share of our common stock would remain unchanged at
No Appraisal Rights
Our stockholders are not entitled to dissenters' or appraisal rights under the General Corporation Law of the
Material
The following is a summary of the material
This discussion is for general information only and does not purport to consider all aspects of
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purposes (or persons holding our common stock through such entities), stockholders who hold the pre-reversesplit shares as part of a straddle, hedge, or conversion transaction, stockholders who hold the pre-reversesplit shares as qualified small business stock within the meaning of Section 1202 of the Code or Section 1244 stock for purposes of Section 1244 of the Code, stockholders who acquired their stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code, or stockholders who acquired their pre-reversesplit shares pursuant to the exercise of employee stock options or otherwise as compensation.
In addition, this summary does not address: (a) the tax consequences of transactions effectuated before, after or at the same time as the Reverse Stock Split, whether or not they are in connection with the Reverse Stock Split; (b) any
For purposes of this discussion, a "
| • |
an individual who is a citizen or resident of |
| • |
a corporation (or other entity treated as a corporation for |
| • |
an estate, the income of which is subject to |
| • |
a trust if (i) a |
The Reverse Stock Split should constitute a "recapitalization" for
A
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decreased by the basis allocated to the fractional share for which such
Stockholders may be subject to information reporting with respect to any cash received in exchange for a fractional share interest in a new share in the Reverse Stock Split. Stockholders who are subject to information reporting and who do not provide a correct taxpayer identification number and other required information (such as by submitting a properly completed
The preceding discussion is intended only as a summary of certain material
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" PROPOSAL NO. 4.
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EXECUTIVE OFFICERS
The following table sets forth information concerning our current executive officers:
|
|
Position |
|
|
|
President and Chief Executive Officer | |
|
|
Chief Legal Officer, Chief Compliance Officer and Corporate Secretary | |
|
|
Interim Chief Financial Officer | |
|
|
Chief Medical Officer | |
|
|
Chief Operating Officer |
Executive Officers Who Are Not Directors
The following sets forth certain information with respect to our executive officers who are not directors:
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31
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our common stock as of
| • |
each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock; |
| • |
each of our named executive officers; |
| • |
each of our directors; and |
| • |
all of our executive officers and directors as a group. |
The percentage ownership information shown in the table below is based upon 91,789,993 shares of common stock outstanding as of
We have determined beneficial ownership in accordance with the rules of the
Except as otherwise noted below, the address for persons listed in the table is c/o
|
|
Number of Shares Beneficially Owned |
Percentage of Shares Beneficially Owned |
||||||||
|
5% or greater stockholders: |
||||||||||
|
Entities affiliated with |
53,707,727 | 49.99 | % | |||||||
|
|
9,173,705 | 9.99 | ||||||||
|
|
9,362,954 | 9.99 | ||||||||
|
|
4,731,150 | 5.1 | ||||||||
|
Named executive officers and directors: |
||||||||||
|
|
53,707,727 | 49.99 | ||||||||
|
|
2,997,394 | 3.2 | ||||||||
|
|
1,438,279 | 1.6 | ||||||||
|
|
76,380 | * | ||||||||
|
Christopher G. Hayes(8) |
542,196 | * | ||||||||
|
|
64,812 | * | ||||||||
|
|
66,712 | * | ||||||||
|
|
20 | * | ||||||||
|
|
522,181 | * | ||||||||
|
|
178,467 | * | ||||||||
|
|
95,614 | * | ||||||||
|
All current executive officers and directors as a group (11 persons)(12) |
59,550,707 | 54.0 | % | |||||||
| * |
Represents beneficial ownership of less than 1% |
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| (1) |
This information has been obtained, in part, from a Schedule 13D/A filed on |
| (2) |
This information has been obtained, in part, from a Schedule 13G filed on |
| (3) |
This information has been obtained from a Schedule 13G filed on |
33
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|
common stock would be aggregated with such holder's for the purposes of Section 13(d) of the Exchange Act and the applicable regulations of |
| (4) |
This information has been obtained from a Schedule 13G/A filed on |
| (5) |
Consists of (a) 1,873,800 shares of common stock and (b) 1,123,594 shares of common stock issuable upon the exercise of warrants within 60 days of |
| (6) |
Consists of (a) 889,881 shares of common stock, (b) 267,500 shares of common stock issuable upon the exercise of options within 60 days of |
| (7) |
Consists solely of common stock underlying options that are exercisable within 60 days of |
| (8) |
Consists of (a) 146,458 shares of common stock and (b) 395,738 shares of common stock issuable upon the exercise of options within 60 days of |
| (9) |
Consists of (a) 100 shares of common stock and (b) 64,712 shares of common stock issuable upon the exercise of options within 60 days of |
| (10) |
Consists of shares of common stock. |
| (11) |
Consists of (a) 79,261 shares of common stock and (b) 442,920 shares of common stock issuable upon the exercise of options within 60 days of |
| (12) |
Consists of (a) 41,135,305 shares of common stock, (b) 1,313,962 shares of common stock issuable upon the exercise of options within 60 days of |
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EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information regarding compensation earned with respect to the years ended
|
Position |
Year | Salary ($) |
Stock Awards ($) |
Option Awards ($)(2) |
Non-Equity Incentive Plan Compensation ($)(3) |
All Other Compensation ($) |
Total ($) |
|||||||||||||||||||||
|
President and Chief Executive Officer |
2024 | 47,727 | - | 1,187,744 | - | 754 | 1,236,225 | |||||||||||||||||||||
|
Christopher G. Hayes Chief Legal Officer |
2024 | 466,000 | 192,000 | (1) | 354,719 | - | 15,343 | (5) | 1,028,062 | |||||||||||||||||||
| 2023 | 424,000 | 1,137,000 | 817,925 | 169,600 | 13,779 | 2,561,674 | ||||||||||||||||||||||
|
Former Chief Medical Officer |
2024 | 462,800 | 192,000 | (1) | 304,326 | - | 14,191 | (7) | 973,317 | |||||||||||||||||||
|
Former President and Chief Executive Officer |
2024 | (8) | 527,618 | 540,000 | (1) | 855,918 | - | 670,846 | (9) | 2,594,832 | ||||||||||||||||||
| 2023 | 600,600 | 1,137,000 | 1,452,968 | 300,300 | 13,779 | 3,504,647 | ||||||||||||||||||||||
|
Former Chief Commercial Officer |
2024 | (10) | 307,840 | 192,000 | (1) | 304,326 | - | 474,872 | (11) | 1,279,038 | ||||||||||||||||||
| 2023 | 444,000 | 947,500 | 514,593 | 177,600 | 13,779 | 2,097,472 | ||||||||||||||||||||||
| (1) |
In accordance with |
| (2) |
The amounts reflect the full grant date fair value for option awards granted during the indicated year. The grant date fair value was computed in accordance with ASC Topic 718, Compensation-Stock Compensation. Consistent with the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note 8 to our audited financial statements included in our Annual Report on Form 10-Kfor the year ended |
| (3) |
The amounts reflect the portion of each named executive officer's target bonus earned based on the achievement of our corporate goals, which are discussed further below under "-Narrative to Summary Compensation Table-Annual Bonus." |
| (4) |
|
| (5) |
Amount includes (a) 401(k) matching contributions of |
| (6) |
|
| (7) |
Amount includes (a) 401(k) matching contributions of |
| (8) |
|
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| (9) |
Amount includes (a) salary continuation payments of |
| (10) |
|
| (11) |
Amount includes (a) salary continuation payments of |
Outstanding Equity Awards as of
The following table sets forth certain information about equity awards granted to our named executive officers that remain outstanding as of
| Option Awards(1) | Stock Awards | |||||||||||||||||||||||
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(2) |
||||||||||||||||||
|
|
- | 2,000,000 | (3) | 0.7463 | - | - | ||||||||||||||||||
|
Christopher G. Hayes |
-
- |
50,000
80,000 |
(4)
(5) |
1.28
4.80 |
||||||||||||||||||||
| 59,062
53,125 |
75,938
21,875 |
(6)
(7) |
7.58
8.00 |
|||||||||||||||||||||
| 60,937
55,000 |
4,063 | (8) | 14.32
11.81 |
|||||||||||||||||||||
| 35,000
58,343 |
-
- |
11.32
16.32 |
||||||||||||||||||||||
| 40,000 | (9) | 28,000 | ||||||||||||||||||||||
|
|
- 37,187 |
80,000
47,813 |
(5)
(6) |
4.80
7.58 |
||||||||||||||||||||
| 53,125
60,937 |
21,875
4,063 |
(7)
(8) |
8.00
14.32 |
|||||||||||||||||||||
| 250,000
5,834 |
-
- |
6.56
11.38 |
||||||||||||||||||||||
| 5,834
17,502 |
-
- |
8.93
15.00 |
||||||||||||||||||||||
| 40,000 | (9) | 28,000 | ||||||||||||||||||||||
|
|
100,000
133,333 |
-
- |
7.58
8.00 |
|||||||||||||||||||||
| 146,666
125,000 100,000 |
-
- - |
14.32
11.81 11.32 |
||||||||||||||||||||||
|
|
33,645
48,437 |
-
- |
7.58
8.00 |
|||||||||||||||||||||
| 58,229
55,000 61,260 |
-
- - |
14.32
11.81 11.32 |
||||||||||||||||||||||
| (1) |
All of the option awards granted prior to our initial public offering in |
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| (2) |
The market value amount is calculated based on the closing price of our common stock of |
| (3) |
The shares of common stock underlying this option vest and become exercisable over a four-year period as to 1/8th of the common stock underlying the option on |
| (4) |
50% of the shares of common stock underlying this option vest and become exercisable on |
| (5) |
The shares of common stock underlying this option vest and become exercisable over a four-year period as to 25% of the common stock underlying the option on |
| (6) |
The remaining unvested shares of common stock underlying this option vest and become exercisable in 27 equal monthly installments until |
| (7) |
The remaining unvested shares of common stock underlying this option vest and become exercisable in 14 equal monthly installments until |
| (8) |
The remaining unvested shares of common stock underlying this option vest and become exercisable in 3 equal monthly installments until |
| (9) |
These shares represent RSUs granted in |
Narrative to Summary Compensation Table
We review compensation annually for all employees, including our executives. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our company. We do not target a specific competitive position or a specific mix of compensation among base salary, bonus or long-term incentives.
The Compensation Committee of our Board of Directors has historically determined our executives' compensation. Our Compensation Committee typically reviews and discusses management's proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those discussions and its discretion, the Compensation Committee then recommends the compensation for each executive officer. Our Compensation Committee, without members of management present, discusses and ultimately approves the compensation of our executive officers.
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Annual Base Salary
We have entered into employment agreements with each of our named executive officers that establish annual base salaries, which are generally determined, approved and reviewed periodically by our Compensation Committee in order to compensate our named executive officers for the satisfactory performance of duties to us. The following table presents the annual base salaries for each of our named executive officers for the years indicated.
|
|
2025 Base Salary ($) |
2024 Base Salary ($) |
||||||
|
|
300,000 | 300,000 | ||||||
|
Christopher G. Hayes |
466,000 | 466,000 | ||||||
|
|
- | 462,800 | ||||||
|
|
- | 624,624 | ||||||
|
|
- | 461,760 | ||||||
| (1) |
|
| (2) |
|
| (3) |
|
| (4) |
|
Annual Bonus
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations for each fiscal year. Each named executive officer has a target bonus opportunity, defined as a percentage of his annual salary, as set forth below:
|
|
2025 Target Bonus as a Percentage of Base Salary |
2024 Target Bonus as a Percentage of Base Salary |
||||||||
|
|
40% | 40% | ||||||||
|
Christopher G. Hayes |
45% | 45% | ||||||||
|
|
- | 40% | ||||||||
|
|
- | 60% | ||||||||
|
|
- | 40% | ||||||||
| (1) |
|
| (2) |
|
| (3) |
|
To reinforce the importance of integrated and collaborative leadership, our executives' bonuses have historically been solely based on company performance, and we did not include an individual performance component. For 2024, the corporate performance goals consisted of clinical development, compliance, regulatory and financial objectives. For 2024, our Compensation Committee determined that the corporate performance goals had been achieved at a 25% level in the aggregate and exercised its discretion not to pay cash bonuses for 2024 corporate performance.
In addition, for 2025, the Compensation Committee approved a cash incentive program pursuant to which our executive officers have aggregate cash bonus opportunities as detailed below, which can be earned based on the
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achievement of specified sales metrics and financial milestones during the year ending
|
|
Maximum Aggregate Payment under 2025 Cash Incentive Program |
||||
|
|
$ | 175,000 | |||
|
Christopher G. Hayes |
$ | 100,000 | |||
|
|
$ | 100,000 | |||
|
|
$ | 100,000 | |||
Equity-Based Awards
Our equity-based incentive awards granted to our named executive officers are designed to align the interests of our named executive officers with those of our stockholders. Vesting of equity awards is generally tied to each officer's continuous service with us and serves as an additional retention measure. Our executives generally are awarded an initial new hire grant upon commencement of employment. Additional grants may occur periodically in order to specifically incentivize executives with respect to achieving certain corporate goals or to reward executives for exceptional performance.
In connection with its annual compensation review, our Compensation Committee granted options to purchase shares of our common stock to certain of our named executive officers, as detailed below, on
|
|
Number Of Shares Underlying Option Grant |
Exercise Price Per Share |
Vesting Schedule |
||||||||||||
|
|
850,000 | $ | 0.89 | (1) | |||||||||||
|
Christopher G. Hayes |
250,000 | $ | 0.89 | (2) | |||||||||||
| (1) |
1/8th of the total shares subject to the option shall vest on |
| (2) |
50% of the total shares subject to the option vest on |
For additional information about equity grants made historically to our named executive officers, please see "-Outstanding Equity Awards as of
Employment Arrangements and Potential Payments upon Termination of Employment or Change in Control
We have entered into employment agreements with each of our current named executive officers.
We entered into an offer letter with
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Pursuant to the terms of his employment agreement,
We entered into an employment agreement with
Pursuant to the terms of his employment agreement,
If
| • |
payment of his then-current base salary in accordance with normal payroll procedures for the applicable severance period; and |
| • |
payment or reimbursement of continued health coverage for |
If
| • |
payment of his then-current base salary in accordance with normal payroll procedures for 12 months; |
| • |
payment of a cash severance benefit equal to |
| • |
payment or reimbursement of continued health coverage for |
| • |
all equity awards held by |
In connection with his resignation from employment as our Chief Medical Officer, on
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In connection with his resignation from employment as our President and Chief Executive Officer, on
In connection with his resignation from employment as our Chief Commercial Officer, on
Retirement Benefits and Other Compensation
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension, retirement or deferred compensation plan sponsored by us during 2024 other than our 401(k) plan described below. Our named executive officers were eligible to participate in our employee benefits, including health insurance and group life insurance benefits, on the same basis as our other employees. We maintain a 401(k) plan intended to qualify as a tax-qualifiedplan under Section 401 of the Code, which our named executive officers are eligible to participate in on the same basis as our other employees. Participants may elect to make both pre- and post-taxcontributions to their accounts in the 401(k) plan, and we match 100% of those contributions up to 4% of employee deferral. We generally do not provide perquisites or personal benefits, and we did not provide any perquisites or personal benefits to our named executive officers in 2024 other than those provided to all employees.
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and
Protection Act and Item 402(v) of Regulation
we are providing the following information about the relationship between the
"compensation actually paid" to our named executive officers ("NEOs") and certain of our financial performance metrics during the fiscal years listed below. For the most recently completed fiscal year, we did not use any "financial performance measures" as defined Item 402(v) of Regulation
to link compensation paid to our NEOs. Accordingly, we have omitted the tabular list of financial performance measures and the table below does not include a column for a "Company-Selected Measure" as defined in Item 402(v) of Regulation
For further information regarding our compensation philosophy and how we seek to align executive compensation with our performance, refer to "Executive Compensation." The disclosure included in this section is prescribed by
|
Year
|
Summary
Compensation Table Total for PEO - Ted White ($) (1)
|
Compensation
actually paid to PEO - Ted White ($) (2)
|
Summary
Compensation Table Total for PEO - Jayson Rieger ($) (3)
|
Compensation
actually paid to PEO - Jayson Rieger ($) (4)
|
Average
Summary Compensation Table Total for NON-PEO NEOs
($) (5)
|
Average
Compensation actually paid to Non-PEO NEOs
($) (6)
|
Value of initial
fixed investment based on total shareholder retu(TSR) ($) (7)
|
Net Loss
(in millions) ($) (8)
|
||||||||||||||||||||||||
|
2024
|
2,594,382 | (467,917 | ) | 1,236,225 | 1,061,427 | 1,192,879 | (1,732 | ) | 7.64 | (76.6 | ) | |||||||||||||||||||||
|
2023
|
3,504,847 | 4,638,908 | - | - | 2,329,573 | 2,806,409 | 79.91 | (67.0 | ) | |||||||||||||||||||||||
|
2022
|
1,935,833 | (798,654 | ) | - | - | 987,849 | (153,491 | ) | 30.02 | (24.5 | ) | |||||||||||||||||||||
| (1) |
The dollar amounts reported are the amounts of total compensation reported for
|
| (2) |
The dollar amounts reported represent the amount of "compensation actually paid" to
S-K.
In accordance with the requirements of Item 402(v) of Regulation S-K,
the following adjustments were made to |
|
Year
|
Total
Compensation from Summary Compensation Table total ($) |
Adjustment
for Grant Date Values in the Summary Compensation Table ($) |
Year-End
Fair Value of
Unvested Awards Granted in the
Current Year ($) |
Year-over-
Year Difference of Year- End Fair Values for Unvested Awards Granted in |
Fair
Values at Vest Date for Awards Granted and Vested in Current Year ($) |
Difference in
Fair Values between Prior Year-End Fair
Values and Vest-Date fair
Values for |
Prior
year-end
fair values years that
failed to meet vesting
conditions ($)
|
Total
Adjustments for Equity Awards ($) |
Compensation
Actually Paid
($) |
|||||||||||||||||||||||||||
|
2024
|
2,594,382 | (1,395,918 | ) | - | - | - | (639,051 | ) | (1,027,330 | ) | (3,062,299 | ) | (467,917 | ) | ||||||||||||||||||||||
|
2023
|
3,504,847 | (2,589,968 | ) | 1,736,665 | 884,677 | 327,000 | 775,687 | - | 1,134,061 | 4,638,908 | ||||||||||||||||||||||||||
|
2022
|
1,935,833 | (1,163,066 | ) | 275,571 | (1,525,788 | ) | - | (321,204 | ) | - | (2,734,487 | ) | (798,654 | ) | ||||||||||||||||||||||
| (3) |
The dollar amounts reported are the amounts of total compensation reported for
|
| (4) |
The dollar amounts reported represent the amount of "compensation actually paid" to
as computed in accordance with Item 402(v) of Regulation S-K.
In accordance with the requirements of Item 402(v) of Regulation S-K,
the following adjustments were made to |
|
Year
|
Total
Compensation from Summary Compensation Table total ($) |
Adjustment for
Grant Date Values in the Summary Compensation Table ($) |
Year-End
Fair Value |
Year-over-
Year of Year-End
Fair |
Fair Values
at Vest Date for Awards Granted and Vested in Current Year ($) |
Difference in
Fair Values between Prior Year-End Fair
Values and Vest-Date
fair |
Prior
year-end
fair values ($)
|
Total
Adjustments for Equity Awards ($) |
Compensation
Actually Paid
($) |
|||||||||||||||||||||||||||
|
2024
|
1,236,225 | (1,187,744 | ) | 1,012,946 | - | - | - | - | (174,798 | ) | 1,061,427 | |||||||||||||||||||||||||
|
2023
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
|
2022
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| (5) |
The dollar amounts reported represent the average of the amounts reported for the NEOs as a group (excluding the PEO) in the "Total" column of the Summary Compensation Table in each applicable year. The NEOs (excluding the PEO) included for purposes of calculating the average amounts are,
|
| (6) |
The dollar amounts reported in this column represent the average amount of "compensation actually paid" to the NEOs as a group (excluding the PEO), as computed in accordance with Item 402(v) of
Regulation S-K.
In accordance with the requirements of Item 402(v) of Regulation S-K,
the following adjustments were made to average total compensation for the NEOs as a group (excluding the PEO) for each year to determine the compensation actually paid. |
|
Year
|
Total
Compensation from Summary Compensation Table total ($) |
Adjustment for
Grant Date Values in the Summary Compensation Table ($) |
Year-End
Fair Value |
Year-over-
Year of Year-End
Fair |
Fair Values
at Vest Date for Awards Granted and Vested in Current Year ($) |
Difference in
Fair Values between Prior Year-End Fair
Values and |
Prior
year-end
fair values |
Total
Adjustments for Equity Awards ($) |
Compensation
Actually Paid
($) |
|||||||||||||||||||||||||||
|
2024
|
1,192,879 | (559,772 | ) | 46,357 | (165,517 | ) | - | (371,986 | ) | (143,693 | ) | (1,194,611 | ) | (1,732 | ) | |||||||||||||||||||||
|
2023
|
2,329,573 | (1,708,194 | ) | 1,047,596 | 437,433 | 299,750 | 400,251 | - | 476,836 | 2,806,409 | ||||||||||||||||||||||||||
|
2022
|
987,849 | (436,149 | ) | 51,669 | (680,104 | ) | - | (76,756 | ) | - | (1,141,340 | ) | (153,491 | ) | ||||||||||||||||||||||
| (7) |
Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our stock price at the end and the beginning of the measurement period by our stock price at the beginning of the measurement period.
|
| (8) |
The dollar amounts reported represent the amount of net loss reflected in our audited financial statements for the applicable year.
|
Versus Performance table. Moreover, we generally seek to incentivize long-term performance, and therefore does not specifically align company performance measures with "compensation actually paid" (as computed in accordance with Item 402(v) of Regulation
for a particular year. In accordance with Item 402(v) of Regulation
we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above.
NEOs, as calculated pursuant to
to our PEOs and our
NEOs, as calculated pursuant to
above under the "Pay Versus Performance" heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent we specifically incorporate such information by reference.
Table of Contents
DIRECTOR COMPENSATION
The following table sets forth information regarding the compensation earned for service on our Board of Directors during the year ended
|
|
Fees Earned or Paid in Cash ($) |
Option Awards ($)(1)(2) |
Total ($) | |||||||||
|
Paul B. Manning |
- | - | - | |||||||||
|
|
70,000 | 131,900 | 201,900 | |||||||||
|
|
- | - | - | |||||||||
|
|
40,000 | 131,900 | 171,900 | |||||||||
|
|
60,000 | 131,900 | 191,900 | |||||||||
|
|
48,750 | 131,900 | 180,650 | |||||||||
| (1) |
The amounts reported do not reflect the amounts actually received by our non-employeedirectors. Instead, these amounts reflect the aggregate grant date fair value of each stock option granted to our non-employeedirectors during the fiscal year ended |
| (2) |
As of |
| (3) |
|
Non-EmployeeDirector Compensation Policy
Our Board of Directors adopted a non-employeedirector compensation policy that became effective in
Each eligible director receives an annual cash retainer of
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In addition, each new eligible director who joins our Board of Directors will be granted a non-statutorystock option to purchase 17,502 shares of common stock under our 2018 Plan, with one-thirdof the shares vesting on the first anniversary of the date of grant and the remaining shares vesting in 24 equal monthly installments thereafter, subject to continued service as a director through the applicable vesting date.
On the date of each annual meeting of our stockholders, each eligible director who continues to serve as a director of our company following the meeting will be granted a non-statutorystock option to purchase 20,000 shares of our common stock under our 2018 Plan, vesting in 12 equal monthly installments following the grant date and in any event will be fully vested on the date of the next annual meeting of our stockholders, subject to continued service as a director though the applicable vesting date.
Each option awarded to eligible directors under the non-employeedirector compensation policy, as amended, is subject to accelerated vesting upon a Change in Control (as defined in the 2018 Plan). The exercise price per share of each stock option granted under the non-employeedirector compensation policy is equal to the closing price of our common stock on the Nasdaq Global Market on the date of grant. Each stock option has a term of ten years from the date of grant, subject to earlier termination in connection with a termination of the eligible director's continuous service with us (provided that upon a termination of service other than for death, disability or cause, the post-termination exercise period will be 12 months from the date of termination).
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Table of Contents
option awards on or soon after a new hire's employment start date and annual refresh employee option grants in the first quarter of each fiscal year, which refresh grants are typically approved at the regularly scheduled meeting of the Compensation Committee occurring in such quarter. Also,
directors receive automatic grants of initial and annual stock option awards, at the time of a director's initial appointment or election to the board and at the time of each annual meeting of our stockholders, respectively, pursuant to our
director compensation policy, as further described under the heading,
Director Compensation-Narrative to Director Compensation Table" above. We do not otherwise maintain any written policies on the timing of awards of stock options, stock appreciation rights, or similar instruments with option-like features. The Compensation Committee considers whether there is any material nonpublic information about us when determining the timing of stock option grants and does
the award of stock options in relation to our public disclosure of material nonpublic information. We have not timed the release of material nonpublic information for the purpose of affecting the value of executive compensation.
|
Name
|
Grant Date
|
Number of Securities
Underlying the Award |
Exercise
Price of the Award (s) |
Grant Date
Fair Value of the Award ($)
(1)
|
Percentage Change in
the Closing Market Price of the Securities Underlying the Award Between the Trading Day Ending Immediately Prior to the Disclosure of Material Nonpublic Information and the Trading Day Beginning Immediately Following the Disclosure of Material Nonpublic Information
|
||||||||||||||||||||
|
|
2,000,000 | 0.7463 | 1,187,744 | (47.81%)
(2)
|
|||||||||||||||||||||
|
Christopher G. Hayes
|
50,000 | 1.28 | 50,500 | 0%
(3)
|
|||||||||||||||||||||
| (1) |
The amounts reflect the full grant date fair value, computed in accordance with ASC Topic 718. Consistent with the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note 8 to our audited financial statements included in our Annual Report on Form
10-K
for the year ended |
| (2) |
We filed our Quarterly Report on Form
10-Q
for the quarter ended pre-market
on |
| (3) |
We filed a Current Report on Form
8-K
after market close on |
Table of Contents
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table shows information regarding our equity compensation plans as of
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights(a) |
Weighted- average exercise price of outstanding options, warrants and rights(b) ($) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(c) |
|||||||||
|
Equity compensation plans approved by security holders |
5,439,887 | (1) | 5.35 | (2) | 4,193,089 | (3) | ||||||
|
Equity compensation plans not approved by security holders(4) |
2,950,000 | 0.81 | 1,550,000 | |||||||||
|
Total |
8,389,887 | 4.72 | 5,743,089 | |||||||||
| (1) |
Consists of shares underlying options and restricted stock units granted pursuant to our 2013 Plan and 2018 Plan. |
| (2) |
The weighted-average exercise price includes 384,267 shares included in column a that are issuable upon vesting of restricted stock units which have no exercise price. The weighted average exercise price of the outstanding options was |
| (3) |
Consists of shares available under the 2018 Plan as of |
| (4) |
Represents securities underlying our 2024 Inducement Plan. |
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Table of Contents
TRANSACTIONS WITH RELATED PERSONS
Related-Person Transactions Policy and Procedures
We have adopted a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body of our Board of Directors, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our Code of Conduct, our employees and directors will have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our Audit Committee, or other independent body of our Board of Directors, will take into account the relevant available facts and circumstances including:
| • |
the risks, costs and benefits to us; |
| • |
the impact on a director's independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
| • |
the availability of other sources for comparable services or products; and |
| • |
the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. |
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit Committee, or other independent body of our Board of Directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or other independent body of our Board of Directors, determines in the good faith exercise of its discretion.
Certain Related Party Transactions
The following is a summary of transactions since
50
Table of Contents
Clinical Service Agreement with
On
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers. The indemnification agreements and our amended and restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by
51
Table of Contents
HOUSEHOLDING OF PROXY MATERIALS
The
This year, a number of brokers with account holders who are our stockholders will be "householding" our proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be "householding" communications to your address, "householding" will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker or us. Direct your written request to
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ Christopher G. Hayes
Christopher G. Hayes
Secretary
Dated:
A copy of our Annual Report on Form 10-Kfor the fiscal year ended
52
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CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
(Pursuant to Section 242 of the General Corporation Law of the
DOES HEREBY CERTIFY:
| 1. |
The name of this Corporation is |
| 2. |
A resolution was duly adopted by the Board of Directors of the Corporation pursuant to Sections 141 and 242 of the General Corporation Law proposing this amendment of the Corporation's Amended and Restated Certificate of Incorporation and declaring the advisability of this amendment of the Amended and Restated Certificate of Incorporation, which resolution setting forth the proposed amendment is as follows: |
RESOLVED, that Article IV of the Amended and Restated Certificate of Incorporation be amended by inserting into Article IV immediately following Section C the following:
D.Effective as of the effective time of [5:00] p.m., EasteTime, on [Date] (the "Effective Time"), each [ten (10) / eleven (11) / twelve (12) / thirteen (13) / fourteen (14) / fifteen (15) / sixteen (16) / seventeen (17) / eighteen (18) / nineteen (19) / twenty (20) / twenty-one(21) / twenty-two(22) / twenty-three (23) / twenty-four (24) / twenty-five (25) / twenty-six(26) / twenty-seven (27) / twenty-eight (28) / twenty-nine (29) / thirty (30)](1) shares of Common Stock issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the Corporation or the respective holders thereof, be combined into one (1) share of Common Stock without increasing or decreasing the par value of each share of Common Stock or the authorized number of shares of Common Stock (the "Reverse Split"); provided, however, that no fractional shares of Common Stock shall be issued as a result of the Reverse Split and, in lieu thereof, upon receipt after the Effective Time by the exchange agent selected by the Corporation of a properly completed and duly executed transmittal letter and, where shares are held in certificated form, the surrender of the stock certificate(s) formerly representing shares of pre-ReverseSplit Common Stock, any stockholder who would otherwise be entitled to a fractional share of post-Reverse Split Common Stock as a result of the Reverse Split, following the Effective Time (after taking into account all fractional shares of post-Reverse Split Common Stock otherwise issuable to such stockholder), shall be entitled to receive a cash payment (without interest) equal to the fractional share of post-Reverse Split Common Stock to which such stockholder would otherwise be entitled multiplied by the average of the closing sales prices of a share of the Corporation's Common Stock (as adjusted to give effect to the Reverse Split) on the Nasdaq Global Market during regular trading hours for the five (5) consecutive trading days immediately preceding the Effective Time. Each stock certificate that, immediately prior to the Effective Time, represented shares of pre-ReverseSplit Common Stock shall, from and after the Effective Time, automatically and without any action on the part of the Corporation or the respective holders thereof, represent that number of whole shares of post-Reverse Split Common Stock into which the shares of pre-ReverseSplit Common Stock represented by such certificate shall have been combined (as well as the right to receive cash in lieu of any fractional shares of post-Reverse Split Common Stock as set forth above; provided, however, that each holder of record of a certificate that represented shares of pre-ReverseSplit Common Stock shall
A-1
Table of Contents
receive, upon surrender of such certificate, a new certificate representing the number of whole shares of post-Reverse Split Common Stock into which the shares of pre-ReverseSplit Common Stock represented by such certificate shall have been combined pursuant to the Reverse Split, as well as any cash in lieu of fractional shares of post-Reverse Split Common Stock to which such holder may be entitled as set forth above. The Reverse Split shall be effected on a record holder-by-recordholder basis, such that any fractional shares of post-Reverse Split Common Stock resulting from the Reverse Split and held by a single record holder shall be aggregated.
| 3. |
Thereafter, pursuant to a resolution of the Board of Directors, this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval, and was duly adopted at an annual meeting of the stockholders of the Corporation, in accordance with the provisions of Section 242 of the General Corporation Law of the |
[Signature page follows]
| (1) |
These amendments approve the combination of any whole number of shares of Common Stock between and including ten (10) and thirty (30) into one (1) share of Common Stock. By these amendments, the stockholders would approve each of the alternate amendments proposed by the Board of Directors. If the reverse stock split proposal is approved by stockholders, the Certificate of Amendment filed with the Secretary of State of the |
A-2
Table of Contents
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this day of 20__.
| By: | ||
| Title: | ||
A-3
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Table of Contents
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-Kare available at www.proxyvote.com. V71988-P31235
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