DEF 14A of Heron Therapeutics, Inc. /De/, Apr 29, 2024

DEF 14A of Heron Therapeutics, Inc. /De/

Filed Apr 29, 2024 · FY20230001140361-24-022881

Open on EDGAR

  1. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    INFORMATION CONCERNING THE BOARD OF DIRECTORS Certain information regarding each of our director nominees, including each nominee’s age, experience, qualifications, attributes and skills that led the Board to conclude that the individual should serve on the Board and each nominee’s principal occupation and directorships during the past five years, is set forth below:

  2. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    | Name | Age | Position | Director Since | | Craig Collard | 58 | Chief Executive Officer and Director | 2023 | | Sharmila Dissanaike, M.D., FACS, FCCM | 49 | Director | 2021 | | Craig Johnson | 62 | Director | 2014 | | Adam Morgan | 45 | Chairman of the Board | 2023 | | Susan Rodriguez | 60 | Director | 2021 | | Christian Waage | 57 | Director | 2016 |

  3. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    Craig Collard has served as a director of Heron since February 2023 and as Chief Executive Officer since April 2023. Mr. Collard most recently served as the Chief Executive Officer of Veloxis Pharmaceutics A/S (now Veloxis Pharmaceuticals Inc., “Veloxis”) before it was acquired by Asahi Kasei Corp, a transplant focused pharmaceutical company with its principal office in Cary, North Carolina, from 2015 to December 2021. Prior to joining Veloxis, Mr. Collard served as the Chief Executive Officer and the Chairman of the Board of Directors of Cornerstone Therapeutics, Inc., a pharmaceutical company (“Cornerstone”), from 2011 until it was acquired by Chiesi Farmaceutici S.p.A. in 2014. Mr. Collard also served as Cornerstone’s Interim Chief Financial Officer, from 2010 to 2011, and as its President, from 2008 to 2011. Mr. Collard served as the Founder, President and Chief Executive Officer of Cornerstone BioPharma Inc. (formerly Cornerstone BioPharma Holdings, Ltd.), a pharmaceutical company, and as a member of its board of directors, from 2004 to 2008. Prior to that, Mr. Collard served as President and Chief Executive Officer of Carolina Pharmaceuticals, Inc., a specialty pharmaceutical company that he founded in 2003. Mr. Collard currently serves on the board of directors of TerrAscend Corp., a North American cannabis operator based in Mississauga, Canada, since December 2018. Mr. Collard previously served as a member of the board of directors of Sierra Oncology, Inc., a San Mateo, California-based late-stage biopharmaceutical company acquired by GlaxoSmithKline plc, from May 2020 to July 2022. He also served as Chairman of Opiant Pharmaceuticals, Inc., a specialty pharmaceutical company in Santa Monica, California developing therapies to treat substance and use disorders and drug overdose since October 2018 until it was acquired by Indivior on March 1, 2023. Mr. Collard holds a B.S. in Engineering from the Southern College of Technology (now Southern Polytechnic State University). Mr. Collard was initially appointed as a director of the Company pursuant to a Cooperation Agreement, dated as of February 21, 2023 (the ‘‘Cooperation Agreement”), by and between the Company, Rubric Capital Management LP and certain of its affiliates and Velan Capital Investment Management LP and certain of its affiliates, regarding changes to the composition of the Board and other related matters. The Board has concluded that Mr. Collard should serve as a director based on his experience in senior management, commercial operations, and as a director with other biotechnology and pharmaceutical companies. Sharmila Dissanaike, M.D., FACS, FCCM has served as a director of Heron since September 2021. Dr. Dissanaike has been University Distinguished Professor and Peter C. Canizaro Chair of the Department of Surgery at Texas Tech University Health Sciences Center (TTUHSC) since 2016. In addition, from 2015 to 2018, Dr. Dissanaike served as Interim Director of the Timothy J. Harnar Burn Center at University Medical Center in Lubbock, Texas (UMC). From 2014 to 2017, Dr. Dissanaike served as Trauma Medical Director of the John A. Griswold Level 1 Trauma Center at UMC. In January 2021, she was appointed to the Texas Medical Board by Governor Greg Abbott. Dr. Dissanaike is a clinically active trauma, burn and acute care surgeon who has won over 50 awards for clinical, academic and research excellence and service during her career. Dr. Dissanaike has published over 100 peer-reviewed scientific articles, in addition to numerous book chapters, peer-reviewed presentations and national and international invited lectureships. Dr. Dissanaike holds multiple national leadership and quality assurance roles including Chair of the American Burn Association Verification Committee, member of the American College of Surgeons Trauma Verification Committee and Committee on Trauma, and Board member of each of the American Burn Association and Southwestern Surgical Congress. She serves the American College of Surgeons as Governor and on the Committee for Ethics, the Advisory Council of Rural Surgery and Program Committee, highlighting her wide array of interests and longstanding dedication to advancing all aspects of surgical care. Dr. Dissanaike received her medical degree from the University of Sydney, Australia and her undergraduate degree from Methodist College in Colombo, Sri Lanka. Dr. Dissanaike completed her postgraduate medical training at the University of Washington at Harborview Medical Center, the Department of Surgery at TTUHSC, the Department of Surgery at Albert Einstein College of Medicine at Beth Israel Medical Center and the Department of Medicine at Inverclyde Hospital, National Health Service. The Board has concluded that Dr. Dissanaike should serve as a director based on her experience and achievements in surgical medicine. Craig Johnson has served as a director of Heron since 2014. He also serves as a director of Odonate, Inc. Mr. Johnson previously served as a director of Mirati Therapeutics, Inc. from 2013 until its acquisition by Bristol Myers Squibb in 2024, La Jolla Pharmaceutical Company from 2013 until its acquisition by Innoviva, Inc. in 2022, Decipher Biosciences, Inc. from 2015 to 2018, Adamis Pharmaceuticals Corporation from 2011 to 2014, and Ardea Biosciences, Inc. from 2008 until its acquisition by AstraZeneca PLC in 2012. Mr. Johnson served as Vice President and Chief Financial Officer of TorreyPines Therapeutics, Inc. from 2004 until its sale to Raptor Pharmaceuticals Corp. in 2009, and then as Vice President of a wholly-owned subsidiary of Raptor Pharmaceutical Corp. from 2009 to 2010. From 1994 to 2004, he held various positions at MitoKor, Inc., concluding his service as Chief Financial Officer and Senior Vice President of Operations. Mr. Johnson practiced as a Certified Public Accountant with Price Waterhouse, and he received a B.B.A. degree in accounting from the University of Michigan-Dearborn. The Board has concluded that Mr. Johnson should serve as a director based on his experience serving as a director of biotechnology companies and his expertise in financial management.

  4. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    Adam Morgan has served as a director of Heron since February 2023 and as Chairman of the Board since April 2023. Beginning in 2020, Mr. Morgan has served as the Chief Investment Officer of Velan Capital Investment Management LP, a healthcare-dedicated investment firm based in Alpharetta, Georgia. Mr. Morgan also currently serves on the board of directors of Alimera Sciences, Inc., where he serves as Chairman of the board, and Health Outlook Corporation, a privately-held developer of predictive healthcare technology and service based in New York, New York, where he serves as a director and chair of the audit committee. Previously, Mr. Morgan served as Senior Analyst at Broadfin Capital, LLC, a healthcare dedicated investment firm based in New York, New York, where he covered the Biotech and Pharmaceutical sectors, from February 2018 to June 2020. Prior to that, Mr. Morgan served as Senior Analyst at Iguana Healthcare Partners LLC, a healthcare-dedicated investment firm based in New York, New York, where he covered Medical Devices and Specialty Pharmaceuticals, from 2015 to January 2018. Mr. Morgan also served as Analyst at Pura Vida Investments, LLC, a healthcare-focused investment firm, where he covered global Medical Devices, from 2014 to 2015. Earlier in his career, Mr. Morgan served as a Research Associate at Cowen and Company (a subsidiary of Cowen Inc.), a financial services company, on the firm’s Medical Supplies and Devices team, from January 2014 to June 2014. Mr. Morgan received his B.S. in Chemistry from the University of Minnesota and his MBA from the Carlson School of Management at the University of Minnesota. Mr. Morgan was initially appointed as a director of the Company pursuant to the Cooperation Agreement. The Board has concluded that Mr. Morgan should serve as a director based on extensive investment experience and operational background focused on the healthcare and biotechnology sectors as well as his corporate governance expertise. Susan Rodriguez has served as a director of Heron since September 2021. Ms. Rodriguez has more than 25 years of experience in the biopharmaceutical industry, serving in senior commercial and operational management roles. Ms. Rodriguez has served as Chief Commercial Officer of Ardelyx, Inc. since May 2020. From 2014 to 2019, Ms. Rodriguez served as the Chief Executive Officer of Tolmar Pharmaceuticals, Inc. (“Tolmar”), a U.S. commercial specialty oncology company, for which in 2019, Ms. Rodriguez was named President of the branded division upon the formation of the global entity, Tolmar, Inc. At Tolmar, Ms. Rodriguez built out their U.S. specialty pharmaceutical business to become a market leader, which required establishing commercial presence in both 340B and private hospitals. Prior to Tolmar, from 1990 to 2014, Ms. Rodriguez held various positions of increasing responsibility at Abbott Laboratories (“Abbott”), most recently as Divisional Vice President of Global Marketing, where she led the global marketing function for an international portfolio of Abbott products. Prior to this role, Ms. Rodriguez served as the Vice President and General Manager of the Abbott Renal Franchise. Ms. Rodriguez received both a M.S. and B.S. in Psychology from the University of Pennsylvania. The Board has concluded that Ms. Rodriguez should serve as a director based on her experience in senior management and commercial operations with other biotechnology and pharmaceutical companies. Christian Waage has served as a director of Heron since 2016. Mr. Waage has more than 15 years of regulatory, legal and financial transaction experience, primarily in the biotechnology industry. Since 2017, he has served as Executive Vice President and General Counsel of Gossamer Bio, Inc., a publicly traded biotechnology company. From 2013 to 2016, Mr. Waage held various positions at Receptos, Inc., a wholly owned subsidiary of Celgene Corporation, most recently serving as Managing Director. Prior to its acquisition by Celgene Corporation in 2015, he served as Senior Vice President and General Counsel of Receptos, Inc. From 2012 through its acquisition by Vista Equity Partners Management, LLC in 2013, Mr. Waage served as Vice President, General Counsel and Corporate Secretary at Websense, Inc. From 2008 through its acquisition by AstraZeneca PLC in 2012, he served as Vice President, General Counsel and Corporate Secretary of Ardea Biosciences, Inc. Prior to 2008, Mr. Waage served as a partner at DLA Piper LLP. He received a J.D. from the University of San Diego School of Law and a B.A. degree in economics from the University of California, San Diego. The Board has concluded that Mr. Waage should serve as a director based on his experience in regulatory, legal and finance matters.

  5. 2023 Summary Compensation Table

    2023 Summary Compensation Table

  6. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary | Stock Awards(1) | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Craig Collard(4),(6) Chief Executive Officer | 2023 | $492,986 | $547,273 | $9,257,049 | $326,957 | $151,553 | $10,775,818 | | | 2022 | $— | $— | $— | $— | $— | $— | | Ira Duarte(4) Chief Financial Officer | 2023 | $271,154 | $60,500 | $1,066,875 | $128,844 | $7,500 | $1,534,873 | | | 2022 | $— | $— | $— | $— | $— | $— | | William Forbes(4) Chief Development Officer | 2023 | $329,519 | $55,500 | $917,433 | $155,654 | $— | $1,458,106 | | | 2022 | $— | $— | $— | $— | $— | $— | | Barry Quart, Pharm.D.(4),(5) Former Chief Executive Officer | 2023 | $188,501 | $788,615 | $1,625,625 | $— | $1,427,606 | $4,030,347 | | | 2022 | $736,000 | $— | $— | $386,400 | $23,304 | $1,145,704 | | David Szekeres(4),(5) Executive Vice President, Chief Commercial Officer | 2023 | $305,539 | $400,920 | $— | $— | $1,170,920 | $1,877,379 | | | 2022 | $533,013 | $441,456 | $235,482 | $199,880 | $19,400 | $1,429,231 |

  7. 2023 Summary Compensation Table

    | (1) This column represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718, for stock awards and option awards granted to the Named Executive Officers in 2023 and 2022. The assumptions used in calculating the fair value of the stock awards and options can be found under Note 10 to the Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2023. These amounts reflect the grant date fair value for these stock awards and option awards and do not necessarily correspond to the actual value that will be realized by the Named Executive Officers. For additional information on stock awards and options granted to the Named Executive Officers in 2023 and in prior years, and outstanding as of the end of fiscal 2023, see below under “Outstanding Equity Awards at Fiscal Year-End.” |

  8. 2023 Summary Compensation Table

    | (2) The amounts listed represent cash awards earned for the year under the Company’s annual cash incentive bonus program. For additional information regarding the annual cash incentive bonus program, see below under “Executive Compensation-Compensation Elements-Annual Cash Incentive Bonus.” |

  9. 2023 Summary Compensation Table

    | (3) “All Other Compensation” listed consist of our matching contributions on behalf of the named individual to our 401(k) Plan, a cash out of accrued vacation and the severance paid to our former executives in 2023 and a housing allowance provided to Mr. Collard. |

  10. 2023 Summary Compensation Table

    | (4) The salary included in the table above is pro-rated for the portion of the year employed by the Company. |

  11. 2023 Summary Compensation Table

    | (5) Dr. Quart ceased to serve as our Chief Executive Officer, Chairman of the Board, and as a director as of April 3, 2023. David Szekeres ceased to serve as our Executive Vice President, Chief Commercial Officer as of July 20, 2023. The departures of Dr. Quart and Mr. Szekeres were initiated by the company and they received severance compensation to which they were entitled by their respective pre-existing Employment Agreements, as amended, in Section 4.4 called Compensation Upon Termination. |

  12. 2023 Summary Compensation Table

    | (6) The compensation for Mr. Collard includes cash compensation of $5,486 and stock awards and option awards provided for Mr. Collard for his service as a member of the Board of Directors. |

  13. 2023 Outstanding Equity Awards at Fiscal Year End

    2023 Outstanding Equity Awards at Fiscal Year End The following tables set forth certain information regarding outstanding equity awards granted to our Named Executive Officers that remain outstanding as of December 31, 2023:

  14. Director Compensation

    Director Compensation Employee directors do not receive any compensation for their service as members of our Board. In 2022, the Board engaged Compensia to conduct an assessment of our Board compensation program as compared to the same peer group used for purposes of reviewing our executive compensation program. The annual cash retainer paid to non-employee members of our Board for general service approximates the 50th percentile of our peer companies and the annual equity-based compensation of our Board for general board service is above the 75th percentile of our peer companies. The use of stock option and restricted stock unit grants further enhances our non-employee Board members’ long-term equity stake in the Company. In particular, because the realization of financial gain from stock option grants is conditioned on the continued increase of the price of the Company’s common stock, the Company believes that stock option grants encourage our directors to engage in behaviors and implement initiatives that lead to long-term value creation that benefits all of the Company’s stockholders. Our average total direct compensation per director, including remunerations for committee service, is above the 50th percentile. The Board approved the following compensation for non-employee directors for 2023:

  15. Equity-Based Compensation (shares underlying awards)

    | Directors(5) | Fees Earned or Paid in Cash | Option Awards(3) | Stock Awards(3) | Total | | Craig Collard(1) | $ — | $— | $— | $ — | | Sharmila Dissanaike, M.D., FACS, FCCM | $55,000 | $— | $— | $55,000 | | Craig Johnson | $79,028 | $— | $— | $79,028 | | Kevin Kotler(2) | $62,014 | $78,716 | $19,175 | $159,905 | | Adam Morgan | $65,417 | $377,840 | $102,273 | $545,530 | | Susan Rodriguez | $65,625 | $— | $— | $65,625 | | Christian Waage | $70,514 | $— | $— | $70,514 |

  16. Pay versus Performance

    Pay versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s compensation philosophy and how the Company seeks to align executive compensation with the Company’s performance, refer to “Executive Compensation—Narrative to Summary Compensation Table.”

  17. Pay versus Performance

    | Year | Summary Compensation Table Total for Current PEO ($)(1) | Summary Compensation Table Total for Former PEO ($)(1) | Compensation Actually Paid to Current PEO ($)(2) | Compensation Actually Paid to Former PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non-PEO NEOs ($)(4) | Value of Initial Fixed $100 Investment Based On: Total Shareholder Return(5) | Net Loss (millions)(6) | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | | 2023 | $10,775,818 | $4,030,347 | $10,089,399 | $673,388 | $1,623,453 | $1,179,569 | $8.03 | $(111) | | 2022 | — | 1,145,704 | — | (2,798,657) | 1,438,169 | 357,507 | 11.81 | (182) | | 2021 | — | 5,430,828 | — | (1,032,982) | 1,581,471 | (619,359) | 43.14 | (221) |

  18. Pay versus Performance

    | (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Craig Collard and Barry Quart (our former Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.” |

  19. Pay versus Performance

    | (2) The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to Craig Collard and Barry Quart, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Craig Collard or Barry Quart during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Craig Collard's and Barry Quart’s total compensation for each year to determine the compensation actually paid: |

  20. Pay versus Performance

    | Year | Reported Summary Compensation Table Total for Current PEO ($) | Reported Summary Compensation Table Total for Former PEO ($) | Reported Value of Equity Awards to Current PEO ($) | Reported Value of Equity Awards to Former PEO ($) | Equity Award Adjustments - Current PEO ($) | Equity Award Adjustments - Former PEO ($) | Compensation Actually Paid to Current PEO ($) | Compensation Actually Paid to Former PEO ($) | | 2023 | $10,775,818 | $4,030,347 | $(9,804,322) | $(2,414,240) | $9,117,903 | $(942,718) | $10,089,399 | $673,388 |

  21. Pay versus Performance

    | • | The “Reported Value of Equity Awards” represents the grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for 2023. |

  22. Pay versus Performance

    | • | The equity award adjustments include the addition (or subtraction, as applicable) of the following: (i) the 2023 year-end fair value of any equity awards granted in 2023 that are outstanding and unvested as of the end of 2023; (ii) the amount of change as of the end of the 2023 (from the end of 2022) in fair value of any awards granted prior to 2023 that are outstanding and unvested as of the end of 2023; (iii) for awards that are granted and vest in 2023, the fair value as of the vesting date; (iv) for awards granted prior to 2023 that vest in 2023, the amount equal to the change as of the vesting date (from the end of 2022) in fair value; and (v) for awards granted prior to 2022 that are determined to fail to meet the applicable vesting conditions during 2022, a deduction for the amount equal to the fair value at the end of 2022. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |

  23. Pay versus Performance

    | Year | Year End Fair Value of Equity Awards granted in 20–3- Current PEO ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions | Total Equity Award Adjustments - Current PEO ($) | | 2023 | $9,107,321 | $— | $10,582 | $— | $— | $9,117,903 |

  24. Pay versus Performance

    | Year | Year End Fair Value of Equity Awards granted in 20–3 - Former PEO ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions | Total Equity Award Adjustments - Former PEO ($) | | 2023 | $— | $— | $— | $(549,550) | $(393,168) | $(942,718) |

  25. Pay versus Performance

    | (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding the PEO in each respective year) 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 in each applicable year are as follows: (i) for 2023, Ira Duarte, William Forbes, and David Szkeres; (ii) for 2022, Kimberly Manhard, and David Szekeres , and (iii) for 2021, Kimberly Manhard, John Poyhonen, David Szekeres and Lisa Peraza. |

  26. Pay versus Performance

    | (4) The dollar amounts reported in column (e) 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. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding the PEO) during the applicable year. 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 2023 to determine the compensation actually paid, using the same methodology described above: |

  27. Pay versus Performance

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards - NEOs ($) | Average Equity Award Adjustments - NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | $1,623,453 | $(500,246) | $56,362 | $1,179,569 |

  28. Pay versus Performance

    | • | The amounts deducted or added in calculating the total average equity award adjustments are as follows: |

  29. Pay versus Performance

    | Year | Average Year End Fair Value of Equity Awards granted in 2023 ($) | Year Over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year Over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Year Over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions | Total Average Equity Award Adjustments - NEOs ($) | | 2023 | $575,333 | $— | $— | ($360,313) | ($158,659) | $56,362 |

  30. Pay versus Performance

    | (5) Cumulative Total Shareholder Return (“TSR”) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |

  31. Pay versus Performance

    | (6) The dollar amounts reported in column (g) represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. |

  32. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following description of the relationships between information presented in the Pay Versus Performance table. Compensation Actually Paid and Net Income (Loss) As shown in the following graph, the compensation actually paid to Mr. Collard and Dr. Quart and the average amount of compensation actually paid to our non-PEO NEOs as a group (excluding Mr. Collard and Dr. Quart) during the periods presented appear to have some correlation because a significant portion of their compensation is in the form of long-term equity awards. The equity award values are significantly impacted by changes in our stock price each period. These equity awards strongly align our executive officers' interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term. Compensation Actually Paid and Cumulative TSR As shown in the following graph, the compensation actually paid to Mr. Collard and Dr. Quart and the average amount of compensation actually paid to our non-PEO NEOs as a group (excluding Mr. Collard and Dr. Quart) during the periods presented appear to have some correlation because a significant portion of their compensation is in the form of long-term equity awards. The equity award values are significantly impacted by changes in our stock price each period. These equity awards strongly align our executive officers' interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

  33. PROPOSAL 1 - ELECTION OF DIRECTORS

    PROPOSAL 1 - ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will vote to elect six nominees to serve as directors of the Company until the 2025 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Pursuant to the Cooperation Agreement, the Company agreed to initially appoint Messrs. Collard and Morgan to the Board and include Messrs. Collard and Morgan in the Company’s slate of nominees for the election of directors at the 2023 Annual Meeting of Stockholders and recommend that the Company’s stockholders vote in favor of their election at the 2023 Annual Meeting of Stockholders. Following their service on the Board during 2023, the Governance Committee has unanimously recommended their nomination for directors at the Annual Meeting. Upon such recommendation of the Governance Committee and the Governance Committee’s nominations with respect to the other director nominees named in this Proxy Statement, our Board has unanimously nominated Dr. Dissanaike, Ms. Rodriguez and Messrs. Collard, Johnson, Morgan and Waage for election as directors of the Company at the Annual Meeting and recommends that the Company’s stockholders vote in favor of their election at the Annual Meeting. The foregoing director nominees have indicated that they are willing and able to serve as directors if elected. If any of these individuals becomes unable or unwilling to serve, the accompanying proxy may be voted for the election of such other person as shall be designated by our Board or our Board may decrease the size of our Board. The proxies being solicited may be voted for no more than six director nominees at the Annual Meeting. The director nominees shall be elected by a majority of the votes properly cast with respect to that director nominee, provided a quorum is established. Abstentions and broker non-votes will have no effect on the outcome of this proposal. The Board of Directors recommends a vote “FOR” each of the director nominees. Unless otherwise instructed, it is the intention of the persons named in the accompanying proxy card to vote shares represented by properly executed proxy cards for the election of Dr. Dissanaike, Ms. Rodriguez and Messrs. Collard, Johnson, Morgan, and Waage.