DEF 14A of Spero Therapeutics, Inc.
Filed Apr 16, 2024 · FY20230001193125-24-097749
NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
| 4. | To approve an amendment to the Company’s 2017 Stock Incentive Plan, as amended, to increase the total number of shares of common stock authorized for issuance thereunder by 3,000,000 shares. |
How Does the Board of Directors Recommend That I Vote on the Proposals?
| • | “FOR” the approval of an amendment to the Company’s 2017 Stock Incentive Plan, as amended, to increase the total number of shares of common stock authorized for issuance thereunder by 3,000,000 shares. |
The Board of Directors
The Board of Directors Our Amended and Restated Bylaws provide that our business is to be managed by or under the direction of our Board of Directors. Our Board of Directors is divided into three classes for purposes of election. One class is elected at each annual meeting of stockholders to serve for a three-year term. Our Board of Directors currently consists of nine members, classified into three classes as follows:
The Board of Directors
| (1) Scott Jackson, John C. Pottage, Jr., M.D. and Cynthia Smith constitute our Class I directors with a term ending at the 2024 annual meeting of stockholders; |
The Board of Directors
| (2) Satyavrat Shukla, Frank E. Thomas and Patrick Vink, M.D. constitute our Class II directors with a term ending at the 2025 annual meeting of stockholders; and |
The Board of Directors
| (3) Milind Deshpande, Ph.D., Ankit Mahadevia, M.D. and Kathleen Tregoning constitute our Class III directors with a term ending at the 2026 annual meeting of stockholders. |
The Board of Directors
On March 6, 2024, our Board of Directors accepted the recommendation of the Nominating and Corporate Governance Committee and voted to nominate Scott Jackson, John C. Pottage, Jr., M.D. and Cynthia Smith for election at the Annual Meeting for a term of three years to serve until the 2027 annual meeting of stockholders, and until their respective successors have been elected and qualified or subject to their earlier death, resignation or removal. Set forth below are the names of the persons nominated as directors and directors whose terms do not expire this year, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which such persons hold or have held directorships during the past five years. Additionally, information about the specific experience, qualifications, attributes or skills that led to our Board of Directors’ conclusion at the time of filing of this proxy statement that each person listed below should serve as a director is set forth below:
The Board of Directors
| Name | Age | Position with the Company | | Milind Deshpande, Ph.D. | 67 | Director | | Scott Jackson | 59 | Director | | Ankit Mahadevia, M.D. | 43 | Chairman | | John C. Pottage, Jr., M.D. | 71 | Director | | Satyavrat Shukla | 52 | President, Chief Executive Officer and Director | | Cynthia Smith | 55 | Director | | Frank E. Thomas | 54 | Director | | Kathleen Tregoning | 53 | Director | | Patrick Vink, M.D. | 60 | Lead Director |
The Board of Directors
Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with Spero Therapeutics, Inc., either directly or indirectly. Based upon this review, our Board of Directors has determined that the following members of the Board of Directors are “independent directors” as defined by rules of The Nasdaq Stock Market (“Nasdaq”): Milind Deshpande, Ph.D., Scott Jackson, John C. Pottage, Jr., M.D., Cynthia Smith, Frank E. Thomas, Kathleen Tregoning and Patrick Vink, M.D. The following Board Diversity Matrix presents our Board of Directors’ diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. While the Board of Directors satisfies the minimum objectives of Nasdaq Rule 5605(f)(2) by having at least one director who identifies as female and at least one director who identifies as a member of an Underrepresented Minority (as defined by Nasdaq rules), we will continue to consider the diversity of the Board of Directors in the selection of director nominees.
The Board of Directors
| Board Diversity Matrix (As of April 16, 2024) | | | | | | Total Number of Directors 9 | | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Gender: | | | | | | Directors | 2 | 7 | | | | Number of Directors Who Identify in Any of the Categories Below: | | | | | | African American or Black | | | | | | Alaskan Native or Native American | | | | | | Asian (other than South Asian) | | | | | | South Asian | | 3 | | | | Hispanic or Latinx | | | | | | Native Hawaiian or Pacific Islander | | | | | | White | 2 | 4 | | | | Two or More Races or Ethnicities | | | | | | LGBTQ+ | | | | | | Persons with Disabilities | | | | |
The Board of Directors
Milind Deshpande, Ph.D. has served on our Board of Directors since January 2014 and previously served as Chairman of our Board of Directors from January 2014 to August 2023. Dr. Deshpande is the acting president and chief executive officer and a board member of Hyku Bio, a role which he has held since January 2022. Dr. Deshpande previously served as the President and Chief Executive Officer at Nayan Therapeutics from February 2019 to February 2022, and previously served as President and Chief Executive Officer of Avilar Therapeutics from January 2020 to June 2021. He is also a Venture Partner at RA Capital, where he has served since October 2018. Dr. Deshpande served as President and Chief Executive Officer of Achillion Pharmaceuticals, Inc. and served on the board of directors from May 2013 until May 2018. He joined Achillion in September 2001 as Vice President of Chemistry, was named Head of Drug Discovery in April 2002, Senior Vice President of Drug Discovery in December 2002, Senior Vice President and Chief Scientific Officer in December 2004, Executive Vice President of Research and Chief Scientific Officer in June 2007 and President of Research and Development in October 2010. Prior to joining Achillion, Dr. Deshpande was Associate Director of Lead Discovery and Early Discovery Chemistry at the Pharmaceutical Research Institute at Bristol-Myers Squibb Co. from 1991 to 2001, where he managed the identification of new clinical candidates to treat infectious and neurological diseases. From 1988 to 1991, he held a faculty position at Boston University Medical School. Dr. Deshpande currently serves as the chairman of the board of directors of Avilar Therapeutics and as a member of the board of directors of Triana Biomedicines and Clear Creek Bio. Dr. Deshpande received his Ph.D. in Organic Chemistry from Ohio University, following his undergraduate education in India. We believe that Dr. Deshpande is qualified to serve on our Board of Directors due to his extensive experience in the life sciences industry. Scott Jackson has served on our Board of Directors since April 2020. Mr. Jackson served as Chief Executive Officer and as a member of the board of directors of Celator Pharmaceuticals, Inc. from April 2008 until July 2016, when the company was acquired by Jazz Pharmaceuticals plc. Mr. Jackson has more than thirty years of corporate leadership experience in the pharmaceutical and biotechnology industry and has held positions of increasing responsibility in sales, marketing and commercial development at Eli Lilly & Company, SmithKline Beecham plc, ImClone Systems Incorporated, Centocor Inc., a division of Johnson & Johnson, Eximias Pharmaceutical Corporation and YM BioSciences Inc. Mr. Jackson presently serves as chairman of the board of Mural Oncology plc, and serves on the boards of MacroGenics, Inc. and GlycoMimetics, Inc. Mr. Jackson holds a B.S. in pharmacy from the Philadelphia College of Pharmacy and Science and an M.B.A. from the University of Notre Dame. We believe that Mr. Jackson’s extensive executive leadership experience in the pharmaceutical industry and his experience as a member of the board of directors of other publicly traded biotechnology companies, as well as his broad life sciences industry knowledge qualifies him to serve on our Board of Directors. Ankit Mahadevia, M.D. has been a member of our Board of Directors since September 2013 and currently serves as Chairman of our Board of Directors, a position he has held since August 2023. Dr. Mahadevia formerly served as our President and Chief Executive Officer from March 2015 until August 2023. He was formerly a Venture Partner in the life sciences group at Atlas Venture, located in Cambridge, Massachusetts. In that capacity, he supported the formation of eight companies focused on novel drug discovery platforms and therapeutic products, including Nimbus Therapeutics, Arteaus Therapeutics (acquired by Lilly), and Translate Bio. He led three of these companies as acting chief executive officer, including Synlogic (Nasdaq: SYBX). Prior to joining Atlas Venture in 2008, Dr. Mahadevia worked on product and business development with the founding team at Arcion Therapeutics, Inc. He has also held positions in business development both at Genentech, Inc. and at Vanda Pharmaceuticals Inc. Previously, he worked in the health care groups of McKinsey & Company and Monitor Group. Dr. Mahadevia began his career in health care policy, with roles in the U.S. Senate Health, Education, Labor, and Pensions committees, the U.S. Government Accountability Office and the Mexican Institute of Social Security. He has spoken widely on entrepreneurship, including at Harvard University, Columbia University, Northwestern University, and the Berkeley Forum. Dr. Mahadevia has also been active in the policy of life science innovation, including service on the Advisory Council at the NIH National Center for Advancing Translational Sciences. Dr. Mahadevia holds an M.D. from the Johns Hopkins School of Medicine, an M.B.A. from the Wharton School at the University of Pennsylvania and a B.A. in Economics and Biology from Northwestern University. We believe that Dr. Mahadevia is qualified to serve on our Board of Directors due to his experience serving as our President and Chief Executive Officer and his extensive experience in the life sciences industry. John C. Pottage, Jr., M.D. has served on our Board of Directors since September 2018. Dr. Pottage served as Senior Vice President and Chief Scientific and Medical Officer of ViiV Healthcare from November 2009 to October 2019. From September 2008 to November 2009, Dr. Pottage served as Senior Vice President, Head of Infectious Disease Medicine Development Center and, from June 2007 to September 2008, as the Vice President, Global Clinical Development of Antivirals, at GlaxoSmithKline. Prior to joining GlaxoSmithKline, Dr. Pottage served as Chief Medical Officer and Senior Vice President of Drug Development of Achillion Pharmaceuticals from May 2002 to May 2007. From July 1998 to May 2002, Dr. Pottage served as Medical Director of Vertex Pharmaceuticals (Nasdaq: VRTX) (“Vertex”). Dr. Pottage served on the board of directors of Pardes Biosciences, Inc. from September 2022 to August 2023. We believe that Dr. Pottage’s extensive industry and executive experience, his broad experience within the biopharmaceutical sector and his knowledge of the life sciences industry qualifies him to serve on our Board of Directors. Satyavrat Shukla has served as our President and Chief Executive Officer since August 2023 and has been a member of our Board of Directors since August 2023. He previously served as our Chief Financial Officer and Treasurer from January 2021 to August 2023. He has over 20 years of strategic and financial leadership experience. He was most recently Chief Financial Officer at Ziopharm Oncology, Inc. from July 2019 to December 2020, where he directed all of Ziopharm’s financial aspects, including financial planning, analysis and reporting, treasury and tax functions, capital strategy and investor relations. Prior to Ziopharm, Mr. Shukla was Vice President and Global Head of Corporate Finance for Vertex. from July 2012 to July 2019, where he managed financial planning, analysis and budgeting, and led the annual long-range planning process encompassing Vertex’s entire portfolio and operations across more than 30 countries. Previously, Mr. Shukla was a Principal at Cornerstone Research, where he led teams providing consulting services for life science clients ranging from start-ups to multi-billion-dollar corporations. Prior to Cornerstone, he worked for finance consulting firms LECG Corporation and Putnam, Hayes & Bartlett, Inc. Mr. Shukla earned a B.A. in Economics from Harvard University and an M.B.A. in Finance and Strategy from Yale University. He also holds the Chartered Financial Analyst designation.
The Board of Directors
Cynthia Smith has served on our Board of Directors since March 2019. Ms. Smith was Chief Commercial Officer of ZS Pharma, from June 2013 to December 2016. ZS Pharma became a subsidiary of AstraZeneca after its acquisition in December 2015. Prior to joining ZS Pharma, Ms. Smith was Vice President, Market Access & Commercial Development at Affymax, Inc., a biotechnology company focused on the development and commercialization of novel renal therapies, including a new anemia drug for chronic kidney disease patients. Ms. Smith was employed at Affymax from October 2008 to March 2013. Prior to Affymax, Ms. Smith was Executive Director of Healthcare Systems and Medicare Strategy at Merck. During her tenure at Merck from June 2000 to October 2008, she also held various leadership positions in corporate strategy, public policy, and external affairs, including global crisis management for the Vioxx recall. Before joining the pharmaceutical industry, she served in the White House Office of Management and Budget (OMB) in the Clinton Administration. Ms. Smith earned an M.B.A. from the Wharton School of the University of Pennsylvania, an MS in public policy from the Eagleton Institute of Politics at Rutgers University, and a BA from the University of North Carolina at Chapel Hill. Ms. Smith also serves on the board of directors of Agios Pharmaceuticals (Nasdaq: AGIO), Akebia Therapeutics (Nasdaq: AKBA) and Protara Therapeutics, Inc. (Nasdaq: TARA). We believe that Ms. Smith’s extensive management experience in the healthcare industry and her experience as a member of the board of directors of other publicly traded biotechnology companies, as well as her broad life sciences industry knowledge, qualifies her to serve on our Board of Directors. Frank E. Thomas has served on our Board of Directors since July 2017. Mr. Thomas is currently President and Chief Operating Officer of Orchard Therapeutics, a development-stage biotechnology company based in the United Kingdom, where he served as Chief Financial Officer and Chief Business Officer from January 2018 to March 2020. Prior to Orchard, Mr. Thomas served as the President and Chief Operating Officer of AMAG Pharmaceuticals, Inc. (“AMAG”), a commercial-stage pharmaceutical company, which was a publicly traded company that was subsequently acquired by Covis Pharmaceuticals, Inc., from April 2015 to April 2017, as AMAG’s Executive Vice President and Chief Operating Officer from May 2012 through April 2015 and as Executive Vice President, Chief Financial Officer and Treasurer from August 2011 through May 2012. Prior to AMAG, he served as Senior Vice President, Chief Operating Officer and Chief Financial Officer for Molecular Biometrics, Inc., a commercial-stage medical diagnostics company, from October 2008 to July 2011. Prior to Molecular Biometrics, Mr. Thomas spent four years at Critical Therapeutics, Inc., which was a publicly traded company that subsequently merged with Cornerstone Therapeutics Inc., from April 2004 to March 2008, where he was promoted to President in June 2006 and Chief Executive Officer in December 2006 from the position of Senior Vice President and Chief Financial Officer. He also served on the board of directors of Critical Therapeutics from 2006 to 2008. Prior to 2004, Mr. Thomas served as the Chief Financial Officer and Vice President of Finance and Investor Relations at Esperion Therapeutics, Inc., a public biopharmaceutical company (Nasdaq: ESPR). Mr. Thomas was a member of the board of directors of the Massachusetts Biotechnology Council from 2007 to 2015. Mr. Thomas currently serves as a member of the board of directors of Larimar Therapeutics Inc (Nasdaq: LRMR). Mr. Thomas holds a B.B.A. from the University of Michigan, Ann Arbor. We believe that Mr. Thomas’ extensive commercial and operational management experience at biopharmaceutical companies and with financial matters qualifies him to serve on our Board of Directors. Kathleen Tregoning has served on our Board of Directors since October 2021. Ms. Tregoning has served as Chief Corporate Affairs Officer of Cerevel Therapeutics Holdings, Inc. since July 2020. Previously, from February 2017 to March 2020, Ms. Tregoning served as Executive Vice President for External Affairs at Sanofi S.A., a French multinational pharmaceutical company, where she was responsible for leading an integrated organization that brought together market access, communications, public policy, government affairs, patient advocacy and corporate social responsibility. Prior to joining Sanofi, Ms. Tregoning spent more than a decade at Biogen Inc., a multinational biotechnology company, first as Vice President, Public Policy & Government Affairs, from 2006 to 2015, and then as Senior Vice President, Corporate Affairs, from December 2015 to February 2017. Previously, Ms. Tregoning served as a professional staff member in the United States Congress, where she held health policy roles with the Senate Budget Committee, the House Energy & Commerce Committee, and the House Ways & Means Committee. Ms. Tregoning began her career with Andersen Consulting, where she developed business strategies and processes for clients in a range of industries, and later served as an Assistant Deputy Mayor for Policy & Budget in the office of the Mayor of Los Angeles. Ms. Tregoning graduated from Stanford University with a B.A. in International Relations and holds an M.A. in Public Policy from the Kennedy School of Government at Harvard University. We believe that Ms. Tregoning is qualified to serve on our Board of Directors because of her senior and executive leadership experience in several biopharmaceutical companies. Patrick Vink, M.D. has served on our Board of Directors since September 2015 and currently serves as our Lead Director, a position he has held since August 2023. Dr. Vink has been an advisor to the pharmaceutical industry since 2015 and board member of several companies. Previously, Dr. Vink was employed at Cubist Pharmaceuticals, Inc. (“Cubist”). Most recently, he served as Executive Vice-President and Chief Operating Officer, overseeing all worldwide commercial and technical operations as well as global alliance management and managing the company’s profit and loss. He joined Cubist in 2012 as Senior Vice President and Head of all International Business Operations. In this role, he was responsible for the business activities in international markets outside USA. Prior to joining Cubist, Dr. Vink served as Senior Vice President, Global Head of Hospital Business and Global Head of Biologics for Mylan Inc. In this role, Dr. Vink managed the global hospital business of the company. He joined Mylan in 2008 and established a number of global functions for the company in Switzerland. Before joining Mylan, Dr. Vink held several leadership positions across the industry, including Head of Global Business Franchise Biopharmaceuticals for Novartis Sandoz; Vice President International Business for Biogen, Inc.; and Head of Worldwide Marketing, Cardiovascular and Thrombosis for Sanofi-Synthélabo SA. Dr. Vink served as a member of the Executive Committee of the European Federation of Pharmaceutical Industries and Associations (EFPIA) between 2013 and 2015. Dr. Vink graduated as a medical doctor from the University of Leiden, Netherlands in 1988 and obtained his M.B.A. in 1992 from the University of Rochester. Dr. Vink serves on the boards of directors of Santhera Pharmaceuticals AG, Amryt Pharma PLC., and is chairman of the board of directors of two privately held companies. We believe that Dr. Vink is qualified to serve on our Board of Directors because of his extensive operational business experience, significant knowledge of the activities of our company, and diverse background serving on the board of directors of various public and private life science companies.
Committees of the Board of Directors and Meetings
| • | exercising all rights, authority and functions of the Board of Directors under all of our stock option, stock incentive, employee stock purchase and other equity-based plans; |
Committees of the Board of Directors and Meetings
| • | reviewing and making recommendations to the Board of Directors with respect to director compensation; |
Committees of the Board of Directors and Meetings
| • | appointing, compensating and overseeing the work of any compensation consultant, legal counsel or other advisor retained by the Compensation Committee; |
Committees of the Board of Directors and Meetings
| • | conducting the independence assessment outlined in Nasdaq rules with respect to any compensation consultant, legal counsel or other advisor retained by the Compensation Committee; |
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Summary Compensation Table
Summary Compensation Table The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2023 and 2022 to our current President and Chief Executive Officer, our former President and Chief Executive Officer, and our two next most highly compensated executive officers who earned more than $100,000 during the fiscal year ended December 31, 2023 and were serving as executive officers as of such date (the “named executive officers”).
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All other Compensation ($)(5) | Total ($) | | Satyavrat Shukla | 2023 | 524,383 | 336,000 | 904,319 | — | 249,462 | 10,483 | 2,024,647 | | President and Chief Executive Officer | 2022 | 478,333 | 168,000 | 424,997 | 424,807 | 172,800 | 4,133 | 1,673,070 | | Ankit Mahadevia, M.D. | 2023 | 379,220 | 508,000 | 999,998 | — | — | 498,687 | 2,385,905 | | Former President and Chief Executive Officer (6) | 2022 | 633,750 | 254,000 | 1,499,998 | 1,499,324 | 342,900 | 9,733 | 4,239,705 | | Tamara Joseph | 2023 | 458,250 | 315,000 | 499,999 | — | 174,420 | 7,457 | 1,455,126 | | Former Chief Legal Officer (7) | 2022 | 448,740 | 157,500 | 424,997 | 424,807 | 162,000 | 7,314 | 1,625,358 | | Timothy Keutzer | 2023 | 456,167 | 297,500 | 499,999 | — | 174,420 | 10,483 | 1,438,569 | | Chief Operating Officer | 2022 | 423,750 | 148,750 | 424,997 | 424,807 | 153,000 | 9,733 | 1,585,037 |
Summary Compensation Table
| 1. | Consists of retention bonuses paid to Mr. Shukla, Dr. Mahadevia, Ms. Joseph and Mr. Keutzer during the years ended December 31, 2023 and 2022. |
Summary Compensation Table
| 2. | These amounts represent the aggregate grant date fair value for restricted stock unit (“RSU”) awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 13, 2024. |
Summary Compensation Table
| 3. | These amounts for the year ended December 31, 2022 represent the aggregate grant date fair value for option awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 13, 2024. |
Summary Compensation Table
| 4. | Amounts represent annual cash bonuses earned for the applicable fiscal year. The annual cash bonuses are paid in the first quarter of the calendar year following the year to which the cash bonus relates. |
Summary Compensation Table
| 5. | Amounts in this column include for the year ended December 31, 2023 (i) in the case of Mr. Shukla, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $9,900 in a matching contribution under our 401(k) plan, (ii) in the case of Dr. Mahadevia, $340 consists of the dollar value of life insurance premiums we paid with respect to term life insurance, and $9,419 in a matching contribution under our 401(k) plan, $225,719 consists of the pro-rata bonus for calendar year 2023, paid pursuant to the Mahadevia Separation |
Summary Compensation Table
| Agreement (as defined below), $11,509 consists of COBRA payments pursuant to the Mahadevia Separation Agreement, $197,250 consists of compensation earned during the year ended December 31, 2023 pursuant to the Mahadevia Consulting Agreement (as defined below), $31,250 consists of cash compensation earned for his services as a member of our board of directors during the year ended December 31, 2023, and $23,200 consists of RSUs granted for service on our board of directors, each as further described below under “Director Compensation,” (iii) in the case of Ms. Joseph, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $6,874 in a matching contribution under our 401(k) plan and (iv) in the case of Mr. Keutzer, $583 consists of the dollar value of life insurance premiums we paid with respect to term life insurance and $9,900 in a matching contribution under our 401(k) plan. |
Summary Compensation Table
| 6. | Dr. Mahadevia served as our President and Chief Executive Officer until August 2023. Thereafter, Dr. Mahadevia continued to serve as a member of the Board and serves as a consultant to the Company. |
Summary Compensation Table
| 7. | Ms. Joseph’s employment as our Chief Legal Officer ended effective March 6, 2024. |
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table shows grants of stock options and awards outstanding on the last day of the fiscal year ended December 31, 2023 to each of the executive officers named in the Summary Compensation Table.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | Option Awards | | | | Stock Awards | | | | | | | | | Market | | | | | | | | Value of | | | Number of | Number of | | | Number of | Shares or | | | Securities | Securities | | | Shares or | Units of | | | Underlying | Underlying | Option | | Units of | Stock that | | | Unexercised | Unexercised | Exercise | Option | Stock That | Have not | | | Options (#) | Options (#) | Price | Expiration | Have not | Vested | | Name | Exercisable | Unexercisable | ($) | Date | Vested (#) | ($) (1) | | Satyavrat Shukla | 54,688(2) | 20,312(2) | 17.93 | 1/4/2031 | — | — | | | 24,378(3) | 28,812(3) | 11.18 | 1/31/2032 | — | — | | | — | — | — | — | 12,033(4) | 17,689 | | | — | — | — | — | 28,510(5) | 41,910 | | | — | — | — | — | 265,957(6) | 390,957 | | | — | — | — | — | 266,000(7) | 391,020 | | Ankit Mahadevia, M.D. | 22,213(8) | — | 5.90 | 7/5/2027 | — | — | | | 101,488(9) | — | 5.90 | 7/5/2027 | — | — | | | 118,888(10) | — | 5.90 | 7/5/2027 | — | — | | | 244,220(11) | — | 5.90 | 7/5/2027 | — | — | | | 125,079(12) | — | 11.63 | 12/12/2027 | — | — | | | 180,000(13) | — | 6.26 | 1/1/2029 | — | — | | | 172,500(14) | 7,500(14) | 9.34 | 2/2/2030 | — | — | | | 127,017(15) | 52,302(15) | 19.18 | 1/31/2031 | — | — | | | 86,043(3) | 101,687(3) | 11.18 | 1/31/2032 | — | — | | | — | — | — | — | 39,109(4) | 57,490 | | | — | — | — | — | 100,626(5) | 147,920 | | | — | — | — | — | 531,914(6) | 781,914 | | Tamara Joseph | 56,250(16) | 56,250(16) | 17.28 | 12/2/2030 | — | — | | | 24,378(3) | 28,812(3) | 11.18 | 1/31/2032 | — | — | | | — | — | — | — | 12,033(4) | 17,689 | | | — | — | — | — | 28,510(5) | 41,910 | | | — | — | — | — | 265,957(6) | 390,957 | | Timothy Keutzer | 55,943(11) | — | 5.90 | 7/5/2027 | — | — | | | 25,016(12) | — | 11.63 | 12/12/2027 | — | — | | | 25,000(13) | — | 6.26 | 1/1/2029 | — | — | | | 52,708(14) | 2,292(14) | 9.34 | 2/2/2030 | — | — | | | 40,681(15) | 16,751(15) | 19.18 | 1/31/2031 | — | — | | | 24,378(16) | 28,812(16) | 11.18 | 1/31/2032 | — | — | | | — | — | — | — | 12,033(4) | 17,689 | | | — | — | — | — | 28,812(5) | 42,354 | | | — | — | — | — | 265,957(6) | 390,957 |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 1. | The market value of the stock awards is based on the closing price of our common stock of $1.47 per share on December 29, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 2. | 25% of the options vested on January 4, 2022 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his employment agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 3. | 25% of the options vested on February 1, 2023 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 4. | Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on August 26, 2022, subject to the individual’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 5. | Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on February 1, 2023, subject to the individual’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 6. | Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on February 1, 2024, subject to the individual’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 7. | Consists of RSUs. Each RSU represents the right to receive one share of common stock upon vesting. The RSUs vest in four equal annual installments beginning on August 1, 2024 subject to the individual’s continued service through the applicable vesting date. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 8. | 100% of these options vested on August 24, 2019. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 9. | 100% of these options vested on April 28, 2020. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 10. | 100% of these options vested on July 6, 2017. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 11. | 100% of these options vested on July 6, 2021. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 12. | 100% of these options vested on December 13, 2021. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 13. | 100% of these options vested on January 2, 2023. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 14. | 25% of the options vested on February 3, 2021 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his employment agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 15. | 25% of the options vested on February 1, 2022 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his employment agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
| 16. | 25% of the options vested on December 2, 2021 and an additional 1/36th of the remaining shares vest monthly until the option is fully vested. In addition, in the event of a Change of Control Termination, the vesting of these options will accelerate in accordance with the terms of the option and his or her employment agreement. |
Outstanding Equity Awards at 2023 Fiscal Year-End
During the year ended December 31, 2023, the executive officers named in the Summary Compensation Table did not exercise any stock options.
Potential Payments upon Termination or Change-In-Control
Potential Payments upon Termination or Change-In-Control The employment agreements provide for the following severance payments upon termination by us without Cause or by the employee for Good Reason: (i) payment of the employee’s then-current base salary for a period of nine months following termination (12 months in the case of the Chief Executive Officer); (ii) a pro-rated target bonus for the period during which the employee was employed in the year of termination; and (iii) continued coverage under our group health insurance plan until the earlier of 12 months from termination or the date the employee becomes eligible for medical benefits with another employer. Further, the agreements provide that upon termination by us without Cause or by the employee for Good Reason within 90 days prior to or one year following the earlier to occur of a Change of Control (as defined in the executive’s employment agreements) or the execution of a definitive agreement the consummation of which would result in a Change of Control, the employee will be entitled to receive: (i) a lump sum payment equal to 12 months of the employee’s then-current base salary, plus the executive’s then-current target performance bonus for the period during which the employee was employed in the year of termination (in the case of Mr. Shukla, our Chief Executive Officer, a lump sum payment equal to 18 months of his then-current base salary, plus a one-and-one-half (1.5) times the target amount of his annual performance bonus); (ii) acceleration of unvested equity awards as of the date of termination in accordance with the terms of the executive’s employment agreement, as described above under “Narrative Disclosure to Summary Compensation Table;” and (iii) continued coverage under our group health insurance plan until the earlier of 12 months (18 months in the case of Mr. Shukla, our Chief Executive Officer) from termination or the date the employee becomes eligible for medical benefits with another employer. Payment in each case is subject to the employee’s execution of a release satisfactory to us following such termination. In addition, if the employee’s employment terminates as a result of disability or death, he or she shall be entitled to receive a pro-rated target bonus for the period during which the employee was employed in the year of termination.
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our principal executive officers (“PEOs”) and the average of our other named executive officers (“NEOs”) and certain financial metrics of our Company. The following table also provides information regarding company performance over the same periods, as well as the relationship of “compensation actually paid” to our PEOs and NEOs to company performance.
Pay Versus Performance
| | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | Year | Summary Compensation Table Total for Satyavrat Shukla ($) (1) | Summary Compensation Table Total for Ankit Mahadevia ($) (1) | Compensation Actually Paid to Satyavrat Shukla ($) (2) (4) | Compensation Actually Paid to Ankit Mahadevia ($) (3) (4) | Average Summary Compensation Table Total Compensation for Other NEOs ($) (5) | Average Compensation Actually Paid to Other NEOs ($) (4) (6) | Company TSR ($) (7) | Net Income (loss) ($ in thousands) (8) | | 2023 | 2,024,647 | 2,385,905 | 2,020,658 | 2,622,030 | 1,446,848 | 1,487,365 | 8 | 22,806 | | 2022 | — | 4,239,705 | — | 2,275,404 | 1,649,214 | 1,069,299 | 9 | (46,415) | | 2021 | — | 4,875,045 | — | 8,187,169 | 2,066,101 | 2,457,789 | 83 | (89,756) |
Pay Versus Performance
| (1) Mr. Shukla and Dr. Mahadevia were our PEOs during 2023. Dr. Mahadevia was our PEO during 2022 and 2021. Reflects compensation (as reported in the Summary Compensation Table) for Mr. Shukla, who is our current President and Chief Executive Officer as of August 2023 and Dr. Mahadevia, who served as our President and Chief Executive Officer until August 2023. Thereafter, Dr. Mahadevia continued to serve as a member of the Board and serves as a consultant to the Company. Mr. Shukla previously served as our Chief Financial Officer. |
Pay Versus Performance
| (2) Calculated in accordance with Item 402(v)(2) of Regulation S-K. The following adjustments were made to Mr. Shukla’s total compensation as reported in the Summary Compensation Table to determine “compensation actually paid”. |
Pay Versus Performance
| Year | Summary Compensation Table Total ($) | Deductions for Reported Grant Date Fair Value of Stock Awards ($) (a) | Deductions for Reported Grant Date Fair Value of Option ($)Awards | Additions for Pay Versus Performance Equity Adjustments ($) (b) | Compensation Actually Paid ($) | | 2023 | 2,024,647 | (904,319) | — | 900,330 | 2,020,658 |
Pay Versus Performance
| a) | Reflects the amounts reported in the Stock Awards column of the Summary Compensation Table in the relevant years. |
Pay Versus Performance
| b) | The pay versus performance equity adjustments reflect the aggregated sum of the following values in the relevant year. |
Pay Versus Performance
| Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Covered Year ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years That Vested in the Covered Year ($) | Total Pay Versus Performance Equity Adjustments ($) | | 2023 | 144,845 | 762,756 | (7,271) | 900,330 |
Pay Versus Performance
| (3) Calculated in accordance with Item 402(v)(2) of Regulation S-K. The following adjustments were made to Dr. Mahadevia’s total compensation as reported in the Summary Compensation Table to determine “compensation actually paid”. |
Pay Versus Performance
| Year | Summary Compensation Table Total ($) | Deductions for Reported Grant Date Fair Value of Stock Awards ($) (a) | Deductions for Reported Grant Date Fair Value of Option ($)Awards (a) | Additions for Pay Versus Performance Equity Adjustments ($) (b) | Compensation Actually Paid ($) | | 2023 | 2,385,905 | (999,998) | — | 1,236,123 | 2,622,030 | | 2022 | 4,239,705 | (1,499,998) | (1,499,324) | 1,035,021 | 2,275,404 | | 2021 | 4,875,045 | (1,300,000) | (2,650,765) | 7,262,889 | 8,187,169 |
Pay Versus Performance
| a) | Reflects the amounts reported in the Stock Awards and Option Awards columns of the Summary Compensation Table in the relevant years. |
Pay Versus Performance
| b) | The pay versus performance equity adjustments reflect the aggregated sum of the following values for the respective years. |
Pay Versus Performance
| Year | Year-End Fair Value of Outstanding and Unvested Equity Awards Granted in the Covered Year ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years ($) | Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years That Vested in the Covered Year ($) | Total Pay Versus Performance Equity Adjustments ($) | | 2023 | 518,974 | 746,167 | (29,018) | 1,236,123 | | 2022 | 4,749,671 | (2,024,308) | (1,690,342) | 1,035,021 | | 2021 | 5,404,344 | 2,483,745 | (625,200) | 7,262,889 |
Pay Versus Performance
| (4) Measurement date equity fair values are calculated with assumptions derived on a basis consistent with those used for grant date fair value purposes. RSUs are valued based on the closing stock price on the relevant measurement date. Stock options are valued using a Black-Scholes model as at the relevant measurement dates. |
Pay Versus Performance
| (5) Reflects compensation for the following non-Chief Executive Officer NEOs: |
Pay Versus Performance
2023: Ms. Joseph and Mr. Keutzer 2022: Mr. Shukla and Ms. Joseph 2021: Mr. Shukla and Cristina Larkin, our former Chief Operating Officer.
Pay Versus Performance
| (6) Average “compensation actually paid” for the non-Chief Executive Officer NEOs has been calculated in accordance with Item 402(v)(2) of Regulation S-K. The following adjustments were made to average Summary Compensation Table total compensation for each year to determine average “compensation actually paid.” |
Pay Versus Performance
| Year | Summary Compensation Table Total | Deductions for Reported Grant Date Fair Value of Stock Awards (a) | Deductions for Reported Grant Date Fair Value of Option Awards (a) | Additions for Pay Versus Performance Equity Adjustments (b) | Compensation Actually Paid | | 2023 | 1,446,848 | (499,999) | — | 540,516 | 1,487,365 | | 2022 | 1,649,214 | (424,997) | (424,807) | 269,889 | 1,069,299 | | 2021 | 2,066,101 | (399,994) | (944,208) | 1,735,891 | 2,457,789 |
Pay Versus Performance
| a) | Reflects the average amounts reported in the Stock Awards and Option Awards columns of the Summary Compensation Table in the relevant years. |
Pay Versus Performance
| b) | The pay versus performance equity adjustments reflect the aggregated sum of the following values for the respective years. |
Pay Versus Performance
| Year | Average Year- End Fair Value of Outstanding and Unvested Equity Awards Granted in the Covered Year ($) | Average Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years ($) | Average Year Over Year Change in Fair Value of Equity Awards Granted in Prior Years That Vested in the Covered Year ($) | Total Pay Versus Performance Equity Adjustments ($) | | 2023 | 147,945 | 371,929 | 20,642 | 540,516 | | 2022 | 1,038,009 | (525,283) | (242,837) | 269,889 | | 2021 | 888,331 | 952,763 | (105,203) | 1,735,891 |
Pay Versus Performance
| (7) As required under Item 201(e) of Regulation S-K, total shareholder return (“TSR”) measures the cumulative value of $100 invested on the last trading day before the earliest fiscal year in the table, or December 31, 2020, through and including the end of the applicable fiscal year for which total shareholder return is calculated, or December 31, 2021, December 31, 2022, and December 31, 2023, respectively. |
Pay Versus Performance
| (8) The dollar amounts are our net income (loss) amounts reflected in our audited financial statements for the applicable year. |
Pay Versus Performance
The following graph visually describes the relationship between “compensation actually paid” to PEOs for each applicable year and the average “compensation actually paid” to our other Non-Chief Executive Officer NEOs, to the cumulative total stockholder return of our company. The following graph visually describes the relationship between “compensation actually paid” to our PEOs for each applicable year and the average “compensation actually paid” to our other Non-Chief Executive Officer NEOs, to net income (loss).
Director Compensation
Director Compensation The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2023 to each of our current non-employee directors. Directors who are employed by us are not compensated for their service on our Board of Directors.
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | Option Awards ($) (2)(6) | Total($) | | Milind Deshpande, Ph.D. | 82,500 | 23,200 | — | 105,700 | | Scott Jackson | 57,500 | 23,200 | — | 80,700 | | Ankit Mahadevia, M.D. (3) | — | — | — | — | | John C. Pottage, Jr., M.D. | 60,000 | 23,200 | — | 83,200 | | Cynthia Smith | 50,000 | 23,200 | — | 73,200 | | Frank E. Thomas | 65,625 | 23,200 | — | 88,825 | | Kathleen Tregoning | 10,000 | 23,200 | 39,974(4) | 73,174 | | Patrick Vink, M.D. | 50,000 | 23,200 | 19,987(5) | 93,187 |
Director Compensation
| 1. | These amounts represent the aggregate grant date fair value for RSU awards computed in accordance with ASC 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 13, 2024. |
Director Compensation
| 2. | These amounts represent the aggregate grant date fair value of options granted to each director in the fiscal year ended December 31, 2023, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 8 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 13, 2024. |
Director Compensation
| 3. | Dr. Mahadevia served as our President and Chief Executive Officer for part of 2023; as such, his compensation earned as a director is disclosed in the Summary Compensation Table above. |
Director Compensation
| 4. | Represents an option to purchase 30,942 shares of common stock at an exercise price of $1.74. The shares underlying the option award vested and became fully exercisable on December 31, 2023. |
Director Compensation
| 5. | Represents an option to purchase 15,471 shares of common stock at an exercise price of $1.74. The shares underlying the option award vested and became fully exercisable on December 31, 2023. |
Director Compensation
| 6. | As of December 31, 2023, the aggregate number of options held by each of our current non-employee directors was as follows (representing both exercisable and unexercisable option awards, none of which have been exercised): |
Director Compensation
| Name | Number of Shares Underlying Outstanding Stock Options | | Milind Deshpande, Ph.D. | 83,664 | | Scott Jackson | 30,000 | | Ankit Mahadevia, M.D. | 1,338,937 | | John C. Pottage, Jr., M.D. | 33,219 | | Cynthia Smith | 35,848 | | Frank E. Thomas | 63,893 | | Kathleen Tregoning | 50,370 | | Patrick Vink, M.D. | 82,067 |
Director Compensation Policy
Director Compensation Policy Under our Non-Employee Director Compensation Policy, as amended (the “Non-Employee Director Compensation Policy”), each non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers and equity awards. Our non-employee directors received the following annual retainers for their service as of December 31, 2023:
Director Compensation Policy
| Position | Retainer | | Board Member | $40,000 | | Board Chairperson (additional retainer) | 30,000 | | Lead Director, if any (additional retainer) | 18,750 | | Audit Committee Chair | 20,000 | | Compensation Committee Chair | 20,000 | | Nominating and Corporate Governance Committee Chair | 15,000 | | Development Committee Chair | 10,000 | | Audit Committee Member | 10,000 | | Compensation Committee Member | 10,000 | | Nominating and Corporate Governance Committee Member | 7,500 | | Development Committee Member | 5,000 |
Director Compensation Policy
Our Non-Employee Director Compensation Policy provides the following with respect to equity awards to non-employee directors: (i) the initial equity award consisting of a non-qualified stock option to purchase shares of our common stock upon first appointment to our Board of Directors and vesting in equal monthly installments until the third anniversary of the grant date subject to the director’s continued service in the amount of 15,000 shares, and (ii) annual equity awards consisting of a grant of 20,000 RSUs (each RSU relating to one share of our common stock) on the date of our annual meeting of stockholders. The RSUs vest on the first anniversary of the grant date, subject to the director’s continued service, and are issued under, and are subject to the terms of, the 2017 Plan. The policy also provides that, prior to the beginning of each calendar year, a non-employee director may elect to receive all or a portion of his or her base annual fee for service on our Board of Directors in the form of a non-qualified stock option to purchase a number of shares of our common stock based on the Black-Scholes value of such option, which option will be granted on the first business day of the calendar year. These options vest in four quarterly installments on the last day of each calendar quarter during the calendar year, subject to the continued service of the non-employee director. Directors may be reimbursed for travel, food, lodging and other expenses directly related to their service as directors. Directors are also entitled to the protection provided by their indemnification agreements and the indemnification provisions in our Amended and Restated Certificate of Incorporation, as amended, and Amended and Restated Bylaws.
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS The Board of Directors has nominated Scott Jackson, John C. Pottage, Jr., M.D. and Cynthia Smith for re-election at the Annual Meeting. The Board of Directors currently consists of nine members, classified into three classes as follows: (i) Scott Jackson, John C. Pottage, Jr., M.D. and Cynthia Smith constitute our Class I directors with a term ending at the upcoming annual meeting of stockholders; (ii) Satyavrat Shukla, Frank E. Thomas and Patrick Vink, M.D. constitute our Class II directors with a term ending at the 2025 annual meeting of stockholders; and (iii) Milind Deshpande, Ph.D., Kathleen Tregoning and Ankit Mahadevia, M.D. constitute our Class III directors with a term ending at 2026 annual meeting of stockholders; At each annual meeting of stockholders, directors are elected for a full term of three years to succeed those directors whose terms are expiring. The Board of Directors has voted to nominate Scott Jackson, John C. Pottage, Jr., M.D., and Cynthia Smith for election at the Annual Meeting as Class I directors for a term of three years to serve until the 2027 annual meeting of stockholders, and until their respective successors are elected and qualified. The Class II directors (Satyavrat Shukla, Frank E. Thomas and Patrick Vink, M.D.) and the Class III directors (Milind Deshpande, Ph.D., Kathleen Tregoning and Ankit Mahadevia, M.D.) will serve until the annual meeting of stockholders to be held in 2025 and 2026, respectively, and until their respective successors have been elected and qualified. Unless authority to vote for any of these nominees is withheld, the shares represented by the enclosed proxy will be voted FOR the election as directors of Scott Jackson, John C. Pottage, Jr., M.D. and Cynthia Smith. In the event that either nominee becomes unable or unwilling to serve, the shares represented by the enclosed proxy will be voted for the election of such other person as the Board of Directors may recommend in that nominee’s place. We have no reason to believe that any nominee will be unable or unwilling to serve as a director. The nominees for director who receive the most votes (also known as a “plurality” of the votes cast) will be elected. You may vote either FOR each of the nominees, withhold your vote from each of the nominees or withhold your vote from any of the nominees. Votes that are withheld will not be included in the vote tally for the election of the directors. Brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on this proposal. As a result, any shares not voted by a customer will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote. While we have no formal policy regarding diversity of our board members, our Corporate Governance Guidelines provide that the background and qualifications of the members of our Board of Directors considered as a group should provide a significant breadth of experience, knowledge, and ability to assist our Board of Directors in fulfilling its responsibilities. Our priority in selection of board members is the identification of members who will further the interests of our stockholders through their established records of professional accomplishment, the ability to contribute positively to the collaborative culture among our board members, knowledge of our business, understanding of the competitive landscape in which we operate and adherence to high ethical standards. THE BOARD OF DIRECTORS RECOMMENDS THE ELECTION OF SCOTT JACKSON, JOHN C. POTTAGE, JR., M.D. AND CYNTHIA SMITH AS DIRECTORS, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY.