DEF 14A of Aldeyra Therapeutics, Inc.
Filed Apr 22, 2024 · FY20230001193125-24-104862
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
General
General Our Board of Directors may establish the authorized number of directors from time to time by resolution. Our Board of Directors is currently comprised of seven members who are divided into three classes with staggered three-year terms. A director serves in office until his or her respective successor is duly elected and qualified or until his or her earlier death or resignation. This classification of the Board of Directors into three classes with staggered three-year terms may have the effect of delaying or preventing changes in our control or management. Your proxy cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Nominees for Election as Class I Directors at the Annual Meeting
Nominees for Election as Class I Directors at the Annual Meeting This year’s nominees for election to the Board of Directors as our Class I directors to serve for a term of three years expiring at the 2027 annual meeting of stockholders, or until their successors have been duly elected and qualified or until their earlier death, resignation or removal, are provided below. All of the nominees listed below are currently our directors. The age of each director as of April 9, 2024 is set forth below. Each of the nominees has agreed to serve as a director if elected, and we have no reason to believe that any nominee will be unable to serve if elected.
Nominees for Election as Class I Directors at the Annual Meeting
| Name | Age | Director Since | | Nancy Miller-Rich | 65 | 2020 | | Ben R. Bronstein, M.D. | 74 | 2010 |
Nominees for Election as Class I Directors at the Annual Meeting
The following is additional information about each of the nominees as of the date of this proxy statement, including their business experience; public company director positions held currently or at any time during the last five years; involvement in certain legal or administrative proceedings, if applicable; and the experiences, qualifications, attributes or skills that caused the nominating/corporate governance committee and our Board of Directors to determine that the nominees should serve as one of our directors.
Nominees for Election as Class I Directors at the Annual Meeting
| Name | Age | Principal Occupation and Business Experience | | Nancy B. Miller-Rich | 65 | Ms. Miller-Rich has been a member of our Board of Directors since January 2020. She is Chief Executive of Miller-Rich Associates, a pharmaceutical industry consultancy she founded in 2017. Previously, she served as Senior Vice-President, Global Human Health Business Development & Licensing, Strategy and Commercial Support at Merck Pharmaceuticals. At Merck, Ms. Miller-Rich had direct P&L involvement in the $38 billion pharmaceutical division and closed approximately 300 deals producing $10 billion of value creation. Prior to Merck, she worked for Schering-Plough Corporation, where she was Senior Vice President, Global Human Health Business Development & Licensing, Strategy and Commercial Support from 2013 to 2017 and Group Vice President, Consumer Care Global New Ventures and Strategic Commercial Development from 2007 to 2013. Prior to joining Schering-Plough in 1990, Ms. Miller-Rich served in a variety of commercial and marketing roles at Sandoz Pharmaceuticals and Sterling Drug, Inc. She is a director of 4D Molecular Therapeutics, Inc., and previously served as a director of Intercept Pharmaceuticals, Inc. and Kadmon Holdings. Ms. Miller-Rich also serves as a board member of a number of private and not-for-profit entities. Ms. Miller-Rich received her B.S. in Business Administration, Marketing from Ithaca College in Ithaca, New York. Ms. Miller-Rich’s public company experience and strong background in areas such as licensing, joint ventures, and global commercial |
Nominees for Election as Class I Directors at the Annual Meeting
| Name | Age | Principal Occupation and Business Experience | | | | development contributed to our conclusion that she should serve as a director of our company. | | Ben R. Bronstein, M.D. | 74 | Dr. Bronstein has served as a member of our Board of Directors since 2010. He has spent the past 35 years in entrepreneurial and management roles in life science companies and venture capital firms. He served as the interim Chief Medical Officer at Sentien Biotechnologies, Inc. from 2016 to 2017. From 2017 to 2018, Dr. Bronstein served as Executive Vice President, Clinical Development at Aclaris Therapeutics. Previously, he served as Chief Medical Officer of Stealth BioTherapeutics, Inc., as a Visiting Scholar at the Wyss Institute of Biologically Inspired Engineering at Harvard Medical School, and as a founder and Senior Vice President of Access BridgeGap Ventures, the life science investment unit of Access Industries, Inc. Earlier, Dr. Bronstein founded or held senior management positions at several venture-backed life science companies including: Aldeyra; BioSurface Technology, Inc. (acquired by Genzyme, Inc.); Peptimmune, Inc., (acquired by Genzyme, Inc.); and Vidus Ocular, Inc. (acquired by OPKO Health). Dr. Bronstein is a board-certified pathologist and dermatopathologist, with over 20 publications. Dr. Bronstein began his professional career on the staff of the Massachusetts General Hospital and on the faculty of Harvard Medical School. Until January 2024, Dr. Bronstein served as the non-executive chair of the Board of Directors of Cleveland Diagnostics, Inc. Dr. Bronstein received his M.D. and M.B.A. from Boston University. Dr. Bronstein’s extensive knowledge of our business and history, experience as a board member and executive of biotechnology companies, and expertise in developing and financing numerous biopharmaceutical companies contributed to our conclusion that he should serve as a director of our company. |
Required Vote and Recommendation of the Board of Directors for Proposal 1
Required Vote and Recommendation of the Board of Directors for Proposal 1 The affirmative vote of a plurality of the votes cast at the Annual Meeting is required for the election of our Class I directors. The two nominees receiving the most “FOR” votes among votes properly cast in person or by proxy will be elected to the Board of Directors as Class I directors. You may vote “FOR” or “WITHHOLD” on each of the nominees for election as director. Shares represented by signed proxy cards will be voted on Proposal 1 “FOR” the election of Nancy B. Miller-Rich and Ben R. Bronstein, M.D. to the Board of Directors at the Annual Meeting, unless otherwise marked on the card. A broker non-vote or a properly executed proxy marked “WITHHOLD” with respect to the election of a Class I director will not be voted with respect to such director, although it will be counted for purposes of determining whether there is a quorum. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE CLASS I NOMINEES NAMED ABOVE.
Continuing Directors Not Standing for Election
Continuing Directors Not Standing for Election Certain information about those directors whose terms do not expire at the Annual Meeting is furnished below, including their business experience; public company director positions held currently or at any time during the last five years; involvement in certain legal or administrative proceedings, if applicable; and the experiences, qualifications, attributes, or skills that caused the nominating/corporate governance committee and our Board of Directors to determine that the directors should serve as one of our directors. The age of each director as of April 9, 2024 is set forth below.
Incumbent Class II Directors Whose Term Expires in 2025
Incumbent Class II Directors Whose Term Expires in 2025
Incumbent Class II Directors Whose Term Expires in 2025
| Name | Age | Principal Occupation and Business Experience | | Richard H. Douglas, Ph.D. | 71 | Dr. Douglas has served on our Board of Directors since September 2016. Dr. Douglas was formerly Senior Vice President, Corporate Development of Genzyme Corporation. From 1989 to 2011, he led Genzyme Corporation’s Corporate Development team, and was involved in numerous acquisitions, licenses, financings, joint ventures, and strategic alliances. From 1982 until its merger with Genzyme Corporation in 1989 (now Sanofi Genzyme), Dr. Douglas served in science and corporate development capacities at Integrated Genetics. Currently, Dr. Douglas is on the board of directors of Novavax, Inc., a publicly-traded commercial vaccine company; chairs the Board of Directors of MaxCyte, Inc., a publicly traded instrument company; and chais the University of Michigan Innovation Partnerships National Advisory Board. Dr. Douglas is also an advisor to Red Sky Partners LLC. Dr. Douglas received a B.S. in chemistry from the University of Michigan and a Ph.D. in biochemistry from the University of California, Berkeley, and he was a postdoctoral fellow in Leroy Hood’s laboratory at the California Institute of Technology. Dr. Douglas’s extensive knowledge of our business; experience as a board member of publicly-traded biotechnology companies; substantial scientific background; and expertise in developing, financing and providing strong executive leadership within the pharmaceutical industry contributed to our conclusion that he should serve as a director of our company. | | Gary M. Phillips, M.D. | 58 | Dr. Phillips has served as a member of our Board of Directors since May 2009. Dr. Phillips has served as Chief Business Officer of Anaveon AG since May 2022. Dr. Phillips currently serves as the Chairman of the supervisory board of Nanobiotix SA. Prior to that, he was President & CEO of OrphoMed, Inc. from 2018 to 2022 and Executive Vice President & Chief Strategy Officer at Mallinckrodt Pharmaceuticals plc from 2013 to 2018. Previously, Dr. Phillips held the dual roles of president, U.S. surgical and pharmaceuticals and global head of pharmaceuticals at Bausch & Lomb. Additionally, he has served as the head of global health at the World Economic Forum in Geneva and was president of Reckitt Benckiser Pharmaceuticals, Inc. (now Indivior). He has also held executive roles at Merck KGaA, Novartis, and Wyeth (now Pfizer). He was a healthcare strategy managing consultant at Towers Perrin (now Willis Towers Watson) and a medical officer with the United |
Incumbent Class II Directors Whose Term Expires in 2025
| Name | Age | Principal Occupation and Business Experience | | | | States Navy, from which he was honorably discharged as a lieutenant commander. Dr. Phillips was educated at the University of Pennsylvania, where he received an M.D. (Alpha Omega Alpha) from the School of Medicine, an M.B.A. from the Wharton School, and B.A. (summa cum laude, Phi Beta Kappa) in biochemistry from the College of Arts and Sciences. He completed postgraduate medical education at Naval Medical Center San Diego and maintains an active medical license. Dr. Phillips’ extensive knowledge of our business and history, and his experience in pharmaceutical strategy at multiple multinational companies, contributed to our conclusion that he should serve as a director of our company. | | Neal S. Walker, D.O. | 54 | Dr. Walker has served on our Board of Directors since June 2013. Dr. Walker is the Chair of the board of directors, and since January 2024 the interim Chief Executive Officer at Aclaris Therapeutics, Inc., a publicly-traded drug development company, having previously served as President and Chief Executive Officer until December 2022. He is a board certified dermatologist and serial entrepreneur with over 25 years of experience in the biopharmaceutical industry. Prior to founding Aclaris Therapeutics, Inc. in 2012, he was co-founder, President and CEO of Vicept Therapeutics, Inc. (acquired by Allergan, Inc.) from 2009 to 2012. Dr. Walker has co-founded and led a number of life science companies: Octagon Research Solutions, Inc., a software and services provider to biopharmaceutical companies (acquired by Accenture plc); Trigenesis Therapeutics, Inc., a specialty dermatology company where he served as Chief Medical Officer (acquired by Dr. Reddy’s Laboratories Ltd); and Cutix Inc., a commercial dermatology company that markets PreSun®, a sunscreen brand acquired from Bristol-Myers Squibb Co. He began his pharmaceutical industry career at Johnson & Johnson, Inc. In addition to Aclaris, Dr. Walker currently is also on the board of directors of Zoomi, Inc, and Myota, Inc. Dr. Walker previously served on the board of directors for Octagon, a contract research organization. He is also on the Advisory Board of Flexible Medical Systems LLC, a privately held medical device company. Dr. Walker received his M.B.A. from The Wharton School of the University of Pennsylvania, his D.O. from Philadelphia College of Osteopathic Medicine, and a B.A. in Biology from Lehigh University. Dr. Walker’s experience as a founder of a number of healthcare companies, strong background in clinical and product development, and substantial knowledge of the pharmaceutical industry contributed to our conclusion that he should serve as a director of our company. |
Incumbent Class III Directors Whose Term Expires in 2026
Incumbent Class III Directors Whose Term Expires in 2026
Incumbent Class III Directors Whose Term Expires in 2026
| Name | Age | Principal Occupation and Business Experience | | Todd C. Brady, M.D., Ph.D | 52 | Dr. Brady has served as our President and Chief Executive Officer since January of 2012 and as a member of our Board of Directors since 2005. Prior to Aldeyra, Dr. Brady served as Entrepreneur in Residence at Domain Associates, LLC, a leading healthcare venture capital firm, where he was a Principal from 2004 to 2013. Dr. Brady currently serves on the board of directors of Evoke Pharma, Inc., a publicly traded healthcare company, and served on the board of directors of F-star Therapeutics, Inc. |
Incumbent Class III Directors Whose Term Expires in 2026
| Name | Age | Principal Occupation and Business Experience | | | | until March 2023. Dr. Brady holds a Ph.D. in pathology from Duke University Graduate School, a M.D. from Duke University Medical School, and an A.B. from Dartmouth College in Philosophy and Psychology. Dr. Brady’s extensive knowledge of our business, as well as his years of experience in the biotechnology industry, including executive leadership in several biotechnology companies, contributed to our conclusion that he should serve as a director of our company. | | Martin J. Joyce, M.B.A. | 70 | Mr. Joyce has served as member of our Board of Directors since October 2013. Mr. Joyce’s professional background includes leadership roles in public and private, medical device, biotechnology, and pharmaceutical companies from start-up stage to over $500 million in annual revenue. He has experience in public equity financings, business development, SEC reporting, strategic planning, mergers, acquisitions, investor relations, and biotechnology operations. Since 2012, Mr. Joyce has served as a consultant to the life science industry assisting biotechnology and pharmaceutical companies in strategic planning, fund raising, and operations. From March 2011 to July 2012, Mr. Joyce was Chief Financial Officer at Lucid Inc., an early stage skin cancer diagnostic company. Previously, Mr. Joyce served as Executive Vice President and Chief Financial Officer of BioSphere Medical from January 2006 through September 2010 and as BioSphere’s Chief Financial Officer and Vice President from September 2004 to January 2006. From January 2001 to September 2004, Mr. Joyce served as Managing Partner of Stratex Group LLC, a provider of biopharmaceutical executive services to early-stage companies and venture investors. From 1996 to January 2001, Mr. Joyce was North American Chief Financial Officer for Serono Inc. a biotechnology company. From April 1987 to 1996, Mr. Joyce held a variety of senior level positions within Serono in finance, sales, marketing and manufacturing. Mr. Joyce was previously employed at Millipore Corporation, a high technology bioscience company. Mr. Joyce received a B.S. in finance from Northeastern University and a M.B.A. from Suffolk University, Boston, Massachusetts. Mr. Joyce’s extensive knowledge of our business and history, experience in multiple publicly traded and privately-held companies, and expertise in developing and financing numerous biopharmaceutical companies contributed to our conclusion that he should serve as a director of our company. |
Incumbent Class III Directors Whose Term Expires in 2026
There are no family relationships among any of our directors or executive officers. See “Corporate Governance” below for additional information regarding our Board of Directors.
General
General In accordance with Section 14A of the Exchange Act and as a matter of good corporate governance, our Board of Directors is providing the stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as described in the section below entitled “Executive Officer Compensation” and accompanying compensation tables, and as discussed in the related narrative disclosure below. This advisory vote is commonly referred to as a “say-on-pay” vote and occurs on an annual basis, with the next such advisory vote being scheduled for the 2025 annual meeting of stockholders. Stockholders may express their views on the design and effectiveness of our executive compensation program by voting “For” or “Against” approval, on a non-binding, advisory basis, of the compensation of our named executive officers, or may abstain. This vote is not intended to address any specific element of compensation, but rather the overall compensation of the named executive officers. Our major stockholders have not expressed significant concerns about the general design of our equity compensation program or our use of stock options and restricted stock units as the primary long-term incentive vehicles. Please read the section below entitled “Executive Officer Compensation - Stockholder Engagement.” Since January 2015, our compensation committee has engaged the services of Pearl Meyer & Partners, LLC (Pearl Meyer), a nationally recognized compensation consulting firm, to advise the compensation committee regarding the amount and types of compensation that we provide to our executives and directors, and compare our compensation practices to the compensation practices of other companies. Pearl Meyer reports directly to the compensation committee. The goal of our executive compensation program is to enable us to attract, recruit, and retain qualified employees who have the collective and individual abilities necessary to run our business to meet the challenges we face, and to focus those executives on achieving results that enhance the value of our stockholders’ investment. Annual variable compensation and long-term equity incentives are significant components of our executive compensation program, and are designed to focus our executive team on those financial goals that we believe are most closely related to stockholder value. We believe our compensation policies and procedures demonstrate a strong link between pay and performance. Please read the section below entitled “Executive Officer Compensation” and the compensation tables and narrative that follow for additional details about our executive compensation program, including information about the fiscal 2023 compensation of our named executive officers.
Compensation Committee
| • | making recommendations to our Board of Directors with respect to director compensation; |
Compensation Committee
| • | overseeing and administering our equity incentive plans and employee benefit plans; |
Nominating/Corporate Governance Committee
| • | the candidate’s commitment to vigorously represent the long-term interests of our stockholders, including, but not limited to, upholding duties of care and loyalty; |
Stock Option Committee
Stock Option Committee During our year ended December 31, 2023, our stock option committee did not hold any meetings and acted by written consent one time. The sole member of our stock option committee is Todd C. Brady, M.D., Ph.D. Pursuant to the stock option committee charter, the function of this committee includes, among other things, granting stock options to non-executive employees under our 2023 Equity Incentive Plan within certain grant guidelines specified in the stock option committee charter or as adopted from time to time by our Board of Directors or compensation committee. Guidelines include, but are not limited to, a cap of 250,000 options to any individual and 3,000,000 shares in the aggregate in any single calendar year.
Director Compensation
Director Compensation The following table sets forth information about the compensation of the non-employee members of our Board of Directors who served as a director during our year ended December 31, 2023. Other than as set forth in the table and described more fully below, during our year ended December 31, 2023, we did not pay any fees to, make any equity awards or non-equity awards to, or pay any other compensation to the non-employee members of our Board of Directors. Dr. Brady, our chief executive officer, receives no compensation for his service as a director, and is not included in the table below. Dr. Douglas currently serves as chair of our Board of Directors.
Director Compensation
| | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | | Ben R. Bronstein, M.D. | $47,250 | $143,145(3) | $190,395 | | Richard H. Douglas, Ph.D. | $59,250 | $162,733(4) | $221,983 | | Martin J. Joyce, M.B.A. | $49,250 | $146,406(5) | $195,656 | | Nancy B. Miller-Rich | $42,500 | $131,715(6) | $174,215 | | Gary M. Phillips, M.D. | $48,750 | $145,317(7) | $194,067 | | Neal S. Walker, D.O. | $42,500 | $131,715(8) | $174,215 |
Director Compensation
| (1) The amounts in this column represent the aggregate grant date fair value of option awards granted to the director during our fiscal year ended December 31, 2023, computed in accordance with FASB ASC Topic 718. See Note 12 to our financial statements included in the 2023 Annual Report for a discussion of our assumptions in determining the ASC 718 values of our option awards. |
Director Compensation
| (2) As of December 31, 2023, our non-employee directors held outstanding stock options as follows: Dr. Bronstein, 216,057 shares; Dr. Walker, 200,500 shares; Mr. Joyce, 224,379 shares; Dr. Phillips, 215,071 shares; Dr. Douglas, 238,746 shares; and Ms. Miller-Rich, 143,152 shares. All of these options were granted pursuant to our non-employee director compensation program. |
Director Compensation
| (3) On June 30, 2023, Dr. Bronstein was granted options to purchase an aggregate of 24,058 shares of our common stock at an exercise price per share of $8.39. |
Director Compensation
| (4) On June 30, 2023, Dr. Douglas was granted options to purchase an aggregate of 27,350 shares of our common stock at an exercise price per share of $8.39. |
Director Compensation
| (5) On June 30, 2023, Mr. Joyce was granted options to purchase an aggregate of 24,606 shares of our common stock at an exercise price per share of $8.39. |
Director Compensation
| (6) On June 30, 2023, Ms. Miller-Rich was granted options to purchase an aggregate of 22,137 shares of our common stock at an exercise price per share of $8.39. |
Director Compensation
| (7) On June 30, 2023, Dr. Phillips was granted options to purchase an aggregate of 24,423 shares of our common stock at an exercise price per share of $8.39. |
Director Compensation
| (8) On June 30, 2023, Dr. Walker was granted options to purchase an aggregate of 22,137 shares of our common stock at an exercise price per share of $8.39. |
Non-Employee Director Compensation
Non-Employee Director Compensation For the year ended December 31, 2023, pursuant to our non-employee director compensation plan, each non-employee member of our Board of Directors received the following cash and equity compensation for board services, as applicable:
Non-Employee Director Compensation
| | Role | Annual Cash Retainer (1) | Initial Equity Grant (2) | Annual Equity Grant (5) | | Board of Directors | Director | $40,000 | Option to purchase $120,000 worth of shares of Common Stock (3) | Option to purchase $116,000 worth of shares of Common Stock | | | Chair | $17,500 | Option to purchase $30,000 worth of shares of Common Stock (4) | Option to purchase $30,000 worth of shares of Common Stock | | Audit Committee | Chair | $7,500 | Option to purchase $15,000 worth of shares of Common Stock (4) | Option to purchase $15,000 worth of shares of Common Stock | | | Other Member | $3,750 | Option to purchase $7,500 worth of shares of Common Stock (4) | Option to purchase $7,500 worth of shares of Common Stock | | Compensation Committee | Chair | $5,000 | Option to purchase $10,000 worth of shares of Common Stock (4) | Option to purchase $10,000 worth of shares of Common Stock | | | Other Member | $2,500 | Option to purchase $5,000 worth of shares of Common Stock (4) | Option to purchase $5,000 worth of shares of Common Stock | | Nominating/Corporate Governance Committee | Chair | $3,500 | Option to purchase $8,000 worth of shares of Common Stock (4) | Option to purchase $8,000 worth of shares of Common Stock | | | Other Member | $1,750 | Option to purchase $3,500 worth of shares of Common Stock (4) | Option to purchase $3,500 worth of shares of Common Stock |
Non-Employee Director Compensation
| (1) Annual cash retainers are payable quarterly. |
Non-Employee Director Compensation
| (2) Initial equity grants are automatically granted on the date the director is elected or appointed as a director, chair, member of a committee, or chair of a committee, as applicable. |
Non-Employee Director Compensation
| (3) The initial equity grant upon election or appointment as a director shall vest in three equal annual installments following the grant date. |
Non-Employee Director Compensation
| (4) Each initial equity grant shall be pro-rated for the number of whole months remaining until the anniversary of the prior year’s stockholders’ meeting, rounded down to the nearest whole share, and shall vest on the anniversary of the prior year’s stockholders’ meeting, provided that the director provides continuous service as a director through such date. |
Non-Employee Director Compensation
| (5) Annual equity grants are automatically granted on the date of each annual meeting of our stockholders and shall vest on the 1-year anniversary of the grant date, provided that the director provides continuous service as a director, member of the applicable committee, or chair, as applicable, through such date. |
Non-Employee Director Compensation
In addition, the following rules apply to initial and annual equity awards:
Non-Employee Director Compensation
| • | All of the awards will be automatically granted to each non-employee director in the form of non-statutory stock options issued under our 2023 Equity Incentive Plan; |
Non-Employee Director Compensation
| • | The number of shares subject to a stock option is determined by using the Black-Scholes option valuation method to determine the value per option on the valuation date (the exercise price shall be the closing price of our common stock on the third trading day prior to the grant date); |
Non-Employee Director Compensation
| • | All of the non-employee directors’ equity awards will become fully vested upon a Change in Control (as defined below) of our company; and |
Non-Employee Director Compensation
| • | All such automatic director option grants to non-employee directors shall have a maximum term of ten years. |
Non-Employee Director Compensation
For purposes of our non-employee director compensation plans or programs, a non-employee director is a director who is not employed by us and who does not receive compensation from us, or have a business relationship with us that would require disclosure under certain rules of the SEC. We also reimburse our non-employee directors for reasonable out-of-pocket expenses incurred in attending Board of Directors and committee meetings. Change in Control means the occurrence of any of the following: (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of our securities representing more than fifty percent (50%) of the total voting power represented by our then-outstanding voting securities; (b) the consummation of the sale or disposition by us of all or substantially all of our assets; (c) the consummation of a merger or consolidation of our company with or into any other entity, other than a merger or consolidation that would result in the voting securities of our company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power of the voting securities of our company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or (d) individuals who are members of our Board of Directors (the Incumbent Board) cease for any reason to constitute a majority of the members of our Board of Directors over a period of 12 months; provided, however, that if the appointment or election (or nomination for election) of any new member of our Board of Directors was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes hereof, be considered as a member of the Incumbent Board. A transaction shall not constitute a Change in Control under the definition set forth in the preceding sentence if its sole purpose is to change the state of our incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held our securities immediately before such transaction. In addition, if a Change in Control constitutes a payment event with respect to any equity or other benefit that provides for a deferral of compensation and which is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the Code), then notwithstanding anything to the contrary in this letter agreement or in any document governing such award, the transaction with respect to such equity or other benefit must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A of the Code.
Summary Compensation Table
Summary Compensation Table The following table provides information concerning the compensation paid to our Chief Executive Officer and our next two most highly compensated executive officers for our year ended December 31, 2023. We refer to these individuals as our named executive officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan ($) | All Other Compensation ($) | Total ($) | | Todd C. Brady, M.D., Ph.D. | 2023 | 581,170 | 1,613,950 | 1,236,598 | 239,733(2) | 13,200(3) | 3,684,651 | | President and Chief Executive Officer | 2022 | 559,357 | 1,130,000 | 818,523 | 338,410 | 12,200 | 2,858,490 | | Stephen G. Machatha, Ph.D. | 2023 | 377,250 | — | 1,089,483 | 113,175(2) | 13,200(3) | 1,593,108 | | Chief Development Officer | 2022 | 359,287 | 1,167,121 | 818,523 | 208,086 | 12,200 | 2,565,216 | | Bruce Greenberg, M.B.A. | 2023 | 330,000 | — | 544,242 | 86,625(2) | 13,200(3) | 974,067 | | Senior Vice President of Finance, Interim Chief Financial Officer | 2022 | 285,340 | 595,131 | 490,385 | 99,000 | 12,200 | 1,482,055 |
Summary Compensation Table
| (1) Reflects the aggregate grant date fair value of stock awards and option awards granted during the applicable year calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 12 to our audited financial statements included in the 2023 Annual Report. In accordance with SEC rules, the grant date fair value of an award subject to performance conditions is based on the probable outcome of the conditions. |
Summary Compensation Table
| (2) Represents amounts paid under our 2023 performance bonus plan in March 2024. |
Summary Compensation Table
| (3) Consists of annual matching contributions to the executives 401(k) plan account. |
Outstanding Equity Awards at Fiscal 2023 Year-End
Outstanding Equity Awards at Fiscal 2023 Year-End The following tables show certain information regarding outstanding equity awards, including, but not limited to, restricted stock unit awards, held by our named executive officers as of December 31, 2023. For information regarding the vesting acceleration provisions applicable to the options held by our named executive officers, please see “Severance and Change in Control Benefits” above.
Outstanding Equity Awards at Fiscal 2023 Year-End
| | Option Awards | | | | | Stock Awards | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Vested | Number of Securities Underlying Unexercised Options Unvested(#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options(#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or unit of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | Equity Incentive Plan Awards: number of unearned shares units or other rights that have not vested (#) | Equity Incentive Plan Awards: market or payout value of unearned shares, units or other rights that have not yet vested ($) | | Todd C. Brady, M.D. Ph.D. | 5/7/2014 | 76,068 | — | — | 8.00 | 5/6/2024 | | | | | | | 6/3/2015 | 90,000 | — | — | 7.85 | 6/2/2025 | | | | | | | 3/16/2016 | 250,000 | — | — | 4.59 | 3/15/2026 | | | | | | | 3/3/2017 | 250,000 | — | — | 5.10 | 3/2/2027 | | | | | | | 3/6/2018 | 217,293 | — | — | 8.60 | 3/5/2028 | | | | | | | 3/5/2019 | 250,000 | — | | 8.05 | 3/4/2029 | | | | | | | 3/2/2020 | 244,791(2) | 5,209 | | 3.78 | 3/1/2030 | | | | | | | 3/2/2020 | | | | | | 62,500(3) | 219,375 | | | | | 4/12/2021 | 182,291(4) | 67,709 | | 11.71 | 4/11/2031 | | | | | | | 4/12/2021 | | | | | | 23,310(5) | 81,818 | | | | | 3/30/2022 | 119,791(6) | 130,209 | | 4.52 | 3/29/2032 | | | | | | | 3/30/2022 | | | | | | 187,500(7) | 658,125 | | | | | 2/28/2023 | 57,291(8) | 192,709 | | 6.76 | 2/27/2033 | | | | | | | 2/28/2023 | | | | | | 238,750(9) | 838,013 | | | | Bruce Greenberg, M.B.A. | 12/12/2019 | 45,000 | — | | 5.32 | 12/11/2029 | | | | | | | 3/5/2020 | 19,583(2) | 417 | | 3.57 | 3/4/2030 | | | | | | | 3/22/2021 | 42,639(4) | 15,838 | | 12.24 | 3/21/2031 | | | | | | | 4/18/2021 | 21,320(4) | 7,919 | | 11.28 | 4/17/2031 | | | | | | | 3/4/2022 | 47,916(6) | 52,084 | | 3.50 | 3/3/2032 | | | | | | | 3/30/2022 | 35,053(6) | 38,103 | | 4.52 | 3/29/2032 | | | | | | | 7/15/2022 | | | | | | 94,566(10) | 331,927 | | | | | 2/28/2023 | 25,214(8) | 84,814 | | 6.76 | 2/27/2033 | | | | | | Stephen G. Machatha, Ph.D. | 4/5/2016 | 35,000 | — | | 4.60 | 4/4/2026 | | | | | | | 3/10/2017 | 26,200 | — | | 5.25 | 3/9/2027 | | | | | | | 3/1/2018 | 45,573 | — | | 8.35 | 2/28/2028 | | | | | | | 3/5/2019 | 63,000 | — | | 8.05 | 3/4/2029 | | | | | | | 3/2/2020 | 132,735(2) | 2,825 | | 3.78 | 3/1/2030 | | | | | | | 4/12/2021 | 84,729(4) | 31,472 | | 11.71 | 4/11/2031 | | | | | | | 3/30/2022 | 119,791(6) | 130,209 | | 4.52 | 3/29/2032 | | | | | | | 3/30/2022 | | | | | | 48,297(7) | 169,522 | | | | | 7/15/2022 | | | | | | 139,204(10) | 488,606 | | | | | 2/28/2023 | 50,475(8) | 169,783 | | 6.76 | 2/27/2033 | | | | |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (1) Computed in accordance with SEC rules as the number of unvested shares multiplied by the closing market price of our Common Stock on December 29, 2023, the last trading day of 2023, which was $3.51. The actual value (if any) to be realized by the officer depends on whether the shares vest and the future performance of our common stock. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (2) Option vests in equal monthly installments over four years following January 1, 2020. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (3) Restricted stock unit award vests in equal annual installments over four years of service following January 1, 2020, provided that the grantee provides continuous service to us through each such vesting date. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (4) Option vests in equal monthly installments over four years following January 1, 2021. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (5) Restricted stock unit award vests in equal annual installments over four years of service following January 1, 2021, provided that the grantee provides continuous service to us through each such vesting date. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (6) Option vests in equal monthly installments over four years following January 1, 2022. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (7) Restricted stock unit award vests in equal annual installments over four years of service following January 1, 2022, provided that the grantee provides continuous service to us through each such vesting date. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (8) Option vests in equal monthly installments over four years following January 1, 2023. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (9) Restricted stock unit award vests in equal annual installments over four years of service following January 1, 2023, provided that the grantee provides continuous service to us through each such vesting date. |
Outstanding Equity Awards at Fiscal 2023 Year-End
| (10) Restricted stock unit award vests in equal annual installments over four years of service following July 15, 2022, provided that the grantee provides continuous service to us through each such vesting date. |
Outstanding Equity Awards at Fiscal 2023 Year-End
In addition to the amounts set forth in the table above, on March 5, 2019, Dr. Brady was granted 45,329 performance-based cash units (the March 2019 Performance Units). The March 2019 Performance Units vested in four annual installments from the date of grant and entitle Dr. Brady to receive a cash payment, on the earlier of (i) four years from the date of grant or (ii) a change of control, equal in value to the amount by which the then value of our common stock exceeds the base value of $8.05. Upon the completion of vesting of the March 2019 Performance Units, the value of our common stock had not exceeded the March 2019 Performance Units base value of $8.05. Accordingly, Dr. Brady did not receive a cash payment in connection with the completion of vesting of the March 2019 Performance Units. On March 2, 2020, Dr. Brady was granted 450,865 performance-based cash units (the March 2020 Performance Units). The performance-based cash units vest in four annual installments from the date of grant and entitle Dr. Brady to receive a cash payment, on the earlier of (i) four years from the date of grant or (ii) a change of control, equal in value to the amount by which the then value of our common stock exceeds the base value of $3.78. Accordingly, Dr. Brady received a cash payment in connection with the completion of the vesting of the March 2020 Performance Units totaling $130,750.85 in March 2024. On March 15, 2022, Dr. Brady was granted 207,758 performance-based cash units. The performance-based cash units vest in four annual installments from the date of grant and entitle Dr. Brady to receive a cash payment, on the earlier of (i) four years from the date of grant or (ii) a change of control, equal in value to the amount by which the then value of our common stock exceeds the base value of $4.52. On July 15, 2022, Dr. Brady was granted 604,308 cash-based bonus units and Dr. Machatha was granted 69,473 cash-based bonus units. Subject to and conditioned upon the acceptance by the U.S. Food and Drug Administration of our submission of a New Drug Application for reproxalap, the cash-based bonus units vest in four annual installments from the date of grant and entitle Drs. Brady and Machatha to receive a cash payment for each vested bonus unit, on the earlier of (i) four (4) years from the date of grant or (ii) a change of control, equal in value to the closing price per share of the our common stock on The Nasdaq Capital Market on the payment date.
Pay Versus Performance Disclosure
Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between the executive “compensation actually paid” to our principal executive officer (PEO) and our other named executive officers (NEOs) and our financial performance for each of the last three completed fiscal years. In determining the “compensation actually paid” (CAP) to our NEOs, we are required to make various adjustments to amounts that have in prior years been reported in the Summary Compensation Table (SCT), as the SEC’s valuation methods for this disclosure differ from those required in the SCT. The values do not necessarily represent the actual compensation received by the NEOs nor how the Compensation Committee evaluates and determines executive compensation levels. For our NEOs other than our PEO, compensation is reported as an average.
Pay Versus Performance Disclosure
| Year | SCT Total for PEO(1) | CAP to PEO(1)(2)(3) | | Average SCT Total for Non-PEO NEOs (4) | Average CAP to Non-PEO NEOs (2)(3)(4) | Value of initial fixed $100 investment based on Total Shareholder Return (TSR)(5) | Net Income (in $000s)(6) | | | 2023 | $3,684,651 | ($ | 1,220,740) | $1,283,588 | $75,336 | $51.17 | ($ | 37,543) | | 2022 | $2,858,490 | | 10,614,223 | $2,023,636 | $3,308,975 | $101.46 | ($ | 62,025) | | 2021 | $3,455,670 | | 188,614 | $1,639,775 | $738,617 | $58.31 | ($ | 57,776) |
Pay Versus Performance Disclosure
| (1) The PEO for all three years included in the table is Todd C. Brady, M.D., Ph.D, our chief executive officer. The dollar amounts reported in this column are the amounts of total compensation reported for Dr. Brady in the “Total” column of the SCT in the applicable fiscal year. |
Pay Versus Performance Disclosure
| (2) In accordance with SEC rules, deductions from and additions to, total compensation reported in the SCT by year to calculate Compensation Actually Paid include: |
Pay Versus Performance Disclosure
| | PEO | | | | | | Average Non-PEO NEOs | | | | | | | | 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 | | | SCT Total | | 3,684,651 | | 2,858,490 | | 3,455,670 | | 1,283,588 | | 2,023,636 | | 1,639,775 | | Adjustments for Equity Awards | | | | | | | | | | | | | | Deduct:Grant date values in SCT | -$ | 2,850,548 | -$ | 1,948,523 | -$ | 2,596,269 | -$ | 816,863 | -$ | 1,535,579 | -$ | 1,092,375 | | Add:Year-end fair value of unvested awards granted in the current year | | 1,302,920 | | 7,938,000 | | 593,081 | | 307,105 | | 2,448,681 | | 216,628 | | Add:Year-over-year difference of year-end fair values for unvested awards granted in prior years | -$ | 3,936,684 | | 1,486,804 | -$ | 2,349,775 | -$ | 969,744 | | 179,149 | -$ | 518,890 | | Add:Fair values at vest date for awards granted and vested in current year | | 327,217 | | 196,282 | | 383,137 | | 216,150 | | 166,207 | | 204,125 | | Add:Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | | 251,703 | | 83,170 | | 702,770 | | 55,100 | | 26,880 | | 289,354 | | Deduct:Forfeitures during current year equal to prior year-end fair value | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Total Adjustments for Equity Awards | -$ | 4,905,391 | | 7,755,733 | -$ | 3,267,056 | -$ | 1,208,252 | | 1,285,339 | -$ | 901,158 | | CAP | -$ | 1,220,740 | | 10,614,223 | | 188,614 | | 75,336 | | 3,308,975 | | 738,617 |
Pay Versus Performance Disclosure
| (3) The following summarizes the valuation assumptions used for stock option awards included as part of CAP: |
Pay Versus Performance Disclosure
| • | Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/fiscal year end (FYE) date. |
Pay Versus Performance Disclosure
| • | Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. |
Pay Versus Performance Disclosure
| • | Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. |
Pay Versus Performance Disclosure
| • | Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. |
Pay Versus Performance Disclosure
| • | Represents annual dividend yield on each vest/FYE date. |
Pay Versus Performance Disclosure
| (4) Non-PEO NEO averages reflect the following executives by year: |
Pay Versus Performance Disclosure
| • | 2022 and 2023: Bruce Greenberg, and Stephen G. Machatha |
Pay Versus Performance Disclosure
| • | 2021: Joshua Reed, and Stephen G. Machatha |
Pay Versus Performance Disclosure
The dollar amounts reported in this column represent the average of the amounts reported for the non-PEO NEOs in the “Total” column of the SCT in the applicable fiscal year.
Pay Versus Performance Disclosure
| (5) Cumulative TSR is calculated by dividing the difference between our company’s share price at the end and the beginning of the measurement period (plus reinvested dividends, if any) by our company’s share price at the beginning of the measurement period. No dividends were issued on stock or option awards in 2021, 2022 or 2023. |
Pay Versus Performance Disclosure
| (6) The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year. |