DEF 14A of Vericel Corp, Mar 21, 2024

DEF 14A of Vericel Corp

Filed Mar 21, 2024 · FY20230001308179-24-000206

Open on EDGAR

  1. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    Director Nominees for Election at the 2024 Annual Meeting of Shareholders The biographical description below for each director nominee includes the specific experiences, qualifications, attributes and skills that led to the conclusion by the Board of Directors that such person should serve as a director of Vericel.

  2. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Robert Zerbe, M.D., 73 Independent Chairman of the Board Retired Chief Executive Officer, QUATRx Pharmaceuticals Company Director Since: 2006 Other Current Public Company Directorships: • None Vericel Board committee(s): • Audit Committee | KEY EXPERIENCE AND QUALIFICATIONS | | | | • BioPharma: Dr. Zerbe has held numerous senior management positions at major pharmaceutical companies throughout his career, including serving as Chief Executive Officer of QUATRx Pharmaceuticals Company as well as senior positions at both Eli Lilly and Company and Pfizer. • CEO/GM: Served as CEO of a drug development company for over 15 years • Research & Development: Led the clinical development programs for a number of key products, including Lipitor and Neurontin, at Pfizer | | | | PROFESSIONAL HIGHLIGHTS • Chief Executive Officer of QUATRx Pharmaceuticals Company, a venture-backed drug development company, which he co-founded (2000-2016) • Senior Vice President of Worldwide Clinical Research and Development of Pfizer (formerly Parke-Davis), as well as other senior executive management positions (1993-2000) • Managing Director, Lilly Research Center U.K., of Eli Lilly and Company (including Vice President of Clinical Investigation and Regulatory Affairs, as well as several other clinical research and development positions) (1982-1993) | OTHER LEADERSHIP POSITIONS AND EXPERIENCE • Member of the boards of directors of Metabolic Solutions Development Company and Cirius Therapeutics, both private companies focused on metabolic diseases EDUCATION • M.D. from Indiana University School of Medicine • Post-doctoral work in internal medicine, endocrinology and neuroendocrinology at Indiana University and the National Institutes of Health |

  3. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Dominick Colangelo, 60 President and Chief Executive Officer, Vericel Director Since: 2013 Other Current Public Company Directorships: • Trevi Therapeutics, Inc. Vericel Board committee(s): • None | KEY EXPERIENCE AND QUALIFICATIONS | | | | • CEO/GM: Mr. Colangelo has more than 20 years of executive management experience in the biopharmaceutical industry. For the past 10 years he has served as President and CEO of Vericel, spearheading the acquisition of MACI and Epicel and leading the Company through an extended period of significant revenue and market growth. Mr. Colangelo also served for more than a decade in senior leadership positions at Eli Lilly and Company. • Finance: Mr. Colangelo possesses a significant accounting and finance background, which has been developed through education, strategy and business development roles, as well as his service on the audit committee of the board of directors of Trevi Therapeutics. • Marketing/Sales: Extensive experience in the acquisition, development and commercialization of products across a variety of therapeutic areas • Business Development: Experience gained through a variety of executive positions in product development, pharmaceutical operations and corporate development | | | | PROFESSIONAL HIGHLIGHTS • President and Chief Executive Officer and a member of the Board of Directors of Vericel (2013-present) • Director of Strategy and Business Development for Eli Lilly’s Diabetes Product Group and founding Managing Director of Lilly Ventures at Eli Lilly and Company | OTHER LEADERSHIP POSITIONS AND EXPERIENCE • Member of the board of directors of Trevi Therapeutics, Inc., a publicly-traded clinical stage biopharmaceutical company focused on the development and commercialization of treatments for chronic cough conditions. Mr. Colangelo is a member of both the audit and compensation committees of the Trevi Therapeutics board. EDUCATION • B.S.B.A. in Accounting, Magna Cum Laude, from the State University of New York at Buffalo • J.D., with honors, from the Duke University School of Law |

  4. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 2024 Proxy Statement | 23 |

  5. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Heidi Hagen, 55 Independent Former Chief Technical Officer, Sonoma Biotherapeutics Director Since: 2013 Other Current Public Company Directorships: • None Vericel Board committee(s): • Compensation and Governance and Nominating (Chair) Committees | KEY EXPERIENCE AND QUALIFICATIONS | | | | • BioPharma/Complex Biologics: Ms. Hagen possesses more than 30 years of product development and leadership experience within the biopharmaceutical and medical device industries, having successfully built organizations and executed development programs within both established and start-up environments. • Chief Operating Officer/Technical Operations: Ms. Hagen has developed extensive operations experience throughout her career, including while serving at multiple commercial-stage biotechnology companies. In those capacities, Ms. Hagen has developed particular expertise in technical operations, where she has overseen production operations for multiple complex biologics across a variety of therapeutic areas. | | | | PROFESSIONAL HIGHLIGHTS • Chief Technical Officer of Sonoma Biotherapeutics, a privately-held biotechnology company (2021-2022) • Interim Chief Executive Officer and member of the board of directors of Ziopharm Oncology, Inc., a publicly-traded company developing immune-oncology gene and cell therapies (2019-2021) • Co-founder and Advisor and former Chief Strategy Officer of Vineti, Inc., a software platform company for cell and gene therapy supply chain management (2015-present) • Senior Vice President of Operations for Dendreon Corporation, a commercial biotechnology company (2002-2012) | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Member of the boards of directors of Obsidian Therapeutics, Inc., a privately-held organization focused on treating cancer through cell and gene therapies, Applied Stem Cell, a privately-held organization developing proprietary gene editing and stem cell technology platforms, and A-Alpha Bio, a privately-held organization focused on developing synthetic biotechnology and machine learning to accelerate drug development EDUCATION • B.S. in cell and molecular biology, M.S. in bioengineering, and M.B.A. from the University of Washington |

  6. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 24 | |

  7. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Alan Rubino, 69 Independent Former Chief Executive Officer, Emisphere Technologies, Inc. Director Since: 2005 Other Current Public Company Directorships: • None Vericel Board committee(s): • Audit and Compensation (Chair) Committees | KEY EXPERIENCE AND QUALIFICATIONS | | | | • CEO/GM: Mr. Rubino possess a wealth of experience across multiple disciplines within the biotechnology and pharmaceutical industries. Mr. Rubino recently served for seven years as CEO of Emisphere Technologies, Inc., a publicly-traded drug delivery company, as well as CEO of RenovaCare, a publicly-held biotechnology company. • Marketing/Sales/Business Development: Mr. Rubino spent 24 years with Roche where he served as a member of the executive committee for ten years and presided over 30 product launches and brand marketing execution plans. He also had leading roles in the acquisitions of Syntex Labs and Boehringer-Mannheim. • Operations: Throughout his career, Mr. Rubino has provided enterprise-wide leadership over corporate, marketing, sales, supply chain and human resources management functions. | | | | PROFESSIONAL HIGHLIGHTS • President and Chief Executive Officer of RenovaCare, a publicly-held biotechnology company (2019-2021) • Chief Executive Officer of Emisphere Technologies, Inc., a publicly-held drug delivery company, which was acquired by Novo Nordisk for $1.8B (2012-2019) • Chief Executive Officer and co-founder of New American Therapeutics, Inc., which acquired Denavir from Novartis (New American was subsequently sold to Renaissance Pharma, LLC for a 49% IRR to investors) • Chief Executive Officer and co-founder of Akrimax Pharmaceuticals, LLC, where he in-licensed Tirosint from IBSA Institut Biochimique SA for the U.S. market | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Currently serves as Executive Chairman of the board of directors of AMO Pharma Limited, a privately-held UK-based company focused on special therapeutics for rare diseases (2021-present) • Former member of boards of directors of numerous public and privately-held organizations, including SANUWAVE Health, Inc., and Genisphere, Inc. EDUCATION • B.A. in economics from Rutgers University with a minor in biology/chemistry • Post-graduate educational programs at the University of Lausanne and Harvard Business School |

  8. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Kevin McLaughlin, 67 Independent Former Chief Financial Officer and Treasurer, Acceleron Pharma Inc. Director Since: 2015 Other Current Public Company Directorships: • None Vericel Board committee(s): • Audit (Chair) Committee | KEY EXPERIENCE AND QUALIFICATIONS | | | | • BioPharma: Mr. McLaughlin has more than 40 years of operating management and financial experience spanning the biotech, high-tech and education industries. • Finance: Mr. McLaughlin served for 11 years as the Senior Vice President, Chief Financial Officer and Treasurer of Acceleron, Pharma Inc., until its acquisition by Merck & Co. in 2021. Prior to Acceleron, he served as Senior Vice President and Chief Financial Officer of Qteros, Inc., a cellulosic biofuels company. | | | | PROFESSIONAL HIGHLIGHTS • Senior Vice President, Chief Financial Officer and Treasurer of Acceleron Pharma Inc., a publicly-traded biopharmaceutical company (2010-2021) • Senior Vice President and Chief Financial Officer of Qteros, Inc., a cellulosic biofuels company (2009-2010) • Co-founder, Chief Operating Officer and a director of Aptius Education, Inc., a publishing company (2007-2009) • President and Chief Executive Officer and a member of the board of directors of PRAECIS Pharmaceuticals until its sale to GSK plc (formerly GlaxoSmithKline). Mr. McLaughlin joined PRAECIS as its first Chief Financial Officer and also served as Chief Operating Officer. | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Former member of the board of directors of Decibel Therapeutics, a clinical-stage and public biotechnology company dedicated to discovering treatments to restore and improve hearing and balance, which was acquired by Regeneron Pharmaceuticals in 2023 • Member of the board of directors of Combined Therapeutics, Inc., a privately-held company focused on the development of mRNA treatments EDUCATION • B.S. in business from Northeastern University and an M.B.A. from the F.W. Olin Graduate School of Business at Babson College |

  9. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 2024 Proxy Statement | 25 |

  10. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Steven Gilman, 71 Independent Retired Chairman and Chief Executive Officer, ContraFect Corporation Director Since: 2015 Other Current Public Company Directorships: • SCYNEXIS, Inc. • Akebia Therapeutics, Inc. Vericel Board committee(s): • Compensation Committee | KEY EXPERIENCE AND QUALIFICATIONS | | | | • BioPharma: Dr. Gilman has a wealth of leadership experience in the biopharmaceutical space, which has been developed while serving in senior roles across the industry. Dr. Gilman has served as the Chief Executive Officer at both ContraFect Corporation until his retirement in 2019, and earlier in his career at ActivBiotics, Inc., a privately-held biopharmaceutical company. • Research & Development/Technical Operations: In addition to his core management experience, Dr. Gilman has served in key Research and Development and Operations roles during his career. Notably, Dr. Gilman served as Executive Vice President, Research and Development and Chief Scientific Officer for five years at Cubist Pharmaceuticals, before the company’s acquisition by Merck & Co. in 2015. | | | | PROFESSIONAL HIGHLIGHTS • Chairman and Chief Executive Officer of ContraFect Corporation (2015-2019) • Executive Vice President, Research & Development and Chief Scientific Officer at Cubist Pharmaceuticals (2010-2015) • Chairman and Chief Executive Officer of ActivBiotics, Inc., a privately-held biopharmaceutical company (2004-2007) • Vice President and General Manager, Inflammation, at Millennium Pharmaceuticals, Inc. • Group Director, Global Research and Development, Pfizer • Held scientific, business, and academic appointments at Wyeth Pharmaceuticals, Inc., Cytogen Corporation, Temple Medical School, and Connecticut College | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Former member of board of directors of the Massachusetts Biotechnology Association • Former member of the boards of directors of ContraFect Corporation and Momenta Pharmaceuticals, Inc. • Held advisory roles on the Penn State University biotechnology board and the Northeastern University drug discovery board EDUCATION • B.A. in microbiology from Miami University of Ohio • Ph.D. and M.S. in microbiology from Pennsylvania State University • Post-doctoral training at Scripps Clinic and Research Foundation |

  11. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 26 | |

  12. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Paul Wotton, Ph.D., 63 Independent Executive Director and Chairman of the Board, Rice Biotech Launch Pad; Adjunct Professor, Rice University Director Since: 2015 Other Current Public Company Directorships: • Cynata Therapeutics Limited Vericel Board committee(s): • Governance and Nominating Committee | KEY EXPERIENCE AND QUALIFICATIONS | | | | • BioPharma/Complex Biologics/Business Development/Marketing and Sales: Dr. Wotton has served in key leadership roles across the pharmaceutical and biotech industries throughout his career and has been integral in a number of high-profile business development transactions during that period. While CEO of Obsidian Therapeutics, Inc., Dr. Wotton spearheaded key deals with Vertex Pharmaceuticals and M.D. Anderson, and earlier in his career, while CEO at Siglion Therapeutics, Inc., he oversaw the eventual acquisition of the company by Eli Lilly and Company. Dr. Wotton’s experiences provide key insight to the Vericel leadership team as the Company continues to investigate expanding its product portfolio with another highly-synergistic therapy. | | | | PROFESSIONAL HIGHLIGHTS • President and Chief Executive Officer and a board member of Obsidian Therapeutics, Inc., a privately-held company (2019-2022) • Founding President and Chief Executive Officer of Sigilon Therapeutics, Inc., a cell therapeutics company (2016-2019) • President and Chief Executive Officer and member of the board of directors of Ocata Therapeutics, Inc. (from July 2014 until its acquisition by Astellas Pharma US, Inc. in February 2016) • President and Chief Executive Officer and member of the board of directors of Antares Pharma, Inc., a publicly-traded biopharmaceutical company (2008-2014) • Held senior level positions at Eurand International BV, Penwest Pharmaceuticals, Abbott Laboratories and Merck, Sharp and Dohme | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Chair of the board of directors of Kytopen, a privately-held biotechnology company focused on developing cellular and genome engineering platforms • Former member of the board of directors and Chairman of the compensation committee of Veloxis Pharmaceuticals A/S • Past Chairman of the Emerging Companies Advisory Board of BIOTEC Canada • Named Ernst & Young Entrepreneur of the Year for Life Sciences, New Jersey, in 2014 EDUCATION • Bachelor’s in Pharmacy, with honors, from University College London • Ph.D. in pharmaceutical sciences from the University of Nottingham • M.B.A. from Kingston Business School |

  13. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 2024 Proxy Statement | 27 |

  14. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | Lisa Wright, 49 Independent President and Chief Executive Officer, Community Health Choice, Inc. Director Since: 2021 Other Current Public Company Directorships: • None Vericel Board committee(s): • Governance and Nominating Committee | KEY EXPERIENCE AND QUALIFICATIONS | | | | • CEO/GM/Payer/Healthcare Operations: Ms. Wright is President and Chief Executive Officer of Community Health Choice, Inc., a managed care organization with approximately 430,000 members and a provider community consisting of over 10,000 physicians and 100 hospitals in the greater Houston area. She is an accomplished healthcare executive with a track record of strong strategic, operations and financial performance across a number of leading healthcare organizations. • Importantly, Ms. Wright brings to the Vericel Board key expertise in the payer and provider aspects of the healthcare system, which is bolstered by her deep understanding of healthcare economics and the full healthcare ecosystem. Her experiences will prove valuable as we continue our journey as a high-growth commercial business with multiple products with varied reimbursement models. | | | | PROFESSIONAL HIGHLIGHTS • President and Chief Executive Officer of Community Health Choice, Inc., a local, non-profit, Managed Care Organization (MCO), offering Children’s Medicaid (STAR), CHIP (Children’s Health Insurance Plan) and DSNP (Dual Special Needs Plan), and participant in the Health Insurance Marketplace (2020-present) • North Regional Medicare President for WellCare Health Plans (2018-2020) • President of the Dual Special Needs Plan, Medicare-Medicaid Plan and Nursing Facilities lines of business in Texas at UnitedHealthcare (2014-2018) • Began career in a variety of roles of increasing responsibility at Anthem | OTHER LEADERSHIP POSITIONS AND EXPERIENCES • Member of the boards of directors of several non-profit organizations in Houston EDUCATION • B.A. in communication from the University of Kentucky • M.B.A. from the University of Maryland |

  15. Director Nominees for Election at the 2024 Annual Meeting of Shareholders

    | 28 | |

  16. Compensation of Directors

    Compensation of Directors Our directors play a critical role in guiding our strategic direction and overseeing the management of Vericel. The many responsibilities and risks and the substantial time commitment of being a director require that we provide adequate compensation commensurate with our directors’ workload and opportunity costs. Our philosophy is to provide competitive compensation necessary to attract and retain high-quality non-employee directors and appropriately compensate them for the time, expertise and effort required to serve as a director of a commercial stage, publicly-traded company that operates in a dynamic and highly-regulated industry. Non-employee directors receive a combination of annual cash retainers and stock option and RSU grants in amounts that correlate to their responsibilities and levels of Board participation, including service on Board committees. At least every three (3) years, the Compensation Committee engages an independent consultant to perform an analysis of the non-employee director compensation program. In 2023, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”) to perform an independent review of the compensation program for non-employee directors.

  17. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

  18. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    | Focus on Equity Compensation | Stock Ownership Guidelines | | A substantial portion of non-employee director compensation is in the form of equity | In 2021, the Board adopted Stock Ownership Guidelines applicable to all non-employee directors The share ownership target for each non-employee director is share value equating to three times (3x) his or her annual cash retainer As of December 31, 2023, all non-employee directors were in compliance with their respective stock ownership targets |

  19. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    | 2024 Proxy Statement | 39 |

  20. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    The director compensation table reflects all compensation awarded to, earned by or paid to our non-employee directors for the fiscal year ended December 31, 2023.

  21. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    | Director(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Total ($) | | Robert L. Zerbe(4) | 97,500 | 102,784 | 154,357 | 354,641 | | Kevin F. McLaughlin | 70,000 | 102,784 | 154,357 | 327,141 | | Alan L. Rubino | 76,875 | 102,784 | 154,357 | 334,016 | | Heidi Hagen | 67,500 | 102,784 | 154,357 | 324,641 | | Paul K. Wotton | 55,000 | 102,784 | 154,357 | 312,141 | | Steven C. Gilman | 57,500 | 102,784 | 154,357 | 314,641 | | Lisa Wright | 55,000 | 102,784 | 154,357 | 312,141 |

  22. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    | (1) As permitted by SEC rules, Mr. Colangelo’s compensation from the Company for 2023 is set forth in the 2023 Summary Compensation Table. Mr. Colangelo did not receive any additional compensation for his service as a director. | | (2) Amount reflects the grant date fair value of awards of time-based RSUs made to the named director in 2023, calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. | | (3) Amount reflects the grant date fair value of stock option awards made to the named director in 2023, calculated in accordance with FASB ASC Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. | | (4) Effective May 27, 2023, Robert L. Zerbe elected to defer $75,000 of his earned director fees pursuant to the Company’s Deferred Compensation Plan. | | Additionally, non-employee directors held the following unvested RSUs and unexercised stock options as of December 31, 2023: |

  23. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    | Director | Stock Awards | Shares Underlying Stock Options | | Robert L. Zerbe | 3,200 | 71,750 | | Alan L. Rubino | 3,200 | 119,250 | | Heidi Hagen | 3,200 | 116,250 | | Steven C. Gilman | 3,200 | 69,750 | | Kevin F. McLaughlin | 3,200 | 117,250 | | Paul K. Wotton | 3,200 | 21,000 | | Lisa Wright | 3,634 | 23,627 |

  24. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    Fees Earned or Paid in Cash. The Chairman of the Board of Directors receives an annual fee of $90,000 paid in equal quarterly increments and does not receive additional fees for service as a member of the Board of Directors or as an individual committee member. Each other non-employee director receives an annual fee of $50,000 paid in equal quarterly increments. The chairperson of each standing committee receives an additional annual fee of $20,000 for the Audit Committee, $17,500 for the Compensation Committee and $10,000 for the Governance and Nominating Committee. The non-chair members of the Audit Committee each receive an additional $10,000 annual fee, each non-chair committee member of the Compensation Committee receives an additional $7,500 annual fee and each non-chair committee member of the Governance and Nominating Committee receives an additional annual fee of $5,000, in each case payable quarterly. Equity Awards. Under Vericel’s 2022 Omnibus Incentive Plan (the “2022 Plan”) and Vericel’s Amended and Restated Non-Employee Director Compensation Guidelines, each non-employee director who continues to serve beyond an annual meeting receives a stock option to purchase 8,000 shares granted on the date of each annual meeting, with an exercise price equal to the fair market value of our common stock on the date of grant, and a grant of 3,200 RSUs. Each non-employee director received a stock option to purchase 8,000 shares and a grant of 3,200 RSUs at the 2023 annual meeting. Such stock options vest in equal monthly increments over a period of one year, subject to continued service through the applicable vesting dates. The RSUs vest on the earlier of the first anniversary date of the RSU grant or the date of the first annual meeting following the grant, subject to continued service through the vesting date. Newly-elected directors joining the Board of Directors during the period between annual meetings receive a grant representing a pro-rata amount of the shares subject to the option (reflecting the period of time until the next annual meeting) and a pro-rata amount of the annual RSUs awarded (reflecting the period of time until the next annual meeting). Unless the non-employee director elects deferred settlement, the RSU grant will settle on vesting.

  25. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

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  26. How Our Director Compensation Program Aligns with Long-Term Shareholder Interests

    In addition, each future non-employee director who joins the Board of Directors will also receive a one-time initial stock option to purchase 4,000 shares on the date of such director’s appointment, which will vest in equal monthly installments over three years, subject to continued service through the applicable vesting dates and a one-time initial grant of 1,600 RSUs, which will vest in 1/3 annual increments over the course of three years, subject to continued service through the applicable vesting dates. Stock options issued to directors shall terminate and may no longer be exercised after the first to occur of (a) the expiration date of the option, (b) 24 months after the date on which the director’s service with Vericel is terminated, or (c) a change-in-control to the extent provided in the stock option agreement. Under the terms of the Company’s Deferred Compensation Plan, which was adopted May 3, 2023, non-employee directors have the ability to defer payment of all or a portion of their annual fees and/or defer settlement of all or a portion of their grant of RSUs. RSUs with a deferred settlement are subject to vesting, but the shares are not issued until the deferred settlement date. A non-employee director must make an election to defer his or her annual fees and/or RSU grant by December 31 of the year prior to the year such amounts will be earned, or such grants made. In addition, a deferral election for the RSU grant must be made during an open-trading window. Newly elected non-employee directors must make an election within thirty days of joining the Board. A non-employee director may elect to defer payment of the annual fees and/or grant of RSUs until a date specified in the non-employee director’s election. The deferred annual fees and/or grant of RSUs will be paid or settled on the earlier of (i) the date specified in the non-employee director’s election, (ii) the termination of the non-employee director’s service to Vericel (including due to death), (iii) the non-employee director becoming disabled, or (iv) a change-in-control, as defined in the 2022 Plan. Further, under the Deferred Compensation Plan, upon the occurrence of such event, the amounts credited in the non-employee director’s account shall be paid in cash and/or shares of stock, as applicable, as soon as practicable, but in no event after the last day of the calendar year in which the distribution event occurs.

  27. Executive Compensation Best Practices

    | | What We Do | | | Design executive compensation to align pay with performance Balance short and long-term incentive compensation to incentivize achievement of short-and long-term goals Retain an independent compensation consultant reporting directly to the Compensation Committee Provide shareholders with an annual say-on-pay vote Prohibit short sales, hedging, pledging or other inherently speculative transactions by our executives, non-employee directors and other Company employees (for more information, please see our Special Trading Procedures for Insiders, available at www.vcel.com) Conduct competitive benchmarking to align executive compensation with the market Maintain robust stock ownership guidelines that apply to our directors and named executive officers Maintain a compensation Clawback Policy in accordance with applicable law and Nasdaq listing rules, which covers both cash and equity incentive compensation and requires recoupment of the incentive compensation of our executive officers in situations involving certain accounting restatements of financial results |

  28. Executive Compensation Best Practices

    | | What We Don’t Do | | | No excessive perquisites No tax gross-ups on executive perquisites or on executive severance or change-in-control benefits No single-trigger change-in-control benefits Do not provide supplemental company-paid retirement benefits Our equity plan does not permit “evergreen” replenishment of shares Do not provide dividends or dividend equivalents on unearned equity awards Do not reprice stock options without prior shareholder approval |

  29. Roles of Compensation Committee, Management and Compensation Consultant

    Roles of Compensation Committee, Management and Compensation Consultant The Compensation Committee performs a review of compensation for our executive officers annually. As part of this review, the Compensation Committee takes into consideration its understanding of external market data, which is primarily based on compensation practices of comparable companies (based on size and stage of development). Periodically, the Compensation Committee engages FW Cook, an independent consultant, to perform an analysis of the current compensation program. In late 2022, the Compensation Committee engaged FW Cook to perform an independent review of the compensation program for our executive officers to assist with setting 2023 compensation. FW Cook reports directly to the Compensation Committee. Other than the work it performs for the Compensation Committee, FW Cook does not provide any consulting services to Vericel or its executive officers. Our Compensation Committee performs an annual assessment of the independence of its compensation advisers. Our Compensation Committee has determined that FW Cook is independent and that their work has not raised any conflict of interests. Generally, our Compensation Committee reviews and approves compensation arrangements for executive officers in the first quarter of each year and in connection with the hiring of new executives. Other than with respect to the compensation of our Chief Executive Officer, our Compensation Committee also takes into consideration the recommendations for executive compensation made by our Chief Executive Officer, which recommendations are generally presented at the time of our Compensation Committee’s review of executive compensation arrangements. The compensation decisions made at the beginning of 2023 occurred in the context of sustained strong long-term performance, evidenced by our 20% three-year compound annual total shareholder return through January 13, 2023, which was in the top quartile of our peer group.

  30. Roles of Compensation Committee, Management and Compensation Consultant

    | 2024 Proxy Statement | 47 |

  31. Peer Group

    Peer Group As part of its engagement, FW Cook analyzed compensation data relating to our peer group companies as approved by the Compensation Committee with input and guidance from FW Cook. The compensation analysis was performed in late 2022 and early 2023 and informed the 2023 compensation program. The peer group companies were reviewed in fall 2022 and consisted of 16 publicly-traded companies in the biotechnology/pharmaceutical, health care equipment & supplies, and life sciences tools & services industries, which had a median market capitalization of $1.57 billion on September 30, 2022 (comparable to our $1.1 billion market capitalization at that time), and the majority of which either have commercial operations or an FDA-approved product. All peers had September 30, 2022 market capitalization in a range of 0.3 to 3.1 times our market capitalization at that time. The peer group companies that informed 2023 executive officer compensation decisions were: Agenus, Inc., Agios Pharmaceuticals, Inc., Amicus Therapeutics, Inc., Anika Therapeutics, Inc., Artivion, Inc., AtriCure, Inc., AxoGen, Inc., Cardiovascular Systems, Inc., Corcept Therapeutics, Inc., Cryoport, Inc., Glaukos Corporation, Ironwood Pharmaceuticals, Inc., PTC Therapeutics, Inc., STAAR Surgical Company, Supernus Pharmaceuticals, Inc., and Vanda Pharmaceuticals, Inc. The only change compared to the previous year peer group was the removal of Flexion Therapeutics, Inc., due to its acquisition.

  32. Components of 2023 Compensation

    Components of 2023 Compensation The primary components of our executive officer compensation program are: (i) annual base salary; (ii) annual incentive compensation, which is based on the achievement of specified Company goals; and (iii) long-term equity incentive compensation in the form of periodic stock option and RSU grants, with the objective of aligning the executive officers’ long-term interests with those of our shareholders. In establishing overall executive compensation levels and making specific compensation decisions for the executives in 2023, the Compensation Committee considered a number of criteria, including each executive’s position, prior compensation levels, scope of responsibilities, prior and current period performance, attainment of individual and overall Company performance objectives, and external market data. In addition, the Compensation Committee considered the results of the advisory vote by shareholders on the “say-on-pay” proposal presented to shareholders at Vericel’s 2022 annual meeting, which had an 86% support rate. The Compensation Committee also reviews the allocation of compensation components regularly to help ensure alignment with strategic and operating goals, competitive market practices and legislative changes. The Compensation Committee does not apply a specific formula to determine the allocation between cash and non-cash forms of compensation.

  33. Base Salary

    Base Salary We believe that a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and experienced executives. Base salaries are established, in part, based on the individual experience, skills and expected contributions of our executives and our executives’ performance during the prior year, with market data considered as context. The Compensation Committee reviews base salaries for our executive officers annually. We may also change the base salary of an executive officer at other times due to market conditions or if a change in the scope of the officer’s responsibilities justifies such adjustment. In February 2023, our Compensation Committee approved base salary increases for each of our named executive officers serving at that time, based upon various factors, including a review of individual performance during 2022 and a comparison of cash compensation versus peer group data. Salary adjustments were focused on providing cash compensation in a competitive range relative to market benchmarks, also taking into account each executive’s tenure and performance. The table below sets forth the adjustments to base salaries for each of our named executive officers:

  34. Annual Non-Equity Incentive Compensation

    Annual Non-Equity Incentive Compensation We maintain an annual incentive program (or “AIP”) that is designed to drive annual performance against important strategic, operational and financial aspects of our organization. We believe the AIP focuses management on advancing our overall corporate strategy and furthering both the short-and long-term growth of the Company. Each executive officer has a target cash incentive amount that is set as a percentage of base salary, based upon consideration of potential contribution, level and market data.

  35. 2023 Performance Metrics

    2023 Performance Metrics The determination of annual incentives for our executives in 2023 was tied to achieving our financial targets, advancing our commercial and development stage products and accomplishing operational goals. In addition, a portion of annual incentive compensation was tied to a stretch upside value goal. These metrics were established by the Compensation Committee and approved by the full Board at the beginning of 2023.

  36. 2023 Performance Metrics

    | | Weighting | Our Goals | Our Metrics | Achievement | | Commercial and Financial Performance Goals | | Total net revenue Budget expense | • Generate total net product revenues of at least $194.3 million • Achieve budget expense of $162.8 million (excluding depreciation, amortization and stock-based compensation, and unusual one-time expenses or changes in accounting methodology) | | | Product Goals | | Commercial Product Goals Long-Term Brand Development Goals Product Development Goals | • Achieve budgeted MACI surgeon engagement goals of increasing number of biopsy surgeons and MACI biopsy conversion rate; achieve unique Epicel biopsy center target; and secure P&T committee approval to use NexoBrid at target number of burn centers • Complete MACI, Epicel and NexoBrid long-term brand development initiatives • Complete MACI Arthro human factors study and submit label update to the FDA by December 1, 2023 | | | Operational Goals | | Manufacturing Capacity and Operational Improvement Initiatives | • Complete manufacturing facility and key manufacturing/IT efficiency improvement initiatives | | | Upside Value Goals | | Business Development | • Execute high-quality business development transaction | |

  37. 2023 Performance Metrics

    No more than 200% of target may be earned under the AIP. The Compensation Committee reviewed the Company’s performance in 2023 against the corporate goals and made a determination of a 110% achievement of our corporate goals for 2023, based on the following:

  38. 2023 Performance Metrics

    | 1. | 43% out of a target 40% was awarded for the Commercial and Financial Performance Goals. The Company exceeded its goal related to total net revenue during 2023, driven largely by the growth of MACI, which grew 25% for the year to $164.8 million and demonstrated outperformance across most major metrics. Budget expense performance was a fraction below the target level and when averaged with above-target achievement for revenue resulted in an overall achievement for the commercial and financial performance goals category that was above target. The Company’s continued 20% year-over-year revenue growth, coupled with its fiscal discipline, ultimately resulted in the Company generating $33.9 million of adjusted EBITDA*, expanding its adjusted EBITDA* growth for the year to 40% and growing its cash, restricted cash and investments balance to $152.6 million. | | * | For more information concerning Vericel’s presentation of non-GAAP measures, including a reconciliation of reported net (loss) income (GAAP) to adjusted EBITDA (non-GAAP), please refer to the Company’s discussion of “GAAP versus non-GAAP Measures”, on page 72 of this Proxy Statement. |

  39. 2023 Performance Metrics

    | 2024 Proxy Statement | 49 |

  40. 2023 Performance Metrics

    | 2. | 56% out of a target 50% was awarded for Product Goals. The Compensation Committee awarded above the target percentage for these goals primarily as a result of the Company conducting and completing a human factors study of the arthroscopic method of delivery for MACI to the knee and submitting a prior approval supplement to the FDA seeking to add instructions for MACI Arthro to the product’s approved labeling ahead of schedule. We now expect a commercial launch of MACI Arthro during the third quarter of 2024, which would provide surgeons with a simpler and less invasive method for delivering MACI and, we expect, help drive continued product growth. In addition to continuing to advance the MACI Ankle program, the Company achieved certain of its commercial product metrics, including its MACI biopsy surgeon engagement goal and the number of burn centers taking Epicel biopsies. A goal related to the MACI biopsy conversion rate was slightly below target, while a goal related to the number of NexoBrid P&T committee approvals was below target as a result of the delay in the commercial launch of the product due to a now-corrected deviation in MediWound’s manufacturing process. Overall, when considering the Company’s significant achievements in advancing its pipeline, the Compensation Committee awarded above the target percentage. | | 3. | 11% out of a target 10% was awarded for the Operational Goals. The Compensation Committee awarded slightly above the target level for these goals as a result of the Company meeting or exceeding each of its budgeted goals relating to: material and vendor cost savings and material movement controls to improve financial management at the operational level; the advancement of plans to occupy the Company’s new manufacturing facility and corporate headquarters later in 2024; and various IT improvement initiatives. | | 4. | 0% out of a maximum 15% was awarded for the Upside Goal. During 2023, the Company chose not to execute any business development transactions. |

  41. 2023 Performance Metrics

    The Compensation Committee made no adjustments to the goals or the manner in which they were scored to account for external events. The table below shows the target award under the 2023 AIP as a percentage of each named executive officer’s annual base salary in 2023, the target cash award opportunity in dollars for 2023, and the actual cash bonus payments and percent of award opportunity paid to our named executive officers for 2023 performance.

  42. 2023 Performance Metrics

    | | 2023 Annual Incentive Program | | | | | Name | 2023 Target Award (% of Base Salary) | 2023 Target Award Opportunity ($) | 2023 Actual Bonus Payment ($) | 2023 Actual Bonus Payment (% of Target Award Opportunity) | | Dominick C. Colangelo | 85% | 671,500 | 738,700 | 110% | | Joe Mara | 50% | 237,500 | 261,300 | 110% | | Michael Halpin | 50% | 252,500 | 277,800 | 110% | | Sean C. Flynn | 45% | 193,500 | 212,900 | 110% | | Jonathan Hopper | 45% | 198,000 | 217,800 | 110% |

  43. Equity Incentive Compensation

    Equity Incentive Compensation Equity incentive compensation aligns executives with shareholders and allows them to share in any appreciation in the value of our common stock. In 2023, the Compensation Committee awarded stock options and RSUs to our named executive officers to aid in their retention, to motivate them to achieve both near-term and long-term corporate objectives and increase share price. In determining the form and value of a grant, the Compensation Committee considers the contributions and responsibilities of each named executive officer, appropriate incentives for the achievement of our long-term growth, the size and value of grants made to other executives at peer companies holding comparable positions, individual achievement of designated performance goals, Vericel’s overall performance relative to corporate objectives, and our overall equity compensation burn rate. Stock options and RSU awards vest over time, generally four years, subject to continued employment with Vericel over the vesting period, which promotes executive retention. All stock options have a ten-year term and an exercise price equal to the fair market value of our common stock on the date of grant, which is equal to our closing market price on such date. Awards are made at levels calculated to be competitive within our peer group. In determining the amount of each grant, the Compensation Committee also reviews the number of shares held by the executive prior to the grant. In late 2022, the Compensation Committee engaged FW Cook to independently review the equity incentive grant practices of Vericel as compared to our peer group, and this market data was used to support compensation decisions for 2023. The Compensation Committee considered our significant 20% three-year compound annual shareholder return through January 13, 2023, which was in the top quartile of our peer group, and well above the peer group median of -4% compound annual shareholder return over this period. The executive equity award strategy for 2023 focused on providing a competitive number of stock options and RSUs with the majority of equity awards provided in stock options to ensure that our executives are aligned with shareholder value creation and to ensure the program pays for performance. The Compensation Committee reviewed the Company’s projected 2023 equity compensation burn rate and determined that the number of shares granted to executives would maintain the burn rate below the median of our peer group.

  44. Equity Incentive Compensation

    | 50 | |

  45. Equity Incentive Compensation

    On February 17, 2023, the Board of Directors granted our CEO, and the Compensation Committee granted our other named executive officers, the following stock options and RSUs at a $29.82 price. The grant date fair value of these awards is also reported in the 2023 Summary Compensation Table below.

  46. Equity Incentive Compensation

    | | Option and RSU Awards Granted February 17, 2023 | | | | | Name | Number of Shares Underlying Options (#) | Number of RSUs (#) | Stock Awards and Option Awards Fair Value ($)(1) | Stock Awards and Option Awards Intrinsic Value ($)(2) | | Dominick Colangelo | 182,500 | 73,000 | 5,513,083 | 11,548,600 | | Joe Mara | 46,250 | 18,500 | 1,397,151 | 2,926,700 | | Michael Halpin | 52,500 | 21,000 | 1,585,955 | 3,322,200 | | Sean Flynn | 30,000 | 12,000 | 906,260 | 1,898,400 | | Jonathan Hopper | 30,000 | 12,000 | 906,260 | 1,898,400 |

  47. Equity Incentive Compensation

    | (1) Amounts reflect the grant date fair value of the stock option awards and RSUs made to the named executive officers, calculated in accordance with FASB ASC Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. | | (2) Amounts reflect the intrinsic value which is calculated as the number of RSUs and stock options granted on February 17, 2023 multiplied by the proxy record date stock price of $45.20. |

  48. 2024 Base Salary

    | Name | Base Salary | Target Annual Incentive Compensation (%) | | Dominick Colangelo | $830,000 | 85% | | Joe Mara | $505,000 | 50% | | Michael Halpin | $535,000 | 50% | | Sean Flynn | $465,000 | 45% | | Jonathan Hopper | $475,000 | 45% |

  49. Compensation Risk Analysis/Risk Assessment

    | • | Inclusion of significant long-term incentive compensation discourages short-term risk taking; | | • | Compensation is in a market range and is not set as an outlier; | | • | The mix of short and long-term compensation (base salary, annual cash incentive, equity grants) is consistent with industry norms; | | • | Goals are appropriately set to avoid targets that, if not achieved, result in a large percentage loss of compensation; and | | • | The prohibition on hedging or pledging of our stock discourages short-term and excessive risk taking. Furthermore, as described in this CD&A section, compensation decisions include subjective considerations to moderate the effects that formulae or objective factors might have on excessive risk taking. |

  50. Summary Compensation Table

    Summary Compensation Table The following table summarizes all compensation earned by or paid to Dominick Colangelo, our President and Chief Executive Officer, effective March 1, 2013; Joe Mara, our Chief Financial Officer, effective January 25, 2021; Michael Halpin, our Chief Operating Officer, effective June 15, 2019; Sean Flynn, our Senior Vice President, General Counsel and Secretary, effective November 4, 2019; and Jonathan Hopper, our Chief Medical Officer, effective August 20, 2018 (the “named executive officers”) during the fiscal years indicated.

  51. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Dominick Colangelo President and CEO | 2023 | 790,000 | — | 2,176,860 | 3,336,223 | 738,700 | 14,639(5) | 7,056,422 | | | 2022 | 760,000 | — | 1,633,320 | 5,655,283 | 646,000 | 13,764 | 8,708,367 | | | 2021 | 730,000 | — | 1,837,550 | 9,981,859 | 620,500 | 13,386 | 13,183,295 | | | 2020 | 675,000 | — | 540,000 | 2,678,783 | 506,250 | 12,685 | 4,412,718 | | Joe Mara Chief Financial Officer | 2023 | 475,000 | — | 551,670 | 845,481 | 261,300 | 14,314(6) | 2,147,765 | | | 2022 | 440,000 | — | 384,528 | 1,331,353 | 220,000 | 13,439 | 2,389,320 | | | 2021 | 383,077 | 50,000(10) | 698,080 | 4,438,361 | 193,300 | 9,865 | 5,772,683 | | Michael Halpin Chief Operating Officer | 2023 | 505,000 | — | 626,220 | 959,735 | 277,800 | 14,113(7) | 2,382,869 | | | 2022 | 470,000 | — | 533,970 | 1,848,843 | 235,000 | 13,238 | 3,101,051 | | | 2021 | 440,000 | — | 578,250 | 3,327,286 | 220,000 | 12,860 | 4,578,396 | | | 2020 | 395,000 | — | 252,000 | 1,250,099 | 177,750 | 12,685 | 2,087,534 | | Sean Flynn SVP, General Counsel and Secretary | 2023 | 430,000 | — | 357,840 | 548,420 | 212,900 | 14,113(8) | 1,563,273 | | | 2022 | 400,000 | — | 324,570 | 1,123,806 | 180,000 | 13,238 | 2,041,615 | | | 2021 | 375,000 | — | 359,800 | 1,996,372 | 168,800 | 12,860 | 2,912,782 | | | 2020 | 350,000 | — | — | — | 140,000 | 12,685 | 502,685 | | Jonathan Hopper Chief Medical Officer | 2023 | 440,000(11) | — | 357,840 | 548,420 | 217,800 | 14,365(9) | 1,578,425 | | | 2022 | 415,000 | — | 324,570 | 1,123,806 | 186,750 | 13,490 | 2,063,617 | | | 2021 | 390,000 | — | 359,800 | 1,996,372 | 175,500 | 12,860 | 2,934,532 | | | 2020 | 365,000 | — | 117,000 | 580,403 | 146,000 | 12,685 | 1,221,088 |

  52. Summary Compensation Table

    | (1) Amounts reflect the grant date fair value of awards of time-based RSUs made to the named executive officer in the year indicated, computed in accordance with FASB ASC Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. | | (2) Amounts reflect the grant date fair value of the stock option awards made to the named executive officers in the year indicated, calculated in accordance with FASB ASC Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. | | (3) Amounts reported in this column represent annual cash incentive bonuses, which were awarded based on achievement of corporate performance goals for the year indicated. The 2023 cash incentive bonus determinations are described in more detail above under the heading “Annual Non-Equity Incentive Compensation.” | | (4) Amounts reported in the “All Other Compensation” column include Vericel’s contributions to its 401(k) Plan and life insurance premiums, as detailed in footnotes 5, 6, 7, 8, and 9. None of the named executive officers received perquisites having an aggregate value of $10,000 or more in the fiscal years ended December 31, 2023, 2022, or 2021. | | (5) This amount includes Vericel’s contributions of $11,550 made to Mr. Colangelo’s 401(k) Plan and payments of $3,089 for life insurance premiums. | | (6) This amount includes Vericel’s contributions of $11,550 made to Mr. Mara’s 401(k) Plan and payments of $2,764 for life insurance premiums. | | (7) This amount includes Vericel’s contributions of $11,550 made to Mr. Halpin’s 401(k) Plan and payments of $2,563 for life insurance premiums. | | (8) This amount includes Vericel’s contributions of $11,550 made to Mr. Flynn’s 401(k) Plan and payments of $2,563 for life insurance premiums. | | (9) This amount includes Vericel’s contributions of $11,550 made to Dr. Hopper’s 401(k) Plan and payments of $2,815 for life insurance premiums. | | (10) This amount reflects the amount of a sign-on bonus paid to Mr. Mara pursuant to the terms of his offer of employment with Vericel. | | (11) Dr. Hopper deferred $25,385 of his salary pursuant to the Company’s Deferred Compensation Plan. |

  53. Summary Compensation Table

    | 54 | |

  54. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table presents information on all grants of plan-based awards made in the fiscal year ended December 31, 2023 to our named executive officers:

  55. Grants of Plan-Based Awards

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(2) | | Name | Grant Date | Target ($) | Maximum ($) | | | | | | Dominick Colangelo | — | 738,700 | 1,477,400 | — | — | — | — | | | 2/17/2023 | — | — | 73,000 | — | — | 2,176,860 | | | 2/17/2023 | — | — | — | 182,500 | 29.82 | 3,336,223 | | Joe Mara | — | 261,300 | 522,600 | — | — | — | — | | | 2/17/2023 | — | — | 18,500 | — | — | 551,670 | | | 2/17/2023 | — | — | — | 46,250 | 29.82 | 845,481 | | Michael Halpin | — | 277,800 | 555,600 | — | — | — | — | | | 2/17/2023 | — | — | 21,000 | — | — | 626,220 | | | 2/17/2023 | — | — | — | 52,500 | 29.82 | 959,735 | | Sean Flynn | — | 212,900 | 425,800 | — | — | — | — | | | 2/17/2023 | — | — | 12,000 | — | — | 357,840 | | | 2/17/2023 | — | — | — | 30,000 | 29.82 | 548,420 | | Jonathan Hopper | — | 217,800 | 435,600 | — | — | — | — | | | 2/17/2023 | — | — | 12,000 | — | — | 357,840 | | | 2/17/2023 | — | — | — | 30,000 | 29.82 | 548,420 |

  56. Grants of Plan-Based Awards

    | (1) Non-equity incentive plan awards consist of performance-based cash bonuses earned based on achievement of pre-determined performance criteria during fiscal year 2023. There is no threshold payout amount under the non-equity incentive plan. The 2023 cash incentive bonus determinations are described in more detail above under the heading “Annual Non-Equity Incentive Compensation.” |

  57. Grants of Plan-Based Awards

    | (2) This reflects the grant date fair value of option and RSU awards granted to our named executive officers during the year ended December 31, 2023, calculated in accordance with FASB ASC Topic 718. For purposes of this calculation, we have disregarded forfeiture assumptions related to service-based vesting conditions. For a discussion of the assumptions used in calculating these values, see Note 7 to our consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 29, 2024. |

  58. Grants of Plan-Based Awards

    | 2024 Proxy Statement | 55 |

  59. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The table below reflects all outstanding equity awards held by each of the named executive officers as of December 31, 2023. We currently grant stock-based awards pursuant to our 2022 Plan and have outstanding awards under our Amended and Restated 2019 Omnibus Incentive Plan (the “2019 Plan”), 2017 Omnibus Incentive Plan (the “2017 Plan”) and our Second Amended and Restated 2009 Omnibus Incentive Plan (the “2009 Plan”).

  60. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | | Dominick Colangelo | 1/5/2015 | 383,452 | — | 3.02 | 1/5/2025 | — | — | | | 2/9/2016 | 53,183 | — | 1.95 | 2/9/2026 | — | — | | | 2/8/2017 | 49,700 | — | 2.75 | 2/8/2027 | — | — | | | 5/22/2017(5) | 28,125 | — | 2.65 | 5/22/2027 | — | — | | | 2/7/2018 | 293,195 | — | 7.20 | 2/7/2028 | — | — | | | 2/6/2019 | 310,000 | — | 16.66 | 2/6/2029 | — | — | | | 2/11/2020 | 210,937 | 14,063 | 18.00 | 2/11/2030 | 7,500 | 267,075 | | | 2/19/2021 | 206,250 | 93,750 | 51.40 | 2/19/2031 | 17,875 | 636,529 | | | 2/18/2022 | 119,437 | 153,563 | 34.90 | 2/18/2032 | 35,100 | 1,249,911 | | | 2/17/2023 | 34,218 | 148,282 | 29.82 | 2/17/2033 | 73,000 | 2,599,530 | | Joe Mara | 1/25/2021(4) | 110,000 | 50,000 | 43.63 | 1/25/2031 | — | — | | | 2/18/2022 | 28,117 | 36,152 | 34.90 | 2/18/2032 | 8,264 | 294,281 | | | 2/17/2023 | 8,671 | 37,579 | 29.82 | 2/17/2033 | 18,500 | 658,785 | | Michael Halpin | 4/10/2017(4) | 2,063 | — | 2.65 | 4/10/2027 | — | — | | | 2/7/2018 | 3,132 | — | 7.20 | 2/7/2028 | — | — | | | 2/6/2019 | 76,250 | — | 16.66 | 2/6/2029 | — | — | | | 2/11/2020 | 98,437 | 6,563 | 18.00 | 2/11/2030 | 3,500 | 124,635 | | | 2/19/2021 | 68,750 | 31,250 | 51.40 | 2/19/2031 | 5,625 | 200,306 | | | 2/18/2022 | 39,046 | 50,204 | 34.90 | 2/18/2032 | 11,475 | 408,625 | | | 2/17/2023 | 9,843 | 42,657 | 29.82 | 2/17/2033 | 21,000 | 747,810 | | Sean Flynn | 11/4/2019(4) | 130,000 | — | 16.25 | 11/4/2029 | — | — | | | 2/19/2021 | 41,250 | 18,750 | 51.40 | 2/19/2031 | 3,500 | 124,635 | | | 2/18/2022 | 23,734 | 30,516 | 34.90 | 2/18/2032 | 6,975 | 248,380 | | | 2/17/2023 | 5,625 | 24,375 | 29.82 | 2/17/2033 | 12,000 | 427,320 | | Jonathan Hopper | 8/20/2018(4) | 32,604 | — | 10.95 | 8/20/2028 | — | — | | | 2/6/2019 | 16,000 | — | 16.66 | 2/6/2029 | — | — | | | 2/11/2020 | 35,703 | 3,047 | 18.00 | 2/11/2030 | 1,625 | 57,866 | | | 2/19/2021 | 41,250 | 18,750 | 51.40 | 2/19/2031 | 3,500 | 124,635 | | | 2/18/2022 | 23,734 | 30,516 | 34.90 | 2/18/2032 | 6,975 | 248,380 | | | 2/17/2023 | 5,625 | 24,375 | 29.82 | 2/17/2033 | 12,000 | 427,320 |

  61. Outstanding Equity Awards at Fiscal Year End

    | (1). | Unless otherwise noted, options vest over a period of four years, with 6.25% vesting each quarter following the grant date. | | (2). | RSUs vest over four years with 25% vesting on the first anniversary of the grant date and the remainder vesting in equal annual installments thereafter. | | (3). | Based on a price of $35.61 per share, which was the closing price per share of our common stock as reported by the Nasdaq Global Market on December 29, 2023. | | (4). | This option vests over a period of four years, with 25% vesting on the first anniversary of the grant date and the remainder vesting in equal monthly installments thereafter. | | (5). | This option vests over a period of four years, with 6.25% vesting each quarter following February 8, 2017. |

  62. Outstanding Equity Awards at Fiscal Year End

    | 56 | |

  63. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table sets forth information with respect to the exercise of options by our named executive officers as well as the vesting of RSUs during the year ended December 31, 2023. None of our named executive officers held equity awards other than stock options and RSUs that were exercised or vested during the year ended December 31, 2023.

  64. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | | Dominick Colangelo | 88,335 | 1,513,939 | 35,076 | 1,044,178 | | Joe Mara | — | — | 2,754 | 82,124 | | Michael Halpin | 17,447 | 492,260 | 12,013 | 356,330 | | Sean Flynn | — | — | 4,075 | 121,517 | | Jonathan Hopper | 5,000 | 127,250 | 6,350 | 188,304 |

  65. Option Exercises and Stock Vested

    | (1) Value realized on exercise of stock option awards does not represent proceeds from any sale of any common stock acquired upon exercise but is determined by multiplying the number of shares acquired upon exercise by the difference between the per share exercise price of the option and the closing price of a share of our common stock on the Nasdaq Global Market on the date of exercise. | | (2) This represents total RSUs that vested for the named executive officer. A portion of these shares were withheld to cover the tax liability of the vesting and the amounts reported do not represent the total shares received by the employee. | | (3) Value realized on vesting of RSUs is determined by multiplying the number of shares vested by the closing price of a share of our common stock on the Nasdaq Global Market on the date of vesting. |

  66. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation On May 3, 2023, the Board approved and adopted the Vericel Corporation Deferred Compensation Plan (the “Deferred Compensation Plan”), which is a non-qualified deferred compensation plan that is intended to comply with Section 409A of the Code. Participation in the Plan is limited to non-employee directors and, as determined by the Compensation Committee in its sole discretion, a select group of management or highly compensated employees of the Company, including our executive officers. Pursuant to the Deferred Compensation Plan, a participant may elect to defer up to 100% of his or her annual base salary, annual bonus and/or cash director fees, as applicable. In addition, a participant may elect to defer up to 100% of each of his or her RSU grants under the Company’s 2022 Plan. The Company may also be required, in accordance with employment or other agreements, to contribute amounts to a participant’s Deferred Compensation Plan account. The Deferred Compensation Plan also permits, but does not require, the Company to make discretionary contributions to participants’ Deferred Compensation Plan accounts. Any RSUs deferred under the Deferred Compensation Plan are reflected on the books of the Company as an unfunded, unsecured promise to deliver to the participant a specific number of actual shares of common stock in the future at the time the RSU would otherwise vest and become transferable to the participant under the terms of the 2022 Plan. All other deferrals under the Deferred Compensation Plan are paid in cash to the participants. Participants’ deferrals of cash compensation are 100% vested at all times. All unvested contributions to a participant’s account from the Company, if any, become 100% vested in the event of a change of control (as defined in the Deferred Compensation Plan) or upon a participant’s death or disability. Each participant’s deferred compensation account is deemed invested in investments selected by the participant from a list of measurement funds selected by the Compensation Committee. Distributions are made in a lump sum or annual installment payments as elected by the participant in accordance with the Deferred Compensation Plan’s terms and conditions. Obligations of the Company under the Deferred Compensation Plan represent at all times an unfunded and unsecured promise to pay money in the future. Each participant in the Deferred Compensation Plan is an unsecured general creditor of the Company with respect to deferred compensation obligations. Any amounts set aside to defray the liabilities assumed by the Company will remain the general, unpledged unrestricted assets of the Company.

  67. Nonqualified Deferred Compensation Table

    Nonqualified Deferred Compensation Table The following table presents information regarding our Deferred Compensation Plan as of December 31, 2023. No withdrawals or distributions from the Deferred Compensation Plan were made in 2023.

  68. Nonqualified Deferred Compensation Table

    | Name | DCP Contributions in Last Fiscal Year ($) | Vericel Contributions in Last Fiscal Year ($) | Aggregate Earnings at fiscal Year-end ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Fiscal Year-End ($)(1) | | Jonathan Hopper | 23,385(1) | — | 2,383 | — | 27,768 |

  69. Nonqualified Deferred Compensation Table

    | (1) $25,385 of this contribution relates to Mr. Hopper’s deferred base salary that was contributed to the Deferred Compensation Plan. The amount is reflected in the “salary” column of the 2023 Summary Compensation Table. |

  70. Nonqualified Deferred Compensation Table

    | 2024 Proxy Statement | 57 |

  71. Pension Benefits

    Pension Benefits We do not offer any defined benefit pension plans or arrangements.

  72. Potential Payments Upon a Termination or Change-in-Control

    Potential Payments Upon a Termination or Change-in-Control The following table sets forth aggregate estimated payment obligations to each of the named executive officers assuming a termination occurred on December 31, 2023, and using the salary in effect on such date.

  73. Potential Payments Upon a Termination or Change-in-Control

    | Name | Benefit | Termination w/o Cause or for Good Reason other than in connection with a Change-in-Control ($) | Termination w/o Cause or for Good Reason in connection with a Change-in-Control ($) | Termination as a Result of Death or Disability | | Nick Colangelo | Severance Pay | 790,000 | 3,031,750 | — | | | Health Care Benefits | 26,727 | 40,091 | — | | | Equity Award Acceleration | 2,212,117(1) | 5,968,277(2) | 5,968,277(3) | | | Total | 3,028,844 | 9,040,118 | 5,968,277 | | Joseph Mara | Severance Pay | 475,000 | 997,600 | — | | | Health Care Benefits | 26,727 | 26,727 | — | | | Equity Award Acceleration | — | 1,196,316(2) | 1,196,316(3) | | | Total | 501,727 | 2,220,643 | 1,196,316 | | Michael Halpin | Severance Pay | 505,000 | 1,060,600 | — | | | Health Care Benefits | 26,727 | 26,727 | — | | | Equity Award Acceleration | — | 1,879,579(2) | 1,879,579(3) | | | Total | 531,727 | 2,966,906 | 1,879,579 | | Jonathan Hopper | Severance Pay | 440,000 | 875,600 | — | | | Health Care Benefits | 26,727 | 26,727 | — | | | Equity Award Acceleration | — | 1,074,656(2) | 1,074,656(3) | | | Total | 466,727 | 1,976,983 | 1,074,656 | | Sean Flynn | Severance Pay | 430,000 | 855,800 | — | | | Health Care Benefits | 22,175 | 22,175 | — | | | Equity Award Acceleration | — | 963,132(2) | 963,132(3) | | | Total | 452,175 | 1,841,107 | 963,132 |

  74. Potential Payments Upon a Termination or Change-in-Control

    | (1) This represents the cumulative value of the equity awards that would accelerate upon a termination of employment not in connection with a Change-in-Control. The amount represents the difference between the closing price of our common stock on December 29, 2023, of $35.61 and the exercise price (if any) multiplied by the number of shares subject to any in-the-money options and RSUs that would accelerate. | | (2) This represents the cumulative value of the equity awards that would accelerate upon a qualifying termination of employment within 18 months following a Change-in-Control (or upon a Change-in-Control if equity awards are not assumed in such Change-in-Control). The amount represents the difference between the closing price of our common stock on December 29, 2023, of $35.61 and the exercise price (if any) multiplied by the number of shares subject to any in-the-money options and RSUs that would accelerate. | | (3) This represents the cumulative value of the equity awards that would accelerate upon the named executive officer’s death or disability. The amount represents the difference between the closing price of our common stock on December 29, 2023, of $35.61 and the exercise price (if any) multiplied by the number of shares subject to any in-the-money options and RSUs that would accelerate. |

  75. Potential Payments Upon a Termination or Change-in-Control

    | 2024 Proxy Statement | 59 |

  76. CEO Pay Ratio

    CEO Pay Ratio Pursuant to the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are required to disclose the median of the annual total compensation of our employees, the annual total compensation of our Principal Executive Officer (“PEO”), Mr. Colangelo, and the ratio of these two amounts. We believe that our compensation philosophy must be consistent and internally equitable to motivate our employees to create shareholder value. The purpose of the required disclosure is to provide a measure of pay equity within the organization. We are committed to internal pay equity, and our Compensation Committee monitors the relationship between the pay our PEO receives and the pay our non-executive employees receive. As illustrated in the table below, our 2023 PEO to median employee pay ratio was approximately 38:1.

  77. CEO Pay Ratio

    | Dominick Colangelo (PEO) 2023 Compensation | $7,056,422 | | Median Employee 2023 Compensation | $184,128 | | Ratio of PEO to Median Employee Compensation | 38:1 |

  78. CEO Pay Ratio

    We determined the median employee compensation using W-2 compensation, plus estimated bonus, the fair market value of equity grants, life and disability insurance, and the estimated value of 401(k) match (whether or not vested), for all individuals who were employed by us on December 31, 2023 (whether employed on a full-time, part-time or seasonal basis). Employees on leave of absence were included in the list and reportable wages were annualized for those employees who were not employed for the full calendar year. For the fiscal year ended December 31, 2023, we calculated that median employee’s total compensation using the same methodology that we used to calculate the total compensation for our CEO. The 2023 annual total compensation of the median employee and our CEO, respectively, were $7,056,422 and $184,128. The ratio of the 2023 annual total compensation for our CEO to that of our median employee was 38 to 1. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  79. Pay versus Performance

    Pay versus Performance Pursuant to the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are required to provide the following information regarding the relationship between executive compensation paid to our named executive officers and Vericel’s financial performance for each of the last four completed calendar years. In determining the Compensation Actually Paid (or “CAP”) to our Principal Executive Officer, who is our CEO, and our other named executive officers, we are required to make various adjustments to the amounts that have been previously reported in the Summary Compensation Table, as summarized below. The CAP amounts reflected in the table below do not reflect the actual amount of compensation earned by or paid to our named executive officers during the applicable year. For information regarding decisions made by our Compensation Committee with respect to executive compensation, refer to the “Compensation Discussion and Analysis” section of this Proxy Statement.

  80. Pay versus Performance

    | | | | | | Value of Initial $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO(1) | Average Summary Compensation Table Total for Other NEOs(2) | Average Compensation Actually Paid to Other NEOs(1)(2) | Vericel TSR(3) | NASDAQ Biotechnology Index TSR(3) | Net Income ($M)(4) | Total Net Revenue ($M)(5) | | 2023 | $7,056,422 | $11,004,671 | $1,918,083 | $2,851,774 | $205 | $115 | $-3 | $198 | | 2022 | $8,708,367 | $905,166 | $2,398,900 | $467,192 | $151 | $111 | $-17 | $164 | | 2021 | $13,183,295 | $15,233,917 | $3,459,670 | $3,204,518 | $226 | $125 | $-7 | $156 | | 2020 | $4,412,718 | $10,300,425 | $1,158,216 | $1,740,344 | $177 | $126 | $3 | $124 |

  81. Pay versus Performance

    | (1) To calculate CAP, the following amounts were deducted from and added to the applicable Summary Compensation Table total compensation: |

  82. Pay versus Performance

    | 60 | |

  83. Pay versus Performance

    | | | CEO | | | | | | | | | | | 2020 | | 2021 | | 2022 | | 2023 | | | | Summary Compensation Table Total | | 4,412,718 | | 13,183,295 | | 8,708,367 | | 7,056,422 | | Less: | Grant Date Fair Value of Stock and Option Awards in the Covered Year | -$ | 3,218,783 | -$ | 11,819,409 | -$ | 7,288,603 | -$ | 5,513,083 | | Plus: | Fair Value at Year-End of Unvested Stock and Option Awards Granted in the Covered Year* | +$ | 5,022,331 | +$ | 6,387,501 | +$ | 4,402,751 | +$ | 5,834,763 | | Plus: | Fair Value of Stock and Option Awards Granted in the Covered Year that Vested in the Covered Year* | +$ | 522,347 | +$ | 1,618,248 | +$ | 724,137 | +$ | 711,181 | | | Change in Fair Value of Unvested Stock and Option Awards Granted in Prior Years* | +$ | 3,550,577 | +$ | 1,965,721 | -$ | 3,564,080 | +$ | 1,963,617 | | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year* | +$ | 11,235 | +$ | 3,898,560 | -$ | 2,077,406 | +$ | 951,771 | | = | Compensation Actually Paid | | 10,300,425 | | 15,233,917 | | 905,166 | | 11,004,671 |

  84. Pay versus Performance

    | | | Average of Other NEOs | | | | | | | | | | | 2020 | | 2021 | | 2022 | | 2023 | | | | Summary Compensation Table Total | | 1,158,216 | | 3,459,670 | | 2,398,900 | | 1,918,083 | | Less: | Grant Date Fair Value of Stock and Option Awards in the Covered Year | -$ | 714,993 | -$ | 2,945,499 | -$ | 1,748,862 | -$ | 1,198,907 | | Plus: | Fair Value at Year-End of Unvested Stock and Option Awards Granted in the Covered Year* | +$ | 756,348 | +$ | 1,626,544 | +$ | 1,056,425 | +$ | 1,275,999 | | Plus: | Fair Value of Stock and Option Awards Granted in the Covered Year that Vested in the Covered Year* | +$ | 83,133 | +$ | 271,626 | +$ | 173,955 | +$ | 147,705 | | | Change in Fair Value of Unvested Stock and Option Awards Granted in Prior Years* | +$ | 636,734 | +$ | 299,760 | -$ | 902,246 | +$ | 445,775 | | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year* | +$ | 5,675 | +$ | 594,099 | -$ | 510,980 | +$ | 263,119 | | Less: | Fair Value of Stock and Option Awards Forfeited During the Covered Year* | -$ | 184,769 | -$ | 101,683 | +$ | 0 | +$ | 0 | | = | Compensation Actually Paid | | 1,740,344 | | 3,204,518 | | 467,192 | | 2,851,774 |

  85. Pay versus Performance

    | * All stock option valuations included in “Compensation Actually Paid” values were performed using the Black-Scholes option pricing model in a manner generally consistent with the process used to determine stock option grant date fair values under FASB ASC Topic 718 (refer to our Annual Report on Form 10-K for the year ending December 31, 2023 for additional detail). |

  86. Pay versus Performance

    | (2) The other NEOs in each covered year were as follows: 2023 – Joe Mara, Michael Halpin, Jonathan Hopper, Sean Flynn; 2022 – Joe Mara, Michael Halpin, Sean Flynn, Jonathan Hopper; 2021 – Joe Mara, Michael Halpin, Sean Flynn, Jonathan Hopper, Sandra Pennell; 2020 – Michael Halpin, Sean Flynn, Jonathan Hopper, Gerard Michel, Sandra Pennell. |

  87. Pay versus Performance

    | (3) TSR is cumulative for the measurement period, calculated in accordance with Item 201(e) of Regulation S-K. Our TSR Peer Group are members of the NASDAQ Biotechnology Index. | | (4) Reflects net Income as shown in the Company’s Annual Report on Form 10-K for the years ending on December 31, 2023, 2022, 2021 and 2020. | | (5) Reflects total net revenue, the “company-selected measure” as shown in the Company’s Annual Report on Form 10-K for the years ending on December 31, 2023, 2022, 2021 and 2020. |

  88. Compensation Actually Paid Comparisons

    Compensation Actually Paid Comparisons The relationship between Compensation Actually Paid (CAP) and the financial performance elements reflected in the above Pay versus Performance table are described in the below charts: Compensation Actually Paid versus TSR 2020-2023 Compensation Actually Paid versus Net Income 2020-2023 Compensation Actually Paid versus Revenue 2020-2023

  89. Compensation Actually Paid Comparisons

    | 62 | |

  90. Compensation Actually Paid Comparisons

    | PROPOSAL 3: | | | | Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation of our Named Executive Officers | | The Board of Directors unanimously recommends that you vote, on an advisory basis, that future advisory votes on the compensation of our named executive officers be held every 1 YEAR. |

  91. Compensation Actually Paid Comparisons

    The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires us to submit a non-binding, advisory resolution, commonly known as a “say-on-frequency” proposal, to shareholders at least once every six years to determine whether advisory votes on executive compensation, such as Proposal 2, should be held every one, two or three years. At the 2018 annual meeting of shareholders, the shareholders voted to hold a “say-on-pay” proposal every year. Following the vote at this Annual Meeting, the next say-on-frequency proposal will be voted upon at the 2030 annual meeting of shareholders. After careful consideration, our Board of Directors has determined that an annual advisory vote to approve the compensation of our named executive officers will allow our shareholders to provide timely and direct input on Vericel’s executive compensation philosophy, policies and practices as disclosed in the proxy statement each year. The Board of Directors believes that an annual vote is therefore consistent with Vericel’s efforts to engage in an ongoing dialogue with our shareholders on executive compensation and corporate governance matters. Accordingly, we are asking our shareholders to vote for every “1 YEAR” as the frequency for future non-binding, advisory votes on the compensation of our named executive officers.