DEF 14A of GENELUX Corp
Filed Jun 14, 2024 · FY20230001493152-24-023868
Nominees for Election for a Three-year Term Expiring at the 2027 Annual Meeting
Nominees for Election for a Three-year Term Expiring at the 2027 Annual Meeting Mary Mirabelli, 67, has served as a member of our Board since June 2021. Ms. Mirabelli served as the senior vice president at the Healthcare Finance Management Association from April 2018 to December 2023. Previously, Ms. Mirabelli has served as the Vice President of Global Healthcare Services at Hewlett Packard Enterprise Company from June 2014 to April 2018. Ms. Mirabelli served as a senior executive at Hospital Corporation of America from 2010 to 2014. Ms. Mirabelli holds a B.S. in occupational therapy from University of Illinois at Urbana-Champaign and a MiM from Northwestern University’s Kellogg Graduate School of Management. We believe Ms. Mirabelli’s extensive experience managing and leading companies within the healthcare industry qualify her to serve on our Board. John Thomas, Ph.D., 66, has served as a member of our Board since September 2002. Dr. Thomas served as our first Chief Financial Officer from 2002 to 2004. Dr. Thomas has been the Dean of the School of Business and Management at La Sierra University since 1999. Dr. Thomas has served on the board of ICON Business Bank since 2023 and is the audit committee chair. Dr. Thomas has served on the boards of directors of KSGN Good News Radio since January 2004, Loma Linda Broadcasting Network International since January 2009 and ADRA International as a member of the finance committee since September 2015. He previously served as a member of the board of directors of the Family Service Association from 1992 to 2018. Dr. Thomas holds an M.B.A. in finance from Loma Linda University and in marketing from Symbiosis Institute of Management Studies, as well as an M.A. in international political economy and a Ph.D. in political economy from Claremont Graduate University. We believe that Dr. Thomas’s extensive training, expertise and experience in finance, qualifies him to serve on our Board.
The Board of Directors Recommends
The Board of Directors Recommends A Vote “For” each Named Nominee.
Directors Continuing in Office Until the 2025 Annual Meeting
Directors Continuing in Office Until the 2025 Annual Meeting James L. Tyree, 71, has served as a member of our Board since May 2012 and as our Lead Independent Director since July 2021. Mr. Tyree previously served as Chairman of the Board from 2014 to 2021 and has had a distinguished career in health care spanning more than forty years. His accomplishments are well recognized as an investor, operating executive, and entrepreneur. Mr. Tyree is the co-founder, Chairman, and managing partner of Tyree & D’Angelo Partners, a private equity investment firm. Prior to founding Tyree & D’Angelo Partners, Mr. Tyree held numerous executive positions at Abbott Laboratories (“Abbott”) including (but not limited too) Executive Vice President Global Pharmaceuticals and Sr. Vice President Global Nutrition. In these positions Mr. Tyree reported to the Chairman and Chief Executive Officer. During the period beginning 1997 until his retirement in 2012, Mr. Tyree was a significant contributor to Abbott’s most defining endeavors. Mr. Tyree was the strategic and tactical driver involved of every major M&A transaction executed by the company including the acquisitions of BASF Pharmaceuticals, KOS Pharmaceuticals, Solvay Pharmaceuticals, and Piramal Health Solutions. He was also responsible for the restructuring of Takeda Abbott Pharmaceuticals, Abbott’s highly successful joint venture with Takeda Chemicals of Japan. During this time period, Abbott was named as the top deal maker in the industry by The Deal. In 2010 Fortune named Abbott as the most admired company in the pharmaceutical sector. Prior to joining Abbott, Mr. Tyree was the President of Sugen, Inc., a biotechnology company focused in oncology. Mr. Tyree led the company’s initial public offering in 1994 and subsequently shaped the company to make it an attractive acquisition target. The company was acquired by Pharmacia in 1997. Earlier in his career, Mr. Tyree held management positions at Bristol-Myers Squibb, Pfizer, and Abbott. Over his entire career, he is a four-time expatriate having lived and worked six and a half years in Latin America and seven years in Japan. Mr. Tyree has served and an independent director of Genelux, SonarMed, Innoviva, Chemocentryx, and Assertio. Mr. Tyree earned bachelor degrees in psychology and forensic studies, and a master’s degree in business administration from Indiana University. We believe that Mr. Tyree’s extensive experience in biotechnology and pharmaceuticals, qualifies him to serve on our Board. Thomas Zindrick, J.D., 65, has served as our President, Chief Executive Officer and a member of our Board since May 2014 and as our Chair since July 2021. Currently, he serves as Executive Chair of Aeromics, Inc., a clinical-stage pharmaceutical company developing products for the treatment of ischemic stroke, since August 2018. Mr. Zindrick served as Chief Executive Officer of Amitech Therapeutic Solutions, Inc., from March 2012 to May 2014. From 1993 to 2009, Mr. Zindrick was at Amgen Inc. (“Amgen”), where he held positions of increasing responsibility, including Vice President Associate General Counsel from 2001 to 2004 and again from 2008 to 2009. At Amgen, from 2004 to 2008, Mr. Zindrick served as Chief Compliance Officer. Prior to joining Amgen, Mr. Zindrick was an attorney at The Dow Chemical Company. Mr. Zindrick served on the board of directors of Amitech Therapeutic Solutions, Inc. from October 2011 to February 2021 and DNX Biopharmaceuticals, Inc. from November 2014 to March 2020. Mr. Zindrick received his J.D. from the University of Illinois College of Law and a B.A. in biology from North Central College in Naperville, Illinois. We believe Mr. Zindrick’s extensive experience managing and leading companies within the pharmaceutical and biotechnology industries qualify him to serve on our Board.
Director Continuing in Office Until the 2026 Annual Meeting
Director Continuing in Office Until the 2026 Annual Meeting John Smither, 71, has served as a member of the Board since September 2023. From August 2023 to April 2024 Mr. Smither served as the Interim Chief Financial Officer of Arcutis Biotherapeutics, Inc. (“Arcutis”) from August 2023 and from May 2019 to May 2021 served as the Chief Financial Officer of Arcutis, where he was responsible for all financial aspects of Arcutis including leading Arcutis’s successful initial public offering and four follow-on financings. Previously, Mr. Smither was the Chief Financial Officer at Sienna Biopharmaceutics from January 2016 to April 2017, and again from April 2018 to March 2019. Mr. Smither also served as the Interim Chief Financial Officer at Kite Pharma, a Gilead Company, from November 2017 through April 2018, and was the chief financial officer of Unity Biotechnology from January 2016 to July 2017. He also served as chief financial officer at Kythera Biopharmaceuticals (“Kythera”), where he was responsible for all financial activities during early clinical stage development through approval and launch, led private fundraising rounds, prepared Kythera for its successful initial public offering in October 2012, and oversaw its acquisition by Allergan plc for approximately $2.1 billion. At Amgen, Mr. Smither held several financial positions of increasing responsibility, including vice president of finance and administration for Amgen’s European operations in 28 countries, and served as Executive Director of Corporate Accounting. In January 2023, Mr. Smither was appointed to the board of NewAmsterdam Pharma and has served as the chair of its audit committee since January 2022 and also serves on its compensation committee. From January 2022 to December 2023, Mr. Smither has served as a member of the board of directors of Applied Molecular Transport Inc., as chair of its audit committee, and as a member of its compensation committee. From March 2018 to September 2023, Mr. Smither has served as a member of the board of directors of eFFECTOR Therapeutics Inc. and its predecessor entity, as chair of its audit committee, and as a member of its nominating and corporate governance committee. Additionally, from December 2013 to May 2020, Mr. Smither served as a member of the board of directors of Achaogen, Inc., as chair of its audit committee, and as a member of its compensation committee. Mr. Smither began his career at Ernst & Young, where he was audit partner and held a certification as a Certified Public Accountant (inactive). He holds a B.S. in accounting, with honors, from California State University at Los Angeles. We believe Mr. Smither’s extensive experience as a chief financial officer and service on the boards of directors of other biotechnology and pharmaceutical companies qualifies him to serve on our Board.
Information regarding the Board of Directors and corporate governance
Information regarding the Board of Directors and corporate governance Independence of the Board of Directors Under the listing rules of The Nasdaq Stock Market LLC (“Nasdaq”), a majority of the members of our Board must qualify as “independent,” as affirmatively determined by our Board. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent. Under the rules of the Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Compensation Committee members must not have a relationship with us that is material to the director’s ability to be independent from management in connection with the duties of a Compensation Committee member. Additionally, Audit Committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. To be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee of the board of directors or any other board committee, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries or be an affiliated person of the listed company or any of its subsidiaries The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent Nasdaq listing rules, as in effect from time to time. Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board has affirmatively determined that each of Ms. Mirabelli, Dr. Thomas, Mr. Tyree and Mr. Smither, representing four of our five directors, is an independent director within the meaning of the applicable Nasdaq listing rules. In making this determination, the Board found that none of these directors or nominees for director had a material or other disqualifying relationship with the Company. Board Diversity While we do not have a formal diversity policy in place, our Nominating Committee monitors the mix of skills and experience of its directors to help ensure it has the necessary tools to perform its oversight function effectively. The Board fully appreciates the value of a diversity of viewpoints, background and experiences as important to the selection of directors to enhance the Board’s cognitive diversity and quality of dialogue in the boardroom. We believe that our current directors possess diverse professional experiences, skills and backgrounds, in addition to, among other characteristics, high standards of personal and professional ethics and valuable knowledge of our business and our industry. Below is our Nasdaq Board Diversity Matrix for the fiscal year 2024. Last year’s Board Diversity Matrix is available in our definitive proxy statement filed with the SEC on July 20, 2023. The following Board Diversity Matrix provides certain self-identified personal demographics of our directors.
Information regarding the Board of Directors and corporate governance
| Board Diversity Matrix (As of June 3, 2024) | | | | | | Total Number of Directors | 5 | | | | | | Female | Male | Non- Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 1 | 4 | - | - | | Part II: Demographic Background | | | | | | African American or Black | - | - | - | - | | Alaskan Native or Native American | - | - | - | - | | Asian | - | 1 | - | - | | Hispanic or Latinx | - | - | - | - | | Native Hawaiian or Pacific Islander | - | - | - | - | | White | 1 | 3 | - | - | | Two or More Races or Ethnicities | - | - | - | - | | LGBTQ+ | - | | | | | Did Not Disclose Demographic Background | - | | | |
Information regarding the Board of Directors and corporate governance
Board Leadership Structure The Company’s Board is currently chaired by the President and Chief Executive Officer of the Company, Mr. Zindrick. Mr. Tyree serves as lead independent director. The Company believes that combining the positions of Chief Executive Officer and Chairman helps to ensure that the Board and management act with a common purpose. In the Company’s view, separating the positions of Chief Executive Officer and Chairman has the potential to give rise to divided leadership, which could interfere with good decision-making or weaken the Company’s ability to develop and implement strategy. Instead, the Company believes that combining the positions of Chief Executive Officer and Chairman provides a single, clear chain of command to execute the Company’s strategic initiatives and business plans. In addition, the Company believes that a combined Chief Executive Officer/Chairman is well positioned to act as a bridge between management and the Board, facilitating the regular flow of information. The Company also believes that it is advantageous to have a Chairman with an extensive history with and knowledge of the Company (as is the case with the Company’s Chief Executive Officer). Because Mr. Zindrick has served and continues to serve in both these roles, our Board appointed Mr. Tyree as the lead independent director to help reinforce the independence of the Board as a whole. The position of lead independent director has been structured to serve as an effective balance to a combined Chief Executive Officer/Chairman: the lead independent director is empowered to, among other duties and responsibilities, approve agendas and meeting schedules for regular Board meetings, preside over Board meetings in the absence of the Chair, preside over and establish the agendas for meetings of the independent directors, act as liaison between the Chair and the independent directors, approve information sent to the Board, preside over any portions of Board meetings at which the evaluation or compensation of the Chief Executive Officer is presented or discussed and, as appropriate upon request, act as a liaison to stockholders. In addition, it is the responsibility of the lead independent director to coordinate between the Board and management with regard to the determination and implementation of responses to any problematic risk management issues. As a result, the Company believes that the lead independent director can help ensure the effective independent functioning of the Board in its oversight responsibilities. In addition, the Company believes that the lead independent director is well positioned to build a consensus among directors and to serve as a conduit between the other independent directors and the Chairman, for example, by facilitating the inclusion on meeting agendas of matters of concern to the independent directors. In light of the Chief Executive Officer’s extensive history with and knowledge of the Company, and because the Board’s lead independent director is empowered to play a significant role in the Board’s leadership and in reinforcing the independence of the Board, the Company believes that it is advantageous for the Company to combine the positions of Chief Executive Officer and Chairman. Role of the Board in Risk Oversight One of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board, as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee has the responsibility to consider and discuss our major risks, including financial risk exposures and cybersecurity risks, and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee reviews cybersecurity risk, as part of its review of our cybersecurity framework, measures, tools, and compliance, on at least an annual basis. The Audit Committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our Nominating Committee monitors the effectiveness of our corporate governance practices, including whether they are successful in preventing illegal or improper liability-creating conduct. The Compensation Committee of our Board (“Compensation Committee”) assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Commitment to Corporate Responsibility
Commitment to Corporate Responsibility As a company focused on developing a pipeline of next-generation oncolytic viral immunotherapies for patients suffering from aggressive and/or difficult-to-treat solid tumor types, we strive to identify ways to enhance and deliver on our commitment to patients, the medical community, our employees, our investors and our other stakeholders. Accordingly, we recognize the intersection between environmental, social and governance practices and these objectives. Given this, in 2023 we focused on the following areas: Environmental Impact. We are cognizant of the impact we have on our broader environment and have supported several green measures in an effort to reduce our carbon footprint, including reducing air travel, allowing our employees to work remotely, providing reusable dishes and cutlery to employees, making available electric car chargers at several of our offices, facilitating paperless operations for our clinical trials, expanding the use of electronic investigator files, eConsent forms and digital logs. Further, as we expand and grow, we are committed to doing so in an environmentally responsible way, and will endeavor to improve efficiencies and minimize our carbon footprint wherever practicable. Social Impact. Our future performance depends significantly upon the continued service of our key scientific, technical and senior management personnel and our continued ability to attract and retain highly skilled employees. We provide our employees with competitive compensation, development programs that enable continued learning and growth and a robust employment package that promotes employee well-being. In addition to salaries, these programs include potential annual discretionary bonuses, stock option and restricted stock unit awards, a 401(k) plan, ESPP plan, healthcare and insurance benefits, flexible spending accounts, paid time off, family leave and flexible work schedules, among other benefits. We are committed to patients and to the communities in which we operate. Diversity and Inclusion. We strive to invest in and create ongoing opportunities for employee development in a diverse and inclusive environment in which each team member plays a unique and vital role. We currently have one female director (representing 20% of our directors) and one Asian director (representing 20% of our directors). We believe that a diverse workforce not only positively impacts our performance and strengthens our culture, but also cultivates an essential pipeline of experienced leaders for management. Hiring for diversity of skills, background and perspective continues to be an area of focus as we grow. Ethics and Corporate Governance. We aspire, and expect our suppliers, to maintain the highest standards of business conduct and ethics. All of our employees, officers and directors are required to adhere to the Genelux Corporation Code of Conduct (the “Code of Conduct”), which provides, among other things, that all of our employees, officers and directors must maintain the highest standards of business conduct and ethics and conduct internal and external affairs in an honest and ethical manner. Meetings of the Board of Directors The Board met 11 times during the last fiscal year. Each Board member attended 75% or more of the aggregate number of meetings of the Board and the committees on which he or she served that were held during the portion of the last fiscal year for which he or she was a director or committee member. Although we do not have a formal policy regarding attendance by Board members at annual meetings of stockholders, we encourage our directors to attend such meetings. All of the Board members attended the 2023 annual meeting. As required under applicable Nasdaq listing rules, in fiscal year 2023, the Company’s independent directors met 11 times in regularly scheduled executive sessions at which only independent directors were present. Information Regarding Committees of the Board of Directors The Board has three committees: the Audit Committee, the Compensation Committee and the Nominating Committee. The following table provides membership and meeting information for fiscal year 2023 for each of the Board committees:
Report of the Audit Committee of the Board of Directors*
| ● | reviewing and approving the compensation and other terms of employment or service, including severance and change-in-control arrangements, of the Company’s Chief Executive Officer and the other executive officers and directors; and |
Report of the Audit Committee of the Board of Directors*
| ● | establishing policies with respect to the Company’s equity compensation plans, pension and profit-sharing plans, deferred compensation plans and other similar plan and programs. |
Report of the Audit Committee of the Board of Directors*
| ● | evaluate the efficacy of the Company’s existing compensation strategy and practices in supporting and reinforcing the Company’s long-term strategic goals; and |
The Board of Directors Recommends
| (7) Consists of (i) 33,356 shares of common stock held directly by Ms. Zak; (ii) 5,072 shares of common stock issuable to Ms. Zak pursuant to restricted stock units that vested as of the Record Date; and (iii) 31,250 shares of common stock issuable to Ms. Zak pursuant to warrants exercisable within 60 days of the Record Date. |
The Board of Directors Recommends
| (9) Consists of (i) the shares of common stock described in notes (2) through (8) above; (ii) 163,883 shares of common stock issuable to Dr. Scigalla pursuant to options exercisable within 60 days of the Record Date; (iii) (a) 5,735 shares of common stock held directly by Dr. Cappello, (b) 159,443 shares of common stock issuable to Dr. Cappello pursuant to options exercisable within 60 days of the Record Date, and (c) 15,218 shares of common stock issuable to Dr. Cappello pursuant to restricted stock units that vested as of the Record Date; (iv) (a) 8,235 shares of common stock held directly by Dr. Yu, (b) 207,652 shares of common stock issuable to Dr. Yu pursuant to options exercisable within 60 days of the Record Date, (c) 15,218 shares of common stock issuable to Dr. Yu pursuant to restricted stock units that vested as of the Record Date, and (d) 2,500 shares of common stock issuable to Dr. Yu pursuant to warrants exercisable within 60 days of the Record Date; (v) (a) 5,421 shares of common stock held directly by Mr. Smalling, (b) 8,333 shares of common stock issuable to Mr. Smalling pursuant to options exercisable within 60 days of the Record Date, (c) 2,723 shares of common stock issuable to Mr. Smalling pursuant to restricted stock units that vested as of the Record Date, and (d) 1,250 shares of common stock issuable to Mr. Smalling pursuant to warrants exercisable within 60 days of the Record Date; and (vi) (a) 12,678 shares of common stock held directly by Mr. Ryder, (b) 93,125 shares of common stock issuable to Mr. Ryder pursuant to options exercisable within 60 days of the Record Date, (c) 12,206 shares of common stock issuable to Mr. Ryder pursuant to restricted stock units that vested as of the Record Date, and (d) 10,000 shares of common stock issuable to Mr. Ryder pursuant to warrants exercisable within 60 days of the Record Date. |
Summary Compensation Table
Summary Compensation Table The following table presents all of the compensation awarded to or earned by or paid to our named executive officers during the fiscal years ended December 31, 2023 and 2022.
Summary Compensation Table
| | Fiscal | Salary | Bonus | Option Awards (1) | Stock Awards (1) | All Other Compensation | Total | | Name and Principal Position | Year | ($) | ($) | ($) | ($) | ($)(5) | ($) | | Thomas Zindrick, J.D. | 2023 | 570,519 | — | 5,479,863(4) | 151,110 | 471 | 6,201,963 | | President and Chief Executive Officer | 2022 | 500,000 | — | — | | | 516,893 | | Lourie Zak (2) | 2023 | 119,077 | — | 2,711,285 | | 157 | 2,830,362 | | Chief Financial Officer | 2022 | — | — | — | | — | — | | Caroline Jewett (3) | 2023 | 134,538 | — | 2,029,994 | | 188 | 2,620,416 | | Vice President, Head of Quality | 2022 | — | — | — | | — | — |
Summary Compensation Table
| (1) The amounts disclosed represent the aggregate grant date fair value of stock options and restricted stock unit awards (RSU) granted to our named executive officers under our 2019 and 2022 Plans, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 Compensation—Stock Compensation (“ASC Topic 718”). As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The assumptions used in calculating the grant date fair value of the stock options are set forth in Note 13 to our annual financial statements included in our Annual Report. This amount does not reflect the actual economic value that may be realized by the named executive officer upon vesting or exercise of the stock options and RSU’s, or the sale of the common stock underlying such awards. | | (2) Ms. Zak joined the Company in August 2023 and as such, her 2023 salary reflects the pro rata amount earned in 2023. | | (3) Ms. Jewett joined the Company in October 2023 and as such, her 2023 salary reflects the pro rata amount earned in 2023. | | (4) Amount reported for Mr. Zindrick represents (a) fair market value of options granted in 2023 in the amount of 250,000 shares ($4,518,800); and (b) the incremental fair value of his stock options repriced during the fiscal year ended December 31, 2023, measured pursuant to ASC Topic 718, the basis for computing the stock-based compensation in our financial statements ($961,063). | | (5) Consists of the Company’s contributions to employee benefit plans in 2023. |
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year End
| | | Option Awards(1) | | | | Stock Awards(1) | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price Per Share ($)(2) | Option Expiration Date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | | Thomas Zindrick, J.D. | 8/15/2014(3) | 333,333 | | 6.00 | 8/15/2024 | | | | | 9/19/2017(3) | 200,000 | | 6.00 | 9/19/2027 | | | | | 9/19/2017(3) | 725,000 | | 6.00 | 9/19/2027 | | | | | 3/23/2020(3) | 157,372 | | 6.00 | 3/23/2030 | | | | | 9/24/2020(3) | 23,568 | | 6.00 | 9/24/2030 | | | | | 9/11/2023(5)(6) | | 250,000 | 22.40 | 9/24/2030 | | | | Lourie Zak | 9/11/2023(5)(6) | | 150,000 | 22.40 | 9/11/2033 | | | | Caroline Jewett | 9/11/2023(5)(6) | | 88,000 | 22.40 | 9/11/2033 | | | | | 9/11/2023(4) | | | | | 20,000 | 448,000 | | | 10/2/2023(5)(6) | | 22,000 | 24.75 | 10/2/2033 | | |
Outstanding Equity Awards at Fiscal Year End
| (1) All of the option and RSU awards were granted under the 2009 Plan, the 2019 Plan, the 2022 Plan or the 2023 Inducement Plan, the terms of which are described below under “Equity Compensation Arrangements—2009 Equity Incentive Plan, 2019 Equity Incentive Plan, 2022 Equity Incentive Plan and 2023 Inducement Plan.” |
Outstanding Equity Awards at Fiscal Year End
| (2) In September 2022, the Board approved a stock option repricing whereby the exercise prices of previously granted and unexercised options held by certain employees, directors and key advisers with exercise prices between $9.00 and $10.50 per share, were adjusted to equal the initial offering price of $6.00, contingent and effective upon the completion of the Company’s initial public offering. | | (3) All shares subject to this option award were fully vested as of the date of grant. | | (4) The shares subject to this RSU award vest on the following schedule: 25% of the total shares vest on March 1, 2024, and; the balance of the shares will vest as to 8.33% on each of the subsequent twelve (12) “quarterly vesting dates” thereafter, subject to continuous service through each such date. “Quarterly vesting dates” means each of March 1, June 1, September 1, and December 1; provided, however, that to the extent any such date occurs on a weekend day or U.S. federal holiday, the quarterly vesting date will be deemed to occur on the immediately following day that is not a weekend day or U.S. federal holiday. | | (5) The shares subject to this option award vest as to 25% of the total shares on the one-year anniversary of the vesting commencement date September 11, 2023 with respect to Mr. Zindrick, August 28, 2023 with respect to Ms. Zak, and June 30, 2023 with respect to Ms. Jewett’s September 11, 2023 option grant, and September 11, 2023 with respect to Ms. Jewett’s October 2, 2023 option grant),and vest in 1/36th monthly thereafter, subject to continuous service through each such date. | | (6) In the event optionholder is terminated without cause within three (3) months prior to, or within eighteen (18) months following, a change in control, or resigns for good reason within such period, then the unvested portion of this option shall vest and become exercisable in full. |
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation We do not maintain nonqualified defined contribution plans or other nonqualified deferred compensation plans. The Board may elect to provide our officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control Regardless of the manner in which a named executive officer’s service terminates, each named executive officer is entitled to receive amounts earned during his or her term of service, including unpaid salary and unused paid time off, as applicable. Pursuant to the terms of Mr. Zindrick’s employment agreement, in the event he is subject to a termination without “cause” or he resigns for “good reason” (each, as defined in Mr. Zindrick’s employment agreement), Mr. Zindrick shall be entitled to receive (i) continued payment of his base salary for twelve (12) months and Company-paid COBRA premiums for up to twelve (12) months, and (ii) in the event of a termination by the Company without cause, 100% of his target annual bonus for the calendar year in which the separation occurs. In the event Mr. Zindrick is subject to a termination without cause or he resigns for good reason within three (3) months prior to or eighteen (18) months following a “change in control” (as defined in the 2022 Plan), Mr. Zindrick shall be entitled to receive (i) a lump sum cash payment equal to eighteen (18) months of his then-current base salary and 100% of his target annual bonus for the calendar year in which the separation occurs; and (ii) Company-paid COBRA premiums for up to eighteen (18) months. Such benefits are contingent on Mr. Zindrick’s execution and nonrevocation of a general release of claims against the Company. Pursuant to the terms of Ms. Zak’s employment agreement, in the event she is subject to a termination without “cause” or she resigns for “good reason” (each, as defined in Ms. Zak’s employment agreement), Ms. Zak shall be entitled to Company-paid COBRA premiums for up to twelve (12) months. In the event Ms. Zak is subject to a termination without cause or she resigns for good reason within three (3) months prior to or eighteen (18) months following a “change in control” (as defined in the 2022 Plan), Ms. Zak shall be entitled to receive (i) a lump sum cash payment equal to twelve (12) months of her then-current base salary and 100% of her target annual bonus for the calendar year in which the separation occurs; and (ii) Company-paid COBRA premiums for up to twelve (12) months. Such benefits are contingent on Ms. Zak’s execution and nonrevocation of a general release of claims against the Company. Pursuant to the terms of Ms. Jewett’s employment agreement, in the event she is subject to a termination for any reason, Ms. Jewett is entitled to all accrued and unpaid wages earned through Ms. Jewett’s last day of employment. In the event Ms. Jewett is subject to an “involuntary termination” that does not occur within the “change in control period” (each, as defined in Ms. Jewett’s employment agreement), Ms. Jewett shall be entitled to Company-paid COBRA premiums for up to nine (9) months. In the event Ms. Jewett is subject to an “involuntary termination” during a “change in control period,” Ms. Jewett is entitled to receive (i) a lump sum cash payment equal to nine (9) months of her then-current base salary and (ii) Company-paid COBRA premiums for up to nine (9) months. Such benefits are contingent on Ms. Jewett’s execution and nonrevocation of a general release of claims against the Company.
Non-Employee Director Compensation
Non-Employee Director Compensation The following table sets forth information regarding the compensation earned for service on the Board during the year ended December 31, 2023. Thomas Zindrick, J.D., our current President and Chief Executive Officer, was also a member of the Board during 2023, but did not receive any additional compensation for his service as a director on the Board. Mr. Zindrick’s compensation as an executive officer is set forth in the section titled “Executive Compensation—Summary Compensation Table.” All of our non-employee directors are entitled to reimbursement of direct expenses incurred in connection with attending meetings of the Board or committees thereof.
Non-Employee Director Compensation
| Name | Cash Compensation ($) | Option Awards ($)(1) | Stock Awards ($)(1) | Total ($) | | James L. Tyree | 70,000 | 77,500 | 136,630 | 284,130 | | John Thomas, Ph.D. | 64,000 | 77,500 | 136,630 | 278,130 | | Mary Mirabelli | 60,500 | 77,500 | 84,070 | 222,070 | | John Smither | 18,621 | 155,000 | 155,000 | 328,621 | | Gabe Woodward (2) | 32,800 | 0 | 6,570 | 39,370 |
Non-Employee Director Compensation
| (1) The amounts reported in this column do not reflect dollar amounts actually received by the director. Instead, the amounts reflect the aggregate grant date fair value of the stock options and RSU’s granted to the director during 2023 under the 2022 Plan, computed in accordance with ASC Topic 718, as further described below. As required by SEC rules, the amount shown excludes the impact of estimated forfeitures related to service-based vesting conditions. The amount reported in this column reflects the accounting cost for these stock options and does not correspond to the actual economic value that may be received by the director upon the exercise of the stock options or any sale of the underlying shares of common stock. | | (2) Effective July 12, 2023, Mr. Woodward resigned from the Board. |
Non-Employee Director Compensation
The table below sets forth the aggregate number of shares subject to outstanding stock options beneficially owned by each of our directors as of December 31, 2023:
Non-Employee Director Compensation
| Name | Number of Shares Underlying Outstanding Options as of December 31, 2023 | Number of Shares Underlying Outstanding RSU Awards as of December 31, 2023 | Total Shares | | James L. Tyree | 123,464 | 3,460 | 126,924 | | John Thomas, Ph.D. | 85,137 | 3,460 | 88,597 | | Mary Mirabelli | 29,397 | 3,460 | 32,857 | | John Smither | 8,447 | 6,343 | 14,790 | | Gabe Woodward | - | - | - |
Non-Employee Director Compensation
The exercise price of each option is equal to the fair market value of our common stock as of the date of grant.
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy We maintain a non-employee director compensation policy that is applicable to all of our non-employee directors, which was effective from the date of our initial public offering, and was most recently amended in September, 2023. This compensation policy provides that each such non-employee director will automatically receive the following compensation for service on the Board:
Non-Employee Director Compensation Policy
| ● | an annual cash retainer of $40,000; | | ● | an additional annual cash retainer of $30,000 to the lead independent director of the Board; |
Non-Employee Director Compensation Policy
| ● | an additional annual cash retainer of $15,000, $10,000, and $8,000 for service as chair of our Audit Committee, Compensation Committee and Nominating Committee, respectively; | | ● | an additional annual cash retainer (not applicable to committee chairs) of $7,500, $5,000, and $4,000 for service as a member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, respectively; | | ● | for each eligible director who is first elected or appointed to the Board, an initial option to purchase a number of shares of our common stock with a grant-date value of $155,000 and a restricted stock unit award with a grant-date value of $155,000 (the “Initial Grants”). These Initial Grants will vest in equal installments every three months over a three year period such that the Initial Grants are fully vested on the third anniversary of the date of grant, subject to the directors continuous service through each such vesting date, and will vest in full upon a Change in Control (as defined in the 2022 Plan)..The number of shares underlying stock options hall be calculated based on the grant date fair value of a share of our common stock using a Black-Scholes model. The number of shares underlying restricted stock unit awards shall be calculated in accordance with the Company’s equity award policy in effect from time to time; | | ● | an annual option grant to purchase a number of shares of our common stock with a grant-date value of $77,500 and a restricted stock unit award with a grant-date value of $77,500 (the “Annual Grants”); provided, however, that if a director has not served as member of the Board for 12 months prior to the applicable annual stockholder meeting, the number of shares subject to such individual’s Annual Grants will be pro-rated based on the number of full months served on the Board, rounded to the nearest whole share. The Annual Grants will vest on the first anniversary of the date of grant, provided that the Annual Grants will in any case be fully vested on the date of Company’s next annual stockholder meeting, subject to the director’s continuous service through such vesting date and will vest in full upon a Change in Control (as defined in the Plan). The number of shares underlying stock options hall be calculated based on the grant date fair value of a share of our common stock using a Black-Scholes model. The number of shares underlying restricted stock unit awards shall be calculated in accordance with the Company’s equity award policy in effect from time to time. |
Non-Employee Director Compensation Policy
Each of the option grants and restricted stock unit awards described above will be granted under our 2022 Plan. The term of each option will be 10 years, subject to earlier termination as provided in the 2022 Plan. In addition, the Board or the Compensation Committee may from time to time determine to make discretionary grants of stock options or other equity awards under the 2022 Plan to our non-employee directors in connection with their service on the Board.