DEF 14A of Mineralys Therapeutics, Inc.
Filed Apr 9, 2024 · FY20230001933414-24-000009
Information Regarding Directors
Information Regarding Directors The information set forth below as to the directors and nominee for director has been furnished to us by the directors and nominee for director:
Nominee for Election to the Board of Directors
Nominee for Election to the Board of Directors
Members of the Board of Directors Continuing in Office
Members of the Board of Directors Continuing in Office
Members of the Board of Directors Continuing in Office
Members of the Board of Directors Continuing in Office
Identification and Evaluation of Nominees for Directors
Identification and Evaluation of Nominees for Directors The nominating and corporate governance committee identifies nominees for director by first evaluating the current members of our board of directors willing to continue in service. Current members with qualifications and skills that are consistent with the nominating and corporate governance committee’s criteria for board of director service and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of our board of directors with that of obtaining a new perspective or expertise. If any member of our board of directors does not wish to continue in service or if our board of directors decides not to re-nominate a member for re-election or if the board of directors decides to expand the size of the board, the nominating and corporate governance committee identifies the desired skills and experience of a new nominee in light of the criteria above. The nominating and corporate governance committee generally polls our board of directors and members of management for their recommendations. The nominating and corporate governance committee may also review the composition and qualification of the boards of directors of our competitors and may seek input from industry experts or analysts. The nominating and corporate governance committee reviews the qualifications, experience, and background of the candidates. Final candidates are interviewed by the members of the nominating and corporate governance committee and by certain of our other independent directors and executive management. In making its determinations, the nominating and corporate governance committee evaluates each individual in the context of our board of directors as a whole, with the objective of assembling a group that can best contribute to the success of our Company and represent stockholder interests through the exercise of sound business judgment. After review and deliberation of all feedback and data, the nominating and corporate governance committee makes its recommendation to our board of directors. The nominating and corporate governance committee may rely on third-party search firms to identify director candidates, especially in situations where particular qualifications are required or where existing contacts are not sufficient to identify an appropriate candidate. The nominating and corporate governance committee evaluates nominees recommended by stockholders in the same manner as it evaluates other nominees. We have not received director candidate recommendations from our stockholders, and we do not have a formal policy regarding consideration of such recommendations. However, any recommendations received from stockholders will be evaluated in the same manner that potential nominees suggested by members of our board of directors, management, or other parties are evaluated. Under our amended and restated bylaws, a stockholder wishing to suggest a candidate for director should write to our corporate secretary and provide such information about the stockholder and the proposed candidate as is set forth in our amended and restated bylaws and as would be required by SEC rules to be included in a proxy statement. In addition, the stockholder must include the consent of the candidate and describe any agreements, arrangements, or understandings between the stockholder and the candidate regarding the nomination. In order to give the nominating and corporate governance committee sufficient time to evaluate a recommended candidate and include the candidate in our proxy statement for the 2025 annual meeting, the recommendation should be received by our corporate secretary at our principal executive offices in accordance with our procedures detailed in the section below titled “Stockholder Proposals.”
EXECUTIVE COMPENSATION AND DIRECTOR COMPENSATION
EXECUTIVE COMPENSATION AND DIRECTOR COMPENSATION This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2023, our “named executive officers,” which consist of each person who served as our principal executive officer during 2023 and our two next most highly compensated executive officers during 2023, and their positions were as follows: •Jon Congleton, Chief Executive Officer; •Adam Levy, Chief Financial Officer and Secretary; and •David Rodman, M.D., Chief Medical Officer.
Summary Compensation Table
Summary Compensation Table The following table presents summary information regarding the total compensation that was awarded to, earned by, or paid to the named executive officers for services rendered during the years ended December 31, 2023 and 2022:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Option Awards ($)(3) | Stock Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Compensation ($)(6) | Total ($) | | Jon Congleton | 2023 | 517,000 | — | 4,579,482 | — | 245,575 | 13,200 | 5,355,257 | | Chief Executive Officer | 2022 | 416,667 | 72,450 | — | 1,118,118 | 120,750 | 12,200 | 1,740,185 | | Adam Levy | 2023 | 450,000 | 21,375 | 1,533,806 | — | 171,000 | 13,200 | 2,189,381 | | Chief Financial Officer and Secretary (7) | 2022 | 334,926 | — | — | 483,500 | 190,900 | 7,262 | 1,016,588 | | David Rodman, M.D. | 2023 | 500,000 | — | 1,620,457 | — | 213,750 | 13,200 | 2,347,407 | | Chief Medical Officer | 2022 | 411,458 | 71,544 | 492,064 | — | 119,241 | 12,200 | 1,106,507 |
Summary Compensation Table
__________________ (1)Annual base salary amounts for 2023 were determined by the board on March 17, 2023. On March 1, 2022, Mr. Congleton’s and Dr. Rodman’s annual base salaries were determined by the board to be $420,000 and 414,750, respectively. Mr. Levy joined the Company as Chief Financial Officer and Chief Business Officer in March 2022, and the base salary amount set forth for 2022 reflects the proportional amount earned based on an annual base salary of $415,000 for the portion of 2022 in which he was employed by us. (2)These amounts reflect incremental performance bonus payments to each named executive officer based on increases the board of directors made to certain performance bonus targets after the conclusion of the applicable performance period. Specifically, the board of directors increased Mr. Levy’s 2023 performance bonus target from 40% to 45% of base salary and Mr. Congleton and Dr. Rodman’s 2022 performance bonus targets from 25% to 40% of base salary. (3)The amounts reported in the “Option Awards” column represent the aggregate grant date fair value of the stock options granted during the applicable year, calculated in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Notes 2 and 7 to our audited financial statements in our 2023 Annual Report. The amounts reported in this column reflect the accounting cost for the stock options and do not reflect the actual economic value that will be realized by the executive upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such awards. See “—Narrative to Summary Compensation Table—Equity-Based Incentive Awards.” (4)The amounts reported in the “Stock Awards” column represent the aggregate grant date fair value of restricted stock awards granted during the applicable year, calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Notes 2 and 7 to our audited financial statements in our 2023 Annual Report. The amounts reported in this column reflect the accounting cost for the restricted stock awards and do not reflect the actual economic value that will be realized by the executive upon the vesting of the restricted stock awards or the sale of the common stock underlying such awards. See “—Narrative to Summary Compensation Table—Equity-Based Incentive Awards.” (5)The amounts reported in this column represent performance bonuses earned in each year that are paid in the following year. As disclosed in Note 2 above, incremental performance bonus payments to each named executive officer based on increases the board of directors made to certain performance bonus targets after the conclusion of the applicable performance period are included in the “Bonus” column. (6)The amounts reported in this column reflect company-matching contributions to a 401(k) savings plan. (7)During 2022 and 2023, Mr. Levy served as the Chief Financial Officer, Chief Business Officer, and Secretary. On January 4, 2024, Minji Kim, Ph.D. joined the Company as Chief Business Officer, and Mr. Levy continued in his role as Chief Financial Officer and Secretary.
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table presents information regarding the outstanding stock options and shares of restricted stock held by each of our named executive officers as of December 31, 2023:
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares of Stock that Have Not Vested | Market Value of Shares that Have Not Vested(1) | | Jon Congleton | 10/9/2020 | — | — | $— | — | 106,116(2)(3) | $912,598 | | | 3/12/2021 | 24,082(3)(4) | — | $0.54 | 3/11/2031 | — | $— | | | 7/12/2022 | — | — | $— | — | 575,270(3)(5) | $4,947,322 | | | 2/9/2023 | — | 250,046(6) | $16.00 | 2/9/2033 | — | $— | | | 3/17/2023 | — | 99,800(6) | $15.44 | 3/17/2033 | — | $— | | Adam Levy | 3/10/2022 | — | — | $— | — | 97,000(3) | $834,200 | | | 7/12/2022 | — | — | $— | — | 172,117(3)(5) | $1,480,206 | | | 2/9/2023 | — | 97,518(6) | $16.00 | 2/9/2033 | — | $— | | | 3/17/2023 | — | 20,000(6) | $15.44 | 3/17/2033 | — | $— | | David Rodman, M.D. | 3/12/2021 | — | 65,224(3)(4) | $0.54 | 3/11/2031 | — | $— | | | 7/12/2022 | 228,548(3)(7) | — | $1.08 | 7/11/2032 | — | $— | | | 2/9/2023 | — | 104,186(6) | $16.00 | 2/9/2033 | — | $— | | | 3/17/2023 | — | 20,000(6) | $15.44 | 3/17/2033 | — | $— |
Outstanding Equity Awards at Fiscal Year-End
__________________ (1)The market value is calculated by multiplying the number of shares of unvested restricted stock outstanding under the award by $8.60, which was the closing price of our common stock as of December 29, 2023, the last trading day of 2023. (2)On October 9, 2020, our board of directors granted Mr. Congleton 463,048 shares of restricted stock under our 2020 Plan, with 25% of such shares vesting on the first anniversary of the date on which Mr. Congleton commenced full-time employment with us (November 1, 2020), and the remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to Mr. Congleton’s continued status as a service provider through each such vesting date. (3)These awards are subject to potential acceleration of vesting in connection with a qualifying termination of employment, including in connection with a change in control, as described below under the subsection titled “Employment Arrangements with our Executive Officers.” Dr. Rodman’s stock option granted on March 12, 2021, as well as Mr. Levy’s restricted stock awards granted on March 10, 2022 and July 12, 2022, are subject to accelerated vesting in connection with a change in control, as described above under the subsection titled “Equity-Based Incentive Awards.” (4)On March 12, 2021, our board of directors granted Mr. Congleton and Dr. Rodman options under our 2020 Plan to purchase 24,082 shares and 240,827 shares, respectively, with 25% of such shares vesting on the first anniversary of the March 1, 2021 and January 11, 2021 vesting commencement dates, respectively, and the remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to the respective named executive officer’s continued status as a service provider through each such vesting date. The stock option granted to Mr. Congleton has an early exercise feature that allows Mr. Congleton to exercise the option while unvested and receive restricted shares of our common stock that are subject to forfeiture until the vesting requirement is met. Our 2020 Plan specifically authorizes this early exercise concept and states that employees who exercise unvested options will receive shares of restricted stock with a vesting period that corresponds to the vesting period that remained in the exercised option. Due to this early exercise feature, these options are reflected in the “Exercisable” column as of December 31, 2023. (5)As a condition to the receipt of the stock options to be granted to each of Mr. Congleton and Mr. Levy in connection with our IPO as described above, each executive agreed to an amendment to his July 2022 restricted stock award to amend the vesting of such award such that the portion of such award that would have vested on or prior to June 10, 2024 will vest on June 10, 2024, and 3/48th of the shares (or any lesser number of shares then remaining available to vest as of any applicable vesting date) subject to such award shall vest in quarterly installments on each July 10, October 10, January 10 and April 10 thereafter until such restricted shares are fully vested, subject to the executive’s continuous service with us as of each such vesting date. (6)The stock option vests as to 25% of the total number of shares of common stock subject to the option on the first anniversary of the grant date, and as to 1/36th of the total number of shares of common stock subject to the option on each monthly anniversary thereafter, subject to the executive’s continuous service with us as of each such vesting date. (7)On July 12, 2022, our board of directors granted Dr. Rodman an option under our 2020 Plan to purchase 304,730 shares, with 25% of such shares vesting on the first anniversary of the July 12, 2022 vesting commencement date, and the remaining shares vesting in equal monthly installments over the 36 months thereafter, subject to Dr. Rodman’s continued status as a service provider through each such vesting date. This stock option granted to Dr. Rodman has an early exercise feature that allows Dr. Rodman to exercise the option while unvested and receive restricted shares of our common stock that are subject to forfeiture until the vesting requirement is met. Due to this early exercise feature, these options are reflected in the “Exercisable” column as of December 31, 2023.
Non-Employee Director Compensation
Non-Employee Director Compensation
Director Compensation Program
Director Compensation Program In connection with our IPO, our board of directors and our stockholders approved the initial terms of our non-employee director compensation program. The material terms of the non-employee director compensation program are summarized below. The non-employee director compensation program provides for annual retainer fees and/or long-term equity awards for our non-employee directors. Each non-employee director receives an annual retainer of $40,000. A non-employee director serving as chairman of the board or lead independent director receives an additional annual retainer of $30,000. The non-employee directors serving as the chairs of the audit, compensation, and nominating and corporate governance committees receive additional annual retainers of $15,000, $10,000, and $8,000, respectively. The non-employee directors serving as members of the audit, compensation, and nominating and corporate governance committees receive additional annual retainers of $7,500, $5,000, and $4,000, respectively. Each non-employee director serving on the board at the time of our IPO, and each non-employee director initially appointed or elected to the board following the date of our IPO, received an initial grant of options to purchase 44,000 shares of our common stock, vesting monthly over three years. Non-employee directors also receive annual grants of options to purchase 22,000 shares of our common stock on the date of each annual meeting of our stockholders following our IPO, vesting in substantially equal monthly installments over the 12 months following the date of grant (or, in the event the next annual meeting of our stockholders occurs prior to the first anniversary of the date of grant, any remaining unvested portion of the annual award will vest on the date of such annual meeting of our stockholders). All options granted to our non-employee directors will have an exercise price equal to the fair market value of our common stock on the date of grant (as determined under the 2023 Plan), which for the options granted in connection with our IPO was the IPO price in the IPO. Awards to our non-employee directors will also vest upon a termination of service by reason of death or disability and in the event of a change in control (as defined in the 2023 Plan). Compensation under our non-employee director compensation program is subject to the annual limits on non-employee director compensation set forth in the 2023 Plan. Our board of directors or its authorized committee may modify the non-employee director compensation program from time to time in the exercise of its business judgment, taking into account such factors, circumstances, and considerations as it shall deem relevant from time to time, subject to the annual limit on non-employee director compensation set forth in the 2023 Plan (which limits will not apply to any non-employee director that serves in any additional capacity with the Company for which he or she receives compensation or any compensation paid to any non-employee director prior to the calendar year following the calendar year of our IPO). As provided in the 2023 Plan, our board of directors or its authorized committee may make exceptions to this limit for individual non-employee directors in extraordinary circumstances, as the compensation committee may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation or in other compensation decisions involving non-employee directors. We have a policy of reimbursing all of our non-employee directors for their reasonable out-of-pocket expenses in connection with attending board of directors and committee meetings.
Director Compensation
Director Compensation The table below summarizes the compensation paid by the Company to non-employee directors for the year ended December 31, 2023:
Director Compensation
| Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1) | Total ($) | | Brian Taylor Slingsby, M.D., Ph.D., M.P.H. (2) | 69,333 | 560,793 | 630,126 | | Srinivas Akkaraju, M.D., Ph.D. (2) | 46,505 | 560,793 | 607,298 | | Alexander Asam, Ph.D. (3) | — | 560,793 | 560,793 | | Derek DiRocco, Ph.D. (2) | 51,121 | 560,793 | 611,914 | | Daphne Karydas (2)(4) | 16,440 | 412,078 | 428,518 | | Olivier Litzka, Ph.D. (2) | 41,176 | 560,793 | 601,969 | | Glenn P. Sblendorio (2)(4) | 14,946 | 412,078 | 427,024 | | Takahashi Takeshi (4) | 26,549 | 560,793 | 587,342 |
Director Compensation
__________________ (1)The amounts reported in the “Option Awards” column represent the aggregate grant date fair value of the stock options granted during the applicable year, calculated in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in Notes 2 and 7 to our audited financial statements in our 2023 Annual Report. The amounts reported in this column reflect the accounting cost for the stock options and do not reflect the actual economic value that will be realized by the executive upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such awards. (2)As of December 31, 2023, each designated director held stock options to purchase 44,000 shares of our common stock that vest in substantially equal monthly installments over the three years following the date of grant. (3)Dr. Asam declined to receive his stock option award for service on the board of directors during 2023. (4)Mr. Takahashi served as a member of the board of directors during 2023 and until September 12, 2023, when he resigned from the board of directors. On September 13, 2023, Ms. Karydas and Mr. Sblendorio were appointed as members of the board of directors.