FORM OF CERTIFICATE OF AMENDMENT TO EFFECT REVERSE STOCK SPLIT
Pursuant to Section 242 of Directorsthe General Corporation Law of the State of Delaware, Yield10 Bioscience, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:
1. The Boardname of Directors held four meetings during the year ended December 31, 2021. In addition, there were numerous conference calls heldCorporation is Yield10 Bioscience, Inc.
2. The Certificate of Incorporation of the Corporation was filed with the Board for informational updates and discussion. During the year ended December 31, 2021, no directorattended fewer than 75%Secretary of State of the aggregateState of (i)Delaware on September 1, 1998. An Amended and Restated Certificate of Incorporation was filed with the total numberSecretary of meetingsState of the BoardState of Delaware on November 15, 2006, and (ii)thereafter, Certificates of Amendment were filed on October 30, 2014, May 26, 2015, January 6, 2017, May 25, 2017, December 27, 2017, May 23, 2018 and January 15, 2020 with the total numberSecretary of meetings held by all committeesState of the Board on which such director served.State of Delaware.
3. The Board has a standing Audit Committee, Compensation Committee, ScienceCorporation’s Amended and Technology CommitteeRestated Certificate of Incorporation, as amended, is hereby further amended by striking out the second paragraph of Article IV and Nominating and Corporate Governance Committee. Withreplacing it with the exception of the Science and Technology Committee, all of these committees has a charter that has been approved by the Board of Directors. A current copy of each charter is available on the Company's website at https://ir.yield10bio.com/corporate-governance. Each committee reviews the appropriateness of its charter periodically, as conditions dictate. Each committee retains the authority to engage its own advisors and consultants. The composition and responsibilities of each committee are summarized below.
Audit Committee
Mr. Van Nostrand, Dr. Sinskey and Dr. Hamilton serve on the Audit Committee. Mr. Van Nostrand is the Chairman of the Audit Committee. The Board of Directors has determined that each member of the Audit Committee is independent within the meaning of the Company's and Nasdaq's director independence standards and the SEC’s heightened director independence standards for Audit Committee members as determined under the Exchange Act. The Board of Directors has also determined that each of Mr. Van Nostrand and Dr. Hamilton qualify as “audit committee financial experts” under the rules of the SEC. The Audit Committee held four meetings during the year ended December 31, 2021.
The Audit Committee is responsible for overseeing the accounting and financial reporting processes of the Company and the audits of the financial statements of the Company and exercising the responsibilities and duties set forth in its charter, including but not limited to:following paragraph:
•appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;
•pre-approving auditing and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
•reviewing and discussing with management and the independent registered public accounting firm our annual and quarterly financial statements and related disclosures;
•coordinating the oversight and reviewing the adequacy of our internal control over financial reporting;
•establishing policies and procedures for the receipt and retention of accounting related complaints and concerns; and
•preparing the Audit Committee report required by SEC rules to be included in our annual proxy statement.
Compensation Committee
Dr. Sinskey, Dr. Hamilton and Mr. Van Nostrand serve on the Compensation Committee. Dr. Sinskey is the Chairman of the Compensation Committee. The Board of Directors has determined that each member of the Compensation Committee is independent within the meaning of the Company’s, the SEC’s and Nasdaq’s director independence standards. The Compensation Committee held five meetings in the year ended December 31, 2021. The Compensation Committee's responsibilities include:
•annually reviewing and approving goals and objectives relevant to compensation of our executive officers, including the Chief Executive Officer;
•evaluating the performance of our Chief Executive Officer and other executive officers in light of such goals and objectives;
•determining the compensation of our Chief Executive Officer and other executive officers;
•reviewing and approving, for the Chief Executive Officer and the other executive officers of the Company, any employment agreements, severance arrangements, and change in control agreements or provisions;
•overseeing the administration of our incentive-based and equity-based compensation plans; and
•reviewing and making recommendations to the Board with respect to director compensation.
Nominating and Corporate Governance Committee
Dr. Sinskey and Dr. Hamilton serve on the Nominating and Corporate Governance Committee. Dr. Hamilton is the Chairman of the Nominating and Corporate Governance Committee. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is independent within the meaning of the Company’s, the SEC’s and Nasdaq’s director independence standards. The Nominating and Corporate Governance Committee held three meetings during the year ended December 31, 2021. The Nominating and Corporate Governance Committee's responsibilities include:
•developing and recommending to the Board criteria for Board and committee membership;
•establishing procedures for identifying and evaluating director candidates, including nominees recommended by stockholders;
•identifying individuals qualified to become Board members;
•recommending to the Board the persons to be nominated for election as directors and to each of the Board's committees;
•developing succession plans for the Board;
•developing and recommending to the Board a code of business conduct and ethics and a set of corporate governance guidelines; and
•overseeing the evaluation of the Board and its committees.
Science and Technology Committee
Dr. Brown, Dr. Hamilton and Dr. Sinskey serve on the Science and Technology Committee, with Dr. Brown serving as Chairwoman. The role of the Science and Technology Committee is to provide oversight and guidance on the scientific research, development and commercialization activities of Yield10. The Science and Technology Committee held three meetings during the year ended December 31, 2021. The duties[“Upon effectiveness of this committee include:
•reviewCertificate of individual program goals and objectives;
•product development strategy, and
•budgets and performance.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizesAmendment (the “Effective Time”), the compensation earned during the years ended December 31, 2021 and December 31, 2020 by our principal executive officer and the two other most highly paid executive officers who were serving as executive officers on December 31, 2021 (our named executive officers):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | | Salary | | Bonus | Stock
Awards(1) | | Option
Awards(1) | | Non-Equity
Incentive Plan
Compensation(2) | | All Other Compensation(3) | | Total |
| Oliver P. Peoples, Ph.D. | 2021 | | $ | 315,000 | | | $ | — | | $ | 137,968 | | | $ | 1,383,768 | | | $ | 91,980 | | | $ | 13,050 | | | $ | 1,941,766 | |
| President and Chief Executive Officer | 2020 | | $ | 288,750 | | | $ | — | | $ | 199,237 | | | $ | 448,172 | | | $ | 132,825 | | | $ | 12,825 | | | $ | 1,081,809 | |
| Lynne H. Brum | 2021 | | $ | 252,350 | | | $ | — | | $ | 22,563 | | | $ | 269,920 | | | $ | 41,909 | | | $ | 13,050 | | | $ | 599,792 | |
| Vice President, Planning and Communications | 2020 | | $ | 238,066 | | | $ | — | | $ | 33,535 | | | $ | 109,437 | | | $ | 62,284 | | | $ | 11,733 | | | $ | 455,055 | |
| Kristi D. Snell, Ph.D. | 2021 | | $ | 252,350 | | | $ | — | | $ | 25,787 | | | $ | 488,011 | | | $ | 47,896 | | | $ | 13,050 | | | $ | 827,094 | |
| Vice President, Research and Chief Scientific Officer | 2020 | | $ | 238,066 | | | $ | — | | $ | 38,328 | | | $ | 218,875 | | | $ | 71,182 | | | $ | 12,825 | | | $ | 579,276 | |
(1)The amounts listed in the “Stock Awards” and “Option Awards” columns do not represent the actual amounts paid in cash or value realized by the named executive officers. These amounts represent the aggregate grant date fair value of restricted stock units and stock option awards for each individual computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 10 to our 2021 Consolidated Financial Statements, and Note 10 to our 2020 Consolidated Financial Statements included in our Annual Reports on Form 10-K for the years ended December 31, 2021 and 2020, respectively.(2)Non-Equity Incentive Plan Compensation represents cash bonus amounts paid based on the Compensation Committee's review of corporate performance for fiscal 2021 and 2020 pursuant to the Company's executive cash incentive performance bonus program.
(3)Other Compensation for 2021 and 2020 includes the value of the Company's Common Stock contributed to the Company's 401(k) plan as a matching contribution.
Narrative Disclosure to Summary Compensation Table
Base Salaries
Base salary levels for the named executive officers were increased effective January 1, 2022, to $330,750 for Dr. Peoples and to $264,968 for Ms. Brum and Dr. Snell. Base salary levels for 2020 were increased effective January 1, 2021 to $315,000 for Dr. Peoples and to $252,350 for Ms. Brum and Dr. Snell.
Pay for Performance
Executive bonuses have historically been awarded based on overall corporate performance and to recognize and reward the teamwork of the named executive officers in advancing corporate goals, although the Compensation Committee retains the discretion to adjust individual bonus amounts in exceptional cases.
In February, 2022 and 2021, payments were made under the Company's executive cash incentive performance bonus program for performance during the prior fiscal year.
Long-Term Incentives
The Compensation Committee awarded long-term stock option incentives in 2021 to the executive officers and other employees. Each awarded option has an exercise price per share equal to the fair market valueshares of Common Stock onissued and outstanding immediately prior to the dateEffective Time and the shares of Common Stock issued and held in the treasury of the grant, vests in sixteen equal quarterly installments at a rate of 6.25% per installment over four years, and has a term of ten years from the date of grant. Named executive officers receiving these stock option awards were as follows:
| | | | | |
2021 | |
Named Executive Officer | Number of
Options |
Oliver P. Peoples, Ph.D. | 156,000 | |
Kristi D. Snell, Ph.D. | 53,000 | |
Lynne H. Brum | 29,500 | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table summarizes stock option and restricted stock unit awards held by our named executive officers at December 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Grant Date | | Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable(1) | | Option
Exercise
Price($) | | Option
Expiration
Date | | Equity Incentive
Plan Awards:
Number of Units
That Have Not Vested
(#) | | Equity Incentive
Plan Awards: Market Value of Units of
Stock That Have Not Vested ($) |
| Oliver P. Peoples, Ph.D. | | 2/1/2012 | | 38 | | | — | | | $ | 6,384.00 | | | 2/1/2022 | | — | | | $ | — | |
| | 9/18/2012 | | 52 | | | — | | | $ | 3,720.00 | | | 9/18/2022 | | — | | | $ | — | |
| | 5/30/2013 | | 29 | | | — | | | $ | 4,056.00 | | | 5/30/2023 | | — | | | $ | — | |
| | 10/26/2016 | | 4,125 | | | — | | | $ | 212.00 | | | 10/26/2026 | | — | | | $ | — | |
| | 5/23/2018 | | 7,329 | | | 1,046 | | | $ | 66.00 | | | 5/23/2028 | | — | | | $ | — | |
| | 5/22/2019 | | 3,750 | | | 2,250 | | | $ | 36.00 | | | 5/22/2029 | | — | | | $ | — | |
| | 5/28/2020 | | 32,250 | | | 53,750 | | | $ | 5.86 | | | 5/28/2030 | | — | | | $ | — | |
| | 1/25/2021 | | 10,500 | | | 45,500 | | | $ | 16.49 | | | 1/25/2031 | | — | | | $ | — | |
| | 9/28/2021 | | 6,250 | | | 93,750 | | | $ | 6.30 | | | 9/28/2031 | | — | | | $ | — | |
| | 3/1/2021 | | | | | | | | | | 6,214 | | | $ | 30,573 | |
| | | | | | | | | | | | | | |
| Lynne Brum | | 5/31/2012 | | 8 | | | — | | | $ | 4,800.00 | | | 5/31/2022 | | — | | | $ | — | |
| | 5/30/2013 | | 17 | | | — | | | $ | 4,056.00 | | | 5/30/2023 | | — | | | $ | — | |
| | 10/26/2016 | | 1,251 | | | — | | | $ | 212.00 | | | 10/26/2026 | | — | | | $ | — | |
| | 5/23/2018 | | 2,188 | | | 312 | | | $ | 66.00 | | | 5/23/2028 | | — | | | $ | — | |
| | 5/22/2019 | | 937 | | | 563 | | | $ | 36.00 | | | 5/22/2029 | | — | | | $ | — | |
| | 5/28/2020 | | 7,875 | | | 13,125 | | | $ | 5.86 | | | 5/28/2030 | | — | | | $ | — | |
| | 1/25/2021 | | 2,156 | | | 9,344 | | | $ | 16.49 | | | 1/25/2031 | | — | | | $ | — | |
| | 9/28/2021 | | 1,125 | | | 16,875 | | | $ | 6.30 | | | 9/28/2031 | | — | | | $ | — | |
| | 3/1/2021 | | | | | | | | | | 1,046 | | | $ | 5,146 | |
| | | | | | | | | | | | | | |
| Kristi Snell, Ph.D. | | 2/1/2012 | | 9 | | | — | | | $ | 6,384.00 | | | 2/1/2022 | | — | | | $ | — | |
| | 5/31/2012 | | 8 | | | — | | | $ | 4,800.00 | | | 5/31/2022 | | — | | | $ | — | |
| | 9/18/2012 | | 25 | | | — | | | $ | 3,720.00 | | | 9/18/2022 | | — | | | $ | — | |
| | 2/13/2013 | | 4 | | | — | | | $ | 4,032.00 | | | 2/13/2023 | | — | | | $ | — | |
| | 7/22/2013 | | 11 | | | — | | | $ | 3,552.00 | | | 7/22/2023 | | — | | | $ | — | |
| | 2/24/2014 | | 12 | | | — | | | $ | 3,096.00 | | | 2/24/2024 | | — | | | $ | — | |
| | 10/26/2016 | | 2,500 | | | — | | | $ | 212.00 | | | 10/26/2026 | | — | | | $ | — | |
| | 5/23/2018 | | 3,720 | | | 530 | | | $ | 66.00 | | | 5/23/2028 | | — | | | $ | — | |
| | 5/22/2019 | | 1,874 | | | 1,126 | | | $ | 36.00 | | | 5/22/2029 | | — | | | $ | — | |
| | 5/28/2020 | | 15,750 | | | 26,250 | | | $ | 5.86 | | | 5/28/2030 | | — | | | $ | — | |
| | 1/25/2021 | | 3,937 | | | 17,063 | | | $ | 16.49 | | | 1/25/2031 | | — | | | $ | — | |
| | 9/28/2021 | | 2,000 | | | 30,000 | | | $ | 6.30 | | | 9/28/2031 | | — | | | $ | — | |
| | 3/1/2021 | | | | | | | | | | 1,195 | | | $ | 5,879 | |
(1)All stock options that are not yet fully exercisable vest in equal quarterly installments over a period of four years from the grant date.
Executive Employment Agreements
Oliver P. Peoples, Ph.D. The Company has an employment agreement with Dr. Oliver P. Peoples, President and Chief Executive Officer. Effective as of January 1, 2022, Dr. Peoples’ salary has been set at $330,750; his agreement includes a minimum salary of $225,000 and provides that Dr. Peoples will be eligible to receive annual bonuses based on individual and Company performance. PursuantCorporation immediately prior to the termsEffective Time are reclassified into a smaller number of Dr. Peoples’ agreement, ifshares such that each [ ] shares of issued Common Stock immediately prior to the Company terminates Dr. Peoples’ employment without “cause” or if Dr. Peoples terminates his employment for “good reason” (each,Effective Time is reclassified into one (1) share of Common Stock. Notwithstanding the immediately preceding sentence, no fractional shares shall be issued as defined ina result of the agreement), he willreverse stock split. Instead, any stockholder who would otherwise be entitled to “separation benefits” (as defined ina fractional share of our Common Stock as a result of the agreement) includingreclassification shall be entitled to receive a lump-sum cash payment equal to the greaterproduct of $480,000 or 24 months’ base salary and a pro rata portionsuch resulting fractional interest in one share of our Common Stock multiplied by the closing trading price of our Common Stock on the trading day immediately preceding the effective date of the target bonus forreverse stock split. Notwithstanding the year in which termination occurs, butforegoing, the Corporation shall not less than a pro rata portionbe obliged to issue certificates evidencing the shares of $180,000, plus payment of COBRA premiums for 24 months, provided that he signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Dr. Peoples’ employment without cause or if Dr. Peoples terminates his employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Dr. Peoples will be entitled to the separation benefits and automatic full vesting of his unvested stock options. To the extent Dr. Peoples would be subject to tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)Common Stock outstanding as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize his total after-tax payments.
Lynne H. Brum. The Company has an employment agreement with Lynne H. Brum, Vice President of Planning and Communications. Effective as of January 1, 2022, Ms. Brum's salary has been set at $264,968; her agreement includes a minimum salary of $220,000 and provides that Ms. Brum will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Ms. Brum's agreement, if the Company terminates Ms. Brum's employment without “cause”reverse stock split or if Ms. Brum terminates her employment for “good reason” (each, as defined in the agreement), she will be entitled to “separation benefits” (as defined in the agreement) including a lump-sum cash payment equal to 12 months’ base salary and payment of COBRA premiums for 12 months, provided that she signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Ms. Brum’s employment without cause or if Ms. Brum terminates her employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Ms. Brum will be entitled to the separation benefits and automatic full vesting of her unvested stock options. To the extent Ms. Brum would be subject to tax under Section 4999 of the Internal Revenue Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize her total after-tax payments.
Charles B. Haaser. The Company has an employment agreement with Charles B. Haaser, Vice President of Finance & Chief Accounting Officer. Effective as of January 1, 2022, Mr. Haaser's salary has been set at $252,000; his agreement includes a minimum salary of $205,000 and provides that Mr. Haaser will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Mr. Haaser's agreement, if the Company terminates Mr. Haaser’s employment without “cause” or if Mr. Haaser terminates his employment for “good reason” (each, as defined in the agreement), he will be entitled to “separation benefits” (as defined in the agreement) including a lump-sum cash payment equal to 12 months' base salary and payment of COBRA premiums for 12 months, provided that he signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Mr. Haaser’s employment without cause or if Mr. Haaser terminates his employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a “change of control” (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Mr. Haaser will be entitled to the separation benefits and automatic full vesting of his unvested stock options. To the extent Mr. Haaser would be subject to tax under Section 4999 of the Internal Revenue Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize his total after-tax payments.
Kristi D. Snell, Ph.D. The Company has an employment agreement with Kristi D. Snell, Vice President of Research & Chief Science Officer. Effective as of January 1, 2022, Dr. Snell's salary has been set at $264,968;
her agreement includes a minimum salary of $220,000 and provides that Dr. Snell will be eligible to receive annual bonuses based on individual and Company performance. Pursuant to the terms of Dr. Snell's agreement, if the Company terminates Dr. Snell's employment without "cause" or if Dr. Snell terminates her employment for "good reason" (each, as defined in the agreement), she will be entitled to "separation benefits" (as defined in the agreement) including a lump-sum cash payment equal to 12 months' base salary and payment of COBRA premiums for 12 months, provided that she signs a separation agreement that includes an irrevocable general release and non-disparagement and confidentiality provisions in favor of the Company. If the Company terminates Dr. Snell's employment without cause or if Dr. Snell terminates her employment for good reason within the twenty-four month period immediately following, or the two month period immediately prior to, a "change of control" (as defined in the agreement), in addition to any accrued obligations, and subject to certain conditions, Dr. Snell will be entitled to the separation benefits and automatic full vesting of her unvested stock options. To the extent Dr. Snell would be subject to tax under Section 4999 of the Internal Revenue Code as a result of company payments and benefits, the payments and benefits will be reduced if the reduction would maximize her total after-tax payments.
Executive Noncompetition, Nonsolicitation, Confidentiality, and Inventions Agreements
All employees named above have signed the Company's Employee Noncompetition, Nonsolicitation, Confidentiality, and Inventions agreement which prohibits them, during their employment by us and for a period of one year thereafter, from engaging in certain business activities which are directly or indirectly in competition with the products or services being developed, manufactured, marketed, distributed, planned, or sold by the Company during the term of their employment.
Hedging Policy
We do not have a hedging policy, but our code of conduct and insider trading policy disallows short sales and trading in our stock on a short-term basis.
DIRECTOR COMPENSATION
The following table summarizes the compensation earned by our non-employee directors in 2021:
| | | | | | | | | | | | | | | | | |
| Name | Fees Earned
($)(1) | | Stock
Options
($)(2)(3) | | Total ($) |
| Anthony J. Sinskey, Sc.D. | $ | 62,500 | | | $ | 35,517 | | | $ | 98,017 | |
| Robert L. Van Nostrand | $ | 72,500 | | | $ | 35,517 | | | $ | 108,017 | |
| Richard W. Hamilton, Ph.D. | $ | 62,500 | | | $ | 35,517 | | | $ | 98,017 | |
| Sherri M. Brown, Ph.D. | $ | 40,000 | | | $ | 35,517 | | | $ | 75,517 | |
As of December 31, 2021, our non-employee directors listed in the table below held the following aggregate number of shares subject to outstanding option awards (representing both exercisable and unexercisable option awards, none of which have been exercised):
| | | | | |
Name | Number of Shares
Underlying Outstanding
Stock Options |
Anthony J. Sinskey, Sc.D. | 21,968 | |
Robert L. Van Nostrand | 18,289 | |
Richard W. Hamilton, Ph.D. | 11,036 | |
Sherri M. Brown, Ph.D. | 20,250 | |
| |
(1)Represents fees for the year 2021. All such fees were paid during 2021. Dr. Sinskey and Mr. Van Nostrand elected to receive options to purchase shares of the Company's Common Stock in lieu of cash for some of their aggregate feesfractional shares, if any, unless and until the certificates evidencing the shares held by a holder prior to the reverse stock split are either delivered to the Corporation or its transfer agent, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in 2021, in the respective amounts of $31,250 and $18,125, computed inconnection with such certificates.”]
(2)4. The amounts listed in the “Stock Options” column do not represent the actual amounts paid in cash or value realized by the directors. These amounts represent the aggregate grant date fair value of option awards for each individual computed in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 10 to our 2021 Consolidated Financial Statements for the year ended December 31, 2021.(3)In 2021, each of our non-employee directors who continued to serve as a director beyond our 2021 Annual Shareholder Meeting was granted an option to purchase 5,000 sharesAmendment of the Company's Common Stock.
Narrative to Director Compensation Table
Under the Company's policy for compensationAmended and Restated Certificate of non-employee directors, each non-employee member of our Board of Directors is entitled to elect to receive either cash or options to purchase shares of the Company's Common StockIncorporation, as compensation for their service to the Board and/or its committees, reflecting the following amounts for service in each specified role:
•Board service: $30,000 per year
•Board Chairman: $20,000 per year
•Committee service: $7,500 per year
•Audit Committee Chair: $15,000 per year
•Compensation Committee Chair: $10,000 per year
•Nominating and Corporate Governance Committee Chair: $10,000 per year
•Science and Technology Committee Chair: $10,000 per year
In addition, renewing members of the Board are entitled to receive annual grants of options to purchase shares of the Company's Common Stock from time to time as compensation for their service to the Board and/or its committees, and new members of the Board are entitled to receive such grants upon joining the Board, in amounts determined by the Compensation Committee. In the year ended December 31, 2021, renewing members of the Board received option grants of 5,000 shares effective upon the annual meeting of stockholders. For the fiscal year ending December 31, 2022, non-employee Board members will receive option grants of 5,000 shares effective upon the annual meeting of stockholders.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information about the Common Stock that may be issued upon the exercise of options, warrants and rights under all the Company's existing equity compensation plans as of December 31, 2021.
| | | | | | | | | | | | | | | | | | | | |
| Plan category | | Number of securities to
be issued upon exercise of
outstanding options,
warrants and rights | | Weighted-average exercise
price of outstanding options,
warrants and rights | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a)) |
| | | (a) | | (b) | | (c) |
| Equity compensation plans approved by stockholders(1) | | 731,716 | | | $ | 14.60 | | | 67,346 | |
| Equity compensation plans not approved by stockholders(2) | | 479 | | | $ | 3,192.00 | | | — | |
(2)Consists of a stock option granted to Mr. Shaulson, our former Chief Executive Officer and former director, as an inducement for him to join the Company. These options originally vested over a four-year period, but the remaining unvested portion became fully vested upon execution of Mr. Shaulson's separation agreement in November 2016.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The charter of the Nominating and Corporate Governance Committee provides that the committee shall conduct an appropriate review of all related person transactions (including those required to be disclosed pursuant to Item 404 of Regulation S-K) for potential conflict of interest situations on an ongoing basis, and the approval of that committee shall be required for all such transactions.
Also, under the Company's Code of Business Conduct, any transaction or relationship that reasonably could be expected to give rise to a conflict of interest involving an employee must be reported promptly to the Company's Chief Accounting Officer, whoamended, herein certified has been designated as the Company's Compliance Officer. The Compliance Officer may notify the Board of Directors or a committee thereof as he deems appropriate. Actual or potential conflicts of interest involving a director, executive officer or the Compliance Officer must be disclosed directly to the Chairman of the Board of Directors.
Tepha, Inc.
During 1999, the Company entered into a technology sublicense agreement with Tepha, Inc. ("Tepha"), a privately held company engaged in the development of medical products. At the time the sublicense was executed, a director of Yield10 was also the president, chief executive officer and a director of Tepha. Three other members of Yield10's board of directors also served on the board of directors of Tepha, of which one continued to serve until completion of the merger of Tepha discussed below. Yield10 received 648,149 shares of Series A Convertible Preferred Stock of Tepha ("Tepha Shares") during 2002 as consideration for outstanding license payments due to Yield10 totaling $700,000. During 2005, the Company determined the value of the Tepha Shares was impaired resulting in their write off through a charge to other income (expense). The sublicense agreement with Tepha ended in 2016. In May 2021, the board of directors of Tepha approved and authorized the merger of Tepha with Becton Dickinson Global Holdings, Inc. and on July 26, 2021, Yield10 received cash consideration of $700,000 in exchange for the surrender of its Tepha Shares upon the closing of the merger.
There were no other related person transactions entered into during the fiscal year ended December 31, 2021.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee for the last fiscal year consisted of Mr. Van Nostrand, Chairman, Dr. Sinskey and Dr. Hamilton. The Audit Committee has the responsibility and authority described in the Yield10 Audit Committee Charter, which has been approved by the Board of Directors. A copy of the Audit Committee Charter is available on our website at http://ir.yield10bio.com/corporate-governance. The Board of Directors has determined that the current members of the Audit Committee meet the independence requirements set forth in Rule 10A-3(b)(1) under the Exchange Act, and the applicable rules of Nasdaq, and that Mr. Van Nostrand and Dr. Hamilton each qualify as an “Audit Committee financial expert” under the rules of the SEC. The Audit Committee oversees the accounting and financial reporting processes of the Company and its subsidiaries and the audits of the financial statements of the Company. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with both the management of the Company and RSM US LLP, the Company's independent registered public accounting firm, the
The Audit Committee has reviewed with RSM US LLP their judgments as to the application of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee by Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), asduly adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has received from RSM US LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding RSM US LLP’s communications with the Audit Committee concerning independence, has discussed with RSM US LLP their independence from management and the Company, and has considered the compatibility with RSM US LLP's independence as auditors of any non-audit services performed for the Company by RSM US LLP.
The Audit Committee discussed with RSM US LLP the overall scope and plans for their audit. The Audit Committee met with RSM US LLP, with and without management present, to discuss the results of their examinations and their evaluations of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company's audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2021 and filed with the SEC, and the Board of Directors approved such inclusion. | | | | | | | | |
| | |
| | Respectfully submitted by the Audit Committee, |
| |
Robert L. Van Nostrand, Chairman
Anthony Sinskey, Ph.D.
Richard Hamilton, Ph.D. |
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors selected the firm of RSM US LLP, an independent registered public accounting firm, to serve as independent auditors for the fiscal year ended December 31, 2020.
Fees
The following sets forth the aggregate fees billed by RSM US LLP, to the Company for the years ended December 31, 2021 and December 31, 2020:
Audit Fees
Fees related to audit services were approximately $177,000 and $167,000 for the years ended December 31, 2021 and 2020, respectively, and relate to the year-end audits of the Company's financial statements for those years.
Audit Related Fees
Audit Related Fees were approximately $65,000 and $90,000 for the years ended December 31, 2021 and December 31, 2020, respectively, and relate to services associated with registration statements and securities offerings.
Tax Fees
Tax fees are estimated to be approximately $90,500 for the fiscal year ended December 31, 2021 and included services to advise on the Company's tax net operating loss and tax credit utilization limitations under
Section 382 of the Internal Revenue Code of 1986. Tax fees for the fiscal year ended December 31, 2020 were approximately $30,500.
All Other Fees
RSM US LLP billed no other fees for the years ended December 31, 2021 and December 31, 2020.
Pre-Approval Policy of the Audit Committee
All the services performed by RSM US LLP for the fiscal year ended December 31, 2021 were pre-approved in accordance with the pre-approval policy set forth inprovisions of Section 242 of the Audit Committee Charter. The Audit Committee pre-approves all audit services and permitted non-audit services performed or proposedGeneral Corporation Law of the State of Delaware.
5. This Certificate of Amendment shall be effective on [ ] at [ ], Eastern Time.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be undertakensigned by the independent registered public accounting firm (including the fees and terms thereof), except where such services are determined to be de minimis under the Exchange Act, giving particular attention to the relationship between the typesits duly authorized officer on this [ ] day of services provided and the independent registered public accounting firm's independence.[ ].
| | YIELD10 BIOSCIENCE, INC. | | | | | |
| | By: | | | | | | | | | | |
| | Name: Oliver P. Peoples | | | | | |
| | Title: President and Chief Executive Officer | | | | | |
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