• reviews and makes recommendation to our board of directorsBoard with respect to management succession planning;
• considers and makes recommendations to our board of directorsBoard regarding the composition of our board of directorsBoard and its committees;
• reviews developments in corporate governance practices;
• evaluates the adequacy of our corporate governance practices and reporting; and
• evaluates the performance of our board of directorsBoard and individual members.
Our corporate governance and nominating committee operates under a written charter that satisfies applicable rules of the SEC and Nasdaq listing rules. The corporate governance and nominating committee met
two (2)four (4) times in fiscal year
2020.2021.
Identifying and Evaluating Director Nominees
Our
board of directorsBoard has delegated to the corporate governance and nominating committee the responsibility of identifying individuals qualified to become board members and recommending to the
board of directorsBoard nominees to fill vacancies and newly created directorships and the nominees to stand for election as directors. If the corporate governance and nominating committee determines that an additional or replacement director is required, it may take such measures that it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the committee, the
board of directorsBoard or management.
In its evaluation of director candidates, including the members of the
board of directorsBoard eligible for reelection, the corporate governance and nominating committee will consider the current size and composition of the
board of directorsBoard and the needs of the
board of directorsBoard and its committees. Some of the factors that our corporate governance and nominating committee considers include, without limitation, character, integrity, judgment, diversity, including diversity in terms of gender, race, ethnicity and experience, independence, area of expertise, corporate experience, length of service, potential conflicts of interest, other commitments and similar factors.
Nominees must also have the highest personal and professional ethics and integrity, proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment, skills that are complementary to those of the existing
board of directors,Board, the ability to assist and support management and make significant contributions to the Company’s success, and an understanding of the fiduciary responsibilities that are required of a member of the
board of directorsBoard and the commitment of time and energy necessary to diligently carry out those responsibilities.
A stockholder that wants to recommend a candidate for election to the Board should direct the recommendation in writing by letter to the Company, attention of the Corporate Secretary, at 202 Carnegie Center, Suite 109, Princeton, New Jersey 08540. The recommendation must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve, information regarding any relationships between the candidate and the Company and evidence of the recommending stockholder’s ownership of Company stock. Such recommendations must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for board membership. In addition, a stockholder must meet the deadlines and other requirements set forth in the Company’s bylaws. The corporate governance and nominating committee will consider candidates recommended by stockholders in the same manner as candidates recommended to the committee from other sources.
Role of the Board in Risk Oversight
Our
board of directorsBoard has an active role, as a whole and also at the committee level, in overseeing the management of our risks. Our
board of directorsBoard is responsible for general oversight of risks and regular review of information regarding our risks, including credit risks, liquidity risks and operational risks. The compensation committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements. The audit committee is responsible for overseeing the management of risks relating to accounting matters and financial reporting. Although each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire
board of directorsBoard is regularly informed through discussions from committee members about such risks. Our
board of directorsBoard believes its administration of its risk oversight function has not negatively affected the
board of directors’Board’s leadership structure. The Board’s allocation of risk oversight responsibility may change from time to time based on the evolving needs of the Company.
Compensation Risk Assessment
The compensation committee periodically reviews the Company’s general compensation strategy and reviews the risks arising from the Company’s compensation policies and practices for all employees that are reasonably likely to have a material adverse effect on the Company.
Communications with Directors
Stockholders and other interested parties may communicate with the board by writing in care of the Corporate Secretary, Oyster Point Pharma, Inc., 202 Carnegie Center, Suite 109, Princeton, New Jersey 08540. Communications intended for a specific director or directors, including the lead director or the independent directors as a group, should be addressed to the attention of the relevant individual(s) in care of the Corporate Secretary at the same address. Our Corporate Secretary will review all correspondence intended for the board and will regularly forward to the board a summary of such correspondence and copies of correspondence that, in the opinion of the Corporate Secretary, is of significant importance to the functions of the Board or otherwise requires the board’s attention.
Corporate Governance Guidelines and Code of Business Conduct and Ethics
Our board of directorsBoard has adopted Corporate Governance Guidelines. These guidelines address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directorsBoard has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior
financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our website at http://investors.oysterpointrx.com in the Governance section of our Investors webpage. We intend to post any amendments to our Code of Business Conduct and Ethics, and any waivers of our Code of Business Conduct and Ethics for directors and executive officers, on the same website.
Information regarding Dr. Nau, who also serves as a director, is set forth above under “Directors and Corporate Governance.”
Daniel Lochner has served as our Chief Financial Officer since July 2019. Previously, Mr. Lochner was a Managing Director within the Investment Management Division of Goldman Sachs where he served as a lead equity portfolio manager and healthcare investor for various fund strategies. Mr. Lochner joined the Investment Management Division of Goldman Sachs in 2005 as an equity investor, a position he maintained during his tenure at the firm. Mr. Lochner received a B.A. in Economics from the University of Richmond and an Executive M.B.A. from Columbia University. We believe that Mr. Lochner is qualified to serve as our CFO because of his financial and accounting expertise and his experience in the healthcare industry.
John Snisarenko has served as our Chief Commercial Officer since September 2019. Mr. Snisarenko was most recently the Group Vice President of the Ophthalmology Business Unit at Takeda Pharmaceuticals (previously Shire) from June 2017 to September 2019. Prior to joining Shire, Mr. Snisarenko was a Vice President in Genentech’s ophthalmology business units from December 2007 until May 2017. From April 2006 to December 2007, Mr. Snisarenko was a Vice President in the ophthalmology business of NOVADAQ Technologies and from June 1996 to April 2006, he was a Vice President in the ophthalmology business of Novartis Pharmaceuticals Canada. Mr. Snisarenko has been a member of the board of directors of Alimera Sciences, Inc. (Nasdaq:ALIM) since July 2019. Mr. Snisarenko received a B.Sc. in Biochemistry and an M.B.A. from McGill University. We believe Mr. Snisarenko is qualified to serve as our Chief Commercial Officer because of his substantial experience in the ophthalmology business.
Process and Procedure for Compensation Decisions
Our compensation committee is primarily responsible for establishing and reviewing our general compensation strategy. In addition, the compensation committee oversees our compensation and benefit plans and policies, administers our equity incentive plans and reviews and approves annually all compensation decisions relating to all of our executive officers, including our Chief Executive Officer. The compensation committee considers recommendations from our Chief Executive Officer regarding the compensation of our executive officers other than himself. Under its charter, our compensation committee has the right to retain or obtain the advice of compensation consultants, independent legal counsel and other advisers. In fiscal
2020,2021, the compensation committee retained
ArnostiAon Consulting, a compensation consultant, to help us determine the appropriate level of overall compensation for our executive officers, as well as assess each separate element of compensation and to assess how our compensation practices compared to the compensation practices of other companies, with a goal of ensuring that the compensation we offer to our executive officers is competitive and fair.
Summary Compensation Table
Our named executive officers for fiscal
2020,2021, which consist of our principal executive officer and the next two most highly compensated executive officers, are:
• Jeffrey Nau, Ph.D., M.M.S., our President and Chief Executive Officer;
• Daniel Lochner, our Chief Financial Officer; and
• John Snisarenko, our Chief Commercial Officer.
The following table sets forth information regarding the total compensation for services rendered in all capacities that was earned by our named executive officers in the year indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) (1),(2) | Option Awards ($) (1) | Non-equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) |
Jeffrey Nau, Ph.D., M.M.S. | 2021 | 562,500 | — | | 486,105 | 1,354,380 | | 388,125 | | 12,229 | | 2,803,339 | |
President, Chief Executive Officer and Director | 2020 | 530,450 | — | | — | 4,919,313 | | 291,748 | | 11,400 | | 5,752,911 | |
Daniel Lochner (5) | 2021 | 426,500 | — | | 210,637 | 1,026,293 | | 196,190 | | 19,307 | | 1,878,927 | |
Chief Financial Officer | 2020 | 412,000 | 40,000 | — | 1,689,468 | | 181,280 | | 11,400 | | 2,334,148 | |
John Snisarenko | 2021 | 426,500 | — | | 210,637 | 760,239 | | 196,190 | | 12,259 | | 1,605,825 | |
Chief Commercial Officer | 2020 | 412,000 | — | | — | 1,689,468 | | 181,280 | | 11,400 | | 2,294,148 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary
($) | | | Bonus
($) | | | Stock
Awards
($) | | Option
Awards
($) (1) | | | Non-equity
Incentive Plan
Compensation
($) (2) | | | All Other
Compensation
($) (3) | | | Total ($) | |
Jeffrey Nau, Ph.D., M.M.S.
President, Chief Executive Officer
and Director
| |
| 2020
2019
|
| |
| 530,450
389,635
|
| |
| —
—
|
| | —
—
| |
| 4,919,313
3,364,813
|
| |
| 291,748
283,250
|
| |
| 11,400
—
|
| |
| 5,752,911
4,037,698
|
|
Daniel Lochner (4)
Chief Financial Officer
| |
| 2020
2019
|
| |
| 412,000
163,523
|
| |
| 40,000
40,000
| (5)
(5)
| | —
—
| |
| 1,689,468
1,498,892
|
| |
| 181,280
78,115
|
| |
| 11,400
—
|
| |
| 2,334,148
1,780,530
|
|
John Snisarenko (6)
Chief Commercial Officer
| |
| 2020
2019
|
| |
| 412,000
110,442
|
| |
| —
—
|
| | —
—
| |
| 1,689,468
1,867,115
|
| |
| 181,280
50,630
|
| |
| 11,400
—
|
| |
| 2,294,148
2,028,187
|
|
(1) | The amounts reported represent the aggregate grant date fair value of the awards, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718—Compensation—Stock Compensation (“ASC 718”), excluding the effect of any estimated forfeitures. Information about the assumptions used in the calculation of these amounts are included in “Note 1. Organization and Summary of Significant Accounting Policies—Stock-Based Compensation” and “Note 6. Equity Incentive Plans” to the Company’s financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for such year.
|
(2) | Non-equity incentive plan compensation consists of bonus awards under the Incentive Compensation Plan (as defined below) earned for 2020 and 2019 performance, which compensation was paid in February 2021 and February 2020, respectively.
|
(3) | All other compensation consists of nonelective employer 401(k) plan contributions.
|
(4) | Effective July 22, 2019, Mr. Lochner was appointed as Chief Financial Officer.
|
(5) | Mr. Lochner received a signing bonus of $40,000 in 2020 and 2019 in accordance with his Employment Offer letter.
|
(6) | Effective September 17, 2019, Mr. Snisarenko was appointed as Chief Commercial Officer.
|
(1) The amounts reported represent the aggregate grant date fair value of the awards, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 — Compensation — Stock Compensation (“ASC 718”), excluding the effect of any estimated forfeitures. Information about the assumptions used in the calculation of these amounts are included in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies — Stock-Based Compensation” and “Note 8. Equity Incentive Plans” to the Company’s financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for such year.
(2) Stock awards consisted of restricted stock units granted under the 2019 Plan (as defined below).
(3) Non-equity incentive plan compensation consists of bonus awards under the Incentive Compensation Plan (as defined below) earned for 2021 and 2020 performance, which compensation was paid in February 2022 and February 2021, respectively.
(4) All other compensation consists of non-elective employer 401(k) plan contributions and other taxable benefits.
(5) Mr. Lochner received a signing bonus of $40,000 in 2020 in accordance with his Employment Offer letter.
Narrative to Summary Compensation Table
Executive Incentive Plan Compensation
Each of our named executive officers were awarded a cash bonus based on the attainment of corporate objectives for the fiscal year ended December 31,
2020.2021. These bonuses were awarded under, and subject to the terms of, our Executive Incentive Compensation Plan (the “Incentive Compensation Plan”), which was adopted by our
board of directorsBoard in October 2019. Our Incentive Compensation Plan allows the Company to provide incentive awards, generally payable in cash, to employees selected by our compensation committee, including our named executive officers, based upon performance goals established by the Company. The compensation committee of our
board of directorsBoard administers the Incentive Compensation Plan, and has the authority, in its sole discretion and at any time, to increase, reduce or eliminate a participant’s actual award, and/or increase, reduce or eliminate the amount allocated to the bonus pool for a particular performance period.
In February 2020,January 2021, our Board granted to Dr. Nau, Mr. Lochner and Mr. Snisarenko options25,898, 11,222 and 11,222 restricted stock units, respectively, at a market price $18.77 per share, as set forth in the Outstanding Equity Awards at December 31, 2021 table below. One quarter of the total number of restricted stock units vested January 29, 2022, and one-third of the remaining restricted stock units
continues to vest, annually thereafter, subject to continued service to the Company through each such vesting date. Each restricted stock unit represents a contingent right to receive one share of our common stock.
In January 2022, in addition to the performance units and option grants noted below, the compensation committee of our Board granted to Dr. Nau, Mr. Lochner and Mr. Snisarenko 46,700, 19,500 and 12,100 restricted stock units, respectively, at a market price $16.00 per share. One quarter of the total number of restricted stock will vest on January 7, 2023, and one thirty-sixth of the remaining shares shall vest, monthly thereafter, subject to continued service to the Company through each such vesting date. Each restricted stock unit represents a contingent right to receive one share of our common stock.
In January 2022, the compensation committee of our board also granted to Dr. Nau, Mr. Lochner and Mr. Snisarenko 170,600, 80,000 and 45,000 performance units (“PSUs” and such number of PSUs granted, the “target number PSU awards”), respectively. These PSUs were granted pursuant to our 2019 Equity Incentive Plan. Upon vesting, each PSU will entitle the grantee to receive one share of our common stock. Shares issuable in respect of each PSU are eligible to vest, in an amount ranging from 0% to 125% of the target number PSU awards, on July 1, 2024, based on the achievement of one or more of three performance objectives related to our total prescriptions, net product revenue and total shareholder return achieved in the period beginning on January 1, 2022 and ending on June 30, 2023 (the “Performance Period”), respectively, based on the following performance milestones and the executive officer’s continued service to the Company:
•25% to 50% of the target number of PSUs will vest based on the achievement of a milestone related to total prescriptions of TYRVAYA™ during the Performance Period (the “TRx Performance Objective”). To the extent the TRx Performance Objective is achieved between the milestone levels for 25% or 50% vesting of the target number of PSUs, the number of PSUs that will vest will be determined using linear interpolation;
•25% to 50% of the target number of PSUs will vest based on the achievement of a milestone related to net product revenue of the Company during the Performance Period (the “Net Product Revenue Performance Objective”). To the extent the Net Product Revenue Performance Objective is achieved between the milestone levels for 25% or 50% vesting of the target number of PSUs, the number of PSUs that will vest will be determined using linear interpolation;
•An additional 25% of the target number of PSUs will vest based on the achievement of a milestone related to the Company’s total shareholder return over the Performance Period (the “TSR Performance Objective”). The TSR Performance Objective will only be achievable if at least one of the TRx Performance Objective or Net Product Revenue Performance Objective is also achieved.
Option Awards
In September 2021, our Board granted to Mr. Snisarenko an option to purchase
211,533, 72,648 and 72,64820,000 shares our common stock
respectively, at an exercise price
$32.65$12.23 per share per share, as set forth in the Outstanding Equity Awards at December 31,
20202021 table below. One quarter of the total number of shares subject to
eachthe option
vested one year after January 1, 2020,will vest on August 25, 2022, and one thirty-sixth of the remaining shares continues to vest, monthly thereafter, subject to continued service to the Company through each such vesting date.
In August 2021, our Board granted to Mr. Lochner an option to purchase 45,000 shares our common stock at an exercise price $13.78 per share per share, as set forth in the Outstanding Equity Awards at December 31, 2021 table below. One quarter of the total number of shares subject to the option will vest August 26, 2022, and one thirty-sixth of the remaining shares continues to vest, monthly thereafter, subject to continued service to the Company through each such vesting date.
In January 2021, our Board granted to Dr. Nau, Mr. Lochner and Mr. Snisarenko options to purchase 116,539, 50,500 and 50,500 shares our common stock, respectively, at an exercise price $18.77 per share per share, as set forth in the Outstanding Equity Awards at December 31, 2021 table below. One quarter of the total number of shares subject to each option vested January 29, 2022, and one thirty-sixth of the remaining shares continues to vest, monthly thereafter, subject to continued service to the Company through each such vesting date.
In January 2022, the compensation committee of our Board granted to Dr. Nau, Mr. Lochner and Mr. Snisarenko options to purchase 210,00, 87,900 and 54,500 shares our common stock, respectively, at an exercise price $16.00 per share per share. One quarter of the
total number of shares subject to each option will vest on January 7, 2023, and one thirty-sixth of the remaining shares shall vest, monthly thereafter, subject to continued service to the Company through each such vesting date.
Named Executive Officer Employment Arrangements
Jeffrey Nau, Ph.D., M.M.S.
We entered into an employment offer letter with Jeffrey Nau, our President and Chief Executive Officer, on November 1, 2017. The employment offer letter has no specific term and provides that Dr. Nau is an at-will employee. Dr. Nau’s current base salary is $562,500$632,600 and his target annual cash bonus is equal to 60% of his annual base salary.
In connection with the commencement of his employment, Dr. Nau was granted an incentive stock option to purchase 519,774 shares of common stock.
Dr. Nau’s incentiveAs of November 1, 2021, this stock option
vested with respect to one forty-eighth of the shares on December 1, 2017 and one forty-eighth of the remaining shares vested, and continues to vest, monthly thereafter, subject to continued service to us through each such vesting date.On June 6, 2019, Dr. Nau was granted an incentive stock option to purchase 309,721 shares of common stock (the “Nau 2019 Time-Based Option”), and an incentive stock option to purchase 77,430 shares of common stock (the “Nau 2019 Performance-Based Option”). The Nau 2019 Time-Based Option vests as to one forty-eighth of the shares subject to the Nau 2019 Time-Based Option on each monthly anniversary of May 3, 2019, subject to continued service to us through each such vesting date. The Nau 2019 Performance-Based Option vested on July 24, 2019 due to the achievement of certain Company performance conditions.
fully vested.
We entered into an employment offer letter with Daniel Lochner, our Chief Financial Officer, on July 2, 2019. The employment offer letter has no specific term and provides that Mr. Lochner is an at-will employee. Mr. Lochner’s current base salary is $426,500$470,000 and his target annual cash bonus is equal to 40%45% of his annual base salary. In addition, pursuant to the terms of Mr. Lochner’s offer letter, he was entitled to receive a
one-time
signing bonus of $80,000, payable in two installments, on or within 30 days of his start date and on the first anniversary of his start date, which Mr. Lochner received in 2019 and 2020, respectively.In connection with the commencement of his employment, Mr. Lochner was granted an option to purchase 201,950 shares of common stock. Mr. Lochner’s option with respect to one quarter of the shares vested on July 25, 2020, and one thirty-sixth of the remaining shares shall vest monthly thereafter, subject to continued service to us through each such vesting date.
We entered into an employment offer letter with John Snisarenko, our Chief Commercial Officer, on August
5,2, 2019. The employment offer letter has no specific term and provides that Mr. Snisarenko is an
at-will employee. Mr. Snisarenko’s current base salary is
$426,500$441,427 and his target annual cash bonus is equal to 40% of his annual base salary.
In connection with the commencement of his employment, Mr. Snisarenko was granted an option to purchase 183,591 shares of common stock. Mr. Snisarenko’s option with respect to one quarter of the shares vested on September 17, 2020, and one thirty-sixth of the shares shall vest monthly thereafter, subject to continued service to us through each such vesting date.
Each named executive officer is eligible for severance and change of control-related benefits as described
under “Change of Control.”Change of Control
below.
Change of Control and Severance Agreements
We have entered into change of control and severance agreements with Dr. Nau, Mr. Lochner and Mr. Snisarenko, which supersede all previous severance and change of control arrangements we had previously entered into with our named executive officers. Under each of these agreements, if, within the period three months prior to and 12 months following a “change of control” (such period, the change in control period), we terminate the employment of the applicable employee other than for “cause”, death or “disability” or the employee resigns for “good reason” (as such terms are defined in the employee’s change of control and severance agreement) and the employee executes a separation agreement and release of claims that becomes
effective and irrevocable within 60 days following the employee’s termination, the employee is entitled to receive (i) a lump sum severance payment, less applicable tax withholdings, equal to the payment of employee’s base salary, as then in effect, for a period of 18 months for Dr. Nau and 12 months for Mr. Lochner and Mr. Snisarenko, respectively (such monthly period, the severance period) (ii) a lump sum payment, less applicable tax withholdings, equal to a percentage of the employee’s annual target bonus for the year in which the termination occurs, with such percentage being 150% for Dr. Nau and 100% for Mr. Lochner and Mr. Snisarenko, respectively, (iii) a lump sum payment, less applicable tax withholdings, equal to the amount of any bonus arising from the achievement of performance objectives in a prior fiscal year that would have been paid to the employee had the employee remained employed through the applicable bonus payment date, provided such date would occur in the fiscal year including the termination date, (iv) reimbursement of premiums to maintain group health insurance continuation benefits pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) for
the employee and the employee’s dependents through the applicable employee’s severance period, and (v) accelerated vesting as to 100% of the employee’s outstanding unvested equity awards.
In addition, under each of these agreements, if, outside of the change in control period, we terminate the employment of the applicable employee other than for cause, death or disability or the employee resigns for good reason, and the employee executes a separation agreement and release of claims that becomes effective and irrevocable within 60 days following the employee’s termination, the employee is entitled to receive (i) a lump sum severance payment, less applicable tax withholdings, equal to the payment of employee’s base salary, as then in effect, of 18 months for Dr. Nau and 12 months for Mr. Lochner and Mr. Snisarenko, respectively (such monthly period, the severance period) (ii) a lump sum payment, less applicable tax withholdings, equal to the amount of any bonus arising from the achievement of performance objectives in a prior fiscal year that would have been paid to the employee had the employee remained employed through the applicable bonus payment date, provided such date would occur in the fiscal year including the termination date, and (iii) reimbursement of premiums to maintain group health insurance continuation benefits pursuant to COBRA for the employee and the employee’s dependents through the applicable employee’s severance period.
Additionally, pursuant to Dr. Nau’s agreement, Dr. Nau will receive accelerated vesting as to 100% of the outstanding unvested shares subject to his option to purchase 519,774 shares granted on November 10, 2017 if (i) outside of the change in control period, Dr. Nau is terminated other than for cause, death or disability and Dr. Nau executes a separation agreement and release of claims that becomes effective and irrevocable within 60 days following Dr. Nau’s termination, or (ii) we experience a change in control and Dr. Nau remains an employee of the Company through such change in control.
Under each of these agreements, in the event any payment to the applicable employee pursuant to his change of control and severance agreement would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, as amended
or the Code (as(the “Code”), as a result of a payment being classified as a parachute payment under Section 280G of the
Code),Code, the employee will receive such payment as would entitle the employee to receive the greatest
after-tax benefit, even if it means that we pay him a lower aggregate payment so as to minimize or eliminate the potential excise tax imposed by Section 4999 of the Code.
On March 15, 2021, our
board of directorsBoard adopted the Oyster Point Pharma, Inc. Severance Pay Plan (the “Severance Plan”), which provides severance and change in control benefits for all eligible employees, including our named executive officers. Our named executive officers will only receive the severance benefit that provides the maximum benefit, either from such executive officer’s change of control and severance agreement or from the Severance Plan, but not both.
Under the Severance Plan, if, within the period three months prior to and 12 months following a “change of control” (such period, the change in control period), we terminate the employment of the applicable
employee other than for “cause”, death or “disability” or the employee resigns for “good reason” (as such terms are defined in the Severance Plan) and the employee executes a separation agreement and release of claims that becomes effective and irrevocable no later than the deadline specified in the release, the employee is entitled to receive (i) a lump sum severance payment, less applicable tax withholdings, equal to the payment of employee’s base salary, as then in effect, of 18 months for Dr. Nau and 12 months for Mr. Lochner and Mr. Snisarenko, respectively (such monthly period, the severance period) (ii) a lump sum payment, less applicable tax withholdings, equal to 100% of the employee’s target annual bonus for the year in which the termination occurs prorated for a period of 18 months for Dr. Nau and 12 months for Mr. Lochner and Mr. Snisarenko, (iii) a lump sum payment, less applicable tax withholdings, equal to the employee’s target annual bonus for the year in which the termination occurs, prorated to the number of days that have passed in the year in which the termination occurs as of the termination date for such employee, (iv) a lump sum payment, less applicable tax withholdings, equal to the amount of any bonus arising from the achievement of performance objectives in a prior fiscal year that would have been paid to the employee had the employee remained employed through the applicable bonus payment date, provided such date would occur in the fiscal year including the termination date, (v) eligibility to maintain, at active employee rates, group health insurance continuation benefits pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) for the employee and the employee’s dependents through the applicable employee’s severance period, and (vi) accelerated vesting as to 100% of the employee’s outstanding unvested equity awards and an extended exercise period to six months.
In addition, under the Severance Plan, if, outside of the change in control period, we terminate the employment of an employee other than for cause, death or disability or the employee resigns for good reason, and the employee executes a separation agreement and release of claims that becomes effective and irrevocable no later than the deadline specified in the release, the employee is entitled to receive (i) a lump sum severance payment, less applicable tax withholdings, equal to the payment of employee’s base salary, as then in effect, for a period of 18 months for Dr. Nau and 12 months for Mr. Lochner and Mr. Snisarenko, respectively (such monthly period, the severance period) (ii) a lump sum payment, less applicable tax withholdings, equal to the amount of any bonus arising from the achievement of performance objectives in a prior fiscal year that would have been paid to the employee had the employee remained employed through the applicable bonus payment date, provided such date would occur in the fiscal year including the termination
date, and (iii) eligibility to maintain, at active employee rates, group health insurance continuation benefits pursuant to COBRA for the employee and the employee’s dependents through the applicable employee’s severance period.
Under the Severance Plan, in the event any payment to the applicable employee pursuant to the Severance Plan would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code, as
amended, or the Code (as a result of a payment being classified as a parachute payment under Section 280G of the
Code),Code, the employee will receive such payment as would entitle the employee to receive the greatest
after-tax benefit, even if it means that we pay him a lower aggregate payment so as to minimize or eliminate the potential excise tax imposed by Section 4999 of the Code.
2021 Inducement Plan
In July 2021, our Board approved the adoption of the Oyster Point Pharma, Inc. 2021 Inducement Plan (the “Inducement Plan”), which is to be used exclusively for grants of awards to individuals who were not previously our employees or directors (or following a bona fide period of non-employment) as a material inducement to such individuals’ entry into employment with us, pursuant to Nasdaq Listing Rule 5635(c)(4). The terms and conditions of the Inducement Plan are substantially similar to those of the 2019 Plan (defined below).
Our Inducement Plan provides that in the event of a merger or Section 409A Change in Control, as defined under our Inducement Plan, the vested Non-Exempt Award, as defined in the Inducement Plan, will automatically be accelerated and the shares will be immediately issued in respect of the vested Non-Exempt Award. Alternatively, we may instead provide that the participant will receive a cash settlement equal to the fair market value of the shares that would otherwise be issued to the participant upon the Section 409A Change in Control.
For awards granted to non-employee directors, upon a Section 409A Change in Control the vesting and settlement of any Non-Exempt Director Award, as defined in the Inducement Plan, will automatically be accelerated and the shares will be immediately issued to the participant in respect of the Non-Exempt Director Award. Alternatively, we may provide that the participant will instead receive a cash settlement equal to the fair market value of the shares that would otherwise be issued to the participant upon the Section 409A Change in Control.
2019 Equity Incentive Plan
Our
In October 2019, our Board and our stockholders approved the adoption of the Oyster Point 2019 Equity Incentive Plan or(the “2019 Plan”). The 2019 Plan provides for the granting of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares to the Company's employees, directors, and others.
Our 2019 Plan provides that in the event of a merger or change in control, as defined under our 2019 Plan, each outstanding award will be treated as the administrator determines, without a participant’s consent. The administrator is not required to treat all awards, all awards held by a participant or all awards of the same type similarly.
If a successor corporation does not assume or substitute for any outstanding award, then the participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, all restrictions on restricted stock and restricted stock units will lapse, and for awards with performance-based vesting, unless specifically provided for otherwise under the applicable award agreement or other agreement or policy applicable to the participant, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met. If an option or stock appreciation right is not
assumed or substituted in the event of a change in control, the administrator will notify the participant in writing or electronically that such option or stock appreciation right will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right will terminate upon the expiration of such period.
For awards granted to an outside director, in the event of a change in control, the outside director will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, all restrictions on restricted stock and restricted stock units will lapse and, for awards with performance-based vesting, unless specifically provided for otherwise under the applicable award agreement or other agreement or policy applicable to the participant, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met.
2019
EmploymentEmployee Stock Purchase Plan
Our
In October 2019, Employmentour Board and our stockholders approved the adoption of the Oyster Point 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP is offered to all eligible employees, which includes eligible named executive officers, to purchase shares of the Company's common stock at 85% of the fair market value of the Company's stock at the beginning or the end of the offering period, whichever is lower through payroll deductions. Eligible employees may contribute up to $25,000 per calendar year and subject to any other plan limitations.
The 2019 ESPP provides that in the event of a merger or change in control, as defined under our 2019 ESPP, a successor corporation (or a parent or subsidiary of the successor corporation) will assume or substitute each outstanding purchase right. If the successor corporation refuses to assume or substitute for the outstanding purchase right, the offering period with respect to which the purchase right relates will be shortened, and a new exercise date will be set that will be before the date of the proposed merger or change in control. The administrator will notify each participant that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period.
Dr. Nau, Mr. Lochner and Mr. Snisarenko participated in the ESPP in 2021.
2016 Equity Incentive Plan
Our 2016 Equity Incentive Plan, as amended (the “2016 Plan”), provides that with respect to awards granted prior to October 11, 2017, in the event of our merger with or into another corporation or entity or a “change in control” (as defined in the 2016 Plan), and with respect solely to any participant who has been a service provider during the 12 month period preceding the closing date of a merger or change in control, such participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, including shares as to which such awards would not otherwise be vested or exercisable, all restrictions on restricted stock and restricted stock units will lapse, and, with respect to awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met.
With respect to all other awards, in the event of our merger with or into another corporation or entity or a change in control, each outstanding award will be treated as the administrator determines, including, without limitation, that (i) awards will be assumed, or substantially equivalent awards will be substituted, by the acquiring or succeeding corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a participant, the participant’s awards will terminate upon or immediately prior to the consummation of such merger or change in control; (iii) outstanding awards will vest and become exercisable, realizable or payable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon consummation of such merger or change in control, and, to the extent the administrator determines, terminate upon or immediately prior to the effectiveness of such merger or change in control; (iv) (A) the termination of an award in exchange for an amount of cash or property, if any, equal to the amount that would have been attained upon the exercise of such award or realization of the participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the administrator determines in good faith that no amount would have been attained upon the exercise of such award or realization of the participant’s rights, then such award may be terminated by us without payment) or (B) the replacement of such award with other rights or property selected by the administrator in its sole discretion; or (v) any combination of the foregoing. The administrator will not be obligated to treat all awards, all awards a participant holds or all awards of the same type, similarly.
Outstanding Equity Awards at December 31,
20202021
The following table shows outstanding equity awards held by our named executive officers as of December 31,
2020. | | | | | | | | | | | | | | |
| | | | Option Awards | | Stock Awards |
| | | | | | | |
Named Executive Officer | | Grant Date | | Option Awards— Number of Securities Underlying Unexercised Options Exercisable (#) | | Option Awards— Number of Securities Underlying Unexercised Options Unexercisable (#) | | Option Awards— Option Exercise Price ($) | | Option Awards— 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 ($) |
Jeffrey Nau, Ph.D., M.M.S. | | 05/24/2017 | | 11,031 | | — | | 0.20 | | 05/24/2027 | | — | | — |
| 11/10/2017 | | 395,665 | | 119,109 | | 1.02 | | 11/10/2027 | | | | |
| 06/06/2019 | | 122,602 | | 187,119 | | 5.33 | | 06/06/2029 | | | | |
| 06/06/2019 | | 77,430 | | — | | 5.33 | | 06/06/2029 | | | | |
| 02/03/2020 | | — | | 211,533 | | 32.65 | | 02/03/2030 | | | | |
| | | | | | | |
Daniel Lochner | | 07/25/2019 | | 63,530 | | 130,420 | | 11.51 | | 07/25/2029 | | — | | — |
| 02/03/2020 | | — | | 72,648 | | 32.65 | | 02/03/2030 | | | | |
| | | | | | | |
John Snisarenko | | 10/2/2019 | | 57,371 | | 126,220 | | 14.28 | | 10/02/2029 | | — | | — |
| 02/03/2020 | | — | | 72,648 | | 32.65 | | 02/03/2030 | | | | |
2021.
| | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | Stock Awards |
Named Executive Officer | Grant Date | Option Awards— Number of Securities Underlying Unexercised Options Exercisable (#) | Option Awards— Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Awards— Option Exercise Price ($) | Option Awards— 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 ($) |
Jeffrey Nau, Ph.D. M.M.S. | 05/24/2017 | 11,031 | — | 0.20 | 05/24/2027 | — | — |
| 11/10/2017 | 434,774 | — | 1.02 | 11/10/2027 | — | — |
| 06/06/2019 | 277,456 | 109,695 | 5.33 | 06/06/2029 | — | — |
| 02/03/2020 | 101,358 | 110,175 | 32.65 | 02/03/2030 | — | — |
| 01/29/2021 | — | 116,539 | 18.77 | 01/29/2031 | 25,898 | 472,897 |
| | | | | | | |
Daniel Lochner | 07/25/2019 | 81,316 | 79,935 | 11.51 | 07/25/2029 | — | — |
| 02/03/2020 | 34,805 | 37,843 | 32.65 | 02/03/2030 | — | — |
| 01/29/2021 | — | 50,500 | 18.77 | 01/29/2031 | 11,222 | 204,914 |
| 08/26/2021 | — | 45,000 | 13.78 | 08/26/2031 | — | — |
| | | | | | | |
John Snisarenko | 10/02/2019 | 103,271 | 80,320 | 14.28 | 10/02/2029 | — | — |
| 02/03/2020 | 34,805 | 37,843 | 32.65 | 02/03/2030 | — | — |
| 01/29/2021 | — | 50,500 | 18.77 | 01/29/2031 | 11,222 | 204,914 |
| 09/22/2021 | — | 20,000 | 12.23 | 09/22/2031 | — | — |
We maintain a 401(k) retirement savings plan for the benefit of our employees. Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code, on a pre-tax or after-tax (Roth) basis, through contributions to the 401(k) plan. The 401(k) plan is intended to qualify under Sections 401(a) and 501(a) of the Code. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan. We match 100% of contributions up to the first 3% of base salary, and 50% of contributions up to the next 2% of base salary made by each employee in their 401(k) plan.
Equity Compensation Plan Information
The following table provides information as of December 31,
20202021 with respect to shares of our common stock that may be issued under our existing equity compensation plans.
| | | | | | | | | | | | |
Plan Category | | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights | | | Weighted Average Exercise Price of Outstanding Options and Rights | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) | |
Equity compensation plans approved by security holders | | | | | | | | | | | | |
2016 Equity Incentive Plan(1) | | | 2,567,566 | | | $ | 4.61 | | | | — | |
2019 Equity Incentive Plan(2) | | | 979,360 | | | $ | 26.15 | | | | 1,790,106 | |
2019 Employee Stock Purchase Plan(3) | | | — | | | | — | | | | 270,000 | |
Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | |
Total | | | 3,546,926 | | | $ | 10.56 | | | | 2,060,106 | |
| | | | | | | | | | | |
Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights | Weighted Average Exercise Price of Outstanding Options and Rights (4) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the first Column) |
Equity compensation plans approved by security holders | | | |
2016 Equity Incentive Plan (1) | 1,935,240 | | $5.42 | — | |
2019 Equity Incentive Plan (2) | 2,257,381 | | $19.42 | 1,535,488 | |
2019 Employee Stock Purchase Plan (3) | 33,589 | | N/A | 191,858 | |
Equity compensation plans not approved by security holders | | | |
2021 Inducement Plan | 270,600 | | $13.67 | 379,400 | |
Total | 4,496,810 | | N/A | 2,372,541 | |
(1) | As a result of our initial public offering and the adoption of the 2019 Equity Incentive Plan, we no longer grant awards under the 2016 Plan; however, all outstanding options issued pursuant to the 2016 Plan continue to be governed by their existing terms. To the extent that any such awards are forfeited or lapse unexercised or are repurchased, the shares of common stock subject to such awards will become available for issuance under the 2019 Equity Incentive Plan.
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(2) | Our 2019 Equity Incentive Plan (the “2019 Plan”) provides that the number of shares available for issuance under the 2019 Plan will be increased on the first day of each fiscal year beginning with the 2021 fiscal year, in an amount equal to the least of (i) 4,000,000 shares, (ii) four percent (4%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as our board of directors or any of its committees as will be administering the 2019 Plan may determine. Pursuant to these terms, an additional 1,035,619 shares were added to the number of available shares under the 2019 Plan effective January 1, 2021. In addition, in accordance with the terms of the 2019 Plan, 130,858 shares were added to the number of available shares under the 2019 Plan due to stock awards granted under the 2016 Plan that expired or otherwise terminated, were forfeited back to or repurchased by the Company, or were withheld or reacquired to settle the exercise price or a tax withholding obligation of the relevant holder prior to March 31, 2021.
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(3) | Our 2019 Employee Stock Purchase Plan (the “2019 ESPP”) provides that the number of shares available for issuance under the 2019 ESPP will be increased on the first day of each fiscal year beginning in 2022 in an amount equal to the least of (i) 1,000,000 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as may be determined by our board of directors or any of its committees as will be administering the 2019 ESPP may determine.
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(1) As a result of our initial public offering and the adoption of the 2019 Plan, we no longer grant awards under the 2016 Plan; however, all outstanding options issued pursuant to the 2016 Plan continue to be governed by their existing terms. To the extent that any such awards are forfeited or lapse unexercised or are repurchased, the shares of common stock subject to such awards will become available for issuance under the 2019 Plan.
(2) The 2019 Plan provides that the number of shares available for issuance under the 2019 Plan will be increased on the first day of each fiscal year beginning with the 2021 fiscal year, in an amount equal to the least of (i) 4,000,000 shares, (ii) four percent (4%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as our Board or any of its committees as will be administering the 2019 Plan may determine. Pursuant to these terms, an additional 1,063,183 shares were added to the number of available shares under the 2019 Plan effective January 1, 2022. In addition, in accordance with the terms of the 2019 Plan, 7,784 shares were added to the number of available shares under the 2019 Plan due to stock awards granted under the 2016 Plan that expired or otherwise terminated, were forfeited back to or repurchased by the Company, or were withheld or reacquired to settle the exercise price or a tax withholding obligation of the relevant holder prior to January 1, 2022.
(3) The 2019 ESPP provides that the number of shares available for issuance under the 2019 ESPP will be increased on the first day of each fiscal year beginning in 2022 in an amount equal to the least of (i) 1,000,000 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as may be determined by our Board or any of its committees as will be administering the 2019 ESPP may determine. Pursuant to these terms, an additional 265,795 shares were added to the number of available shares under the 2019 ESPP effective January 1, 2022.
(4) The weighted-average exercise price is calculated solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of restricted stock units, which have no exercise price.
We have entered into an indemnification agreement with each of our directors and executive officers. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent
permitted by Delaware law. See “Certain Relationships and
Related Person Transactions – Transactions and Relationships with Directors, Officers and 5% Stockholders – Indemnification of Officers and Directors.”
Hedging and Pledging Policies
Pursuant to our Insider Trading Policy, all employees are prohibited from trading in puts or calls or other derivative or hedging transactions in our securities. Employees are also prohibited from including our securities in a margin account or pledging our securities as collateral for a loan, and other employees are discouraged from doing so. Further, it is against Company policy for any employee (including any executive officers) to engage in short sales of our common stock. Any violation of the policies may result in disciplinary action, including dismissal for cause.
COMPENSATION OF NON-EMPLOYEE DIRECTORS
The following table sets forth information concerning compensation earned by the
non-employee members of our Board
of Directors in fiscal
2020.2021. Dr. Nau, our President and Chief Executive Officer, is also a director but does not receive any additional compensation for his services as a director. Information concerning the compensation earned by Dr. Nau is set forth in the section titled “Executive Compensation.”
| | | | | | |
Name | | Fees Earned ($) | | Stock Awards ($)(1)(2) | | Total ($) |
| | | |
Michael Ackermann, Ph.D.(3) | | 83,323 | | 414,984 | | 498,307 |
| | | |
Mark Murray | | 51,573 | | 184,998 | | 236,571 |
| | | |
Ali Behbahani, M.D. (4) | | 64,067 | | 184,998 | | 249,065 |
| | | |
William J. Link, Ph.D. | | 45,000 | | 184,998 | | 229,998 |
| | | |
Clare Ozawa, Ph.D. (5) | | 44,914 | | 184,998 | | 229,912 |
| | | |
Benjamin Tsai (6) | | 50,000 | | 184,998 | | 234,998 |
| | | |
Aimee Weisner | | 47,500 | | 184,998 | | 232,498 |
| | | |
Michael Atieh (7) | | 12,567 | | 476,422 | | 488,989 |
| | | |
George Eliades, Ph.D.(8) | | – | | – | | – |
| | | | | | | | | | | |
Name | Fees Earned ($) | Stock Awards ($) (1),(2) | Total ($) |
Michael Atieh | 57,875 | | 118,555 | | 176,430 | |
Ali Behbahani, M.D. (3) | 88,763 | | 118,555 | | 207,318 | |
George Eliades, Ph.D.(4) | 34,200 | | 519,173 | | 553,373 | |
William J. Link, Ph.D. (5) | 45,575 | | 118,555 | | 164,130 | |
Mark Murray | 40,000 | | 118,555 | | 158,555 | |
Clare Ozawa, Ph.D. (6) | 49,150 | | 118,555 | | 167,705 | |
Donald Santel (7) | 50,417 | | 304,054 | | 354,471 | |
Benjamin Tsai (8) | 52,875 | | 118,555 | | 171,430 | |
Aimee Weisner | 48,938 | | 118,555 | | 167,493 | |
(1) | The amounts reported represent the aggregate grant date fair value of the awards, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718—Compensation—Stock Compensation (“ASC 718”), excluding the effect of any estimated forfeitures. Information about the assumptions used in the calculation of these amounts are included in “Note 1. Organization and Summary of Significant Accounting Policies—Stock-Based Compensation” and “Note 6. Equity Incentive Plans” to the Company’s financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for such year.
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(1) The amounts reported represent the aggregate grant date fair value of the awards, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718—Compensation—Stock Compensation (“ASC 718”), excluding the effect of any estimated forfeitures. Information about the assumptions used in the calculation of these amounts are included in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies—Stock-Based Compensation” and “Note 8. Equity Incentive Plans” to the Company’s financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K for such year.
(2) The following table lists all outstanding option awards and restricted stock units held by our non-employee directors as of December 31, 2021:
| | | | | | | | |
Name | Option Awards | Stock Awards |
Michael Atieh | 5,199 | | 13,663 | |
Ali Behbahani, M.D. | 5,199 | | 3,466 | |
George Eliades, Ph.D. | 5,199 | | 23,401 | |
William J. Link, Ph.D. | 5,199 | | 3,466 | |
Mark Murray | 185,475 | | 3,466 | |
Clare Ozawa, Ph.D. | 5,199 | | 3,466 | |
Donald Santel | 15,170 | | 10,114 | |
Benjamin Tsai | 5,199 | | 3,466 | |
Aimee Weisner | 5,199 | | 11,174 | |
(2) | The following table lists all outstanding option and restricted stock unit awards held by our non-employee directors as of December 31, 2020:
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| | | | |
Name | | Option Awards | | Stock Awards |
| | |
Michael Ackermann, Ph.D. | | 513,900 | | 7,403 |
| | |
Mark Murray | | 180,276 | | 3,300 |
| | |
Ali Behbahani, M.D. | | – | | 3,300 |
| | |
William J. Link, Ph.D. | | – | | 3,300 |
| | |
Clare Ozawa, Ph.D. | | – | | 3,300 |
| | |
Benjamin Tsai | | – | | 3,300 |
| | |
Aimee Weisner | | – | | 18,717 |
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Michael Atieh | | – | | 18,595 |
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George Eliades, Ph.D. | | – | | – |
(3) | Dr. Ackermann resigned from the Board of Directors effective October 8, 2020.
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(4) | Fees earned by Dr. Behbahani were paid to NEA Management Company, LLC.
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(5) | Fees earned by Dr. Ozawa were paid to Versant Venture Management, LLC.
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(6) | Fees earned by Mr. Tsai were paid to Invus Financial Advisors, LLC.
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(7) | Mr. Atieh joined the Board of Directors effective October 8, 2020.
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(8) | Dr. Eliades joined the Board of Directors effective April 2, 2021.
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(3) Fees earned by Dr. Behbahani were paid to NEA Management Company, LLC.
(4) Dr. Eliades joined the Board of Directors effective April 2, 2021.
(5) Dr. Link retired from the Board effective March 17, 2022.
(6) Fees earned by Dr. Ozawa were paid to Versant Venture Management, LLC.
(7) Mr. Santel joined the Board of Directors effective July 30, 2021.
(8) Fees earned by Mr. Tsai were paid to Invus Financial Advisors, LLC.
We also reimburse our non-employee directors for their reasonable out-of-pocket costs and travel expenses in connection with their attendance at Board of Directors and committee meetings.
Outside Director Compensation Policy
Our Board adopted
a newan outside director compensation policy
(the(“the “Outside Director Compensation Policy”) on January 21, 2021
that will bewhich has been effective
as of the Annual Meeting date.since June 4, 2021. Under the Outside Director Compensation
Policy,policy, each
non-employee director
will beis eligible to receive compensation for his or her service consisting of the following annual cash retainers and equity awards. Our
board of directorsBoard has the discretion to revise
non-employee director compensation as it deems necessary or appropriate.
All
non-employee directors are entitled to receive the following cash compensation for their services:
• $40,000 per year for services as a board member;
• $75,000 per year additionally for service as chairman of the board;
• $20,000 per year additionally for service as chairman of the audit committee or $10,000 per year additionally for service as an audit committee member;
• $15,000 per year additionally for service as chairman of the compensation committee or $6,000 per year additionally for service as a compensation committee member; and
• $10,000 per year additionally for service as chairman of the corporate governance and nominating committee or $5,000 per year additionally for service as a corporate governance and nominating committee member.
For clarity, each
non-employee director who serves as the chair of a committee will receive only the annual fee for services as the chair of the committee and not the additional annual fee for services as a member of the committee, provided that the
non-employee director who serves as the chairman of the board will receive the annual fee for services as the chairman of the board and the annual fee for services as a board member.
All
non-employee directors are entitled to receive all types of awards (except incentive stock options) under the 2019
Equity Incentive Plan
(the “2019 Plan”) including discretionary awards not covered under the Outside Director Compensation Policy. Automatic grants of restricted stock units are made to our
non-employee directors as follows:
| • | | Initial Award. Upon joining the board of directors, each newly-elected non-employee director will be granted an award of restricted stock units and stock options with a combined value of 0.08% of the total number of shares outstanding as of the grant date. The number of stock options will be calculated by multiplying the total shares outstanding, as of the grant date, by 0.08% and multiplying the product by 50%. The number of restricted stock units will be calculated by (i) multiplying the total shares outstanding, as of the grant date, by 0.08% and multiplying the product by 50% (the “Initial Award RSU Quantity”) and (ii) dividing the Initial Award RSU Quantity by 1.5 (the “Initial Award”).
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| • | | Additional Initial Award. Upon joining the board of directors, each new-elected non-employee director will also be granted an award of restricted stock units equal to the product of (i) the number of restricted stock units subject to the Annual Award (as defined below) provided to non-employee directors at the last annual meeting of stockholders multiplied by (ii) a fraction (A) the numerator of which is (x) 12 minus (y) the number of fully completed months between the date of the last annual meeting of stockholders and the non-employee’s start and (ii) the denominator of which is 12, rounded to the nearest unit (the “Additional Initial Award”).
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| • | | Annual Award. Each non-employee director (including the chairman of the board) will be granted an award of restricted stock units and stock options with a combined value of 0.04% of the total shares outstanding as of the annual meeting of stockholders. The number of stock options will be calculated by multiplying the total shares outstanding, as of the annual meeting, by 0.04% and multiplying the product by 50%. The number of restricted stock units will be calculated by (a) multiplying the total shares outstanding, as of the annual meeting, by 0.04% and multiplying the product by 50% (the “Annual Award RSU Quantity”) and (b) dividing the Annual Award RSU Quantity by 1.5.(the “Annual Award”).
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• Initial Award. Upon joining the Board, each newly-elected non-employee director will be granted an award of restricted stock units and stock options with a combined value of 0.08% of the total number of shares outstanding as of the grant date. The number of stock options will be calculated by multiplying the total shares outstanding, as of the grant date, by 0.08% and multiplying the product by 50%. The number of restricted stock units will be calculated by (i) multiplying the total shares outstanding, as of the grant date, by 0.08% and multiplying the product by 50% (the “Initial Award RSU Quantity”) and (ii) dividing the Initial Award RSU Quantity by 1.5 (the “Initial Award”).
• Additional Initial Award. Upon joining the Board, each new-elected non-employee director will also be granted an award of restricted stock units equal to the product of (i) the number of restricted stock units subject to the Annual Award (as defined below) provided to non-employee directors at the last annual meeting of stockholders multiplied by (ii) a fraction (A) the numerator of which is (x) 12 minus (y) the number of fully completed months between the date of the last annual meeting of stockholders and the non-employee’s start and (ii) the denominator of which is 12, rounded to the nearest unit (the “Additional Initial Award”).
•Annual Award. Each non-employee director (including the chairman of the board) will be granted an award of restricted stock units and stock options with a combined value of 0.04% of the total shares outstanding as of the annual meeting of stockholders. The number of stock options will be calculated by multiplying the total shares outstanding, as of the annual meeting, by 0.04% and multiplying the product by 50%. The number of restricted stock units will be calculated by (a)
multiplying the total shares outstanding, as of the annual meeting, by 0.04% and multiplying the product by 50% (the “Annual Award RSU Quantity”) and (b) dividing the Annual Award RSU Quantity by 1.5.(the “Annual Award”).
The “value” for the awards of restricted stock units described above means the fair value for financial accounting purposes on the date of grant.
Subject to the applicable provisions of the 2019 Plan, (i) for each Initial Award, the stock options will vest over three years (on the same day of the month as the
non-employee director’s start date) with 1/3 cliff vesting at 12 months and the remainder to vest at 1/24 per month, and the restricted stock units will vest over three years (on the same day of the month as the
non-employee director’s start date) with 1/3 vesting annually, in each case, subject to continued service as a Service Provider (as defined in the Outside Director Compensation Policy) through each vesting date; (ii) each Additional Initial Award will vest monthly on the same day of the month as other outstanding Annual Awards as to the same number of restricted stock units subject to such other outstanding Annual Awards, but will vest fully on the date of the next annual meeting of stockholders held after the date of grant if not fully vested on such date, in each case, subject to continued service as a Service Provider through each vesting date; and (iii) for each Annual Award, the stock options will vest monthly as to 1/12th of the total stock options subject to the Annual Award beginning on the first month following the grant date (on the same day of the month as the grant date) and the restricted stock units will vest on the one year anniversary of the grant date, but, in each case, the Annual Award will vest fully on the date of the next annual meeting of stockholders held after the date of grant if not fully vested on such date, in each case, subject to continued service as a Service Provider through each vesting date. Additionally, pursuant to the Outside Director Compensation Policy, in the event of a change of control, each outstanding and unvested equity award held by a
non-employee director will accelerate and fully vest, subject to the director continuing to provide services to the Company as a
non-employee director through the date of such change in control.
Pursuant to the Outside Director Compensation Policy, no
non-employee director may be issued, in any fiscal year, cash compensation and equity awards with an aggregate value greater than $750,000. Any cash compensation paid or equity awards granted to an individual for his or her services as an employee, for his or her services as a consultant (other than as a
non-employee director), will not count for purposes of this limitation.
Limitation of Liability and Indemnification
Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by Delaware law. Delaware law prohibits our amended and restated certificate of incorporation from limiting the liability of our directors for the following:
• any breach of the director’s duty of loyalty to us or to our stockholders;
• acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
• unlawful payment of dividends or unlawful stock repurchases or redemptions; and
• any transaction from which the director derived an improper personal benefit.
If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to purchase insurance on behalf of any person whom we are required or permitted to indemnify.
In addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered into an indemnification agreement with each member of our board of directorsBoard and each of our officers. These agreements provide for the indemnification of our directors and officers for certain expenses and liabilities incurred in connection with any action, suit, proceeding or alternative dispute resolution mechanism or hearing, inquiry or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director, officer, employee, agent or fiduciary of our company, or any of our subsidiaries, by reason of any action or inaction by them while serving as an officer, director, agent or fiduciary, or by reason of the fact that they were
serving at our request as a director, officer, employee, agent or fiduciary of another entity. In the case of an action or proceeding by or in the right of our company or any of our subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that these charter and bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. Moreover, a stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the Securities Act), may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
BENEFICIAL OWNERSHIP OF SHARES OF COMMON STOCK
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 31,
20212022 for:
• each beneficial owner of 5% or more of the outstanding shares of our common stock;
• each of our named executive officers; and
• all directors and executive officers as a group.
The number of shares of common stock beneficially owned by each person or entity is determined in accordance with the applicable rules of the SEC and includes voting or investment power with respect to shares of our common stock. The information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated, to our knowledge, all persons named in the table have sole voting and investment power with respect to their shares of common stock, except to the extent authority is shared by spouses under community property laws. The inclusion herein of any shares as beneficially owned does not constitute an admission of beneficial ownership.
Applicable percentage ownership is based on
25,960,78826,662,697 shares of common stock outstanding at March 31,
2021.2022. In computing the number of shares of common stock beneficially owned by a
person or entity and the percentage ownership of such person or entity, we deemed to be outstanding all shares of common stock underlying restricted stock units held by the person that will vest within 60 days of March 31,
20212022 and/or subject to options held by the person that are currently exercisable or exercisable within 60 days of March 31,
2021.2022. However, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person.
| | | | | | | | |
Name of Beneficial Owner | | Number of Shares Beneficially Owned | | | Percent of Shares Outstanding | |
| | |
Five Percent Stockholders: | | | | | | | | |
| | |
Entities affiliated with New Enterprise Associates(1) | | | 5,925,287 | | | | 22.8% | |
| | |
Entities affiliated with Versant Ventures(2) | | | 4,932,924 | | | | 19.0% | |
| | |
Entities affiliated with Invus Opportunities(3) | | | 2,768,586 | | | | 10.7% | |
| | |
Entities affiliated with RTW Investments, L.P.(4) | | | 1,925,594 | | | | 7.4% | |
| | |
Entities affiliated with Wellington Management Group(5) | | | 1,501,545 | | | | 5.8% | |
| | |
Directors and Named Executive Officers: | | | | | | | | |
| | |
Jeffrey Nau, Ph.D., M.M.S.(6) | | | 769,637 | | | | 2.9% | |
| | |
Daniel Lochner(7) | | | 113,971 | | | | * | |
| | |
John Snisarenko(8) | | | 107,710 | | | | * | |
| | |
Michael G. Atieh(9) | | | 3,850 | | | | * | |
| | |
Mark Murray(10) | | | 259,169 | | | | 1.0% | |
| | |
Ali Behbahani, M.D.(11) | | | 6,050 | | | | * | |
| | |
William J. Link, Ph.D.(12) | | | 1,737,303 | | | | 6.7% | |
| | |
Clare Ozawa, Ph.D.(13) | | | 3,247,161 | | | | 12.5% | |
| | |
Benjamin Tsai(14) | | | 6,050 | | | | * | |
| | |
Aimee Weisner(15) | | | 13,758 | | | | * | |
| | |
George Eliades, Ph.D.(16) | | | 1,100 | | | | * | |
| | |
All executive officers and directors (11 persons) | | | 6,265,759 | | | | 24.1% | |
| | | | | | | | |
Name of Beneficial Owner | Number of Shares Beneficially Owned | Percent of Shares Outstanding |
| | |
Five Percent Stockholders: | | |
Entities affiliated with New Enterprise Associates(1) | 5,925,287 | 22.2% |
Entities affiliated with Versant Ventures(2) | 3,657,618 | | 13.7% |
Entities affiliated with Invus Opportunities(3) | 2,768,586 | | 10.4% |
Entities affiliated with Point72 Asset Management LP (4) | 2,104,202 | | 7.9% |
Entities affiliated with RTW Investments, L.P.(5) | 2,058,504 | | 7.7% |
Directors and Named Executive Officers: | | |
Jeffrey Nau, Ph.D., M.M.S.(6) | 1,010,892 | | 3.7% |
Daniel Lochner(7) | 212,360 | | * |
John Snisarenko(8) | 192,405 | | * |
Michael G. Atieh(9) | 14,264 | | * |
Mark Murray(10) | 286,925 | | 1.1% |
Ali Behbahani, M.D.(11) | 11,366 | | * |
Clare Ozawa, Ph.D.(12) | 3,252,670 | | 12.2% |
Benjamin Tsai(13) | 11,366 | | * |
Aimee Weisner(14) | 26,782 | | * |
George Eliades, Ph.D.(15) | 6,416 | | * |
Donald Santel (16) | 3,899 | | * |
All executive officers and directors (11 persons) (17) | 5,029,345 | | 17.9% |
* | Represents beneficial ownership of less than 1%.
| |
(1) | Consists of 5,925,287 shares of common stock beneficially owned by New Enterprise Associates 14, L.P., a Cayman Islands exempted limited partnership (“NEA 14 LP”). The shares directly held by NEA 14 LP are indirectly held by NEA Partners 14 L.P., a Cayman Islands exempted limited partnership (“NEA Partners 14”), the sole general partner of NEA 14 LP, NEA 14 GP, LTD, a Cayman Islands exempted company (“NEA 14 LTD”), the sole general partner of NEA Partners 14 and each of the individual Directors of NEA 14 LTD. The individual Directors of NEA 14 LTD (collectively, the “Directors”) are Forest Baskett, Patrick J. Kerins, Anthony A. Florence, Jr., Peter W. Sonsini and Scott D. Sandell. NEA Partners, NEA 14 GP, and the Directors share voting and dispositive power with regard to the Company’s securities directly held by NEA 14 LP. The address for these entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093. Dr. Ali Behbahani is a General Partner at New Enterprise Associates, Inc. and a member of our board of directors, and has no voting or dispositive power with respect to any of the above referenced shares and disclaims beneficial ownership of such shares except to the extent of his respective pecuniary interest therein.
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(2) | Based on a Schedule 13D/A filed with the SEC on April 5, 2021, consists of (i) 2,236,888 shares of common stock beneficially owned by Versant Venture Capital VI, L.P. (“Versant VI”), (ii) 1,681,930 shares of common stock beneficially owned by Versant Venture Capital IV, L.P. (“Versant IV”), (iii) 1,003,658 shares of common stock beneficially owned by Versant Vantage I, L.P. (“Versant Vantage”), and (iv) 10,448 shares of common stock beneficially owned by Versant Side Fund IV, L.P. (“Versant Side Fund IV”). Versant Ventures VI GP L.P. (“Versant Ventures VI GP”) is the general partner of Versant VI, and Versant Ventures VI GP-GP
LLC (“Versant Ventures VI GP-GP”) is the general partner of Versant Ventures VI GP. Versant Vantage I, GP, L.P. (“Versant Vantage I GP”) is the general partner of Versant Vantage, and Versant Vantage I, GP-GP, LLC (“Versant Vantage I GP-GP”) is the general partner of Versant Vantage I GP. Each of Clare Ozawa, Ph.D. and William Link, Ph.D. is a Managing Director at Versant Ventures and a member of our board of directors, and has no voting or dispositive power with respect to any of the above referenced shares and disclaims beneficial ownership of such shares except to the extent of his or her respective pecuniary interest therein. The address of Versant IV, Versant VI, Versant Side Fund IV and Versant Vantage is One Sansome Street, Suite 3630, San Francisco, CA 94104.
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(3) | Consists of (i) 1,850,818 shares held of record by InvOpps IV, L.P. (“Invus IV”), and (ii) 917,768 shares held of record by InvOpps IV US, L.P. (“Invus IV US”). InvOpps GP IV, L.L.C., a Delaware limited liability company (“InvOpps GP”), is the sole general partner of each of Invus IV and Invus IV US. Sacha Lainovic, as Managing Member of InvOpps GP, may be deemed to have voting and dispositive power over the shares held by Invus IV and Invus IV US. Such persons and entities disclaim beneficial ownership of the shares held by Invus IV and Invus IV US, except to the extent of any proportionate pecuniary interest therein. The address for these entities is 126 East 56th Street, 20th Floor, New York, NY, 10022. Benjamin Tsai is a partner at Invus Opportunities and is a member of our board of directors, and has no voting or dispositive power with respect to any of the above referenced shares and disclaims beneficial ownership of such shares except to the extent of his respective pecuniary interest therein.
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(4) | Based on a Schedule 13G/A filed with the SEC on February 12, 2021. Consists of 1,925,594 shares held by RTW Master Fund, Ltd. and one or more private funds (together the “Funds”) managed by RTW Investments, LP (the “RTW Investments”). RTW Investments may be deemed to have voting and dispositive power over the shares held by RTW Master Fund, Ltd. Adviser, in its capacity as the investment manager of the Funds, has the power to vote and the power to direct the disposition of all shares held by the Funds. Roderick Wong is the Managing Partner of the Adviser. Such person and entity disclaim beneficial ownership of the shares reported herein except to the extent of the reporting person’s pecuniary interest therein. The address for these entities is 40 10th Avenue, Floor 7, New York, New York 10014.
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(5) | Based on a Schedule 13G filed with the SEC on February 4, 2021. Consists of 1,501,545 shares held by Wellington Group Holdings LLP, Wellington Investment Advisors LLP and Wellington Management Global Holdings, Ltd., and by one or more of the following advisers: Wellington Management Company LLP; Wellington Management Canada LLC; Wellington Management Singapore Pte Ltd; Wellington Management Hong Kong Ltd; Wellington Management International Ltd; Wellington Management Japan Pte Ltd; and Wellington Management Australia Pty Ltd (the “Wellington Investment Advisors”). Wellington Management Group LLP, as parent holding company of certain holding companies and the Wellington Investment Advisers, are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. The address for these entities is 280 Congress Street, Boston, MA 02210.
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(6) | Consists of (i) an aggregate of 16,000 shares of common stock held directly by Dr. Nau or his spouse and (ii) 753,637 shares of common stock issuable pursuant to options held directly by Dr. Nau exercisable within 60 days of March 31, 2021.
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(7) | Consists of (i) 14,300 shares of common stock held directly by Mr. Lochner and (ii) 99,671 shares of common stock issuable pursuant to options held directly by Mr. Lochner exercisable within 60 days of March 31, 2021.
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(8) | Consists of (i) 7,000 shares of common stock held directly by Mr. Snisarenko and (ii) 100,710 shares of common stock issuable pursuant to options held directly by Mr. Snisarenko exercisable within 60 days of March 31, 2021.
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(9) | Consists of (i) 2,750 shares of common stock held directly by Mr. Atieh and (ii) 1,100 shares of common stock underlying restricted stock units held by Mr. Atieh that will vest within 60 days of March 31, 2021.
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(10) | Consists of (i) 113,397 shares of common stock held directly by Mr. Murray, (ii) 1,100 shares of common stock underlying restricted stock units held by Mr. Murray that will vest within 60 days of March 31, 2021 and (iii) 144,672 shares of common stock issuable pursuant to options held directly by Mr. Murray exercisable within 60 days of March 31, 2020.
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(11) | Consists of (i) 4,950 shares of common stock held directly by Dr. Behbahani and (ii) 1,100 shares of common stock underlying restricted stock units held by Dr. Behbahani that will vest within 60 days of March 31, 2021. Dr. Behbahani is a General Partner at New Enterprise Associates, Inc. Dr. Behbahani has no voting or dispositive power over any of the shares held by NEA 14 LP referenced in footnote (1) above and disclaims beneficial ownership of all such shares, except to the extent of any pecuniary interest therein.
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(12) | Consists of (i) 4,950 shares of common stock held directly by Dr. Link, (ii) 1,100 shares of common stock underlying restricted stock units held by Dr. Link that will vest within 60 days of March 31, 2021, (iii) 10,448 shares owned by Versant Side Fund VI, (iv) 1,681,930 shares owned by Versant IV, (v) 27,942 shares owned by Flying L Partners VII LLC (“Flying L Partners”), (vi) 10,302 shares owned by Link Family Enterprise, L.P. and (vii) 631 shares owned by The Link Family Trust. Dr. Link is the trustee of the Link Family Trust, the controlling member of each of Link Family Enterprise, L.P. and Flying L Partners, a managing director of Versant Ventures and is also a member of our board of directors. Dr. Link may be deemed to share voting and investment power with respect to certain of the shares reported herein and disclaims beneficial ownership over such shares, except to the extent of his pecuniary interest therein, if any. The address of the Versant entities listed herein is One Sansome Street, Suite 3630, San Francisco, CA 94104 and the address of Flying L Partners is 11 Linda Isle, Newport Beach, CA 92660.
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(13) | Consists of (i) 5,515 shares of common stock held directly by Dr. Ozawa, (ii) 1,100 shares of common stock underlying restricted stock units held by Dr. Ozawa that will vest within 60 days of March 31, 2021, (iii) 1,003,658 shares of common stock beneficially owned by Versant Vantage and (iv) 2,236,888 shares of common stock beneficially owned by Versant VI. Dr. Ozawa is a Managing Director at Versant Ventures and shares voting and investment control with respect to the shares held by Versant Vantage and Versant VI. Dr. Ozawa disclaims beneficial ownership of all shares held by Versant Vantage and Versant VI, except to the extent of any pecuniary interest therein. The address of the entities listed above is One Sansome Street, Suite 3630, San Francisco, CA 94104.
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(14) | Consists of (i) 4,950 shares of common stock held directly by Mr. Tsai and (ii) 1,100 shares of common stock underlying restricted stock units held by Mr. Tsai that will vest within 60 days of March 31, 2021. Mr. Tsai is a partner at Invus Opportunities. Mr. Tsai has no voting or dispositive power with respect to any of the shares held by Invus IV and Invus IV US referenced in footnote (3) above. Mr. Tsai disclaims beneficial ownership of all shares held by Invus Opportunities, except to the extent of any pecuniary interest therein.
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(15) | Consists of (i) 12,658 shares of common stock held directly by Ms. Weisner and (ii) 1,100 shares of common stock underlying restricted stock units held by Ms. Weisner that will vest within 60 days of March 31, 2021.
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(16) | Consists of 1,100 shares of common stock underlying restricted stock units held by Dr. Eliades that will vest within 60 days of March 31, 2021.
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* Represents beneficial ownership of less than 1%.(1) Consists of 5,925,287shares of common stock beneficially owned by New Enterprise Associates 14, L.P., a Cayman Islands exempted limited partnership (“NEA 14 LP”). The shares directly held by NEA 14 LP are indirectly held by NEA Partners 14 L.P., a Cayman Islands exempted limited partnership (“NEA Partners 14”), the sole general partner of NEA 14 LP, NEA 14 GP, LTD, a Cayman Islands exempted company (“NEA 14 LTD”), the sole general partner of NEA Partners 14 and each of the individual Directors of NEA 14 LTD. The individual Directors of NEA 14 LTD (collectively, the “Directors”) are Forest Baskett, Patrick J. Kerins, Anthony A. Florence, Jr., Peter W. Sonsini and Scott D. Sandell. NEA Partners, NEA 14 GP, and the Directors share voting and dispositive power with regard to the Company’s securities directly held by NEA 14 LP. The address for these entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093. Dr. Ali Behbahani is a General Partner at New Enterprise Associates, Inc. and a member of our Board, and has no voting or dispositive power with respect to any of the above referenced shares and disclaims beneficial ownership of such shares except to the extent of his respective pecuniary interest therein.
(2) Consists of (i) 2,236,888 shares of common stock beneficially owned by Versant Venture Capital VI, L.P. (“Versant VI”), (ii) 414,607 shares of common stock beneficially owned by Versant Venture Capital IV, L.P. (“Versant IV”), (iii) 1,003,658 shares of common stock beneficially owned by Versant Vantage I, L.P. (“Vantage LP”), and (iv) 2,465 shares of common stock beneficially owned by Versant Side Fund IV, L.P. (“Side Fund IV”). Versant Ventures VI GP L.P. (“GP VI”) is the general partner of Versant VI, and Versant Ventures VI GP-GP LLC (“LLC VI”) is the general partner of GP VI. Versant Vantage I, GP, L.P. (“Vantage GP”) is the general partner of Vantage LP, and Versant Vantage I, GP-GP, LLC (“Vantage LLC”) is the general partner of Vantage GP. Versant Ventures IV, LLC (“LLC IV”) is the general partner of Versant IV and Side Fund IV. Each of Clare Ozawa, Ph.D. and William Link, Ph.D. is a Managing Director at Versant Venture Management LLC. Dr. Ozawa is a member of our Board and Dr. Link was a member of our Board prior to his retirement from our Board
effective March 17, 2022. Both Dr. Ozawa and Dr. Link have no voting or dispositive power with respect to any of the above referenced shares and have disclaimed beneficial ownership of such shares except to the extent of his or her respective pecuniary interest therein. The address of Versant IV, Versant VI, Side Fund IV and Vantage LP is One Sansome Street, Suite 3630, San Francisco, CA 94104.
(3) Consists of (i) 1,850,818 shares held of record by InvOpps IV, L.P. (“Invus IV”), and (ii) 917,768 shares held of record by InvOpps IV US, L.P. (“Invus IV US”). InvOpps GP IV, L.L.C., a Delaware limited liability company (“InvOpps GP”), is the sole general partner of each of Invus IV and Invus IV US. Sacha Lainovic, as Managing Member of InvOpps GP, may be deemed to have voting and dispositive power over the shares held by Invus IV and Invus IV US. Such persons and entities disclaim beneficial ownership of the shares held by Invus IV and Invus IV US, except to the extent of any proportionate pecuniary interest therein. The address for these entities is 126 East 56th Street, 20th Floor, New York, NY, 10022. Benjamin Tsai is a partner at Invus Opportunities and is a member of our Board, and has no voting or dispositive power with respect to any of the above referenced shares and disclaims beneficial ownership of such shares except to the extent of his respective pecuniary interest therein.
(4) Based on a Schedule 13G filed with the SEC on February 14, 2022. Consists of (i) 2,101,441 shares held of record by investment funds managed by Point72 Asset Management, L.P. (“Point72 Asset Management”) and (ii) 2,761 shares held of record by investment funds managed by Cubist Systematic Strategies, LLC. Point72 Capital Advisors Inc. is the general partner of Point72 Asset Management. Steven A. Cohen controls each of Point72 Asset Management, Point72 Capital Advisors Inc., and Cubist Systematic Strategies, LLC. By reason of the provisions of Rule 13d-3 of the Securities Exchange Act of 1934, as amended, each of (i) Point72 Asset Management, Point72 Capital Advisors Inc., and Mr. Cohen may be deemed to beneficially own 2,101,441 shares and (ii) Cubist Systematic Strategies, LLC and Mr. Cohen may be deemed to beneficially own 2,761 Shares. Each of Point72 Asset Management, Point72 Capital Advisors Inc., Cubist Systematic Strategies, LLC and Mr. Cohen disclaims beneficial ownership of any of the securities covered by this statement. (“Point72”). The address of Point72 Asset Management, L.P., Point72 Capital Advisors Inc. and Steven A. Cohen is 72 Cummings Point Road, Stamford, CT 06902 and the address for Cubist Systematic Strategies, LLC is 55 Hudson Yards, New York, NY 10001.
(5) Based on a Schedule 13G filed with the SEC on February 14, 2022. Consists of 2,058,504 shares held by RTW Master Fund, Ltd. and one or more private funds (together the “Funds”) managed by RTW Investments, LP (the “RTW Investments”). RTW Investments may be deemed to have voting and dispositive power over the shares held by RTW Master Fund, Ltd. Adviser, in its capacity as the investment manager of the Funds, has the power to vote and the power to direct the disposition of all shares held by the Funds. Roderick Wong is the Managing Partner of the Adviser. Such person and entity disclaim beneficial ownership of the shares reported herein except to the extent of the reporting person’s pecuniary interest therein. The address for these entities is 40 10th Avenue, Floor 7, New York, New York 10014.
(6) Consists of (i) an aggregate of 93,135 shares of common stock held directly by Dr. Nau or his spouse and (ii) 917,757 shares of common stock issuable pursuant to options held directly by Dr. Nau exercisable within 60 days of March 31, 2022.
(7) Consists of (i) 50,805 shares of common stock held directly by Mr. Lochner and (ii) 161,555 shares of common stock issuable pursuant to options held directly by Mr. Lochner exercisable within 60 days of March 31, 2022.
(8) Consists of (i) 10,806 shares of common stock held directly by Mr. Snisarenko and (ii) 181,599 shares of common stock issuable pursuant to options held directly by Mr. Snisarenko exercisable within 60 days of March 31, 2022.
(9) Consists of (i) 9,498 shares of common stock held directly by Mr. Atieh and (ii) 4,766 shares of common stock issuable pursuant to options held directly by Mr. Atieh exercisable within 60 days of March 31, 2022.
(10) Consists of (i) 115,047 shares of common stock held directly by Mr. Murray and (ii) 171,878 shares of common stock issuable pursuant to options held directly by Mr. Murray exercisable within 60 days of March 31, 2022.
(11) Consists of (i) 6,600 shares of common stock held directly by Dr. Behbahani and (ii) 4,766 shares of common stock issuable pursuant to options held directly by Dr. Behbahani exercisable within 60 days of March 31, 2022. Dr. Behbahani is a General Partner at New Enterprise Associates, Inc. Dr. Behbahani has no voting or dispositive power over any of the shares
held by NEA 14 LP referenced in footnote (1) above and disclaims beneficial ownership of all such shares, except to the extent of any pecuniary interest therein.
(12) Consists of (i) 7,358 shares of common stock held directly by Dr. Ozawa, (ii) 4,766 shares of common stock issuable pursuant to options held directly by Dr. Ozawa, (iii) 1,003,658 shares of common stock beneficially owned by Versant Vantage and (iv) 2,236,888 shares of common stock beneficially owned by Versant VI. Dr. Ozawa is a Managing Director at Versant Ventures and shares voting and investment control with respect to the shares held by Versant Vantage and Versant VI. Dr. Ozawa disclaims beneficial ownership of all shares held by Versant Vantage and Versant VI, except to the extent of any pecuniary interest therein. The address of the entities listed above is One Sansome Street, Suite 3630, San Francisco, CA 94104.
(13) Consists of (i) 6,600 shares of common stock held directly by Mr. Tsai and (ii) 4,766 shares of common stock issuable pursuant to options held directly by Mr. Tsai exercisable within 60 days of March 31, 2022. Mr. Tsai is a partner at Invus Opportunities. Mr. Tsai has no voting or dispositive power with respect to any of the shares held by Invus IV and Invus IV US referenced in footnote (3) above. Mr. Tsai disclaims beneficial ownership of all shares held by Invus Opportunities, except to the extent of any pecuniary interest therein.
(14) Consists of (i) 22,016 shares of common stock held directly by Ms. Weisner and (ii) 4,766 shares of common stock issuable pursuant to options held directly by Ms. Weisner exercisable within 60 days of March 31, 2022.
(15) Consists of (i) 1,650 shares of common stock held directly by Dr. Eliades and (ii) 4,766 shares of common stock issuable pursuant to options held directly by Mr. Eliades exercisable within 60 days of March 31, 2022.
(16) Consists of 3,899 shares of common stock issuable pursuant to options held directly by Mr. Santel exercisable within 60 days of March 31, 2022.
(17) Consists of (i) 3,564,061 shares of common stock and (ii) 1,465,284 shares of common stock issuable pursuant to options exercisable within 60 days of March 31, 2022.
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
Other than compensation arrangements, including employment, termination of employment and change in control arrangements, with our directors and executive officers, the following is a description of each transaction since January 1,
2019,2020, to which we were a party, in which:
• the amounts involved exceeded or will exceed $120,000; and
• any of our directors, nominees for director, executive officers or beneficial holders of more than 5% of any class of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.
Series B Preferred Stock Financing
In February 2019 and April 2019, we issued and sold an aggregate of 6,581,590 shares of our Series B preferred stock at a purchase price of $14.13 per share for an aggregate purchase price of $93.0 million. These shares of Series B preferred stock converted into an aggregate of 6,581,590 shares of common stock upon the completion of our initial public offering. The table below sets forth the number of shares of Series B preferred stock sold to our directors, executive officers and holders of more than 5% of our capital stock:
| | | | | | |
Investor | | Affiliated Director(s) or Officer(s) | | Shares of Series B Preferred Stock | | Total Purchase Price |
Entities affiliated with Invus Opportunities(1) | | Benjamin Tsai | | 1,840,015 | | $25,999,994 |
Entities affiliated with Versant Ventures(2) | | Clare Ozawa | | 1,061,546 | | $14,999,998 |
New Enterprise Associates 14, L.P. | | Ali Behbahani | | 1,061,547 | | $14,999,998 |
Oyster Point Pharma I, LLC | | William Link | | 955,392 | | $13,499,997 |
Falcon Vision LLC | | | | 884,622 | | $12,499,998 |
Vida Ventures, LLC | | | | 778,469 | | $10,999,997 |
| | | | | | |
(1) Entities affiliated with Invus Opportunities holding shares of our Series B preferred stock which are aggregated for purposes of reporting share ownership information include InvOpps IV, LP and InvOpps IV US, LP.
(2) Entities affiliated with Versant Ventures holding shares of our Series B preferred stock which are aggregated for purposes of reporting share ownership information include Versant Venture Capital VI, L.P. and Versant Vantage I, L.P.
We were party to a consulting agreement with FLG Partners, LLC (“FLG”), dated as of November 24, 2015 (the FLG Agreement)“FLG Agreement”), pursuant to which Mr.Mark Murray provided us with chief financial officer services until July 25, 2019. The FLG Agreement was then amended effective as of July 25, 2019, following our appointment of Daniel Lochner as our chief financial officer, to provide that Mr. Murray would no longer serve as our chief financial officer and that future services under the agreement will be limited to general financial advisory services. The FLG Agreement contained customary representations and warranties and indemnification provisions. We terminated our agreement with FLG Partners, LLC on March 3, 2020. We paiddid not pay FLG an aggregate of $470,250 in 2019any fees for services provided.in 2020. Mr. Murray, who has been serving as a member of our board of directorsBoard since October 2017 and who previously served as our Chief Financial Officer from November 2017 until July 2019, was a partner of FLG throughout this period and continues to be a partner of FLG where he provides services to other clients.
Mr. Murray’s compensation from FLG is based on aggregate client billings and overall partnership performance rather than the FLG Agreement alone.
License Agreement
On August 5, 2021, we entered into a license agreement (the “License Agreement”) with Ji Xing, a biotechnology company headquartered in Shanghai, China which is affiliated with RTW Investments, LP. Pursuant to the License Agreement, we have granted Ji Xing an exclusive license to develop and commercialize OC-01 (varenicline solution) and OC-02 (simpinicline) nasal sprays, for all prophylactic uses for, and treatment of, ophthalmology diseases or disorders in the greater China region. Ji Xing is responsible for the development, regulatory, manufacturing and commercialization activities and all related costs in the greater China region, and we are responsible for supplying the drug substance and finished products of OC-01 (varenicline solution) and OC-02 (simpinicline) for Ji Xing's clinical development at quantities agreed by the parties for a period of up to twelve months, subject to one or more separate supply agreements as contemplated by the license agreement.Pursuant to the License Agreement, we recognized $5.0 million in milestone revenue upon FDA approval of TYRVAYA Nasal Spray. In addition, we received license revenue of $18.4 million during the year ended December 31, 2021, which consisted of $17.5 million recognized in connection with the License Agreement and the receipt of non-cash consideration of senior common shares of Ji Xing with a fair market value of $0.9 million. We received 397,562 senior common shares of Ji Xing in August 2021 and 397,561 senior common shares in October 2021.
Investor Rights Agreement
We are party to an amended and restated investor rights agreement with (i) certain holders of our capital stock, including entities affiliated with Invus Opportunities, entities affiliated with Versant Ventures, New Enterprise Associates 14, L.P., Oyster Point Pharma I, LLC, Falcon Vision LLC, and Vida Ventures, LLC and
(ii) an entity affiliated with Mr. Murray. Under our investor rights agreement, certain holders of our capital stock have the right to demand that we file a registration statement or request that their shares of our capital stock be covered by a registration statement that we are otherwise filing.
Indemnification Agreements
We have entered into separate indemnification agreements with each of our directors and executive officers, in addition to the indemnification provided for in our amended and restated certificate of incorporation and amended and restated bylaws. The indemnification agreements and our amended restated certificate of incorporation and amended and restated bylaws require us to indemnify our directors, executive officers and certain controlling persons to the fullest extent permitted by Delaware law.
Directed Share Program
At our request, the underwriters of our initial public offering in October 2019 reserved up to 3% of the shares of common stock that were offered for sale, at the initial public offering price, to our officers, directors, employees and certain other persons associated with us.
Participation in our Initial Public Offering
Certain of our directors, executive officers and previously existing stockholders that are affiliated with certain of our directors or that beneficially owned more than 5% of our outstanding common stock purchased an aggregate of approximately 2.4 million shares of our common stock in our initial public offering in October 2019 at the initial public offering price. The following table sets forth the aggregate number of shares of our common stock that these, directors, officers and 5% stockholders and their affiliates purchased in our initial public offering:
| | |
Purchaser | | Shares of
Common Stock |
| |
New Enterprise Associates 14, L.P.
| | 935,000 |
| |
KKR Fund Holdings L.P. and affiliated entities
| | 155,000 |
| |
InvOpps GP IV, L.L.C.
| | 750,000 |
| |
Versant Venture Capital VI, L.P.
| | 590,000 |
| |
Jeffrey Nau
| | 1,000 |
| |
Daniel Lochner
| | 6,300 |
| |
John Snisarenko
| | 3,000 |
Director RSU Grant
Our board of directors approved a restricted stock unit award with a cash value of $370,000 to one of our directors appointed in 2019, Aimee Weisner, which became effective as of the business day following her election to the board of directors, which occurred immediately following the effectiveness of our registration statement.
Related Person Transaction Policy
Our audit committee maintains the primary responsibility for reviewing and approving or disapproving “related person transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person has or will have a direct or indirect material interest. The charter of our audit committee will provide that our audit committee shall review and approve in advance any related person transaction.
Our related person transaction policy provides that we are not permitted to enter into any transaction that exceeds $120,000 and in which any related person has a direct or indirect material interest without the consent of our audit committee. In approving or rejecting any such transaction, our audit committee is to consider the relevant facts and circumstances available and deemed relevant to our audit committee, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
PROPOSALS REQUIRING YOUR VOTE
ITEM 1 — Election of Class II III Directors
Number of Directors; Board Structure
Our
board of directorsBoard currently consists of nine members. Our directors are divided into three classes serving staggered three year terms. Upon expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three year term at the annual meeting of stockholders in the year in which their term expires.
The terms of the Class
IIIII directors,
Ali Behbahani, M.D.Jeffrey Nau, Ph.D.,
Benjamin TsaiM.M.S., Michael G. Atieh and
Aimee Weisner,George Eliades, Ph.D., expire at the Annual Meeting.
The Class III directors will serve until our annual meeting of stockholders in 2022. The Class I directors will serve until our annual meeting of stockholders in 2023.
The Class II directors will serve until our annual meeting of stockholders in 2024.
As recommended by the corporate governance and nominating committee, the board has nominated each of
Dr. Behbahani, Mr. TsaiJeffrey Nau, Ph.D., M.M.S., Michael G. Atieh and
Ms. WeisnerGeorge Eliades, Ph.D for election as a Class
IIIII director. For information concerning the nominees, please see “Directors and Corporate Governance—Board Composition”.
The Class
IIIII directors elected at this Annual Meeting will continue in office until our Annual Meeting of Stockholders in
20242025 and until the director’s successor has been duly elected and qualified, or until the earlier of the director’s death, resignation or retirement. The proxy holders named on the proxy card intend to vote the proxy (if you are a stockholder of record) for the election of Dr.
Behbahani,Nau, Mr.
TsaiAtieh and
Ms. Weisner,Dr. Eliades, unless you indicate on the proxy card that your vote should be cast against any of them. Under SEC rules, proxies cannot be voted for a greater number of persons than the number of nominees named.
Each of the Class
IIIII directors has consented to be named as a nominee in this proxy statement and to serve if elected. If any nominees is not able to serve, proxies may be voted for a substitute nominee, unless the Board chooses to reduce the number of directors serving on the Board.
Recommendation of our Board
The Board of Directors unanimously recommends a vote FOR the election of each of Ali Behbahani, M.D.Jeffrey Nau, Ph.D., Benjamin TsaiM.M.S., Michael G. Atieh and Aimee WeisnerGeorge Eliades, Ph.D. as a Class IIIII director.
ITEM 2 — Ratification of Independent Registered Public Accounting Firm
The audit committee has selected PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31,
2021.2022.
We are asking our stockholders to ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, we are submitting the selection of PricewaterhouseCoopers LLP to our stockholders for ratification as a matter of good corporate practice and because we value our stockholders’ views on the Company’s independent registered public accounting firm. In the event that our stockholders fail to ratify the selection, the Audit Committee will review its future selection of independent auditors. Even if this selection is ratified, pursuant to the Sarbanes-Oxley Act of 2002, the audit committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm and may determine to change the firm selected at such time and based on such factors as it determines to be appropriate.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting to answer appropriate questions. They also will have the opportunity to make a statement if they desire to do so.
Audit and Non-Audit Fees
The following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLP for the audit of the Company’s annual financial statements and internal control over financial reporting for the fiscal years ended December 31,
20202021 and
20192020 and fees billed for audit-related, tax, and other services rendered by PricewaterhouseCoopers LLP during those periods.
| | | | | | | | | | |
| | | | 2020 | | | 2019 | |
Audit fees (1) | | | | | $1,140,000 | | | | $1,755,374 | |
Audit-related fees (2) | | | | | — | | | | 35,665 | |
Tax fees | | | | | — | | | | — | |
All other fees (3) | | | | | 900 | | | | — | |
| | | | | | | | | | |
Total fees | | | | | $1,140,900 | | | | $1,791,039 | |
| | | | | | | | | | |
| | | | | | | | | | | |
| 2021 | | 2020 |
Audit fees (1) | $ | 1,125,000 | | | $ | 1,140,000 | |
Audit-related fees (2) | 105,000 | | | $ | — | |
| | | |
All other fees (3) | 900 | | | 900 |
Total fees | $ | 1,230,900 | | | $ | 1,140,900 | |
(1) Audit fees consist of fees billed for professional services performed by PricewaterhouseCoopers LLP for the audit of our annual financial statements, the review of interim financial statements, and related services that are normally provided in connection with registration statements, including the registration statements for our initial public offering and other offerings.statements. Included in the 20192021 Audit Fees is $1,085,374$90,000 of fees billed in connection with our initial public offering.regulatory filings.
(2) Audit-related fees consist of amountsfees billed by PricewaterhouseCoopers LLP for professional services renderedpre-implementation review procedures related to the initial public offeringcommercial readiness.
(3) All other fees include any fees billed that are not audit, audit related, or tax fees. These fees related to accounting research software.
All fees described above were
pre-approved by our audit committee.
Policy on Audit Committee
Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Registered Public Accounting Firm
Pursuant to the audit committee charter and policy, the audit committee
pre-approves all audit and permissible
non-audit services to be provided by our independent registered public accounting firm. As part of its review, the audit committee also considers whether the categories of
pre-approved services are consistent with the rules on accountant independence of the SEC and the Public Company Accounting Oversight Board.
Recommendation of our Board
The Board of Directors unanimously recommends a vote FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021.2022.
The information contained in the following Audit Committee Report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that Oyster Point Pharma, Inc. (the “Company”) specifically incorporates it by reference in such filing.
The audit committee assists our
board of directorsBoard in its oversight of the Company’s financial statements and reporting process, audit process and internal controls. The audit committee operates under a written charter adopted by our
board of directors,Board, which describes this and the other responsibilities of the audit committee. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. PricewaterhouseCoopers LLP (“PwC”) our independent registered public accounting firm is responsible for performing an independent audit of our financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”) and to issue a report thereon.
During
2020,2021, the audit committee held
sevennine meetings in order to fulfill the duties and obligations of its Charter. Four of these meetings were with management and PwC at which the Company’s quarterly earnings press releases, financials statements and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (including significant accounting policies and judgements) were reviewed in advance of their public release. In addition, the Committee received management reports on cyber security, related party transactions and compliance, among other topics. The other
threefive meetings
were with management and PwC and covered various topics including
SOXinternal control design, implementation
remediation of
material weaknesses innew internal controls,
review and
approval of PwC’s 2021 Audit Plan and pre-approval of audit, audit-related and
non-audit services provided by PwC.
In February 2021,2022, the audit committee reviewed and discussed the Company’s audited financial statements with management, which has primary responsibility for the financial statements. PwC, the Company’s independent registered public accounting firm for fiscal year ended December 31, 2020,2021, is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles. The audit committee has discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. The audit committee has received and reviewed the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the audit committee concerning independence and has discussed with PwC its independence. In addition, the audit committee has discussed with PwC its independence from management and the Company, including matters in the letter from PwC required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services with PwC’s independence.
Based on the review and discussions referred to above, the audit committee recommended to our
board of directorsBoard that the Company’s audited financial statements be included in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31,
20202021 for filing with the SEC. The audit committee also has selected PwC as the independent registered public accounting firm for fiscal year
2021.2022. Our
board of directorsBoard recommends that stockholders ratify this selection at the Annual Meeting.
Respectfully submitted by the members of the audit committee of the
board of directors:Board:
Michael G. Atieh (Chairperson)
Aimee Weisner
TRANSACTION OF OTHER BUSINESS
The board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons appointed in the accompanying proxy intend to vote the shares represented thereby in accordance with their best judgment on such matters, under applicable laws.
REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS, NOMINATION OF DIRECTORS AND OTHER BUSINESS OF STOCKHOLDERS
Under the rules of the SEC, if a stockholder would like us to include a proposal in our proxy statement and form of proxy for presentation at our
20222023 Annual Meeting of Stockholders, the proposal must be received by us at our principal executive offices at 202 Carnegie Center, Suite 109, Princeton, New Jersey 08540, to the attention of the Corporate Secretary, no later than December
24, 2021.23, 2022.
Alternatively, under our bylaws, if a stockholder would like to propose a matter for presentation at the
20222023 Annual Meeting of Stockholders rather than for inclusion in the proxy materials, or would like to nominate a person as a candidate for election to the Board at the
20222023 Annual Meeting of Stockholders, the stockholder must follow certain procedures contained in our bylaws. Stockholders may request a free copy of our bylaws from:
Oyster Point Pharma, Inc.
Attn: Corporate Secretary
202 Carnegie Center, Suite 109
Princeton, New Jersey 08540
Under the bylaws, notice of a nomination or other business must be delivered to the Corporate Secretary no later than the close of business on March 9, 20228, 2023 and no earlier than the close of business on February 7, 2022.6, 2023. If the date of our 20222023 Annual Meeting of Stockholders is advanced more than 30 days prior to, or delayed by more than 60 days after, the anniversary of the date of the 20212022 Annual Meeting of Stockholders, notice must be delivered to the Corporate Secretary not earlier than the close of business on the 120th day prior to the 20222023 Annual Meeting of Stockholders nor later than the close of business on the later of (i) the 90th day prior to the 20222023 Annual Meeting of Stockholders or (ii) the 10th day following the day on which public announcement of the date of the 20222023 Annual Meeting of Stockholders is first made. Nominations and the proposal of other business also must satisfy other requirements set forth in the bylaws. The chairman of the meeting may refuse to acknowledge the introduction of any stockholder proposal or nomination not made in compliance with the foregoing procedures.
If a stockholder fails to comply with the forgoing deadlines established under the bylaws, the Company will have discretionary authority to vote shares under proxies we solicit when and if the nomination or other business is raised at the
Annual Meeting of Stockholders and, to the extent permitted by law, on any other business that may properly come before the Annual Meeting and any adjournments or postponements.
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single annual report, proxy statement and Notice of Internet Availability to those stockholders. This process, which is commonly referred to as “householding,” potentially provides convenience for stockholders and cost savings for companies. Although we do not household for registered stockholders, a number of brokerage firms have instituted householding for shares held in street name, delivering a single set of proxy materials to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that the broker will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, now or in the future, you no longer wish to participate in householding and would prefer to receive a separate annual report,
proxy statement and Notice of Internet Availability, please notify us by calling (609) 382-9032 or by sending a written request to 202 Carnegie Center, Suite 109, Princeton, New Jersey 08540, Attention: Corporate Secretary, and we will promptly deliver a separate copy of our annual report and proxy statement. If you are receiving multiple copies of the annual report and proxy statement and wish to receive only one, please notify your broker.
OYSTER POINT PHARMA, INC. 202 CARNEGIE CENTER, SUITE 109 PRINCETON, NJ 08540 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 PM EDT on June 3, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/OYST2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions VOTE BY PHONE -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 PM EDT on June 3, 2021. Have your proxy card in hand when you call and then follow the instructions VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR each of the following: For All Withhold All For All Except To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominees(s) on the line below. 1. Election of Class II Directors Nominees 01) Ali Behbahani, M.D. 02) Benjamin Tsai 03) Aimee Weisner The Board of Directors recommends you vote FOR the following proposal: 2. Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. For Against Abstain Please sign exactly as your name(s) appear(s) hereon, When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000505038_1 R1.0.0.177
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement and Annual Report are available at www.proxyote.com. OYSTER POINT PHARMA, INC. Annual Meeting of Stockholders June 4, 2021 8:30AM, EDT This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Jeffrey Nau, Ph.D, M.M.S. and Daniel Lochner, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of OYSTER POINT PHARMA, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 8:30AM, EDT on June 4, 2021, via live webcast at www.virtualshareholdermeeting.com/OYST2021, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side