*
| Committee Chairperson(1)
| Resigned on October 25, 2019.
|
(2) (1)
| Resigned on November 30, 2019. Ms. Wilson joined the Audit Committee and has served as the Chair of the Audit Committee since August 2020. |
On October 25, 2019, the committees of the board of directors were re-constituted. The following table provides membership for the remainder of 2019 for each of the committees of the board of directors:
Name
| | Audit
| | Compensation
| | NominatingMr. Boyd and Corporate Governance
| Wouter W. Latour, M.D.
| | | | | | | Michael J. Finney, Ph.D.
| | √
| | | | | Richard J. Markham (1)
| | | | √
| | √
| Anne M. VanLent
| | √*
| | √
| | | Robert A. Yedid
| | √
| | | | √*
| Todd C. Davis
| | | | √*
| | | Steven Boyd
| | | | | | | KeithDr. Maher M.D.
| | | | | | |
* Committee Chairperson
(1)
| Mr. Markham resigned from the board of directors and all committees of the board of directors in November 2019 andJanuary 2021.
|
(3)
| Mr. Floroiu served ason the chairperson ofAudit Committee from April 2020 until June 2020. |
(4)
| Dr. Finney also joined the Compensation Committee until his resignation.in January 2021. |
(5)
| Mr. Davis also joined the Nominating and Governance Committee in April 2021. |
(6)
| Dr. Wheadon also joined the Compensation Committee in April 2021. |
Committees of the Board of Directors Below is a description of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the board of directors. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The board of directors reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of the Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) and (ii) of the Nasdaq listing standards). The Audit Committee held sevenfour meetings and acted through written consent in lieu of holding a meeting once during 2019.2020. The board of directors determined that Ms. VanLent qualified, and Mr. FloroiuWilson qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The board of directors made a qualitative assessment of each of Ms. VanLent’s and Mr. Floroiu’sWilson’s level of knowledge and experience based on a number of factors, including Ms. VanLent’sWilson’s experience as a chief financial officer for public reporting companies and Mr. Floroiu’s experience as Head of Finance, Strategy and Operations at AgenTus Therapeutics, Inc.companies. The primary purpose of the Audit Committee is to discharge the responsibilities of the board of directors with respect to our accounting, financial and other reporting and internal control practices and to oversee its independent registered accounting firm. Specific responsibilities of the audit committee include: selecting a qualified firm to serve as the independent registered public accounting firm to audit the combined company’s financial statements; helping to ensure the independence and performance of the independent registered public accounting firm; discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, the combined company’s interim and year-end operating results; developing procedures for employees to anonymously submit concerns about questionable accounting or audit matters; | ●
| selecting a qualified firm to serve as the independent registered public accounting firm to audit the combined company’s financial statements;
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| ●
| helping to ensure the independence and performance of the independent registered public accounting firm;
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| ●
| discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, the combined company’s interim and year-end operating results;
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TABLE OF CONTENTS reviewing policies on risk assessment and risk management; 14reviewing related party transactions;
obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the combined company’s internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.
| ●
| developing procedures for employees to anonymously submit concerns about questionable accounting or audit matters;
|
| ●
| reviewing policies on risk assessment and risk management;
|
| ●
| reviewing related party transactions;
|
| ●
| obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the combined company’s internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
|
| ●
| approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.
|
Report of the Audit Committee of the Board of Directors The Audit Committee reviewed and discussed the audited financial statements for the year ended December 31, 20192020 with Vaxart’s management. The Audit Committee discussed with Vaxart’s independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board or PCAOB.(“PCAOB”). The Audit Committee also received the written disclosures and the letter from Vaxart’s independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee recommended to the Vaxart board of directors that the audited financial statements be included in Vaxart’s Annual Report on Form 10‑K10-K for the year ended December 31, 2019.2020. Ms. Anne M. VanLentKaren J. Wilson (Chairperson)
The material in this report is not “soliciting material,” is not deemed “filed” with the Commission and is not to be incorporated by reference in any filing of Vaxart underunder the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act whetherof 1934, as amended (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporationincorporation language in any such filing.All members of the Compensation Committee are independent (as independence is currently defined in Rule 5605(d)(2) of the Nasdaq listing standards). The Compensation Committee held sixfive meetings and acted through written consent in lieu of holding a meeting four times during 2019.2020. The primary purpose of the Compensation Committee is to discharge the responsibilities of the board of directors to oversee our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of the Compensation Committee include: reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers; reviewing and recommending to our board of directors the compensation of our directors; reviewing and approving, or recommending that our board of directors approve, the terms of compensatory arrangements with our executive officers; administering our stock and equity incentive plans; selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisers; reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate; and reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy. | ●
| reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers;
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| ●
| reviewing and recommending to our board of directors the compensation of our directors;
|
| ●
| reviewing and approving, or recommending that our board of directors approve, the terms of compensatory arrangements with our executive officers;
|
| ●
| administering our stock and equity incentive plans;
|
TABLE OF CONTENTS | ●
| selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisers;
|
| ●
| reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate; and
|
| ●
| reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.
|
Compensation Committee Processes and Procedures Typically, the Compensation Committee will meet at least twice annually and with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with the Chief Executive Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, to provide financial or other background information or advice or to otherwise participate in Compensation Committee meetings. TheOur Chief Executive Officer may not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his or her compensation. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the compensation committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent. Compensation Committee Interlocks and Insider Participation None of the members of the Compensation Committee is currently, or has been at any time, one of our officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or Compensation Committee of any entity that has one or more executive officers serving as a member of our board of directors or Compensation Committee. Compensation Committee Report The information contained in this Compensation Committee Report shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission, subject to Regulations 14A or 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or subject to the liabilities of Section 18 of the Exchange Act. No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, through any general statement incorporating by reference in its entirety the proxy statement in which this report appears, except to the extent that Vaxart specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act. The Compensation Committee has reviewed and discussed the section captioned “Compensation Discussion and Analysis” with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that this “Compensation Discussion and Analysis” section be included in this proxy statement. Respectfully submitted by the members of the Compensation Committee of the Board of Directors: Todd C. Davis (Chairperson)
Michael J. Finney, Ph.D. Nominating and Corporate Governance Committee As of December 31, 2019,2020, we only had one membertwo members on our Nominating and Corporate Governance Committee, who is independent. All membersboth of the Nominating and Corporate Governance Committee in 2019 werewhom are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Nominating and Corporate Governance Committee held three meetingacted by written consent in 2019.lieu of holding meetings four times during 2020. Specific responsibilities of the Nominating and Corporate Governance committeeCommittee include: identifying, evaluating and selecting, or recommending that the board of directors approve, nominees for election to the board of directors; | ●
| identifying, evaluating and selecting, or recommending that the board of directors approve, nominees for election to the board of directors;
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| ●
| evaluating the performance of the board of directors and of individual directors;
|
| ●
| considering and making recommendations to the board of directors regarding the composition of the committees of the board of directors;
|
TABLE OF CONTENTS evaluating the performance of the board of directors and of individual directors; 16considering and making recommendations to the board of directors regarding the composition of the committees of the board of directors;
reviewing developments in corporate governance practices; evaluating the adequacy of corporate governance practices and reporting;
reviewing management succession plans; developing and making recommendations to the board of directors regarding corporate governance guidelines and matters; and overseeing an annual evaluation of the board of directors’ performance. | ●
| reviewing developments in corporate governance practices;
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| ●
| evaluating the adequacy of corporate governance practices and reporting;
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| ●
| reviewing management succession plans;
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| ●
| developing and making recommendations to the board of directors regarding corporate governance guidelines and matters; and
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| ●
| overseeing an annual evaluation of the board of directors’ performance.
|
The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the company,Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of our stockholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in the context of the current composition of the board of directors, the operating requirements of the companyCompany and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity, age, skills and such other factors as it deems appropriate, given the current needs of the board and the company,Company, to maintain a balance of knowledge, experience and capability. Recently, in recruiting and nominating candidates for our board of directors, our Nominating and Governance Committee has focused on increasing diversity overall, considering, among other factors, gender, race, nationality, country of origin, and cultural diversity of potential director nominees. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to Vaxart during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The committee also takes into account the results of the board of directors’ self-evaluation, conducted annually on a group and individual basis. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Nominating and Corporate Governance Committee then uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the board of directors. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the board by majority vote. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the board may do so by delivering a written recommendation to the Nominating and Corporate Governance Committee at the following address: 385 Oyster Point Boulevard,170 Harbor Way, Suite 9A,300, South San Francisco, California 94080. Submissions must include the full name of the proposed nominee, a description of the proposed nominee’s business experience for at least the previous five years, complete biographical information, a description of the proposed nominee’s qualifications as a director and a representation that the nominating stockholder is a beneficial or record holder of Vaxart’s stock and has been a holder for at least one year. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. TABLE OF CONTENTS STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS 17
Stockholder Communications With the Board of Directors
Historically, we have not provided a formal process related to stockholder communications with the board of directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the board of directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner.
Communications addressed to the board of directors will be reviewed by one or more Vaxart executive officers, who will determine whether the communication should be presented to the board of directors. The purpose of this screening is to allow the board of directors to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications). All communications directed to the Audit Committee in accordance with our whistleblower policy that relate to questionable accounting or auditing matters involving Vaxart will be promptly and directly forwarded to the Audit Committee. Code of Ethics
We have adopted a Code of Conduct that applies to all officers, directors and employees. The Code of Conduct is available on the Investors section of our website at www.vaxart.com. If we make any substantive amendments to the Code of Conduct or grant any waiver from a provision of the Code of Conduct to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. Corporate Governance Guidelines
ANTI-HEDGING/PLEDGING POLICY Our insider trading policy prohibits directors, executive officers and other employees from engaging in speculative trading activities, including hedging transactions or other inherently speculative transactions with respect to our securities. Our insider trading policy also prohibits directors, executive officers and other employees from pledging our securities as collateral for any loans. CORPORATE GOVERNANCE GUIDELINES The board of directors has documented our governance practices by adopting Corporate Governance GuidelinesPrinciples to assure that the board of directors will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance GuidelinesPrinciples set forth the practices the board of directors intends to follow with respect to board composition and selection, board meetings and involvement of senior management, chief executive officer performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines,Principles, as well as the charters for each committee of the board of directors, may be viewed on the Investors section of our website at www.vaxart.com. TABLE OF CONTENTS
APPROVAL OF AMENDMENT TO 2019 EQUITY INCENTIVE PLAN Proposal No. 2
Approval of INCREASEin Number of Authorized Shares of Common Stock AND DECREASE IN PAR VALUE
What am I voting on? | To approve an amendment to our Restated Certificate of Incorporation to increase our authorized number of shares of common stock from 100,000,000 shares to 150,000,000 shares and decrease the par value of our capital stock from $0.10 to $0.0001.
|
Vote recommendation: | “FOR” the approval of the amendment to our Restated Certificate of Incorporation.
|
Vote required: | A majority of the shares of common stock outstanding and entitled to vote.
|
Effect of abstentions:
| Same as a vote “AGAINST”.
|
Effect of broker non-votes:
| Same as a vote “AGAINST”.
|
General
The board of directors is requesting stockholder approval of an amendment to our Restated Certificate of Incorporation to increase our authorized number of shares of common stock from 100,000,000 shares to 150,000,000 shares (the “Authorized Shares Increase”), and to decrease the par value of our capital stock from $0.01 to $0.0001 (the “Par Value Reduction”), by filing a Certificate of Amendment to our Certificate of Incorporation in the form attached to this proxy statement as Exhibit B (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware. The Par Value Reduction is not contingent upon the occurrence of the Reverse Stock Split.
Background and Purpose of the Authorized Shares Increase
The board of directors has determined that we do not currently have enough authorized shares of common stock to accommodate our forecasted capital raising needs, based on the current outstanding shares of common stock and shares of common stock reserved for issuance upon exercise of outstanding stock options, warrants and other arrangements. As of April 9, 2020, we had 72,054,720 shares of common stock outstanding. In addition, the board of directors has reserved as of April 9, 2020:
| ●
| 1,600,848 shares issuable upon the exercise of outstanding stock options with a weighted-average exercise price of $2.76 per share;
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| ●
| 25,924,042 shares issuable upon the exercise of outstanding warrants with a weighted-average exercise price of $0.70 per share;
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| ●
| 278,535 net shares issuable on the vesting of performance-based restricted stock units after having deducted an estimated 121,465 shares that will be forfeited to pay the related income taxes; and
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| ●
| 110,276 shares available for future issuance under our 2019 Plan, which may be increased to an aggregate of 6,510,276 shares upon approval by our stockholders at the Annual Meeting. Please see Proposal No. 3 for further information.
|
Except as discussed above, the board of directors has no other plans to issue any additional shares of common stock at this time; however, it desires to have shares available to provide flexibility to use as capital stock for business and financial purposes in the future, and believes that 150,000,000 shares is adequate for the foreseeable future.
Background and Purpose of the Par Value Reduction
Historically, the concept of par value served to protect creditors and senior security holders by ensuring that a company received at least the par value as consideration for issuances of stock. Over time, the concept of par value has lost its significance as lenders, creditors and other persons doing business with a company tend to rely on the total financial strength of the company as shown by its financial statements and earnings prospects and, especially in the case of financial institutions that lend money to a company, on contractual restrictions that establish financial requirements that the company must satisfy. Many companies that incorporate today use a nominal par value or have no par value. Under Delaware law, the par value is the minimum amount a company must receive upon the issuance of any shares of common stock. Given the current market price of our common stock, the board of directors believes it is in the best interests of the company and our stockholders to implement the Par Value Reduction.
Impact of the Authorized Shares Increase and Par Value Reduction if Implemented
The adoption of the Authorized Shares Increase would not affect the rights of the holders of currently outstanding common stock.
The Par Value Reduction will have no effect on the rights of the holders of common stock or preferred stock, except for reducing the minimum amount per share the Company must receive upon the issuance of any shares of common stock from $0.10 to $0.0001. Following the effectiveness of the Par Value Reduction, the Company’s “capital” under the Delaware General Corporation Law will be adjusted to reflect the Par Value Reduction. On the effective date of the Par Value Reduction, the stated capital on the Company’s balance sheet attributable to the Company’s common stock will be reduced to give effect to the decrease in par value from $0.10 to $0.0001 and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced.
Certificates representing shares of our common stock, par value $0.10 per share, issued and outstanding prior to the effective time of the filing of the Certificate of Amendment will be deemed to represent the same number of shares of our common stock, par value $0.0001 per share, as they did prior to such effective time. Existing certificates will not be exchanged for new certificates in connection with either the Authorized Shares Increase or the Par Value Reduction.
Procedure for Effecting the Authorized Shares Increase and Par Value Reduction
If the stockholders approve Proposal No. 2, the Authorized Shares Increase and Par Value Reduction and the board of directors decides to implement the Authorized Shares Increase and Par Value Reduction, the Authorized Shares Increase and Par Value Reduction will become effective either upon the filing of the Certificate of Amendment with the Secretary of State of the State of Delaware or at such other date and time as is specified therein. Although the board of directors intends to file the Certificate of Amendment as soon as practicable after the Annual Meeting, the board of directors may determine in its discretion not to effect the Authorized Shares Increase or the Par Value Reduction at any time prior to the effectiveness of the Certificate of Amendment.
Vote Required
The affirmative vote of the holders of a majority of the outstanding shares of common stock will be required to approve this amendment to our Restated Certificate of Incorporation.
The Board of Directors Recommends
a Vote in Favor Of Proposal No. 2.
Proposal No. 3
Approval of AMENDMENT TO 2019 Equity Incentive Plan
What am I voting on?
| To approve an amendment to our 2019 Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder by 6,400,0008,900,000 shares to 8,000,00016,900,000 shares. |
Vote recommendation:recommendation: | | | “FOR” the approval of the amendment to our 2019 Equity Incentive Plan. |
Vote required:required: | | | A majority of the shares cast. |
Effect of abstentions:abstentions: | None. | | “AGAINST” the approval of the amendment to our 2019 Equity Incentive Plan. |
Effect of broker non-votes:non-votes: | | | None. |
At the Annual Meeting, we will request that our stockholders approve the Amendment No. 12 to the Vaxart, Inc. 2019 Equity Incentive Plan (the(as amended from time to time, the “ 2019 Plan”), attached hereto as ExhibitExhibit A (the “ Plan Amendment”). The Plan Amendment was approved by our board of directors on February 21, 2020,March 25, 2021, subject to approval by our stockholders. If approved, the Plan Amendment will increase the number of shares of our common stock reserved under the 2019 Plan by 6,400,0008,900,000 shares to 8,000,00016,900,000 shares. Approval of the Plan Amendment by our stockholders will allow us to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by our board of directors or Compensation Committee. On April 28, 2021, the board of directors approved an additional amendment to the 2019 Plan to prohibit the “repricing” of stock awards without stockholder approval. The 2019 Plan was initially approved by our stockholders on April 23, 2019. At that time, 1,600,000 shares were reserved for issuance under the 2019 Plan. As of April 9, 2020, and excluding the proposed share increase, there were 110,276 shares available for issuance underPlan, which was increased through an amendment to the 2019 Plan pursuantadopted by the Company’s stockholders on June 8, 2020, to future awards.8,000,000, subject to equitable adjustments in the event of a stock split, stock dividend or other extraordinary dividend, or other similar change in the Company’s common stock or capital structure. The board of directors believes that the future success of the Company depends, in large part, upon our ability to effectively attract, motivate and retain high caliber key employees and directors. The board of directors believes that the issuance of equity awards is a key element ofon our ability to attract, motivate and retain thesehigh-caliber employees, consultants and directors. Equity compensation is a key component of our compensation program, because it helps us attract, motivate and retain talented employees, consultants and directors and align their interests with those of our stockholders. As of April 23, 2021, and excluding the proposed increase in the number of shares reserved under the 2019 Plan, there were 84,376 shares available for issuance under the 2019 Plan pursuant to future awards. Based on our historical grant practices, as summarized below, and our projected recruiting and retention needs, we anticipate that the Company will no longer be unableable to grant annual equity awards under our long-term incentive program for employees and our non-employee director compensation program in 2021 and beyond unless we reserve more shares for issuance under the 2019 Plan. In order to maintain the flexibility to keep pace with our competitors and effectively attract, motivate and retain high-caliber employees, consultants and directors, we are asking our stockholders to authorize an additional 8,900,000 shares for issuance under the 2019 Plan, which would increase the aggregate number of shares available for issuance as future awards under the 2019 Plan to 8,984,367 shares. We intend to grant future equity awards under the Plan in amounts that are reasonable and consistent with market data prepared by the Compensation Committee’s independent consultant. Based on our projected recruiting and retention needs, we believe that the proposed share increase under the Plan Amendment would allow us to continue granting equity awards under the 2019 Plan in 2020to employees, consultants and beyond unless we increase the number of shares reserveddirectors for issuance under the 2019 Plan.approximately two more years. TABLE OF CONTENTS To meet our future equity compensation needs,
In this regard, on March 25, 2021, the board of directors, upon recommendation of the Compensation Committee, approved the Plan Amendment, which would become effective upon receiving stockholder approval at the Annual Meeting. By reserving an additional 6,400,000 shares for issuance under the 2019 Plan,a grant of time-based stock options covering a total of 6,510,276750,000 shares, will be available for future issuance. We expect thatwith a per share exercise price equal to the shares authorized for issuance under the 2019 Plan will meetclosing per-share price of the Company’s equity compensation needs for approximately onecommon stock on the date of grant, to two years.Our boardthe following officers:
Andrei Floroiu
Chief Executive Officer
| | | 250,000 | Brant Biehn
Senior Vice President of Business Operations
| | | 100,000 | Margaret Echerd
Senior Vice President, Principal Accounting Officer
| | | 100,000 | Shaily Garg
Senior Vice President of Clinical Development and Project Management
| | | 100,000 | Richard Schwartz
Senior Vice President of Technical Operations
| | | 100,000 | Sean Tucker
Senior Vice President, Chief Scientific Officer
| | | 100,000 |
These stock options vest as to 25% of directors recommends that ourthe underlying shares of common stock on the first anniversary of the date of grant and thereafter in thirty-six (36) equal monthly installments and shall only be exercisable if stockholders approve the Plan Amendment. As noted above, we do not expect to meet our anticipated equity compensation needs in 2020 or beyond absent an increase in the share reserve. We rely on equity compensation to attract, motivate and retain key employees and directors, link compensation with key business objectives and share price, and align the interests of stockholders, employees, and directors. ApprovalWithout stockholder approval of the Plan Amendment, these stock options would further these objectives by allowing usbe cancelled upon the conclusion of the Annual Meeting and no shares would be delivered under the awards. In addition, on March 25, 2021, the board of directors, upon recommendation of the Compensation Committee, approved a grant of time-based stock options with a value equal to $103,000 to each non-employee director who (i) is serving on the board as of the Annual Meeting and has been serving as a non-employee director for at least six months as of the date of such meeting, and (ii) will continue to serve as a non-employee director immediately following such meeting. These stock options shall vest on the earlier of the first anniversary of the date of grant equity awardsor the 2022 Annual Meeting and shall only be granted if stockholders approve the Plan Amendment. The option award for each eligible non-employee director shall cover a number of shares (rounded up to key employees and directors. the nearest whole share) obtained by dividing the award value, by the Black-Scholes value per share as of the date of the Annual Meeting, as calculated by the Compensation Committee’s independent consultant based on the methodology used for benchmarking director compensation. Without stockholder approval of the Plan Amendment, these stock options would not become effective. Please refer to the “New Plan Benefits” for additional information about these stock option grants. If the stockholders do not approve the Plan Amendment, we may be required to increase the cash components of our compensation programs to remain at competitive levels in the marketplace, which would significantly inhibit our ability to attract, motivate and retain keyhigh-caliber employees and directors necessary to compete inand align their interests with those of our industry could be seriously harmed. In turn, this would negatively impact our long-term success.stockholders.In determining the number of additional shares to reserve for issuance under the 2019 Plan, our board of directors considered the number of shares available for future awards, the potential dilution resulting from the proposed increase, equity plan guidelines established by certain proxy advisory firms, and advice provided by the Compensation Committee’s compensation consultant. On March 24, 2020, the board of directors, upon recommendation of the Compensation Committee, approved a grant of time-based stock options covering a total of 2,610,000 shares, which shall vest as to 25% of the option shares on the date of grant and 75% of the options shares over two years on a monthly basis thereafter, which shall only be exercisable if stockholders approve the Plan Amendment, and shall have a per share exercise price equal to the closing price of the shares on March 24, 2020.
For more information on these grants, please see the Plan Benefits table on page 32 of this proxy statement.
The 2019 Plan includes provisions that are designed to protect our stockholders’ interests and to reflect corporate governance best practices including: No single trigger acceleration. Generally, there is no single-trigger acceleration of vesting upon change in control. The 2019 Plan does not provide for automatic vesting of awards upon a change in control; although certain performance-based stock option grants made to our Chief Executive Officer in 2020 were eligible to vest on a single trigger basis. Awards subject to forfeiture/clawback. Awards granted under the 2019 Plan will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required | •
| No single trigger accelerated vesting upon change in control. The 2019 Plan does not provide for automatic vesting of awards upon a change in control.
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| Awards subject to forfeiture/clawback. Awards granted under the 2019 Plan will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, we may impose other clawback, recovery or recoupment provisions in an award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause.
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| No liberal change in control definition. The change in control definition in the 2019 Plan is not a “liberal” definition. A change in control transaction must actually occur in order for the change in control provisions in the 2019 Plan to be triggered.
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| No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the 2019 Plan must have an exercise or strike price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted.
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| Administration by our board of directors or independent committee. The 2019 Plan will be administered by our board of directors, which may in turn delegate authority to administer the 2019 Plan to a committee with the members of such committee being “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act and “independent” within the meaning of the Nasdaq listing standards.
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| Material amendments require stockholder approval. Consistent with Nasdaq rules, the 2019 Plan requires stockholder approval of any material revisions to the 2019 Plan. In addition, certain other amendments to the 2019 Plan require stockholder approval.
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| Limit on non-employee director awards and other awards. The maximum number of shares subject to stock awards granted during any calendar year to any of our non-employee directors, taken together with any cash fees paid by the Company to such non-employee director during such calendar year, may not exceed $600,000 in total value, or $750,000 in total value with respect to the calendar year in which the individual is first appointed or elected to our board of directors (calculating the value of any such stock awards based on the grant date fair value of the stock awards for financial reporting purposes).
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TABLE OF CONTENTS by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, we may impose other clawback, recovery or recoupment provisions in an award agreement, including a reacquisition right in respect of previously acquired shares or other cash or property upon the occurrence of cause. 22No liberal change in control definition. The change in control definition in the 2019 Plan is not a “liberal” definition. A change in control transaction must actually occur in order for the change in control provisions in the 2019 Plan to be triggered.
No discounted stock options or stock appreciation rights. All stock options and stock appreciation rights granted under the 2019 Plan must have an exercise or strike price equal to or greater than the fair market value of our common stock on the date the stock option or stock appreciation right is granted. Administration by our board of directors or independent committee. The 2019 Plan will be administered by our board of directors, which may in turn delegate authority to administer the 2019 Plan to a committee with the members of such committee being “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act and “independent” within the meaning of the Nasdaq listing standards. Material amendments require stockholder approval. Consistent with Nasdaq rules, the 2019 Plan requires stockholder approval of any material revisions to the 2019 Plan. In addition, certain other amendments to the 2019 Plan require stockholder approval. Repricing. Pursuant to an amendment approved by our board of directors on April 28, 2021, the 2019 Plan does not permit the “repricing” of stock options, stock appreciation rights or other stock awards without stockholder approval. Limit on non-employee director awards and other awards. The maximum number of shares subject to stock awards granted during any calendar year to any of our non-employee directors, taken together with any cash fees paid by the Company to such non-employee director during such calendar year, may not exceed $600,000 in total value, or $750,000 in total value with respect to the calendar year in which the individual is first appointed or elected to our board of directors (calculating the value of any such stock awards based on the grant date fair value of the stock awards for financial reporting purposes). If this Proposal No. 32 is approved, the Plan Amendment will become effective as of the date of the Annual Meeting. TABLE OF CONTENTS Equity Compensation Plans at DecemberEQUITY COMPENSATION PLANS AT DECEMBER 31, 20192020 The following table provides certain information with respect to all equity compensation plans in effect as of December 31, 2019. | | | | | | | Number of | | | | | | | | | | Securities | | | | | | | | | | Remaining | | | | | | | | | | Available for | | | | | | | | | | Future Issuance | | | | | Number of | | | | | Under Equity | | | | | Securities to | | | | | Compensation | | | | | Be Issued | | | | | Plans | | | | | Upon | | | Weighted-Average | | (Excluding | | | | | Exercise of | | | Exercise Price of | | Securities | | | | | Outstanding | | | Outstanding | | Reflected in | | | | | Options | | | Options | | Column (a)) | | | Plan Category | | (a) | | | (b) | | (c) | | | | | | | | | | | | | | | | Equity compensation plans approved by security holders | | | 1,811,652 | (1) | | $ | 2.74 | | | 295,180 | (2) | | Equity compensation plans not approved by security holders | | | — | | | $ | — | | | — | | | Total | | | 1,811,652 | | | $ | 2.74 | | | 295,180 | | |
(1) Reflects shares of common stock issuable upon the exercise of outstanding stock options granted under the 2019 Plan, Vaxart’s 2007 Equity Incentive Plan, Aviragen’s 2016 Equity Incentive Plan and Aviragen’s 2007 Omnibus Equity and Incentive Plan, all of which have been approved by security holders.
(2) Reflects shares of common stock that are available for future issuance under the 2019 Plan.
2020. Equity compensation plans approved by security holders | | | 6,813,033(1) | | | $2.70 | | | 1,230,863(2) | Equity compensation plans not approved by security holders | | | — | | | $— | | | — | Total | | | 6,813,033 | | | $2.70 | | | 1,230,863 |
(1)
| Reflects shares of common stock issuable upon the exercise of outstanding stock options granted under the 2019 Plan, Vaxart’s 2007 Equity Incentive Plan, Aviragen’s 2016 Equity Incentive Plan and Aviragen’s 2007 Omnibus Equity and Incentive Plan, all of which have been approved by security holders. |
(2)
| Reflects shares of common stock that are available for future issuance under the 2019 Plan. |
The following table provides certain additional information regarding our equity incentive plans. Total number of shares of common stock subject to outstanding stock options | | 1,600,848 | 7,741,425 | Weighted-average exercise price of outstanding stock options | | $2.76 | $3.29 | Weighted-average remaining term of outstanding stock options | | 7.98
| 8.90 years | Total number of shares of common stock subject to outstanding full value awards | | 411,000 | — | Total number of shares of common stock available for grant under the 2019 Plan | | 110,276 | 84,367 | Total number of shares of common stock available for grant under other equity incentive plans | | | — |
Total number of shares of common stock outstanding | | 72,054,720 | 117,963,912 | Per-share closing price of common stock as reported on Nasdaq Capital Market | | $1.72 | $5.56 |
Burn Rate The following table provides detailed information regarding the activity related to our 2019 Plan for 2019: | | 2019
| Total number of shares of common stock subject to stock options granted
| | 1,791,030
| | Total number of shares of common stock subject to full value awards granted
| | —
| | Total number of shares of common stock outstanding as of December 31, 2019
| | 48,254,994
| | Burn Rate (1)
| | 3.7
| %
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(1) Burn Rate2018, 2019 and 2020:
Total number of shares of common stock subject to stock options granted | | | 431,100 | | | 1,791,030 | | | 5,579,800 | Total number of shares of common stock subject to full value awards granted | | | — | | | — | | | — | Total number of shares of common stock outstanding as of December 31 | | | 7,141,189 | | | 48,254,994 | | | 110,271,093 | Burn Rate | | | 6.0% | | | 3.7% | | | 5.1% |
Our burn rate is (numbercalculated as the total amount of equity granted in any year, divided by the number of common shares subjectoutstanding. For purposes of this calculation (i) stock options were counted in the year granted, and (ii) performance-
TABLE OF CONTENTS based restricted share unit awards were counted in the year earned (and only to the extent earned). Our future burn rate will depend on a number of factors, including the number of participants in the 2019 Plan, our stock price, changes to our compensation strategy, changes in business practices or industry standards, changes in our capital structure due to stock splits or similar events, the compensation practices of our competitors or changes in compensation practices in the market generally, and the methodology used to establish the equity awards granted during the year) / (common shares outstanding as of December 31, 2019).award mix. Description of the 2019 Equity Incentive Plan The material features of the 2019 Plan are described below. The following description of the 2019 Plan is a summary only and is qualified in its entirety by reference to the complete text of the 2019 Plan. Stockholders are urged to read the actual text of the 2019 Plan in its entirety, which has been previously filed with the SEC as Exhibit 10.1 to the Current Report on Form 8-KS-8 on April 24, 2019.July 7, 2020 (File No. 333-239727). The 2019 Plan is designed to secure and retain the services of our employees, directors and consultants, provide incentives for our employees, directors and consultants to exert maximum efforts for our success and our affiliates’ success, and provide a means by which our employees, directors and consultants may be given an opportunity to benefit from increases in the value of our common stock.
The terms of the 2019 Plan provide for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock awards, and performance awards that may be settled in cash, stock, or other property.
Shares AvailableAvailable for AwardsSubject to adjustment for certain changes in our capitalization, the Share Reserve under the 2019 Plan, as amended by the Plan Amendment, will not exceed 8.0 million16,900,000 shares. The following shares of our common stock will become available again for issuance under the 2019 Plan: (i) any shares subject to a stock award that are not issued because such stock award expires or otherwise terminates without all of the shares covered by such stock award having been issued; (ii) any shares subject to a stock award that are not issued because such stock award is settled in cash; (iii) any shares issued pursuant to a stock award that are forfeited back to or repurchased by us because of the failure to meet a contingency or condition required for the vesting of such shares; and (iv) any shares reacquired by us in satisfaction of tax withholding obligations on a stock award or as consideration for the exercise or purchase price of a stock award.
All of our 11 employees and sixfive non-employee directors (which includes employees and non-employee directors of our affiliates) as of April 9, 2020,23, 2021, were eligible to participate in the 2019 Plan and may receive all types of awards other than incentive stock options. Incentive stock options may be granted under the 2019 Plan only to our employees (including officers) and employees of our affiliates. Non-Employee Director Compensation Limit Under the 2019 Plan, the maximum number of shares of our common stock subject to stock awards granted during any one calendar year to any of our non-employee directors, taken together with any cash fees paid by the Company to such non-employee director during such calendar year, will not exceed $600,000 in total value, or $750,000 with respect to the calendar year in which the individual is first appointed or elected to the board of directors (calculating the value of any such stock awards based on the grant date fair value of such stock awards for financial reporting purposes).
The 2019 Plan will be administered by our board of directors, which may in turn delegate authority to administer the 2019 Plan to a committee. Our board of directors has delegated concurrent authority to administer the 2019 Plan to our Compensation Committee, but may, at any time, revest in itself some or all of the power delegated to our Compensation Committee. Our board of directors and our Compensation Committee are each considered to be a Plan Administrator for purposes of this Proposal No. 3.2. TABLE OF CONTENTS Subject to the terms of the 2019 Plan, the Plan Administrator may determine the recipients, the types of awards to be granted, the number of shares of our common stock subject to or the cash value of awards, and the terms and conditions of awards granted under the 2019 Plan, including the period of their exercisability and vesting. The Plan Administrator also has the authority to provide for accelerated exercisability and vesting of awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable to a stock award and the exercise or strike price of stock options and stock appreciation rights granted under the 2019 Plan. The Plan Administrator may also delegate to one or more of our officers with the authority to designate employees who are not officers to be recipients of certain stock awards and the number of shares of our common stock subject to such stock awards. Under any such delegation, the Plan Administrator will specify the total number of shares of our common stock that may be subject to the stock awards granted by such officer. The officer may not grant a stock award to himself or herself.
Stock options may be granted under the 2019 Plan pursuant to stock option agreements. The 2019 Plan permits the grant of stock options that are intended to qualify as incentive stock options, or ISOs, and nonstatutory stock options, or NSOs. The exercise price of a stock option granted under the 2019 Plan may not be less than 100% of the fair market value of the common stock subject to the stock option on the date of grant and, in some cases (see “Limitations on Incentive Stock Options” below), may not be less than 110% of such fair market value. The closing price of a share as reported on the Nasdaq on April 9, 2020,23, 2021, was $1.72$5.56 per share. The term of stock options granted under the 2019 Plan may not exceed ten years and, in some cases (see “Limitations on Incentive Stock Options” below), may not exceed five years. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s service relationship with us or any of our affiliates (referred to in this Proposal No. 32 as “continuous service”) terminates (other than for cause and other than upon the participant’s death or disability), the participant may exercise any vested stock options for up to three months following the participant’s termination of continuous service. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service terminates due to the participant’s disability or death (or the participant dies within a specified period, if any, following termination of continuous service), the participant, or his or her beneficiary, as applicable, may exercise any vested stock options for up to 12 months following the participant’s termination due to the participant’s disability or for up to 18 months following the participant’s death. Except as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with us or one of our affiliates, if a participant’s continuous service is terminated for cause (as defined in the 2019 Plan), all stock options held by the participant will terminate upon the participant’s termination of continuous service and the participant will be prohibited from exercising any stock option from and after such termination date. Except as otherwise provided in a participant’s stock option agreement or other written agreement with us or one of our affiliates, the term of a stock option may be extended if the exercise of the stock option following the participant’s termination of continuous service (other than for cause and other than upon the participant’s death or disability) would be prohibited by applicable securities laws or if the sale of any common stock received upon exercise of the stock option following the participant’s termination of continuous service (other than for cause) would violate our insider trading policy. In no event, however, may a stock option be exercised after its original expiration date. Acceptable forms of consideration for the purchase of our common stock pursuant to the exercise of a stock option under the 2019 Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (iii) by delivery to us of shares of our common stock (either by actual delivery or attestation); (iv) by a net exercise arrangement (for NSOs only); or (v) in other legal consideration approved by the Plan Administrator. Stock options granted under the 2019 Plan may become exercisable in cumulative increments, or “vest,” as determined by the Plan Administrator at the rate specified in the stock option agreement. Shares covered by different stock options granted under the 2019 Plan may be subject to different vesting schedules as the Plan Administrator may determine. TABLE OF CONTENTS Our board of directors may provide for limitations on the transferability of awards, in its sole discretion. Option awards are generally not transferable other than by will, the laws of descent and distribution or as otherwise provided under our 2019 Plan.
Limitations on Incentive Stock Options The aggregate fair market value, determined at the time of grant, of shares of our common stock with respect to ISOs that are exercisable for the first time by a participant during any calendar year under all of our stock plans may not exceed $100,000. The stock options or portions of stock options that exceed this limit or otherwise fail to qualify as ISOs are treated as NSOs. No ISO may be granted to any person who, at the time of grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any affiliate unless the following conditions are satisfied: | ●
| the exercise price of the ISO must be at least 110% of the fair market value of the common stock subject to the ISO on the date of grant; and
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| the term of the ISO must not exceed five years from the date of grant.
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the exercise price of the ISO must be at least 110% of the fair market value of the common stock subject to the ISO on the date of grant; and the term of the ISO must not exceed five years from the date of grant. The aggregate maximum number of shares of our common stock that may be issued pursuant to the exercise of ISOs under the 2019 Plan is a number of shares of common stock equal to three (3) multiplied by the Share Reserve. Stock
Stock Appreciation RightsRights Stock appreciation rights may be granted under the 2019 Plan pursuant to stock appreciation right agreements. Each stock appreciation right is denominated in common stock share equivalents. The strike price of each stock appreciation right will be determined by the Plan Administrator, but will in no event be less than 100% of the fair market value of the common stock subject to the stock appreciation right on the date of grant. The Plan Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate. The appreciation distribution payable upon exercise of a stock appreciation right may be paid in shares of our common stock, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the stock appreciation right agreement. Stock appreciation rights will be subject to the same conditions upon termination of continuous service and restrictions on transfer as stock options under the 2019 Plan. Restricted Stock Awards Restricted stock awards may be granted under the 2019 Plan pursuant to restricted stock award agreements. A restricted stock award may be granted in consideration for cash, check, bank draft or money order payable to us, the participant’s services performed for us or any of our affiliates, or any other form of legal consideration acceptable to the Plan Administrator. Shares of our common stock acquired under a restricted stock award may be subject to forfeiture to or repurchase by us in accordance with a vesting schedule to be determined by the Plan Administrator. Rights to acquire shares of our common stock under a restricted stock award may be transferred only upon such terms and conditions as are set forth in the restricted stock award agreement. A restricted stock award agreement may provide that any dividends paid on restricted stock will be subject to the same vesting conditions as apply to the shares subject to the restricted stock award. Upon a participant’s termination of continuous service for any reason, any shares subject to restricted stock awards held by the participant that have not vested as of such termination date may be forfeited to or repurchased by us.
Restricted Stock Unit Awards Restricted stock unit awards may be granted under the 2019 Plan pursuant to restricted stock unit award agreements. Payment of any purchase price may be made in any form of legal consideration acceptable to the Plan Administrator. A restricted stock unit award may be settled by the delivery of shares of our common stock, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the restricted stock unit award agreement. Restricted stock unit awards may be subject to vesting in accordance with a vesting schedule to be determined by the Plan Administrator. Dividend equivalents may be credited in respect of shares of our common stock covered by a restricted stock unit award, provided that any additional shares credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying TABLE OF CONTENTS restricted stock unit award. Except as otherwise provided in a participant’s restricted stock unit award agreement or other written agreement with us or one of our affiliates, restricted stock units that have not vested will be forfeited upon the participant’s termination of continuous service for any reason.
The 2019 Plan allows us to grant performance stock and cash awards. A performance stock award is a stock award that is payable (including that may be granted, may vest, or may be exercised) contingent upon the attainment of pre-determined performance goals during a performance period. A performance stock award may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by the Plan Administrator in its discretion. In addition, to the extent permitted by applicable law and the performance stock award agreement, the Plan Administrator may determine that cash may be used in payment of performance stock awards. A performance cash award is a cash award that is payable contingent upon the attainment of pre-determined performance goals during a performance period. A performance cash award may require the completion of a specified period of continuous service. At the time of grant of a Performance Cash Award, the length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by our board of directors, except that the Plan Administrator also may make any such determinations. The Plan Administrator may specify the form of payment of performance cash awards, which may be cash or other property, or may provide for a participant to have the option for his or her performance cash award to be paid in cash or other property. Performance goals could be based on any one or more of the following performance criteria (1) earnings (including earnings per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation and amortization; (4) total stockholder return; (5) return on equity or average stockholder’s equity; (6) return on assets, investment, or capital employed; (7) stock price; (8) margin (including gross margin); (9) income (before or after taxes); (10) operating income; (11) operating income after taxes; (12) pre-tax profit; (13) operating cash flow; (14) sales or revenue targets; (15) increases in revenue or product revenue; (16) expenses and cost reduction goals; (17) improvement in or attainment of working capital levels; (18) economic value added (or an equivalent metric); (19) market share; (20) cash flow; (21) cash flow per share; (22) share price performance; (23) debt reduction; (24) implementation or completion of projects or processes; (25) subscriber satisfaction; (26) stockholders’ equity; (27) capital expenditures; (28) debt levels; (29) operating profit or net operating profit; (30) workforce diversity; (31) growth of net income or operating income; (32) billings; (33) the number of subscribers, including but not limited to unique subscribers; (34) employee retention; and (35) other measures of performance selected by the Plan Administrator. Performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. The Plan Administrator is authorized to make appropriate adjustments in the method of calculating the attainment of performance goals for a performance period as follows: (i) to exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards Board; (iv) to exclude the effects of any items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (v) to exclude the effects to any statutory adjustments to corporate tax rates; and (vi) to make other appropriate adjustments selected by the Plan Administrator. In addition, the Plan Administrator retains the discretion to reduce or eliminate the compensation or economic benefit due upon the attainment of any performance goals and to define the manner of calculating the performance criteria it selects to use for a performance period.
Other forms of stock awards valued in whole or in part by reference to, or otherwise based on, our common stock may be granted either alone or in addition to other stock awards under the 2019 Plan. Subject to the terms of the 2019 Plan, the Plan Administrator will have sole and complete authority to determine the persons to whom and the time TABLE OF CONTENTS or times at which such other stock awards will be granted, the number of shares of our common stock to be granted and all other terms and conditions of such other stock awards.
Awards granted under the 2019 Plan will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Plan Administrator may impose other clawback, recovery or recoupment provisions in an award agreement as the Plan Administrator determines necessary or appropriate, including a reacquisition right in respect of previously acquired shares of our common stock or other cash or property upon the occurrence of cause.
Changes to Capital Structure In the event of certain capitalization adjustments, the Plan Administrator will appropriately adjust: (i) the class(es) and maximum number of securities subject to the 2019 Plan; (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of ISOs; and (iii) the class(es) and number of securities and price per share of stock subject to outstanding stock awards. Corporate Transaction In the event of a corporate transaction (as defined in the 2019 Plan and described below), the Plan Administrator may take one or more of the following actions with respect to stock awards, contingent upon the closing or consummation of the corporate transaction: arrange for the surviving or acquiring corporation (or its parent company) to assume or continue the award or to substitute a similar stock award for the award (including an award to acquire the same consideration paid to our stockholders pursuant to the transaction); arrange for the assignment of any reacquisition or repurchase rights held by us with respect to the stock award to the surviving or acquiring corporation (or its parent company); accelerate the vesting (and, if applicable, the exercisability) of the stock award and provide for its termination prior to the effective time of the transaction; arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us with respect to the award; cancel or arrange for the cancellation of the stock award, to the extent not vested or exercised prior to the effective time of the transaction, in exchange for such cash consideration, if any, as the board of directors may consider appropriate; and make a payment, in such form as may be determined by the board of directors, equal to the excess, if any, of the value of the property the participant would have received upon exercise of the awards prior to the transaction over any exercise price payable by the participant in connection with the exercise. The plan administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner. The Plan Administrator is not required to take the same action with respect to all stock awards or portions of stock awards or with respect to all participants. The Plan Administrator may take different actions with respect to the vested and unvested portions of a stock award. For purposes of the 2019 Plan, a corporate transaction generally will be deemed to occur in the event of the consummation of: (i) a sale or other disposition of all or substantially all of our consolidated assets; (ii) a sale or other disposition of more than 50% of our outstanding securities; (iii) a merger, consolidation or similar transaction following which we are not the surviving corporation; or (iv) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to the transaction are converted or exchanged into other property by virtue of the transaction.
In the event of a change in control, awards granted under the 2019 Plan will not receive automatic acceleration of vesting and exercisability, although this treatment may be provided for in an award agreement. Under the 2019 Plan, TABLE OF CONTENTS a change in control is defined to include (1) the acquisition of any person of more than 50% of the combined voting power of our then outstanding stock; (2) a merger, consolidation or similar transaction in which our stockholders immediately prior to the transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity); (3) a sale, lease, exclusive license or other disposition of all or substantially all of our assets to an entity that did not previously hold more than 50% of the voting power over our capital stock and (4) individuals who constitute our incumbent board of directors ceasing to constitute at least a majority of our board of directors. Plan Amendments and Termination Our board of directors has the authority to amend, suspend, or terminate our 2019 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No incentive stock options may be granted after the tenth anniversary of the date our board of directors adopted our 2019 Plan. No stock awards may be granted under our 2019 Plan while it is suspended or after it is terminated. U.S. Federal Income Tax Consequences The following is a summary of the principal United States federal income tax consequences to participants and us with respect to participation in the 2019 Plan. This summary is not intended to be exhaustive and does not discuss the income tax laws of any local, state or foreign jurisdiction in which a participant may reside. The information is based upon current federal income tax rules and therefore is subject to change when those rules change. Because the tax consequences to any participant may depend on his or her particular situation, each participant should consult the participant’s tax adviser regarding the federal, state, local and other tax consequences of the grant or exercise of an award or the disposition of stock acquired the 2019 Plan. The 2019 Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974. Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness and the satisfaction of our tax reporting obligations.
Nonstatutory Stock Options Generally, there is no taxation upon the grant of an NSO if the stock option is granted with an exercise price equal to the fair market value of the underlying stock on the grant date. Upon exercise, a participant will recognize ordinary income equal to the excess, if any, of the fair market value of the underlying stock on the date of exercise of the stock option over the exercise price. If the participant is employed by us or one of our affiliates, that income will be subject to withholding taxes. The participant’s tax basis in those shares will be equal to his or her fair market value on the date of exercise of the stock option, and the participant’s capital gain holding period for those shares will begin on that date. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant.
The 2019 Plan provides for the grant of stock options that are intended to qualify as “incentive stock options,” as defined in Section 422 of the Code. Under the Code, a participant generally is not subject to ordinary income tax upon the grant or exercise of an ISO. If the participant holds a share received upon exercise of an ISO for more than two years from the date the stock option was granted and more than one year from the date the stock option was exercised, which is referred to as the required holding period, the difference, if any, between the amount realized on a sale or other taxable disposition of that share and the participant’s tax basis in that share will be long-term capital gain or loss. If, however, a participant disposes of a share acquired upon exercise of an ISO before the end of the required holding period, which is referred to as a disqualifying disposition, the participant generally will recognize ordinary income in the year of the disqualifying disposition equal to the excess, if any, of the fair market value of the share on the date of exercise of the stock option over the exercise price. However, if the sales proceeds are less than the fair market value of the share on the date of exercise of the stock option, the amount of ordinary income recognized by the participant will not exceed the gain, if any, realized on the sale. If the amount realized on a disqualifying disposition exceeds the fair market value of the share on the date of exercise of the stock option, that excess will be short-term or long-term capital gain, depending on whether the holding period for the share exceeds one year. TABLE OF CONTENTS For purposes of the alternative minimum tax, the amount by which the fair market value of a share of stock acquired upon exercise of an ISO exceeds the exercise price of the stock option generally will be an adjustment included in the participant’s alternative minimum taxable income for the year in which the stock option is exercised. If, however, there is a disqualifying disposition of the share in the year in which the stock option is exercised, there will be no adjustment for alternative minimum tax purposes with respect to that share. In computing alternative minimum taxable income, the tax basis of a share acquired upon exercise of an ISO is increased by the amount of the adjustment taken into account with respect to that share for alternative minimum tax purposes in the year the stock option is exercised. We are not allowed a tax deduction with respect to the grant or exercise of an ISO or the disposition of a share acquired upon exercise of an ISO after the required holding period. If there is a disqualifying disposition of a share, however, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the participant, subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and provided that either the employee includes that amount in income or we timely satisfy our reporting requirements with respect to that amount.
Exercise of Stock Options Acceptable forms of consideration for the purchase of our common stock pursuant to the exercise of a stock option under the 2019 Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to us; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; or (iii) in other legal consideration approved by the Plan Administrator. Generally, the recipient of a restricted stock award will recognize ordinary income at the time the stock is received equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. If, however, the stock is not vested when it is received (for example, if the employee is required to work for a period of time in order to have the right to sell the stock), the recipient generally will not recognize income until the stock becomes vested, at which time the recipient will recognize ordinary income equal to the excess, if any, of the fair market value of the stock on the date it becomes vested over any amount paid by the recipient in exchange for the stock. A recipient may, however, file an election with the Internal Revenue Service, within 30 days following his or her receipt of the stock award, to recognize ordinary income, as of the date the recipient receives the award, equal to the excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient for the stock. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock award will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or when the stock becomes vested. Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock award.
Restricted Stock Unit Awards Generally, the recipient of a restricted stock unit award structured to comply with the requirements of Section 409A of the Code or an exception to Section 409A of the Code will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the stock received over any amount paid by the recipient in exchange for the stock. To comply with the requirements of Section 409A of the Code, the stock subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A of the Code (including delivery upon achievement of a performance goal), in addition to the tax treatment described above, the recipient will owe an additional 20% federal tax and interest on any taxes owed. The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is delivered. TABLE OF CONTENTS Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Code, and the satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the restricted stock unit award. Stock Appreciation Rights Stock appreciation rights are granted pursuant to stock appreciation grant agreements adopted by the Plan Administrator. The Plan Administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of common stock on the date of grant. Upon the exercise of a stock appreciation right, we will pay the participant an amount equal to the product of (1) the excess, if any, of the per share fair market value of common stock on the date of exercise over the purchase price or strike price and (2) the number of shares of common stock with respect to which the stock appreciation right is exercised. This amount may be paid in shares of common stock, in cash, in any combination of cash and shares of common stock or in any other form of consideration, as determined by the Plan Administrator and set forth in the award agreement. A stock appreciation right granted under the 2019 Plan vests at the rate specified in the stock appreciation right agreement as determined by the Plan Administrator. The Plan Administrator determines the term of stock appreciation rights granted under the 2019 Plan, which may be up to a maximum of ten years. Unless the terms of a participant’s stock appreciation right agreement provides otherwise, if a participant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. The term of the stock appreciation right may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws or by our insider trading policy. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant (or, if applicable, a beneficiary) may generally exercise any vested stock appreciation right for a period of 12 months (in the case of disability) or 18 months (in the case of death). Stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term.
New Plan BenefitsBecause it is within the discretion ofBenefits
The Compensation Committee and the board of directors andretain discretion under the Compensation Committee2019 Plan to determine which directors, officers, employees and employeesconsultants will receive equity awards and the amount and type of awards received, it generally isawards. Therefore, we are not possibleable to determine the total number of individuals to whom awardswho will be madeparticipate in the future under the2019 Plan Amendment or the total amount of those awards.awards granted thereunder. However, on March 24, 2020,25, 2021, the board of directors upon recommendation of the Compensation Committee, approved (i) a grant of time-based stock options covering a total of 2,610,000750,000 shares which shall vest as to 25% of the option shares on the date of grantour officers and 75% of the options shares over two years on a monthly basis thereafter, which shall only be exercisable if stockholders approve the Plan Amendment, and shall have a per share exercise price equal to the closing price of the shares on March 24, 2020. The following table provides additional information on these stock option grants:
| Name and Position
| | Dollar value
| | Number of shares
| Wouter W. Latour, M.D.
| | — | | 900,000
| Sean N. Tucker
| | — | | 360,000
| Margaret A. Echerd
| | — | | 315,000
| All current executive officers as a group
| | — | | 1,575,000
| All current directors who are not executive officers as a group
| | — | | (1)
| All employees, including all current officers who are not executive officers, as a group
| | — | | 1,035,000 |
(1) | Awards that may be granted under the 2019 Plan to our non-employee directors will be discretionary and will not be subject to set benefits or amounts under the terms of the 2019 Plan. If the Plan Amendment is approved by our stockholders, we expect that our board of directors will adopt a new non-employee director equity compensation policy. All option grants to our non-employee directors will have an exercise price per share equal to the fair market value of our common stock on the date of grant. |
On April 13, 2020, the board of directors, upon recommendation of the Compensation Committee, approved(ii) a grant of time-based stock options to Mr. Andrei Floroiu coveringwith a total of 54,720 shares, which shall vest in three equal annual installments over three years, which shall only be exercisable if stockholders approve the Plan Amendment and shall have a per share exercise pricevalue equal to $103,000 to each non-employee director who (x) is serving on the closing priceboard as of the Annual Meeting and has been serving as a non-employee director for at least six months as of the date of such meeting, and (y) will continue to serve as a non-employee director immediately following such meeting. The table below shows the allocation of these awards among the named executive officers listed below, all current executive officers as a group, all current non-employee directors as a group, and all other employees, respectively. If stockholders do not approve this Proposal 2, then these stock option awards would be cancelled upon the conclusion of the Annual Meeting and no shares on April 13, 2020.would be delivered under the awards.
Andrei Floroiu
Chief Executive Officer
| | | | | | 250,000 | Sean Tucker
Senior Vice President, Chief Scientific Officer
| | | | | | 100,000 | Margaret A. Echerd
Senior Vice President Principal Accounting Officer
| | | | | | 100,000 | Executive Group | | | | | | 450,000 | Non-Employee Director Group | | | $412,000 | | | | Non-Executive Officer Employee Group | | | | | | 300,000 |
TABLE OF CONTENTS Required Vote and Board of Directors Recommendation
REQUIRED VOTE AND BOARD OF DIRECTORS RECOMMENDATION Approval of this Proposal No. 32 requires that the proposal receive “For” votes from the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting that cast votes with respect to this Proposal No. 3.2. Abstentions and broker non-votes will count towards a quorum, butquorum. Abstentions will count as a vote “Against” the proposal and broker non-votes will have no effect on the outcome of this Proposal No. 3.Recommendation of the Board
2. The board of directors recommends that our stockholders adopt the following resolution: “RESOLVEDRESOLVED, that the Amendment No. 12 to 2019 Equity Incentive Plan is hereby APPROVED.” TABLE OF CONTENTS
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Proposal No. 4
Ratification of Selection of Independent Registered Public Accounting Firm
What am I voting on? | | | Ratification of the selection of OUM & Co. LLP as our independent registered public accounting firm for the year ending December 31, 2020.2021. |
Vote recommendation:recommendation: | | | “FOR” the ratification of OUM & Co. LLP. |
Vote required:required: | | | A majority of shares cast. |
Effect of abstentions:abstentions: | | | None. |
Effect of broker non-votes:non-votes: | | | None (because this is a routine proposal, there are no broker non-votes). |
The Audit Committee of the board of directors has selected OUM & Co. LLP as our independent registered public accounting firm for the year ending December 31, 20202021 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Our lead audit partner at OUM & Co. LLP serves no more than five consecutive years in that role. Representatives of OUM & Co. LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of OUM & Co. LLP as our independent registered public accounting firm. However, the Audit Committee is submitting the selection of OUM & Co. LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify the selection of OUM & Co. LLP.
Current Principal Accountant Fees andand Services
The following table represents aggregate fees billed to Vaxart for the years ended December 31, 2020 and 2019, by OUM & Co. LLP. Audit Fees(1) | | | $627,683 | | | $182,547 | Audit-Related Fees | | | — | | | — | Tax Fees | | | — | | | — | All Other Fees | | | — | | | — | Total Fees | | | $627,683 | | | $182,547 |
(1)
| Audit Fees consisted of fees for professional services rendered for the audits of our financial statements, including the audits of our annual financial statements and reviews of our interim quarterly reports, and services provided in connection with SEC filings, including consents and comfort letters. |
KPMG LLP On December 31, 2019, we dismissed KPMG LLP (“KPMG”) as our independent registered accounting firm and appointed OUM & Co. LLP as our new independent registered accounting firm. No fees were billed by OUM & Co. LLP in 2019. TABLE OF CONTENTS The following table represents aggregate fees billed to Vaxart for the years ended December 31, 20182020 and 2019, by KPMG LLP. | Year Ended December 31, | | 2018 | | 2019 | | | | | Audit Fees(1) | $ | 559,000 | | $ | 381,143 | Audit-Related Fees | | — | | | — | Tax Fees | | — | | | — | All Other Fees(2) | | 1,780 | | | 1,780 | Total Fees | $ | 560,780 | | $ | 382,923 |
(1) Audit Fees consisted of fees for professional services rendered for the audits of our financial statements which were billed during the respective year, including the audits of our annual financial statements and reviews of our interim quarterly reports, and services provided in connection with SEC filings, including consents and comfort letters. KPMG.Audit Fees(1) | | | $88,295 | | | $381,143 | Audit-Related Fees | | | — | | | — | Tax Fees | | | — | | | — | All Other Fees(2) | | | — | | | 1,780 | Total Fees | | | $88,295 | | | $382,923 |
(1)
| Audit Fees consisted of fees for professional services rendered for the audits of our financial statements, including the audits of our annual financial statements and reviews of our interim quarterly reports, and services provided in connection with SEC filings, including consents and comfort letters. |
(2)
| All Other Fees consisted of access to KPMG’s Accounting Research Online website. |
(2) All Other Fees consisted of access to KPMG LLP’s Accounting Research Online website.
Prior to the Merger in February 2018, as Vaxart was a private company, none of the KPMG LLP fees were pre-approved. Following the Merger, all KPMG LLP’s fees were pre-approved by our Audit Committee.
During the years ended December 31, 20182020 and 2019, neither Vaxart nor anyone on their behalf consulted with KPMG LLP or OUM & Co. LLP, regarding either (i) the application of accounting principles to a specific transaction, completed or proposed, or the type of audit opinion that might be rendered on Vaxart’s financial statements, and neither a written report nor oral advice was provided to Vaxart that KPMG LLP or OUM & Co. LLP concluded was an important factor considered by Vaxart in reaching a decision as to any accounting, auditing or financial reporting issue or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K). Former Principal Accountant Fees and Services KPMG LLP served as Vaxart’s independent registered public accounting firm and audited Vaxart’s financial statement for the years ended December 31, 2015, 2016, 2017 and 2018. KPMG LLP was dismissed on December 31, 2019, and OUM & Co. LLP was appointed as the new independent registered public accounting firm. Ernst & Young LLP was engaged by Aviragen in March 2016. In February 2018, upon the closing of the Merger, the combined company dismissed Ernst & Young LLP as its independent registered public accounting firm and appointed KPMG LLP as the new independent registered public accounting firm. Ernst & Young LLP billed Vaxart $13,000 in 2019 and $13,750 in 2018 for fees for professional services, including consents. Pre-Approval Policies and Procedures The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services rendered by our independent registered public accounting firm, OUM & Co. LLP. The policy generally pre-approves specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service. The pre-approval of services may be delegated to one or more of the Audit Committee’s members, but the decision must be reported to the full Audit Committee at its next scheduled meeting. The Audit Committee has determined that the rendering of services other than audit services by OUM & Co. LLP is compatible with maintaining the principal accountant’s independence. BACKGROUND REGARDING CHANGE IN CERTIFYING ACCOUNTANT
Background Regarding Change in Certifying Accountant We dismissed KPMG LLP, or KPMG, as our independent registered public accounting firm on December 31, 2019. The decision to dismiss KPMG was approved by our audit committee. Audit Committee. The report of KPMG on our consolidated financial statements as of and for the years ended December 31, 2018 and 2017 contained no adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principle, except as follows: The report of KPMG on our consolidated financial statements as of and for the years ended December 31, 2018 and 2017, contained a separate paragraph stating that “the Company has experienced losses and negative cash flows from operations since its inception, has an accumulated deficit, and has debt obligations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.” TABLE OF CONTENTS During the years ended December 31, 2018 and December 31, 2017, and the subsequent interim period from January 1, 2019 through December 31, 2019, (1) there were no disagreements (as that term is used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between us and KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KPMG, would have caused KPMG to make reference thereto in its report on our consolidated financial statements for the years ended December 31, 2018 and 2017, and (2) there were no “reportable events” as such term is defined in Item 304(a)(1)(v) of Regulation S-K, except for the material weaknesses identified in our internal control over financial reporting related to our lack of consistent processes to appropriately perform effective and timely review of account reconciliations and non-routine transactions. The Company provided KPMG with a copy of the information required by Item 304(a) of Regulation S-K, which was also filed with the SEC in Current Reports on Form 8-K, filed on January 2, 2020. The Company requested that KPMG review such disclosures and provide a letter addressed to the SEC, a copy of which was filed as an exhibit to such report. We appointed OUM & Co. LLP as our independent registered public accounting firm on December 31, 2019 to audit our financial statements for the year ended December 31, 2019. The decision to change our independent registered public accounting firm was approved by our Audit Committee. During the years ended December 31, 2018 and December 31, 2017, and the subsequent interim period from January 1, 2019 through December 31, 2019, preceding our appointment of OUM & Co. LLP, as our independent registered public accounting firm, we did not consult with OUM & Co. LLP, on matters that involved the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on our financial statements or any other matter that was either the subject of a disagreement or reportable event. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL NO. 3. The Board of Directors Recommends
a Vote in Favor of Proposal No. 4.
TABLE OF CONTENTS
TO APPROVE, ON A NON-BINDING, ADVISORY BASIS, THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT Security Ownership Of Certain Beneficial Owners And Management
The following table sets forth certain information regarding the ownership of our common stock as of April 9, 2020, by:
| ●
| each nominee for director;
|
| ●
| each current executive officer
|
| ●
| all current executive officers and nominees for director as a group; and
|
| ●
| all those known by us to be beneficial owners of more than five percent of our outstanding common stock.
|
This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 72,054,720 shares outstanding on April 9, 2020, adjusted as required by rules promulgated by the SEC.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Vaxart, Inc., 385 Oyster Point Boulevard, Suite 9A, South San Francisco, California 94080.
| | Beneficial Ownership | Name of Beneficial Owner | | Shares | | % | Greater than 5% Stockholders: | | | | | Armistice Capital, LLC (1) | | 25,200,000 | | 34.5% | Executive Officers and Directors: | | | | | Steven Boyd (2) | | 25,200,000 | | 34.5% | Todd C. Davis | | — | | * | Margaret Echerd (3) | | 26,278 | | * | Michael J. Finney (4) | | 653,090 | | * | Andrei Floroiu (5) | | — | | * | Wouter Latour (6) | | 576,653 | | * | Keith Maher, M.D. | | — | | * | Sean Tucker (7) | | 230,120 | | * | Anne VanLent (8) | | 31,424 | | * | Robert A. Yedid | | — | | * | All executive officers and directors as a group (10 persons) | | 26,717,565 | | 36.7% |
* Represents beneficial ownership of less than one percent.
(1)
| Consists of 25,200,000 shares of common stock held directly by Armistice Capital, LLC.
|
(2)
| Consists of 25,200,000 shares of common stock held by Armistice Capital, LLC, an entity with which Mr. Boyd is affiliated due to his position as Chief Investment Officer of Armistice Capital, LLC. Mr. Boyd may be deemed to have shared voting and dispositive power over the shares beneficially owned by Armistice Capital, LLC, but disclaims such beneficial ownership except to the extent of their pecuniary interest therein, if any.
|
(3)
| Consists of 26,278 shares issuable pursuant to stock options exercisable within 60 days of April 9, 2020.
|
(4)
| Consists of (i) 452,572 shares of common stock held directly by Mr. Finney, and (ii) 181,818 shares of common stock issuable pursuant to warrants and 18,700 shares of common stock issuable pursuant to stock options, each exercisable within 60 days of April 9, 2020.
|
(5)
| Mr. Floroiu joined our board of directors effective as of April 13, 2020, and was awarded a stock option to purchase up to 54,720 shares of common stock, none of which are exercisable within 60 days of April 9, 2020. In addition, such options will only be exercisable if stockholders approve the Plan Amendment. |
(6)
| Consists of (i) 166,667 shares of common stock held directly by Dr. Latour, and (ii) 166,667 shares of common stock issuable pursuant to warrants and 243,319 shares of common stock issuable pursuant to stock options, each exercisable within 60 days of April 9, 2020.
|
(7)
| Consists of (i) 47,653 shares held directly by Dr. Tucker, (ii) 52,661 shares held jointly by Frances Chang and Dr. Tucker, (iii) 9,060 shares held by Dr. Tucker’s spouse, (iv) 27,273 shares issuable pursuant to warrants held jointly by Frances Chang and Dr. Tucker, exercisable within 60 days of April 9, 2020, and (v) 93,473 shares issuable pursuant to stock options exercisable within 60 days of April 9, 2020.
|
(8)
| Consists of (i) 3,181 shares held directly by Ms. VanLent, and (ii) 28,243 shares issuable pursuant to stock options exercisable within 60 days of April 9, 2020.
|
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires that our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Vaxart. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2019, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with.
Proposal No. 5
To Approve, on an Advisory Basis, the Compensation
of Our Named Executive Officers, as Disclosed in this Proxy statement
What am I voting on? | | | A non-binding vote, known as “say-on-pay,” to approve the 20192020 compensation of our named executive officers. |
Vote recommendation:recommendation: | | | “FOR” the approval of our 20192020 named executive officer compensation. |
Vote required:required: | | | A majority of shares cast. |
Effect of abstentions:abstentions: | | | None. |
Effect of broker non-votes:non-votes: | | | None. |
In accordance with Section 14A of the Exchange Act, we are asking our stockholders to vote on ana non-binding advisory basis, commonly referred to as “say-on-pay”, to approve the compensation paid to our named executive officers as disclosed in the compensation tables and the related narrative disclosure contained in this proxy statement. In response to our stockholders’ preference, the board of directors has adopted a policy of providing for annual “say-on-pay” votes. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. This non-binding, advisory proposal is not binding on the board of directors or us. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the board of directors and, accordingly, the board of directors and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding named executive officer compensation arrangements. Recommendation of the Board
RECOMMENDATION OF THE BOARD The board of directors recommends that our stockholders adopt the following resolution: “ RESOLVEDRESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation, tables and narrative discussion is hereby APPROVED.”Executive Compensation
The following tables andthe accompanying narrative disclosure and related material, set forth information aboutin the Company’s definitive Proxy Statement for the Annual Meeting, is hereby APPROVED.”
TABLE OF CONTENTS COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis (this “CD&A”) describes the 2020 compensation paid or earnedprogram established by the Compensation Committee (the “Committee”) for our named executive officers. Our named executive officers during the year ended December 31, 2019. These executive officers were:for 2020 include: Andrei Floroiu M.B.A. | | | President and Chief Executive Officer.Officer and Principal Financial Officer, effective June 14, 2020 |
Wouter Latour, M.D. | ● | | Former President and Chief Executive Officer | Sean N. Tucker, Ph.D., our* | | | Vice President, Chief Scientific Officer.Officer |
Margaret A. Echerd* | ● | Margaret Echerd, our VP
| Vice President, Corporate Controller, and Principal Accounting Officer |
*
| Effective March 25, 2021, Dr. Tucker was elected Senior Vice President, Chief Scientific Officer of the Company and Ms. Echerd was elected Senior Vice President and Principal Accounting Officer of the Company. |
Compensation Objectives Our mission is the promotion of global health through the development of effective vaccines that can be administered by tablet rather than by injection, providing for the simple and efficient distribution and administration of safe vaccines in any setting. We referoperate in a highly competitive and rapidly changing industry and continue to these individualsevolve our businesses. Our compensation objectives for 2020 are outlined below. Pay-For-Performance | | | • | | | Emphasize performance-based compensation to motivate executives to achieve strong financial, operational and individual performance in a manner that balances short-term and long-term results | Talent Retention | | | • | | | Attract and retain high-caliber executives who can effectively manage our complex global business. | Alignment with Stockholder Interests | | | • | | | Align our executives’ interests with those of our stockholders by making stock-based incentives a core element of our executives’ compensation. |
Pay-for-Performance The guiding principle of our compensation philosophy is that pay should be linked to performance and that the interests of executives and stockholders should be aligned. That principle is embedded in our compensation program, which is designed to optimize alignment between executive pay and actual results. As described below, the variable components of our compensation program for 2020 are the short-term incentives (“STI”) and long-term incentives (“LTI”). Our STI opportunities are provided under an annual cash bonus plan, the payout of which is dependent on corporate and individual performance. Our LTI opportunities are provided through stock options and performance-based restricted share unit (“RSU”) awards, the payout of which is also dependent on corporate performance. TABLE OF CONTENTS Name Executive Officer Pay Mix The following charts illustrate allocation of 2020 total direct compensation among salary, STI (at target) and LTI (accounting value) for (i) the current CEO and (ii) the other current named executive officers as a group. CEO 2020 Salary does not include board of director fees. All other officers STI at target does not include retention bonuses. All other officers’ LTI includes performance-based RSUs granted in March 2020 that were subsequently forfeited in December 2020 when the “named executive officers.”performance criteria were not met. Say-on-Pay The disclosures regardingCompensation Committee has considered the results of the most recent shareholder advisory vote on executive compensation in this proxy statement describedetermining compensation policies and decisions. The Company received strong support from our stockholders for our executive compensation program in 2020, with a favorable “say-on-pay” vote at our 2020 annual meeting exceeding 96%. The Compensation Committee viewed this strong result as confirmation that our compensation program is appropriately structured to support our strategic initiatives and our pay-for-performance commitment. Market Practices Competitive Compensation Levels We believe that each element of our compensation program should remain competitive in order to retain, and, if necessary, attract experienced, high-caliber executives. When setting 2020 compensation levels for 2019; accordingly, they do not address the potential impactnamed executive officers, the Compensation Committee retained Compensia as its independent compensation consultant, reporting directly to the Committee and serving at the sole discretion of the Compensation Committee. During its engagement, Compensia was asked to review competitive compensation data, including pay mix and compensation levels. The compensation data was derived from several sources, including the companies in a compensation peer group established by the Compensation Committee, upon advice of Compensia, and select compensation surveys. Each of these sources is described below. The Compensation Committee generally attempts to structure base salary for named executive officers at approximately the 25th to 50th percentile of the market data, annual incentives at approximately the 40th percentile of the market data, and equity awards at approximately the 50th to 75th percentile of the market data. The Compensation Committee, however, retains discretion to adjustment specific compensation elements and levels above or below these guidelines in order to respond to market conditions, promotions, new hires, individual performance or other circumstances. TABLE OF CONTENTS Compensation Peer Group Our compensation peer group consists of 18 public life science companies that have the following characteristics: Stage of Lead Drug: Phase I and II Headcount range: fewer than 100 employees (median = 47) Market capitalization range: less than $1.4 billion (median = $377M) The members of the compensation peer group are as follows: Altimmune | | | IDEAYA Biosciences | AnaptysBio | | | Kaleido Biosciences | Aptinyx | | | KalVista Pharmaceuticals | Capricor Therapeutics | | | Matinas BioPharma | Cardiff Oncology | | | NantKwest | Five Prime Therapeutics | | | RAPT Therapeutics | Genocea Biosciences | | | Selecta Biosciences | Harpoon Therapeutics | | | Syndax Pharmaceuticals | Heat Biologics | | | Vaccinex |
The Compensation Committee also reviews market data from a special cut of the Radford Global Life Sciences Survey, focusing on public life science companies with headcount of fewer than 50 employees. Elements of Total Direct Compensation A brief summary of our total direct compensation - consisting of base salary, STI opportunities and LTI opportunities - for our named executive officers is set forth below. Annual Base Salaries We provide a base salary to retain and attract key executive talent and to align our compensation with market practices. Base salaries are reviewed and established by the Compensation Committee on a competitive basis each year to align with market levels. The Compensation Committee approved an initial base salary for Mr. Floroiu of $400,000, which was negotiated at the time he was elected President and Chief Executive Officer. The base salary levels for our other named executive officers remain unchanged from 2020 levels. For more information about the 2020 base salaries for each of our named executive officers, please refer to the “Salary” column of the 2020 Summary Compensation Table on page 40 of this proxy statement. Short-Term Incentive Compensation The STI plan is designed to motivate our named executive officers to achieve annual business plan objectives and individual goals. Each year the Compensation Committee establishes a STI award opportunity for each named executive officer. For 2020, the Compensation Committee approved a STI award opportunity for Mr. Floroiu of 50% of his annual base salary, which was pro-rated for the 2020 fiscal year and negotiated at the time of his hire. During the annual performance review process in 2020, the Compensation Committee established the short-term incentive opportunity for each of the other named executive officers, which remained unchanged from 2019 levels: 50% of annual base salary for Dr. Latour and 30% of annual base salary for each of Dr. Tucker and Ms. Echerd. Payout levels could range from 0% to 200% of the STI award opportunity, depending on performance, with target payout set at 100% of the STI award opportunity. The 2020 STI payout levels were determined by the Compensation Committee based on an overall assessment of corporate performance and individual contributions. The goals and objectives were not pre-established and were not weighted, as the Company’s business plan shifted dramatically during the onset of COVID-19. The Compensation TABLE OF CONTENTS Committee reviewed 2020 performance in relation to the following business objectives when determining overall payout levels: progress toward developing a COVID-19 coronavirusvaccine candidate, positioning the vaccine program for governmental and non-governmental support in the U.S. and aboard, rebuilding the GMP manufacturing capability and developing a reliable manufacturing process, repositioning the value of our technology in the post-COVID-19 world, and recapitalizing and rebuilding the Company. Based on its assessment of overall corporate performance and the individual contributions of each participating executive, and its desire to retain the current management team who is essential to our continued success, the Compensation Committee approved the following payout levels for our named executive officers for 2020 (other than Dr. Latour, who resigned on June 14, 2020 and therefore was not eligible for a STI payout): Andrei Floroiu
Chief Executive Officer | | | 115% | Sean Tucker
Senior Vice President, Chief Scientific Officer | | | 125% | Margaret A. Echerd
Senior Vice President, Principal Accounting Officer | | | 158% |
The amount of the 2020 STI award payable to each named executive officer is set forth in the “Bonus” column of the 2020 Summary Compensation Table of this proxy statement at page 40. Other Bonus Opportunities In connection with his appointment as Chief Executive Officer of the Company, Mr. Floroiu was eligible to receive a bonus equal to $100,000 if he remained continuously employed through the earlier of the following dates (a) the date that the Company executes a substantial strategic agreement, as determined by the Board, and (b) the date on which a change in control occurs, in either case on or before November 30, 2020. Neither of these events occurred prior to November 30, 2020 and therefore Mr. Floroiu did not receive payout of this bonus. On February 21, 2020 Dr. Tucker was eligible for a retention bonus opportunity equal to $43,134 if he remained continuously employed with the Company and its affiliates until June 30, 2020 at which time he did earn the retention bonus. On February 21, 2020 Ms. Echerd was eligible for a retention bonus opportunity equal to $34,450 if she remained continuously employed with the Company and its affiliates until March 31, 2020 at which time she did earn the retention bonus. On April 17, 2020, Ms. Echerd was eligible for an additional retention bonus opportunity equal to $70,000 if she remained continuously employed with the Company and its affiliates until the earlier of (a) the date that the Company files its Form 10-K for the 2020 fiscal year, or (b) the date a change in control occurs. Ms. Echerd earned this bonus when the Company filed its Form 10-K for the 2020 fiscal year. TABLE OF CONTENTS Long-Term Incentives In March 2020, the Compensation Committee, with the help of Compensia, its independent compensation consultant, conducted a review of the LTI award opportunities for our named executive officers. Due to the significant recapitalization of the Company in September 2019, the management team held about 1% of total ownership via in-the-money stock options, which was well below market practices of approximately 6% of total ownership. The Compensation Committee recognized that the management team was essential to driving the Company’s vaccine strategy going forward. To retain and motivate the management team, the Compensation Committee approved a grant of stock options that was intended to move the management team’s stock option holdings approximately half-way to the median of the market data. In this regard, the Compensation Committee approved a grant of time-based stock options to our named executive officers, in the amounts set forth below, which vest as to 25% of the option shares on the date of grant and 75% of the options shares on a monthly basis thereafter for a period of two years (which grant was subject to the approval of the equity plan amendment at the 2020 annual meeting): Wouter Latour
Former President and Chief Executive Officer | | | 900,000 | Sean Tucker
Senior Vice President, Chief Scientific Officer | | | 360,000 | Margaret A. Echerd
Senior Vice President Principal Accounting Officer | | | 315,000 |
In addition, the Compensation Committee approved a grant of performance-based RSUs to our named executive officers, in the amounts set forth below, which (subject to continued service) would vest in full upon the earlier of (x) the closing of a BARDA contract, or (y) the closing of a substantive partnership agreement, in either case on or prior to December 31, 2020 and with at least $10,000,000 in funding and/or fees, with waiver of the service (but not performance) condition on a termination without cause: Wouter Latour
Former President and Chief Executive Officer | | | 74,000 | Sean Tucker
SeniorVice President, Chief Scientific Officer | | | 74,000 | Margaret A. Echerd
Senior Vice President Principal Accounting Officer | | | 25,000 |
Neither of these performance conditions was satisfied by December 31, 2020, and therefore these performance-based awards expired without being earned or paid. Mr. Floroiu did not participate in the annual LTI program for 2020. Instead, Mr. Floroiu negotiated his equity awards at the time of his appointment as Chief Executive Officer of the Company on June 14, 2020. In this regard, as of June 15, 2020, the Company granted him the following awards: Time-Based Option: An option to purchase 845,280 shares that vests as follows: 25% on the first anniversary of the grant date and 75% in equal monthly installments over the three-year period commencing on such first anniversary, with accelerated vesting with respect to 50% of any then-unvested option shares upon the Company’s execution of a substantial strategic agreement, as determined by the Board, and with accelerated vesting in full in the event of a change in control. Performance-Based Option: An option to purchase 900,000 shares that vests as follows: (i) one-third if the Company achieves a per share closing price equal to $5.00 or more during any 10-consecutive trading days after the grant date but before November 30, 2020 or such later date as determined by the Board (the “Reference Date”), (ii) one-third if the Company achieves a per share closing price equal to $7.50 or more during any 10-consecutive trading days after the grant date but before the Reference Date, and (iii) one-third if the Company achieves a per share closing price equal to $10.00 or more during any 10-consecutive trading days after the grant date but before the Reference Date, in each case subject to continued employment. In the event a change in control occurs before the Reference Date, any unvested portion of the performance-based option will vest in accordance with the above schedule based on the TABLE OF CONTENTS Company attaining the specified stock price immediately prior to the closing of such transaction (rather than based on a 10-consecutive trading day period). The Company achieved these stock price goals prior to the Reference Date and therefore the performance-based option is fully vested. Additional Compensation Arrangements Severance Benefit Plan Each of the current named executive officers participates in the Severance Benefit Plan (the “Severance Plan”). Under the Severance Plan, a participating individual is entitled to receive severance benefits upon a qualified termination of employment, with enhanced benefits if the termination occurs in connection with a change in control. The Severance Plan does not provide tax grossups for named executive officers or any other employees in the event they are subject to golden parachute excise taxes on severance or other payments received in connection with a change in control. The Severance Plan promotes retention incentives for our executives by establishing severance protections for participants that are consistent with market levels, while eliminating the need to negotiate individual severance agreements in connection with an executive’s termination or at the time of hire. The enhanced benefits available upon a change in control increase our retention incentives by reducing the personal uncertainty that arises from the possibility of a future business combination and promoting objectivity in the evaluation of transactions that are in the best interests of our stockholders. More information on the Severance Plan, including the estimated payments and benefits payable to the named executive officers, is provided under the “Potential Payments Upon Termination or Change in Control” section beginning on page 45 of this proxy statement. Mr. Floroiu In connection with his appointment as Chief Executive Officer of the Company, Mr. Floroiu entered into a letter agreement with the Company, dated as of June 14, 2020 (the “Letter Agreement”). Pursuant to the Letter Agreement, Mr. Floroiu holds the title of Chief Executive Officer. The Letter Agreement provides for a base salary of $400,000 per year, a “target” bonus opportunity of 50% of his annual base salary and coverage under the Severance Plan, with his “Non-CiC Severance Period”, as defined in the Severance Plan, set at three months and his “CiC Severance Period”, as defined in the Severance Plan, set at six months. Mr. Floroiu will not receive any non-employee director cash retainers or other compensation under the Company’s director compensation program for his services as a director while he is serving as Chief Executive Officer. In addition, the Letter Agreement provides that during the period of his employment with the Company and for a period of two years thereafter, Mr. Floroiu will not compete anywhere in the world outside the State of California with the Company to develop, sell, market, or offer to sell products that are competitive with any products being developed or sold by the Company. Dr. Latour On June 14, 2020, Dr. Latour resigned his employment as President and Chief Executive Officer of the Company. Dr. Latour has continued to serve on the Board, subject to re-election by stockholders. However, he is not eligible for and will not receive any non-employee director cash retainers or equity compensation under the Company’s director compensation program for his services as a director for the one-year period commencing on his separation date. In connection with his resignation, Dr. Latour entered into a Separation Agreement with the Company. Dr. Latour’s departure constituted a termination without cause within the meaning of the Company’s Severance Plan, and Dr. Latour accordingly was entitled to the applicable benefits available to him under that plan. In addition, any stock options issued under the Company’s equity plan and held by him as of the separation date will continue to vest while Dr. Latour serves on our executive compensation for 2020. The compensation committee will consider such impacts when reviewing our 2020 executive compensation program and may align 2020 executive compensationboard of directors, which is considered continued employment with the current economic environment. Those 2020Company for purposes of the applicable vesting and exercise conditions. The Company also agreed to accelerate payment of his retention bonus and reimburse his legal fees incurred in connection with the negotiation of his separation agreement. In exchange for these benefits, Dr. Latour has signed a release of claims in favor of the Company. More information on Dr. Latour’s severance benefits is provided under the “Potential Payments Upon Termination or Change in Control” section beginning on page 45 of this proxy statement. Retirement Plan We maintain a tax-qualified retirement plan that provides eligible employees, including our named executive officers, with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible TABLE OF CONTENTS compensation program decisions will be describedup to certain tax code limits, which are updated annually. Employees are immediately and fully vested in our proxy statement for next year’stheir own contributions. We make matching contributions to participants in the 401(k) plan annually in arrears in an amount equal to the employee’s deferral up to a maximum of 3% of the employee’s annual meeting of stockholders.eligible earnings, which are immediately and fully vested. As a tax-qualified retirement plan, contributions to the 401(k) plan are deductible by us when made, and contributions and earnings on those amounts are not taxable to the employees until withdrawn or distributed from the 401(k) plan. The named executive officers did not participate in, or otherwise receive any benefits under any pension plan or nonqualified deferred compensation plan. TABLE OF CONTENTS Summary Compensation Table The following table provides information regarding the total compensation for services rendered in all capacities that was earned by our named executive officers during the years ended December 31, 2020, 2019 and 2018. Name and Principal Position (3) | | Fiscal Year | | Salary | | Bonus (1) | | | Option Awards (2) | | All Other Compensation | | | Total | Wouter W. Latour, M.D. | | 2019 | | $ | 485,000 | | $ | 52,542 | | | $ | 201,769 | | $ | 8,400 | (4) | | $ | 747,711 | President and Chief Executive Officer | | 2018 | | $ | 450,000 | | $ | — | | | $ | 392,162 | | $ | 8,250 | (4) | | $ | 850,412 | Sean N. Tucker, Ph.D. | | 2019 | | $ | 331,800 | | $ | 21,567 | | | $ | 82,541 | | $ | — | | | $ | 435,908 | Chief Scientific Officer | | 2018 | | $ | 319,000 | | $ | — | | | $ | 50,398 | | $ | 8,610 | (5) | | $ | 378,008 | Margaret A. Echerd | | 2019 | | $ | 265,000 | | $ | 17,225 | | | $ | 38,777 | | $ | 7,950 | (4) | | $ | 328,952 | VP Controller and Principal Accounting Officer | | | | | | | | | | | | | | | | | | | |
__________
(1) The Compensation Committee of our board of directors approved bonuses for our named executive officers in 2019 of approximately 22% of the “target” amount for which they were eligible to receive. The 2019 bonus program was based on the percentage of corporate targets achieved multiplied by a percentage determined by the board of directors in its discretion.
(2) Represents the grant date fair value of the awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. See Note 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 19, 2020, for a discussion of the relevant assumptions used in calculating value pursuant to FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options.
Andrei Floroiu | | | 2020 | | | $227,595 | | | $126,668 | | | $— | | | $2,008,479 | | | $— | | | $2,362,742 | Chief Executive Officer (8)
| | | 2019 | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | | 2018 | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | Wouter W. Latour, M.D. | | | 2020 | | | $231,965 | | | $105,083 | | | $125,800 | | | $1,733,220 | | | $648,760(7) | | | $2,844,828 | Former President and | | | 2019 | | | $485,000 | | | $52,542 | | | $— | | | $201,769 | | | $8,400(5) | | | $747,711 | Chief Executive Officer | | | 2018 | | | $450,000 | | | $— | | | $— | | | $392,162 | | | $8,250(5) | | | $850,412 | Sean N. Tucker, Ph.D. | | | 2020 | | | $348,390 | | | $173,780 | | | $125,800 | | | $693,288 | | | $8,550(5) | | | $1,349,808 | Chief Scientific Officer | | | 2019 | | | $331,800 | | | $21,567 | | | $— | | | $68,291 | | | $8,790(5) | | | $430,448 | | | | 2018 | | | $319,000 | | | $— | | | $— | | | $50,398 | | | $8,610(6) | | | $378,008 | Margaret A. Echerd | | | 2020 | | | $278,250 | | | $236,268 | | | $42,500 | | | $606,627 | | | $8,550(5) | | | $1,172,195 | SVP Controller and | | | 2019 | | | $265,000 | | | $17,225 | | | $— | | | $38,777 | | | $7,950(5) | | | $328,952 | Principal Accounting Officer | | | 2018 | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— |
(3) (1)
| Represents the bonuses awarded to the named executive officers for the applicable year. The amount listed for Dr. Latour for 2020 represents the payment of a retention bonus that was due in connection with his termination of employment. The amount listed for Dr. Tucker includes a retention bonus of $43,134. The amount listed for Ms. Echerd includes retention bonuses in the amounts of $34,450 and $70,000. |
(2)
| Represents the grant date intrinsic value of performance-based restricted stock unit awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. These awards were forfeited as of December 31, 2020 because the applicable performance goals were not achieved. |
(3)
| Represents the grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718. See Note 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021, for a discussion of the relevant assumptions used in calculating value pursuant to FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our named executive officers will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options. Also includes the grant date fair value of stock options received by Mr. Floroiu as a non-employee director, covering 54,720 shares. |
(4)
| Each of Dr. Latour and Dr. Tucker commenced service with Vaxart in February 2018 upon the closing of the Merger. Amounts disclosed for such officers include amounts paid for service with private Vaxart in 2018. Ms. Echerd commenced service with Vaxart in April 2018 and became an officer effective January 1, 2019. |
(4) (5)
| Amount shown consists solely of a 401(k) match. |
(5) (6)
| Consists of a 401(k) match of $8,400 and travel reimbursements of $390 in 2019 and a 401(k) match of $8,250 and travel reimbursements of $360. $360 in 2018. |
(7)
| Consists of a 401(k) match of ($8,550), 12 months of severance ($509,250), subsidized medical premiums for 12 months ($43,985) and reimbursement of legal fees in connection with negotiation of his separation agreement ($6,210) and payment of his accrued vacation ($80,765). |
(8)
| Mr. Floroiu was elected Chief Executive Officer of the Company on June 15, 2020. From April 13, 2020 until June 15, 2020, he served as a non-employee director. The cash fees of $7,898 earned by Mr. Floroiu as a non-employee director are included in the “Salary” column. |
TABLE OF CONTENTS Grants of Plan-Based Awards The following table sets forth information regarding our grants of plan-based awards to the named executive officers during the fiscal year ended December 31, 2020. Andrei Floroiu
| | | | | | | | | | | | | | | | | | | Stock Options | | | 4/13/2020(5) | | | | | | | | | 54,720 | | | $1.71 | | | $106,288 | Stock Options(7) | | | 6/15/2020 | | | | | | | | | 845,280 | | | $2.46 | | | $1,623,191 | Stock Options(8) | | | 6/15/2020 | | | | | | | | | 900,000 | | | $2.46 | | | $279,000 | Bonus | | | | | | $$110,137 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Wouter W. Latour, M.D.
| | | | | | | | | | | | | | | | | | | Stock Options | | | 3/24/2020(6) | | | | | | | | | 900,000 | | | $1.70 | | | $1,733,220 | Bonus | | | | | | $$254,625 | | | | | | | | | | | | | RSUs | | | | | | | | | 74,000 | | | | | | | | | $125,800 | | | | | | | | | | | | | | | | | | | | Sean N. Tucker, Ph.D.
| | | | | | | | | | | | | | | | | | | Stock Options | | | 3/24/2020(6) | | | | | | | | | 360,000 | | | $1.70 | | | $693,288 | Bonus | | | | | | $$104,517 | | | | | | | | | | | | | RSUs | | | | | | | | | 74,000 | | | | | | | | | $125,800 | | | | | | | | | | | | | | | | | | | | Margaret A. Echerd
| | | | | | | | | | | | | | | | | | | Stock Options | | | 3/24/2020(6) | | | | | | | | | 315,000 | | | $1.70 | | | $606,627 | Bonus | | | | | | $$83,475 | | | | | | | | | | | | | RSUs | | | | | | | | | 25,000 | | | | | | | | | $42,500 |
(1)
| The amounts shown in this column reflect the target annual bonus opportunity for the named executive officers under the discretionary 2020 annual incentive program. The amounts we actually paid to each named executive officer under the program are reported in the “Bonus” column of the Summary Compensation Table. See the section entitled “Compensation Discussion and Analysis – Elements of Total Direct Compensation – Short-Term Incentive Compensation,” for additional information regarding the annual incentive awards. |
(2)
| The amounts shown in this column reflect the number of performance-based restricted share units granted to our named executive officers in 2020. The performance-based restricted share units would vest in full (subject to continued service) upon the earlier of (x) the closing of a BARDA contract, or (y) the closing of a substantive partnership agreement, in either case on or prior to December 31, 2020 and with at least $10,000,000 in funding and/or fees, with waiver of the service (but not performance) condition on a termination without cause. Neither of these performance conditions was satisfied by December 31, 2020, and therefore these performance-based awards expired without being earned or paid. |
(3)
| The amounts shown in this column reflect the number of shares of our common stock underlying options we granted to each named executive officer in 2020. |
(4)
| The values shown reflect the grant date fair value of the awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. See Note 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021, for a discussion of the relevant assumptions used in calculating value pursuant to FASB ASC Topic 718. |
(5)
| The option grant was approved by the board of directors on April 13, 2020, subject to stockholder approval of an amendment to the Vaxart, Inc. 2019 Equity Incentive Plan, under which the stock option was granted. Our stockholders approved the plan amendment on June 8, 2020. This stock option was granted to Mr. Floroiu in his capacity as a non-employee director and vests in equal annual installments through April 13, 2023. |
(6)
| The option grant was approved by the board of directors on March 24, 2020, subject to stockholder approval of an amendment to the Vaxart, Inc. 2019 Equity Incentive Plan, under which the stock option was granted. Our stockholders approved the plan amendment on June 8, 2020. The option vests as to 25% of the option shares on the date of grant and 75% of the options shares on a monthly basis over the two years commencing on May 1, 2020, or the date of grant if later, and ending on April 1, 2022. |
TABLE OF CONTENTS (7)
| The option covering 845,280 shares vests as follows: 25% on the first anniversary of the grant date and 75% in equal monthly installments over the three-year period commencing on such first anniversary, with accelerated vesting with respect to 50% of any then-unvested option shares upon the Company’s execution of a substantial strategic agreement, as determined by the Board, and with accelerated vesting in full in the event of a change in control. |
(8)
| The option covering 900,000 shares vests as follows: (i) one-third if the Company achieves a per share closing price equal to $5.00 or more during any 10-consecutive trading days after the grant date but before November 30, 2020 or such later date as determined by the Board (the “Reference Date”), (ii) one-third if the Company achieves a per share closing price equal to $7.50 or more during any 10-consecutive trading days after the grant date but before the Reference Date, and (iii) one-third if the Company achieves a per share closing price equal to $10.00 or more during any 10-consecutive trading days after the grant date but before the Reference Date, in each case subject to continued employment. In the event a change in control occurs before the Reference Date, any unvested portion of the performance-based option will vest in accordance with the above schedule based on the Company attaining the specified stock price immediately prior to the closing of such transaction (rather than based on a 10-consecutive trading day period). The Company achieved these stock price goals prior to the Reference Date and therefore the performance-based option is fully vested. |
TABLE OF CONTENTS Outstanding Equity Awards at December 31, 20192020 The following table presents, for each of our named executive officers, information regarding outstanding stock options held as of December 31, 2019. | | Option Awards | Name | | Grant Date of Option Award | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Options Exercise Price ($) | | Option Expiration Date | Wouter W. Latour, M.D. | | 6/29/2011 (1) | | | 6,535 | | | — | | $ | 8.03 | | 6/28/2021 | | | 11/3/2011 (1) | | | 9,441 | | | — | | $ | 8.03 | | 11/2/2021 | | | 8/8/2013 (1) | | | 13,255 | | | — | | $ | 6.49 | | 8/7/2023 | | | 5/8/2014 (1) | | | 14,908 | | | — | | $ | 8.03 | | 5/7/2024 | | | 7/23/2015 (1) | | | 18,120 | | | — | | $ | 17.49 | | 7/22/2025 | | | 3/25/2016 (2) | | | 10,060 | | | 671 | | $ | 12.98 | | 3/24/2026 | | | 6/24/2017 (3) | | | 14,782 | | | 8,869 | | $ | 4.07 | | 6/23/2027 | | | 5/25/2018 (4) | | | 50,737 | | | 59,963 | | $ | 5.17 | | 5/24/2028 | | | 5/12/2019 (5) | | | — | | | 363,261 | | $ | 0.77 | | 5/11/2029 | Sean N. Tucker, Ph.D. | | 8/27/2010 (1) | | | 4,026 | | | — | | $ | 6.49 | | 8/26/2020 | | | 3/30/2011 (1) | | | 1,006 | | | — | | $ | 6.49 | | 3/29/2021 | | | 4/13/2012 (1) | | | 3,020 | | | — | | $ | 8.03 | | 4/12/2022 | | | 8/8/2013 (1) | | | 10,523 | | | — | | $ | 6.49 | | 8/7/2023 | | | 5/8/2014 (1) | | | 11,604 | | | — | | $ | 8.03 | | 5/7/2024 | | | 7/23/2015 (1) | | | 10,067 | | | — | | $ | 17.49 | | 7/22/2025 | | | 3/25/2016 (2) | | | 7,248 | | | 483 | | $ | 12.98 | | 3/24/2026 | | | 6/24/2017 (3) | | | 5,663 | | | 3,397 | | $ | 4.07 | | 6/23/2027 | | | 5/25/2018 (4) | | | 6,417 | | | 7,583 | | $ | 5.17 | | 5/24/2028 | | | 5/12/2019 (5) | | | — | | | 124,061 | | $ | 0.77 | | 5/11/2029 | Margaret Echerd | | 5/25/2018 (6) | | | 6,667 | | | 9,333 | | $ | 5.17 | | 5/24/2028 | | | 5/12/2019 (5) | | | — | | | 70,444 | | $ | 0.77 | | 5/11/2029 |
2020.Andrei Floroiu | | | 4/13/2020(7) | | | — | | | 54,720 | | | $1.71 | | | 4/12/2030 | | 6/15/2020(8) | | | — | | | 845,280 | | | $2.46 | | | 6/14/2030 | | 6/15/2020(1) | | | 900,000 | | | — | | | $2.46 | | | 6/14/2030 | Wouter W. Latour, M.D. | | | 6/29/2011(1) | | | 6,535 | | | — | | | $8.03 | | | 6/28/2021 | | 11/3/2011(1) | | | 9,441 | | | — | | | $8.03 | | | 11/2/2021 | | 8/8/2013(1) | | | 13,255 | | | — | | | $6.49 | | | 8/7/2023 | | 5/8/2014(1) | | | 14,908 | | | — | | | $8.03 | | | 5/7/2024 | | 7/23/2015(1) | | | 18,120 | | | — | | | $17.49 | | | 7/22/2025 | | 3/25/2016(1) | | | 10,731 | | | — | | | $12.98 | | | 3/24/2026 | | 6/24/2017(2) | | | 20,695 | | | 2,956 | | | $4.07 | | | 6/23/2027 | | 5/25/2018(3) | | | 78,413 | | | 32,287 | | | $5.17 | | | 5/24/2028 | | 5/12/2019(4) | | | 143,791 | | | 219,470 | | | $0.77 | | | 5/11/2029 | | 3/24/2020(6) | | | 450,000 | | | 450,000 | | | $1.70 | | | 3/23/2030 | Sean N. Tucker, Ph.D. | | | 3/30/2011(1) | | | 1,006 | | | — | | | $6.49 | | | 3/29/2021 | | 4/13/2012(1) | | | 3,020 | | | — | | | $8.03 | | | 4/12/2022 | | 8/8/2013(1) | | | 10,523 | | | — | | | $6.49 | | | 8/7/2023 | | 5/8/2014(1) | | | 11,604 | | | — | | | $8.03 | | | 5/7/2024 | | 7/23/2015(1) | | | 10,067 | | | — | | | $17.49 | | | 7/22/2025 | | 3/25/2016(1) | | | 7,731 | | | — | | | $12.98 | | | 3/24/2026 | | 6/24/2017(2) | | | 7,928 | | | 1,132 | | | $4.07 | | | 6/23/2027 | | 5/25/2018(3) | | | 9,917 | | | 4,083 | | | $5.17 | | | 5/24/2028 | | 5/12/2019(4) | | | 49,107 | | | 74,954 | | | $0.77 | | | 5/11/2029 | | 3//24/2020(6) | | | 180,000 | | | 180,000 | | | $1.70 | | | 3/23/2030 | Margaret Echerd | | | 5/25/2018(5) | | | 10,667 | | | 5,333 | | | $5.17 | | | 5/24/2028 | | 5/12/2019(4) | | | 27,884 | | | 42,560 | | | $0.77 | | | 5/11/2029 | | 3/24/2020(6) | | | 157,500 | | | 157,500 | | | $1.70 | | | 3/23/2030 |
(1)
| The shares subject to this option are fully vested. |
(2)
| The unvested shares vest in equal monthly installments through March 25, 2020, subject to the executive officer’s continued service with us through each relevant vesting date.
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(3)
| The unvested shares vest in equal monthly installments through June 24, 2021, subject to the executive officer’s continued service with us through each relevant vesting date. |
(4) (3)
| The unvested shares vest in equal monthly installments through February 13, 2022, subject to the executive officer’s continued service with us through each relevant vesting date. |
(5) (4)
| The unvested shares subject to this stock option shall vest as follows: 1/4th of the total number of shares subject to the stock option shall vest on the 12-month anniversary of the vesting commencement date ofin equal monthly installments through May 10, 2019, and 1/48th of the total number of shares subject to the stock option shall vest on each monthly anniversary of the vesting commencement date thereafter,2023, subject to the executive officer’s continued service with us through each relevant vesting date. |
(6) (5)
| The unvested shares vest in equal monthly installments through April 9, 2022, subject to the executive officer’s continued service with us through each relevant vesting date. |
(6)
| The unvested shares vest in equal monthly installments through April 1, 2022, subject to the executive officer’s continued service with us through each relevant vesting date. |
(7)
| The unvested shares vest in equal annual installments through April 13, 2023, subject to the executive officer’s continued service with us through each relevant vesting date. |
(8)
| The unvested shares vest over a four-year period, with 25% of the underlying shares vesting on June 15, 2021, and the remaining shares subject to the option vesting in equal monthly installments over the subsequent 36 months. The option is subject to accelerated vesting with respect to 50% of any then-unvested option shares upon a substantial strategic agreement, as determined by the Board, and to accelerated vesting in full in the event of a “Change in Control” (as defined under the Plan). |
TABLE OF CONTENTS Option Exercises and Stock Vested During 2020 41In 2020, Dr. Tucker exercised 4,026 options, realizing a value on the exercise date of $10.468. None of our other officers exercised any options no restricted stock units vested.
Pension Benefits We do not maintain defined benefit or supplemental retirement plans.
Nonqualified Deferred Compensation We do not maintain nonqualified deferred compensation plans. Employment andPotential Payments upon Termination or Change in Control Arrangements
Wouter W.
We have entered into agreements and maintain plans and arrangements that may require us to pay or provide compensation and benefits to our named executive officers in the event of certain terminations of employment or a change in control. The estimates set forth below of the amounts payable to our named executive officers upon termination of employment or in connection with a change in control generally are based on the assumption that the various triggering events occurred on the last day of 2020, along with other material assumptions noted below. The actual amounts that would be paid to a named executive officer upon termination or a change in control can only be determined at the time the actual triggering event occurs. With respect to Dr. Latour, M.D.In May 2011, Private Vaxart extended an offer letter to Wouter W. Latour, M.D., Vaxart’s President andonly the benefits actually received in connection with his departure as Chief Executive Officer. Officer during fiscal 2020 are reported below.
The offer letter was subsequently amendedestimated amount of compensation and benefits described below for our named executive officers generally does not take into account compensation and benefits that were already earned at the time of the applicable triggering event, such as equity awards that have previously vested in October 2011. The offer letter has no specific term and constitutes an at-will employment arrangement. Dr. Latour’s current annual base salary is $509,250 and his annual target bonus is 50% of his base salary.Sean N. Tucker, Ph.D.
In May 2006, Private Vaxart extended an offer letter to Sean N. Tucker, Ph.D., Vaxart’s Chief Scientific Officer. The offer letter has no specific term and constitutes an at-will employment arrangement. Dr. Tucker’s current annual base salary is $348,390 and his annual target bonus is 30% of his base salary.
Margaret Echerd
In January 2019, the Company appointed Margaret Echerd as Vaxart’s Principal Accounting Officer. The position has no specific term and constitutes an at-will employment arrangement. Ms. Echerd’s current annual base salary is $278,250 and her annual target bonus is 30% of her base salary.
accordance with their terms or vested benefits otherwise payable under our compensation programs. Severance Absent a Change in ControlPlan Under the Severance Plan, if a participating individual shall be entitled to receive, in the event of a terminationnamed executive officer is terminated other than for cause, death or disability, or resigns for good reason, other than in connection with a change in control, (a) cash severance in accordance with our standard payroll practices and subjecthe or she shall be entitled to standard payroll deductions and withholdings, equal to his annualreceive (i) continued payment of base salary multiplied by a fraction,for 6 months for Dr. Tucker and 3 months for each of Mr. Floroiu and Ms. Echerd, and (ii) the numeratorportion of which is the number of months set forth in his Participation Notice, and the denominator of which is 12) and (b) continuation of his current health insurance coverage, or paymentpremiums paid by the Company, prior to the termination, under our group health insurance plans as provided under COBRA, until the end of the premiums forapplicable salary continuation period (or, if earlier, such coverage, for up totime as the number of months specified in his participation notice. Each named executive officer is eligible to receive the following payments and benefits: | ●
| in the case of Dr. Latour, 100% of annual base salary;
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| ●
| in the case of Dr. Tucker, 50% of annual base salary;
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| ●
| in the case of Ms. Echerd, 25% of annual base salary; and
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| ●
| the portion of health insurance premiums paid by Vaxart, prior to the termination, under our group health insurance plans as provided under COBRA, until the earlier of (i) six months (12 months in the case of Dr. Latour) after termination, (ii) the expiration of the named executive officer’s eligibility for the continuation coverage under COBRA, or (iii) such time as the named executive officer is eligible for health insurance coverage with a subsequent employer.
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Severance in Connection with a Change in Control
In the case of a termination (following a change in control), ifsubsequent employer).
If a participating individualnamed executive officer is terminated withoutother than for cause, death or disability, or resigns for good reason, (as such terms are defined in the Severance Benefit Plan, either during the three months before or in the 12 months after a change in control, then he or she will be entitled to receive | ●
| a lump sum cash severance payment on (i) lump sum cash severance equal 12 months of base salary for Dr. Tucker and 6 months of base salary for each of Mr. Floroiu and Ms. Echerd, (ii) the portion of health insurance premiums paid by the Company, prior to the termination, under our group health insurance plans as provided under COBRA, until the end of the applicable salary continuation period (or, if earlier, such time as the first payroll date that occurs more than five (5) days following the effective date of the release signed by the named executive officer, subject to standard payroll deductions and withholdings, equal to a percentage of his annual base salary multiplied by a fraction, the numerator of which is the number of months set forth in his participation notice, and the denominator of which is 12;
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| ●
| a pro rata amount of the named executive officer��s target bonus for the calendar year in which the termination occurs calculated at 100% of target levels in the case of Dr. Tucker and Ms. Echerd and 150% of target levels in the case of Dr. Latour, as specified in our annual bonus plan or program in effect immediately prior to the effective date of the change in control and a fraction, the numerator of which is the number of months of the participant’s employment during the calendar year in which the change of control occurs, and the denominator of which is 12;
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| ●
| continuation of his current health insurance coverage, or payment of the premiums for such coverage, for up to the number of months specified in his participation notice under the Severance Benefit Plan; and
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| ●
| accelerated vesting of then outstanding compensatory equity awards as to all unvested shares.
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Each named executive officer is eligible for health insurance coverage with a subsequent employer), (iii) full vesting of any unvested time-based equity awards, and (iv) a pro-rated target annual bonus for the year of termination.
In exchange for the severance benefits, the participating named executive officers must agree to receivecomply with the Company’s standard employee invention assignment and confidentiality agreement, return all company property, and sign a release of claims in favor of the Company Mr. Floroiu’s time-based stock options granted on June 15, 2020, would vest in full upon a change in control. For purposes of the Severance Plan, the term “cause” means (i) engaging in willful or gross misconduct or willful or gross neglect; (ii) the commission of a felony or a crime involving any of the following: moral turpitude, dishonesty, breach of trust or unethical business conduct; or the commission of any crime involving the Company or any of its subsidiaries; (iii) fraud, misappropriation or embezzlement; or (iv) the abuse of illegal drugs or other controlled substances or habitual intoxication while providing services for the Company or any of its affiliates. TABLE OF CONTENTS The term “good reason” means the occurrence of any of the following paymentsevents without the participant’s consent; (i) a material diminution in base salary or target bonus; (ii) a material diminution in authority, duties, or responsibilities; or (iii) a relocation of the principal place of employment or service to a location that increases his or her one-way commute distance by more than thirty-five (35) miles, subject to applicable notice and benefits:cure provisions. Table of Potential Payments Andrei Floroiu
| | | | | | | | | | | | | • | | | Voluntary termination | | | — | | | — | | | — | | | — | • | | | Involuntary or good reason termination prior to a CIC | | | 120,000 | | | 5,768 | | | — | | | 125,768 | • | | | Change in Control | | | — | | | — | | | 2,747,160 | | | 2,747,160 | • | | | Involuntary or good reason termination after a CIC | | | 240,000 | | | 5,768 | | | 218,880 | | | 464,648 | • | | | Death | | | — | | | 400,000 | | | — | | | 400,000 | • | | | Disability | | | — | | | 300,000 | | | — | | | 300,000 | | | | | | | | | | | | | | | | | Sean N. Tucker, Ph.D.
| | | | | | | | | | | | | • | | | Voluntary termination | | | — | | | — | | | — | | | — | • | | | Involuntary or good reason termination prior to a CIC | | | 182,500 | | | — | | | — | | | 182,500 | • | | | Change in Control | | | — | | | — | | | — | | | — | • | | | Involuntary or good reason termination after a CIC | | | 365,000 | | | — | | | 1,096,134 | | | 1,461,134 | • | | | Death | | | — | | | 400,000 | | | — | | | 400,000 | • | | | Disability | | | — | | | 279,000 | | | — | | | 279,000 | | | | | | | | | | | | | | | | | Margaret Echerd
| | | | | | | | | | | | | • | | | Voluntary termination | | | — | | | — | | | — | | | — | • | | | Involuntary or good reason termination prior to a CIC | | | 87,500 | | | 9,262 | | | — | | | 96,762 | • | | | Change in Control | | | — | | | — | | | | | | — | • | | | Involuntary or good reason termination after a CIC | | | 175,000 | | | 9,262 | | | 844,701 | | | 1,028,963 | • | | | Death | | | — | | | 400,000 | | | — | | | 400,000 | • | | | Disability | | | — | | | 270,000 | | | — | | | 270,000 |
(1)
| ● Amounts listed under “Cash Severance Payment” are payable under the terms of the Severance Plan. |
(2)
| Amounts listed under “Welfare and Other Benefits” include premiums for continued medical, dental and vision insurance in the caseevent of Dr. Latour, 150%an involuntary termination or a resignation for good reason. In the event of annual base salary; death or disability, the amount equals proceeds from insurance policies covering death or disability of the executive. |
(3)
| ●
| in
Represents (a) the caseproduct of Dr. Tucker, 100%(i) the number of annual base salary; |
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| inshares underlying the caseapplicable unvested stock option awards outstanding as of Ms. Echerd, 50%December 31, 2020, multiplied by (ii) $5.71 (i.e., the closing market price on December 31, 2020), less (b) the aggregate exercise price of annual base salary;
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| ●
| in the case of Dr. Latour, Dr. Tucker and Ms. Echerd, prorated target bonus for the calendar year in which the termination occurs;
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| ●
| fullshares that are subject to acceleration of vesting of anyunder the applicable stock options to purchase common stock grantedoption awards. Please refer to the named executive officer; and “Outstanding Equity Awards at December 31, 2020” table for more detail. |
(4)
| ●
| health insurance premiumsRepresents the total payout under our group health insurance plans as provided under COBRA, to the extent such COBRA premiums exceed the costs previously paid by the named executive officer for group health insurance coverage while employed by us, until the earlier of (i) 12 months (18 months in the case of Dr. Latour) after a change in control, (ii) the expiration of the named executive officer’s eligibility for the continuation coverage under COBRA, or (iii) such time as the named executive officer is eligible for health insurance coverage with a subsequent employer. each termination category. |
401(k) Plan
Vaxart maintains a tax-qualified retirement plan that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation up to certain Code limits, which are updated annually. Employee contributions are allocated to each participant’s individual account
Resignation of Dr. Latour as President and are then invested in selected investment alternatives according to each participant’s directions. Employees are immediately and fully vested in their own contributions. The 401(k) plan is intended to be qualified under Section 401(a)Chief Executive Officer; Continued Service as Chairman of the Code,Board On June 14, 2020, Dr. Latour resigned his employment as President and Chief Executive Officer of the Company. In connection with his resignation, Dr. Latour entered into a Separation Agreement with the related trust intended to be tax exempt under Section 501(a)Company. Dr. Latour’s departure constituted a termination without cause within the meaning of the Code. As a tax-qualified retirement plan, contributionsSeverance Plan, and Dr. Latour accordingly was entitled to the 401(k)applicable benefits available to him under that plan. In addition, any stock options issued under the Company’s equity plan are deductibleand held by us when made, and contributions and earnings on those amounts are not taxable to the employees until withdrawn or distributed from the 401(k) plan. We make matching contributions to participants in the 401(k) plan annually in arrears in an amount equal to the employee’s deferral up to a maximum of 3%him as of the employee’s annual eligible earnings,separation date will continue to vest as Dr. Latour continues to serve on our board of directors, which are immediately and fully vested.constitutes continued employment with the Company for purposes Pension Benefits
The named executive officers did not participate in, or otherwise receive any benefits under any pension or retirement plan Vaxart sponsored during 2019.
TABLE OF CONTENTS of the applicable vesting and exercise conditions. The Company also agreed to accelerate payment of his retention bonus and reimburse his legal fees incurred in connection with the negotiation of his separation agreement. In exchange for these benefits, Dr. Latour has signed a release of claims in favor of the Company. Cash Severance | | | $509,250 | Health Insurance Premiums | | | $43,985 | Payment of Retention Bonus | | | $105,083 | Legal Fees | | | $6,210 | Total | | | $664,528 |
Nonqualified Deferred Compensation
The named executive officers did not participate in, or earn any benefits under, a nonqualified deferred compensation plan sponsored by Vaxart.
Director Compensation
During 2019,2020, our non-employee directors were compensated in the following manner under our director compensation program.
The Company’s director compensation program is designed to enhance its ability to attract and retain highly qualified directors and to align their interests with the long-term interests of its shareholders. The program includes a cash component, which is designed to compensate non-employee directors for their service on our board of directors and an equity component, which is designed to align the interests of non-employee directors and shareholders. Directors who are employees of the Company receive no additional compensation for their service on our board of directors. The Compensation Committee annually reviews compensation paid to our non-employee directors and makes recommendations for adjustments, as appropriate, to the full board of directors. As part of this annual review, the committee considers the significant time commitment and skill level required by each non-employee director in serving on our board of directors and its various committees. The Compensation Committee seeks to maintain a market competitive director compensation program and, with the assistance of its independent compensation consultant, benchmarks our director compensation program against those maintained by the peer group we use to evaluate our executive compensation program. Annual and Meeting Fees.From January 1, 2019 until July 1, 2019,Fees
During 2020, our non-employee directors received the following cash compensation for their service on theour board of directors and its committees: | ●
| $37,000 annual cash retainer;
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| ●
| $20,000
$40,000 annual cash retainer; $28,000 for the Chairman of the Board; |
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| $17,500 for the chair of the Audit Committee and $8,750 for each of its other members;
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| ●
| $12,500 for the chair of the Compensation Committee and $6,250 for each of its other members; and
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| ●
| $9,000 for the chair of the Nominating and Corporate Governance Committee and $4,500 for each of its other members.
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From July 1, 2019 until December 31, 2019, our non-employee directors received the following cash compensationChairman of the Board;
$15,000 for their service on the boardchair of directorsthe Audit Committee and $7,500 for each of its committees: | ●
| $40,000 annual cash retainer;
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| ●
| $28,000 for the Chairman of the Board;
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| ●
| $15,000 for the chair of the Audit Committee and $7,500 for each of its other members;
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| ●
| $10,000 for the chair of the Compensation Committee and $5,000 for each of its other members; and
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| ●
| $7,500 for the chair of the Nominating and Corporate Governance Committee and $4,000 for each of its other members.
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other members; $10,000 for the chair of the Compensation Committee and $5,000 for each of its other members; and $7,500 for the chair of the Nominating and Governance Committee and $4,000 for each of its other members. The Company does not have a formal policy for equity awards to non-employee directors. In 2018, no awards were made. In 2019, each non-employee director that was on the Board at the start of the year was awarded 9,000 options vesting annually over three years commencing on the date of the Merger, February 13, 2018, and 12,700 options cliff-vesting one year from June 10, 2019. Each independent non-employee director that subsequently joined the Board in 2019 was awarded 54,720 options vesting in three equal annual installments over three years commencing on the date they joined the Board. In 2020, each of Dr. Finney, Mr. Davis and Mr. Yedid was awarded 65,700 options vesting in full on the annual anniversary of the 2020 annual meeting of the Company’s stockholders, and Ms. Wilson was awarded 65,700 options vesting annually over three years beginning on the date she joined the Board. 2019 Compensation.
The following table provides director compensation information for each of the non-employee directors of the board of directors who served between January 1, 20192020 until December 31, 2019: Name | Fees Earned or Paid in Cash | | Grant Date Fair Value of Options (1) | | Total | | Geoffrey F. Cox, Ph.D (2) | $ | 38,102 | | $ | 10,196 | | $ | 48,298 | | Michael J. Finney, Ph.D. | | 48,215 | | | 10,196 | | | 58,411 | | Richard J. Markham (3) | | 71,167 | | | 10,196 | | | 81,363 | | John P. Richard (2) | | 41,102 | | | 10,196 | | | 51,298 | | Anne M. VanLent | | 60,375 | | | 10,196 | | | 70,571 | | Steven Boyd (4) | | — | | | | | | — | | Todd C. Davis (4) | | 8,315 | | | 12,146 | | | 20,461 | | Keith Maher, M.D. (4) | | — | | | | | | — | | Robert A. Yedid (4) | | 10,163 | | | 12,146 | | | 22,309 | | | | | | | | | | | |
(1) The values shown reflect the grant date fair value of the awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. See Note 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on March 19, 2020, for a discussion of the relevant assumptions used in calculating value pursuant to FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our non-employee directors will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options.
2020:Michael J. Finney, Ph.D. | | | $47,500 | | | $121,151 | | | $168,651 | Karen J. Wilson | | | $19,296 | | | $372,729 | | | $392,025 | Steven Boyd | | | — | | | — | | | — | Todd C. Davis | | | $50,948 | | | $121,151 | | | $172,099 | Keith Maher, M.D. | | | — | | | — | | | — | Anne VanLent(2) | | | $26,374 | | | $14,094 | | | $40,468 | Robert A. Yedid | | | $54,202 | | | $121,151 | | | $175,353 |
(1)
| The values shown reflect the grant date fair value of the awards computed in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. See Note 13 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 25, 2021, for a discussion of the relevant assumptions used in calculating value pursuant to FASB ASC Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Our non-employee directors will only realize compensation to the extent the trading price of our common stock is greater than the exercise price of such stock options. |
As of December 31, 2019,2020, our non-employee directors held the following stock options: Name |
Underlying Stock Options | Geoffrey F. Cox, Ph.D. (2)
| 28,979 | Michael J. Finney, Ph.D. | 21,700 | | 87,400 | John P. Richard (2)
| 31,243 | Richard J. Markham (3)
| 3,000 | Anne VanLent
| 31,243 | Steven Boyd (4)
| — | Todd C. Davis(4) | 54,720 | | 120,420 | Keith Maher, M.D. (4)
Karen J. Wilson | — | | 65,700 | Robert A. Yedid(4) | 54,720 | | 120,420 |
On January 28, 2021, Steven J. Boyd and Keith Maher, M.D., each resigned from the board of directors. Neither held any stock options as of December 31, 2020, or as of the date of their resignation. (2)
| ResignedMs. VanLent resigned on October 25, 2019.June 8, 2020. The sum recorded under the Option Awards column represents the incremental fair value related to the modification of options to accelerate vesting, the fair value of the modified award on June 8, 2020, being $18,316, compared to a grant date fair value of the original award of $4,222.
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TABLE OF CONTENTS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding the ownership of our common stock as of April 23, 2021, by: each nominee for director; each current executive officer all current executive officers and nominees for director as a group; and all those known by us to be beneficial owners of more than five percent of our outstanding common stock. This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, we believe that each of the stockholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 117,963,912 shares outstanding on April 23, 2021, adjusted as required by rules promulgated by the SEC. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Vaxart, Inc., 170 Harbor Way, Suite 300, South San Francisco, California 94080. Greater than 5% Stockholders:
| | | | | | | RA Capital Management(1) | | | 10,810,937 | | | 9.2% | State Street Corporation(2) | | | 9,444,967 | | | 8.0% | Executive Officers, Directors and Director Nominee:
| | | | | | | Todd C. Davis(3) | | | 203,940 | | | * | Margaret Echerd(4) | | | 265,920 | | | * | Michael J. Finney(5) | | | 721,790 | | | * | Andrei Floroiu(6) | | | 1,129,560 | | | * | Wouter Latour(7) | | | 846,839 | | | * | Sean Tucker(8) | | | 517,466 | | | * | David Wheadon | | | — | | | * | Karen J. Wilson | | | — | | | * | Robert A. Yedid(9) | | | 83,940 | | | * | All executive officers, directors and director nominee as a group (9 persons) | | | 3,769,455 | | | 3.1% |
*
| Represents beneficial ownership of less than one percent. |
(3) (1)
| ResignedConsists of 10,810,937 shares of common stock beneficially owned by RA Capital Management, whose address is 20 Park Plaza, Suite 1200, Boston, MA 02116. This information is based on November 30, 2019. shares issued through Vaxart’s At-the-market facility on July 13, 2020. |
(4) (2)
| AppointedConsists of 9,444,967 shares of common stock beneficially owned by State Street Corporation, whose address is State Street Financial Center, 1 Lincoln Street, Boston, MA 02111. This information has been obtained from the Schedule 13G filed by State Street on October 25, 2019.February 11, 2021. |
(3)
| Consists of (i) 120,000 shares of common stock held directly by Mr. Davis, and (ii) 83,940 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
(4)
| Consists of 265,920 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
(5)
| Consists of (i) 452,572 shares of common stock held directly by Mr. Finney, and (ii) 181,818 shares of common stock issuable pursuant to warrants and 87,400 shares of common stock issuable pursuant to stock options, each exercisable within 60 days of April 23, 2021. |
(6)
| Consists of 1,129,560 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
(7)
| Consists of 846,839 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
(8)
| Consists of (i) 48,053 shares held directly by Dr. Tucker, (ii) 57,293 shares held jointly by Frances Chang and Dr. Tucker, (iii) 9,060 shares held by Dr. Tucker’s spouse, (iv) 27,273 shares issuable pursuant to warrants held jointly by Frances Chang and Dr. Tucker, exercisable within 60 days of April 23, 2021, and (v) 375,787 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
(9)
| Consists of 83,940 shares issuable pursuant to stock options exercisable within 60 days of April 23, 2021. |
TABLE OF CONTENTS DELINQUENT SECTION 16(A) REPORTS 45Section 16(a) of the Exchange Act requires that our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Vaxart. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the year ended December 31, 2020, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent beneficial owners were complied with. TABLE OF CONTENTS TRANSACTIONS WITH RELATED PARTIES Transactions With Related Parties
Related-Party Transaction policyTransaction Policy and ProceduresWe have adopted a written Related Party Transaction Policy that sets forth our policies and procedures regarding the identification, review, consideration and approval or ratification of “related party transactions.” For purposes of our policy only, a “related party transaction” is a transaction, arrangement or relationship (including indebtedness or a guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which we and any “related party” are, were or will be participants involving an amount that exceeds $120,000 and in which any “related party” has a direct or indirect material interest. Transactions involving compensation for services provided to us as an employee, director, consultant or similar capacity by a related party are not covered by this policy. A related party is any executive officer, director, nominee to become a director or more than 5% stockholder of us, including any of their immediate family members, and any entity owned or controlled by such persons. We describe below such transactions or series of similar transactions to which we have been or were a party since January 1, 2018.2020. Under the policy, where a transaction has been identified as a related party transaction, management must present information regarding the proposed related party transaction to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the board of directors) for consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related parties, the benefits to us of the transaction and whether any alternative transactions were available. To identify related party transactions in advance, we rely on information supplied by its executive officers, directors and certain significant stockholders. In considering related party transactions, the Audit Committee takes into account the relevant available facts and circumstances including, but not limited to (a) the risks, costs and benefits to us, (b) the impact on a director’s independence in the event the related party is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms of the transaction, (d) the availability of other sources for comparable services or products and (e) the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. In the event a director has an interest in the proposed transaction, the director must recuse himself or herself form the deliberations and approval. The policy requires that, in determining whether to approve, ratify or reject a related party transaction, the Audit Committee consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, the best interests of us and our stockholders, as the Audit Committee determines in the good faith exercise of its discretion.
Certain Related-Person TransactionsTransactions We have entered into indemnity agreements with certain officers and directors which provide, among other things, that we will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of ours, and otherwise to the fullest extent permitted under Delaware law and our Bylaws.
We have entered into offer letters, employment agreements and change in control arrangements with our executive officers. For more information regarding these agreements, see “Executive Compensation— Employment and Change in Control Arrangements.”
We have granted stock options to our executive officers and certain members of our board of directors. For a description of our executive officers’ options, see “Executive Compensation—Outstanding Equity Awards at December 31, 2019.2020.” TABLE OF CONTENTS HOUSEHOLDING OF PROXY MATERIALS 46
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single Notice of Internet Availability of Proxy Materials or other Annual Meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. This year, a number of brokers with account holders who are Vaxart stockholders will be “householding” our proxy materials. A single Notice of Internet Availability of Proxy Materials will be delivered 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 they will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receive a separate Notice of Internet Availability of Proxy Materials, please notify your broker. Stockholders who currently receive multiple copies of the Notices of Internet Availability of Proxy Materials at their addresses and would like to request “householding” of their communications should contact their brokers. Other Matters
The board of directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. As part of our precautions regarding COVID-19, we are planning for the possibility that the meeting may be held completely virtually over the Internet. If we take this step, we will announce the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material. As always, we encourage you to vote your shares prior to the Annual Meeting. By Order of the Board of Directors
/s/ Wouter W. Latour, M.D.
We file annual and quarterly reports and other reports and information with the SEC. These reports and other information can be read over the Internet at the SEC’s website at www.sec.gov or at our website at www.vaxart.com. A copy of Vaxart’s Annual Report to the U.S. Securities and Exchange Commission on Form 10-K for the year ended December 31, 2019,2020, is available without charge upon written request to: Secretary, Vaxart, Inc., 385 Oyster Point Boulevard,170 Harbor Way, Suite 9A,300, South San Francisco, California 94080. You may also contact our proxy solicitor at:
Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Tel: (800) 662-5200
Banks and brokers can call collect at: (203) 658-9400
Email: vxrt.info@investor.morrowsodali.com
TABLE OF CONTENTS Exhibit A
Amendment to
AMENDMENT TO 2019 Equity Incentive PlanEQUITY INCENTIVE PLAN
VAXART, INC. 2019 EQUITY INCENTIVE PLAN AMENDMENT NO. 1,2, dated as of June 8, 2020April 28, 2021 (this “Amendment”), to the 2019 Equity Incentive Plan (as amended, the “Plan”) of Vaxart, Inc., a Delaware corporation (the “Corporation”). WHEREAS, the Corporation maintains the Plan, adopted by the Board of Directors of the Corporation on February 26, 2019 and approved by the stockholders of the Corporation on April 23, 2019; and
WHEREAS, the Board of Directors of the Corporation deems it to be in the best interest of the Corporation and its stockholders to amend the Plan in order to (i) increase the maximum number of shares of the Corporation’s Common Stock, par value $0.0001 per share, which may be issued and sold under the Plan from 1,600,0008,000,000 shares to 8,000,000 shares.16,900,000 shares, and (ii) prohibit the “repricing” of stock awards without stockholder approval. NOW, THEREFORE, BE IT RESOLVED the Plan is hereby amended as follows: 1. Section 3(a)(i)(a)
1.
| Section 2(b)(xi) shall be deleted in its entirety and replaced in lieu thereof with the following: |
“To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or (6) other valuable consideration determined by the Board, in its entiretysole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and replaced in lieu thereof with(y) granted under the following:Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles; provided that, except for adjustments authorized and permitted under Section 9 of the Plan, the Board shall first receive approval of the Company’s stockholders prior to taking any action under paragraphs (A) through (C) above.” 2.
| Section 3(a)(i)(a) shall be deleted in its entirety and replaced in lieu thereof with the following: |
“Subject to Section 9(a) relating to Capitalization Adjustments, and the following sentence regarding the annual increase, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 8,000,00016,900,000 shares (the “Share Reserve”“Share Reserve”).” 2. This Amendment shall be effective as of the date first set forth above.
3. In all respects not amended, the Plan is hereby ratified and confirmed and remains in full force and effect.
3.
| This Amendment shall be effective as of the date first set forth above. |
4.
| In all respects not amended, the Plan is hereby ratified and confirmed and remains in full force and effect. |
| | | VAXART, INC. | | | | | | | | | | | By: | | | | | By: | | | | | Name: Andrei Floroiu | | | Name: Wouter W. Latour, M.D.
| | | | | Title: President and Chief Executive Officer |
TABLE OF CONTENTS Exhibit B
CERTIFICATE OF AMENDMENT OF
RESTATED CERTIFICATE OF INCORPORATION OF
VAXART, INC.
Vaxart, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”),
DOES HEREBY CERTIFY:
FIRST: The name of Corporation is Vaxart, Inc.
SECOND: The Board of Directors of the Corporation, acting in accordance with the provisions of Sections 141 and 242 of the General Corporation Law of the State of Delaware, adopted resolutions amending its Restated Certificate of Incorporation as follows:
The first sentence in Article FOURTH shall be deleted and the following paragraphs shall be inserted in lieu thereof:
“FOURTH: The total number of shares of all classes of stock which the Corporation shall have authority to issue is 155,000,000 shares consisting of
a) 5,000,000 shares of Preferred Stock, par value $0.0001 per share, and
b) 150,000,000 shares of Common Stock, par value $0.0001 per share.”
THIRD: Thereafter pursuant to a resolution of the Board of Directors, this Certificate of Amendment was submitted to the stockholders of the Corporation for their approval, and was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
[Remainder of the Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its Chief Executive Officer this day of , 2020.
| | | | | VAXART, INC.
| | | | | | | | | By:
| | | | | | Name: Wouter W. Latour, M.D.
Title: President and Chief Executive Officer
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