INFORMATIONProxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x
☒Filed by a Party other than the Registrant
¨ ☐Check the appropriate box:
| ☐ | | | | | | | | |
¨ | | Preliminary Proxy Statement |
| ☐ | |
¨ | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | |
x | | Definitive Proxy Statement |
| ☐ | |
¨ | | Definitive Additional Materials |
| ☐ | |
¨ | | Soliciting Material Pursuant to § 240.14a-12 |
CIDARA THERAPEUTICS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment of Filing Fee (Check all boxes that apply)
| ☒ | | | | | | | | | | | | | | |
x | | No fee requiredrequired. |
| ☐ | |
¨ | | Fee paid previously with preliminary materialsmaterials. |
| ☐ | | |
¨ | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
| | 0-11. |
CIDARA THERAPEUTICS, INC.
6310 Nancy Ridge Drive, Suite 101
NOTICE OF ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 22,on December 15, 2022
You are cordially invited to attend the 2022 Annuala Special Meeting of Stockholders (the “Annual“Special Meeting”) of Cidara Therapeutics, Inc., a Delaware corporation (the “Company”). The AnnualSpecial Meeting will be held on Wednesday, June 22,Thursday, December 15, 2022 at 8:00 a.m. Pacific Time. The AnnualSpecial Meeting will be held in a virtual meeting format only, via live webcast on the internet, with no physical in-person meeting. You will be able to attend and participate in the AnnualSpecial Meeting online by pre-registering by entering your uniquely assigned control number at
www.proxydocs.com/CDTXwww.virtualshareholdermeeting.com/CDTX2022SM, where you will be able to listen to the meeting live, submit questions and vote. To participate in the meeting,Special Meeting, you must have your control number that is shown on your Notice of Internet Availability of Proxy Materials or on yourthe enclosed proxy card if you receivecard. You will not be able to attend the materials by mail. Special Meeting in person. As always, we encourage you to vote your shares prior to the AnnualSpecial Meeting.You are being asked to vote on the following matters:
1. To elect the three nominees for Class I director named herein to hold office until the 2025 Annual Meeting of Stockholders.
2. To ratify the selection of Ernst & Young LLP by the Audit Committee of the Board of Directors to serve as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022.
3. To approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Proxy Statement accompanying this notice.
4. To conduct any other business properly brought before the meeting.
| 1. | To approve a series of alternate amendments to the Company’s Amended and Restated Certificate of Incorporation, to effect, at the discretion of the Company’s Board of Directors: (i) a reverse split of the Company’s common stock, whereby each outstanding 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of common stock would be combined and converted into one share of common stock; and (ii) for reverse splits in the range of 1-for-10 to 1-for-20, a reduction in the number of authorized shares of common stock from 200,000,000 to 40,000,000, 36,363,636, 33,333,332, 30,769,230, 28,571,428, 26,666,666, 25,000,000, 23,529,410, 22,222,222, 21,052,630 or 20,000,000 shares, respectively. We refer to this proposal as the “Reverse Stock Split Proposal” or “Proposal 1.” |
| 2. | To approve the adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal 1. We refer to this as the “Adjournment Proposal” or “Proposal 2.” |
These items of business are more fully described in the accompanying Proxy Statement accompanying this Notice.
The Annual Meeting will be a completely virtual meeting of stockholders. To participate, vote or submit questions during the Annual Meeting via live webcast, please visit www.proxydocs.com/CDTX. You will not be able to attend the Annual Meeting in person.
Statement.The record date for the AnnualSpecial Meeting is April 25,November 8, 2022. Only stockholders of record at the close of business on that date may vote duringat the meeting or any adjournment thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annuala Special Meeting of Stockholders to be Heldheld on Wednesday, June 22,December 15, 2022 at 8:00 a.m. Pacific Time via live webcast at
www.proxydocs.com/CDTXwww.virtualshareholdermeeting.com/CDTX2022SM.The proxy statement and annual report to stockholders areis available at
www.proxydocs.com/CDTXwww.proxyvote.com. | | | | | | | | |
| | By Order of the Board of Directors |
| | |
| | /s/ Jeffrey Stein, Ph.D. |
| | Jeffrey Stein, Ph.D. |
| | President and Chief Executive Officer |
San Diego, California
November 10, 2022
April 29, 2022
You are cordially invited to attend the virtual AnnualSpecial Meeting. Whether or not you expect to attend the AnnualSpecial Meeting, PLEASE VOTE YOUR SHARES. As an alternative to voting online at the AnnualSpecial Meeting, you may vote via the internet, by telephone or if you receive a paperby completing, dating, signing and returning the enclosed proxy card by mailing the completed proxy card.mail. Voting instructions are provided in the Notice of Internet Availability of Proxy Materials, or, if you receive a paperenclosed proxy card by mail, the instructions are printed on your proxy card.
Even if you have voted by proxy, you may still vote online at the AnnualSpecial Meeting. Please note, however, that if your shares are held of record by a broker, bank or other agent and you wish to vote at the AnnualSpecial Meeting, you must follow the instructions from such organizations and will need to obtain a proxy card issued in your name from that record holder.
CIDARA THERAPEUTICS, INC.
6310 Nancy Ridge Drive, Suite 101
FOR THE 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held On June 22,December 15, 2022
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
OurWhy am I receiving these materials?
We have sent you these proxy materials because our Board of Directors (sometimes referred to as the(the “Board”) is soliciting your proxy to vote at the 2022 annual meeting of stockholders (the “Annual Meeting”)Special Meeting of Cidara Therapeutics, Inc., a Delaware corporation (sometimes referred to as “we,” “us,” the “Company” or “Cidara”) to be held virtually, via live webcast at
www.proxydocs.com/CDTXwww.virtualshareholdermeeting.com/CDTX2022SM, on Wednesday, June 22,Thursday, December 15, 2022, at 8:00 a.m. Pacific Time, and any adjournment or postponement thereof. WeYou are committedinvited to ensuring that our stockholdersattend the Special Meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, date, sign and return the enclosed proxy card, or follow the instructions below to vote over the telephone or through the internet. Stockholders attending the virtual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting.For the Annual Meeting, we have elected to furnish our proxy materials, including this proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”), to our stockholders primarily via the internet. On or about May 11, 2022, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) that contains notice of the Annual Meeting and instructions on how to access our proxy materials on the internet, how to vote at the Annual Meeting, and how to request printed copies of the proxy materials. That notice also contains instructions on how you can receive a paper copy of this proxy statement and Annual Report or an electronic copy via e-mail if you prefer either of those alternatives.
Only stockholders of record of our common stock at the close of business on April 25,November 8, 2022 (the “Record Date”) will be entitled to vote at the AnnualSpecial Meeting. On the Record Date, there were 69,049,49771,618,091 shares of common stock outstanding and entitled to vote (together, the “common stock”). A list of stockholders entitled to vote at the AnnualSpecial Meeting will be available for examination during normal business hours for ten days before the AnnualSpecial Meeting at our address above. The stockholder list will also be available online during the Annual Meeting.
The Annual Report, which contains consolidated financial statements as of and for the fiscal year ended December 31, 2021, accompanies this proxy statement. You also may obtain a copy of the Annual Report that was filed with the Securities and Exchange Commission (the “SEC”), without charge, by writing to our Corporate Secretary at Cidara Therapeutics, Inc., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121, Attn: Corporate Secretary.
Why did I receive a notice regarding the availability of proxy materials on the internet?
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board of Cidara is soliciting your proxy to vote at the 2022 Annual Meeting, including at any adjournments or postponements of the Annual Meeting. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice.
We intend to mail the Noticethese proxy materials on or about May 11,November 10, 2022 to all stockholders of record entitled to vote at the AnnualSpecial Meeting.
Will I receive any other proxy materials by mail?
We may send you a proxy card, along with a second Notice, on or after May 21, 2022.
How do I attend the virtual AnnualSpecial Meeting?
The virtual meeting will be held on Wednesday, June 22,Thursday, December 15, 2022 at 8:00 a.m. Pacific Time. In light of the COVID-19 pandemic, to support the health and well-being of our stockholders, employees and directors, and taking into account recent federal, state and local guidance, the AnnualSpecial Meeting will be held in a virtual meeting format only, via live webcast on the internet, with no physical in-person meeting.
A summary of the informationThe Special Meeting can be accessed by visiting www.virtualshareholder meeting.com/ CDTX2022SM, where you needwill be able to attend the Annual Meeting online is provided below:
•Any stockholder may listen to the Annual Meetingmeeting live, submit questions and participate live via webcast at www.proxydocs.com/CDTX. The webcast will begin at 8:00 a.m. Pacific Time.
•To enter the meeting, you must pre-register at www.proxydocs.com/CDTX. One hour prior to the meeting taking place, you will receive an email with a link to enter the meeting.vote online. You may access the meeting using the provided link and entering your control number within 15 minutes of the meeting���sSpecial Meeting’s scheduled start time.
•Instructions on how to connect to and participate in the Annual Meeting via the internet, including how to demonstrate proof of stock ownership, are available during the pre-registration process at www.proxydocs.com/CDTX.
•Stockholders may vote and submit questions 15 minutes before and during the AnnualSpecial Meeting via live webcast. All appropriateAppropriate questions asked during the AnnualSpecial Meeting will be read and addressed during the AnnualSpecial Meeting.
We recommend that you log in a few minutes before 8:00 a.m. Pacific Time to ensure you are logged in when the AnnualSpecial Meeting starts. Online check-in will begin, and stockholders may begin submitting written questions, at 7:45 a.m. Pacific Time. You will be able to submit questions during the AnnualSpecial Meeting as well. We encourage you to submit any question that is relevant to the business of the meeting. The information on our website is not incorporated by reference into this proxy statement or the Annual Report.statement.
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You may vote your shares by other means during the webcast of the AnnualSpecial Meeting. See “How do I vote?” below to vote by phone, internet, or proxy card in advance of the AnnualSpecial Meeting. OurThe proxy card that you received in the mail contains instructions for voting by these methods. If you plan to vote during the AnnualSpecial Meeting, you may still do so even if you have already returned your proxy.
What do I need in order to be able to participate in the AnnualSpecial Meeting online?
You will need the control number included on your Notice or your proxy card in order to be able to vote your shares or submit questions during the AnnualSpecial Meeting.
If you do not have your control number, you will be able to listen to the meeting only and you will not be able to attend the meeting, or vote or submit questions during the meeting. Instructions on how to connect and participate in the AnnualSpecial Meeting via the internet, including how to demonstrate proof of stock ownership, are posted at www.proxydocs.com/CDTXwww.virtualshareholdermeeting.com/CDTX2022SM.What if during the AnnualSpecial Meeting I have technical difficulties or trouble accessing the live webcast of the AnnualSpecial Meeting?
On the day of the AnnualSpecial Meeting, if you encounter any difficulties with the live webcast, please call the technical support number that will be included in your email with a link to enterposted on the meetinglog-in page for the Special Meeting for assistance.
Who can vote at the annual meeting?
Special Meeting?Only stockholders of record at the close of business on April 25,November 8, 2022 will be entitled to vote at the AnnualSpecial Meeting. On thethis record date, there were 69,049,49771,618,091 shares of common stock outstanding and entitled to vote. A list of stockholders entitled to vote at the AnnualSpecial Meeting will be available for examination by stockholders for any purpose germane to the Special Meeting for ten days before the Special Meeting during normal business hours at our principal executive offices at the address listed above for a period of 10 days prior to the Annual Meeting, and during the Annual Meeting such list will be available for examination at
www.proxydocs.com/CDTX. above.Stockholder of Record: Shares Registered in Your Name
If, on April 25,November 8, 2022, your shares were registered directly in your name with Cidara’s transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote by virtual attendance at the AnnualSpecial Meeting or vote by proxy. Whether or not you plan to attend the AnnualSpecial Meeting virtually, we urge you to fill out and return the enclosed proxy card, that may be mailed to you, or vote by proxy over the telephone or on the internet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If, on April 25,November 8, 2022, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice isthese proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the AnnualSpecial Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the AnnualSpecial Meeting. However, since you are not the stockholder of record, you may not vote your shares by virtual attendance at the AnnualSpecial Meeting unless you request and obtain a valid proxy from your broker or other agent.
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There are four matters scheduledtwo proposals being presented for stockholder vote:
•Proposal 1: Electionseries of alternate amendments to the Company’s Amended and Restated Certificate of Incorporation, to effect, at the discretion of the three nominees for Class I director named herein to hold office until the 2025 Annual Meeting of Stockholders;
•Proposal 2: Ratification of the selection of Ernst & Young LLP by the Audit Committee of the Board to serve as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022; and
•Proposal 3: Approval, on an advisory basis, of the compensationBoard: (i) a reverse split of the Company’s named executive officers, as disclosedcommon stock, whereby each outstanding 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of common stock would be combined and converted into one share of common stock; and (ii) for reverse splits in the Proxy Statement.range of 1-for-10 to 1-for-20, a reduction in the number of authorized shares of common stock from 200,000,000 to 40,000,000, 36,363,636, 33,333,332, 30,769,230, 28,571,428, 26,666,666, 25,000,000, 23,529,410, 22,222,222, 21,052,630 or 20,000,000 shares, respectively; and
to adjourn the Special Meeting to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposal.
What if another matter is properly brought before the Annual Meeting?
meeting?The Board knows of no other matters that will be presented for consideration at the AnnualSpecial Meeting. If any other matters are properly brought before the Annual Meeting,meeting, it is the intention of the persons acting as proxiesnamed in the proxy statement accompanying the Notice to vote on those matters in accordance with their best judgment.
You may either vote “For” all the nominees to the Board or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting.
The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote by virtual attendance atduring the AnnualSpecial Meeting, or you may vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using athe enclosed proxy card that you may request or that we may elect to deliver at a later time.card. Whether or not you plan to attend the AnnualSpecial Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the AnnualSpecial Meeting and vote online during the AnnualSpecial Meeting even if you have already voted by proxy.
| • | | VOTE DURING MEETING: To vote online during the Special Meeting, follow the provided instructions to join the Special Meeting at www.virtualshareholdermeeting.com/CDTX2022SM, starting at 8:00 a.m. Pacific Time on Thursday, December 15, 2022. |
•VOTE DURING MEETING: To vote online during the Annual Meeting, follow the provided instructions to join the Annual Meeting at www.proxydocs.com/CDTX, starting at 8:00 a.m. Pacific Time on Wednesday, June 22, 2022.
•VOTE BY PHONE:
To vote over the telephone, dial toll-free 1-800-690-69031-866-243-5097 using any touch-tone telephone and follow the recorded instructions. You will be asked to provide the control number from the Notice orenclosed proxy card.•VOTE BY INTERNET: To Your telephone vote over the internet, complete an electronic proxy card at www.proxypush.com/CDTX. You willmust be askedreceived by 11:59 p.m. Eastern Time on December 14, 2022 to provide the control number from the Notice or proxy card.be counted.
| • | | VOTE BY INTERNET: To vote over the internet, complete an electronic proxy card at www.proxyvote.com. You will be asked to provide the control number from the enclosed proxy card. Your internet vote must be received by 11:59 p.m. Eastern Time on December 14, 2022 to be counted. |
•VOTE BY PROXY CARD:
To vote using athe enclosed proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope we have provided or return it to Mediant Communications, P.O. Box 8016, Cary, NC 27512.Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you return your signed proxy card to us before the AnnualSpecial Meeting, we will vote your shares as you direct.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your brokerage firm,broker, bank, dealer or other agent, you should have received the Notice containinga voting instructionsinstruction form with these proxy materials from that organization rather than from Cidara. Simply follow the voting instructions in the Noticeinstruction form to ensure that your vote is counted. Alternatively, you may
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vote by telephone or over the internet as instructed by your broker or bank. To vote online during the AnnualSpecial Meeting, you must obtain a valid proxy from your brokerage firm, bank, dealer or other agent. Follow the instructions from your broker or bank, or contact your broker or bank to request a proxy form.
We provide internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet access providers and telephone companies.
Can I vote my shares by filling out and returning the Notice?
No. The Notice identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote through the internet, by telephone, by using a printed proxy card or by submitting a ballot online during the Annual Meeting.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as of the close of business on April 25,November 8, 2022.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the internet, by completing, dating, signing and returning your proxy card, or online at the AnnualSpecial Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your brokerage firm,broker, bank, dealer or other agent how to vote your shares, the question of whether your broker or nomineethey will still be able to vote your shares of our common stock depends on whether the New York Stock Exchange (the “NYSE”) deems the particular proposal is considered to be a routine matter under applicable rules.“routine” matter. Brokers and nominees can use their discretion to vote uninstructed“uninstructed” shares with respect to matters that are considered to be routine under applicable rules,“routine,” but not with respect to non-routine“non-routine” matters. Under the rules of the NYSE applicable rulesto brokers and interpretations, non-routinenominees, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. Accordingly, without your instructionsThe NYSE has informed us that each proposal should be considered a “routine” matter, and accordingly, we believe that your broker or nominee may notwill be permitted vote your shares on Proposals 1 and 2. However, this remains subject to the final determination from the NYSE regarding which of the proposals are “routine” or 3, but may vote your shares on Proposal 2.
As a reminder, if you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you “non-routine.”must provide voting instructions to your broker, bank or other agent by the deadline provided in the materials you receive from your broker, bank or other agent.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of all nominees for director, “For” the ratification of the selection of Ernst & Young LLP by the Audit Committee of the Board to serve as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2022,Reverse Stock Split Proposal and “For” the approval of the compensation for our executive officers.Adjournment Proposal. If any other matter is properly presented at the meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Who is paying for this proxy solicitation?
CidaraWe will pay for the entire cost of soliciting proxies, including preparing, assembling, making available on the internet and printing and mailing this proxy statement, the proxy card and any additional information furnished to stockholders.proxies. In addition to these proxy materials, Cidara’sour directors and employees may also solicit proxies in person, by telephone, electronic mail, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks dealers orand other agents for the cost of forwarding proxy materials to beneficial owners. However, please be aware that you must bear any costs associated with your internet service, such as usage charges from internet access providers or telephone companies.We have engaged Georgeson LLC to assist in the solicitation of proxies and provide related advice and information support, for a fee of $13,500 plus the reimbursement of customary disbursements.
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What does it mean if I receive more than one Notice?
set of proxy materials?If you receive more than one Notice,set of proxy materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each Noticeproxy card in the proxy materials to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the AnnualSpecial Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:
•You may submit another properly completed proxy card with a later date.
•You may grant a subsequent proxy by telephone or through the internet. You will be asked to provide the control number from the Notice orenclosed proxy card.
•You may send a timely written notice that you are revoking your proxy to Cidara’s Corporate Secretary at 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121.
•You may vote during the Annual Meeting. Simply attending the virtual meeting will not, by itself, revoke your proxy. Even if you plan to virtually attend the Annual Meeting, we recommend that you also submit your proxy or voting instructions or vote by telephone or by completing an electronic proxy card at www.proxypush.com/CDTX so that your vote will be counted if you later decide not to virtually attend the Annual Meeting.
| • | | You may vote during the Special Meeting. Simply attending the virtual meeting will not, by itself, revoke your proxy. Even if you plan to virtually attend the Special Meeting, we recommend that you also submit your proxy or voting instructions or vote by telephone or by completing an electronic proxy card at www.proxyvote.com so that your vote will be counted if you later decide not to virtually attend the Special Meeting. |
Your most recentcurrent proxy card or telephone or internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If your shares are held by your brokerage firm,broker or bank dealer or other agent as a nominee or agent, you should follow the instructions provided by your broker or bank.
How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately count “For” and “Against” votes, abstentions and broker non-votes. Abstentions will be counted towards the vote total for each proposal and will have the same effect as “Against” votes. Broker non-votes will also have the same effect as “Against” votes for Proposal 1 and no effect on Proposal 2.
What are “broker non-votes”?
When a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be non-routine under applicable rules, the broker or nominee cannot vote the shares on such matters. These unvoted shares are counted as “broker non-votes.” Broker non-votes will be counted towards the presence of a quorum but will not be counted towards the vote total for any proposal.
As a reminder, if you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to your broker, bank, dealer or other agent.agent by the deadline provided in the materials you receive from them.
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How many votes are needed to approve each proposal?
Approval of the Reverse Stock Split Proposal will require the affirmative vote of the majority of outstanding shares of our common stock entitled to vote. Abstentions and broker non-votes will have the same effect as “AGAINST” votes.
Approval of the Adjournment Proposal will require the affirmative vote of the majority of shares present by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote on the subject matter. Abstentions will have the same effect as “AGAINST” votes. Broker non-votes will have no effect on this proposal.
What is the quorum requirement?
A quorum of stockholders is necessary to hold the Special Meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares of common stock entitled to vote are present by virtual attendance at the Special Meeting or represented by proxy. On the record date, there were 71,618,091 shares outstanding and entitled to vote. Thus, the holders of 35,809,046 shares must be present by virtual attendance or represented by proxy at the Special Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your brokerage firm, bank, dealer or other agent) or if you vote online during the Special Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present by virtual attendance at the Special Meeting or represented by proxy may adjourn the Special Meeting to another date.
How can I find out the results of the voting at the Special Meeting?
Preliminary voting results will be announced at the Special Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file with the SEC within four business days after the Special Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Special Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
When are stockholder proposals and director nominations due for next year’s annual meeting?
To be considered for inclusion in the Company’s proxy materials for next year’s annual meeting, your proposal must be submitted in writing by January 11, 2023, to the attention of the Corporate Secretary of Cidara Therapeutics, Inc., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121,and comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 14a-8”). If you wish to submit a proposal (including a director nomination) that is not to be included in the Company’s proxy materials for next year’s annual meeting pursuant to Rule 14a-8, you must do so between February 22, 2023 and March 24, 2023, as required by our bylaws. You are also advised to review the Company’s Bylaws, which contain additional requirements relating to advance notice of stockholder proposals and director nominations. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than our Board’s nominees must provide notice that sets forth any additional information required by Rule 14a-19 promulgated under the Securities Exchange Act of 1934, as amended, no later than April 23, 2023.
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What are “broker non-votes”?
WhenPROPOSAL 1:
APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL
General
The Board has approved a beneficial ownerseries of shares held in “street name” does not give instructionsproposed amendments to the brokerage firm, bank, dealer or other agent holding the shares as to how to vote on matters deemed to be non-routine under applicable rules, the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
How are votes counted?
Votes will be counted by the inspectorCompany’s Amended and Restated Certificate of election appointed for the Annual Meeting, who will separately count votes for each proposal as follows:
1.for Proposal 1 to elect directors, votes “For,” “Withhold” and broker non-votes;
2.for Proposal 2 to ratify the Audit Committee’s selectionIncorporation (the “Certificate of Ernst & Young LLP as our independent public accounting firm, votes “For” and “Against”Incorporation”), and abstentions and broker non-votes; and
that would effect:3.for Proposal 3 to approve, on an advisory basis, the compensation of our named executive officers, votes “For” and “Against,” and abstentions and broker non-votes.
For Proposals 2 and 3, abstentions will be counted and will have the same effect as “Against” votes. Broker non-votes will be counted towards the presence of a quorum but will not be counted towards the vote total for any proposal.
How many votes are needed to approve each proposal?
•For Proposal 1, the election of directors, the three nominees receiving the most “For” votes from the holders of shares present online or represented by proxy and entitled to vote on the election of directors will be elected. Only votes “For” or “Withheld” will affect the outcome. Broker non-votes will have no effect.
•To be approved, Proposal 2, the ratificationreverse stock split of the selectionCompany’s common stock, whereby each outstanding 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of Ernst & Young LLP as the Company’s independent registered public accounting firm for its fiscal year ending December 31, 2022, must receive “For” votes from the holderscommon stock would be combined and converted into one share of a majoritycommon stock (each of shares properly voted. Abstentions will have the same effect as “Against” votes. Broker non-votes, if any, will have no effect. We do not expect any broker non-votes on this proposal.
•To be approved, Proposal 3, the advisory approval of the compensation of our named executive officers, must receive “For” votes from the holders of a majority of shares properly voted. We value the opinions expressed by our stockholderswhich is referred to in this advisory vote,proxy statement as a Reverse Stock Split); and
for Reverse Stock Splits in the Compensation Committeerange of our Board of Directors, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of this vote when designing our compensation programs and making future compensation decisions for our named executive officers. Abstentions will have the same effect as “Against” votes. Broker non-votes will have no effect.1-for-10
What is the quorum requirement?
A quorum of stockholders is necessary to hold the Annual Meeting. A quorum will be present if stockholders holding at least1-for-20, a majority of the outstanding shares entitled to vote are present by virtual attendance at the Annual Meeting or represented by proxy. On the record date, there were 69,049,497 shares outstanding and entitled to vote. Thus, the holders of 34,524,749 shares must be present by virtual attendance or represented by proxy at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your brokerage firm, bank, dealer or other agent) or if you vote online during the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present by virtual attendance at the Annual Meeting or represented by proxy may adjourn the Annual Meeting to another date.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increasereduction in the number of directors, shall serve for the remainderauthorized shares of common stock from 200,000,000 to 40,000,000, 36,363,636, 33,333,332, 30,769,230, 28,571,428, 26,666,666, 25,000,000, 23,529,410, 22,222,222, 21,052,630 or 20,000,000 shares, respectively.
The combined effect of each of the full termalternative amendments (each of that class and until the director’s successorwhich is duly elected and qualified.
The Board presently has eight members. There are three Class I directors whose term of office expiresreferred to in 2022: Jeffrey Stein, Ph.D., Bonnie Bassler, Ph.D., and David Gollaher, Ph.D.
Drs. Stein, Bassler and Gollaher have been nominated for reelection at the Annual Meeting. Drs. Stein, Bassler and Gollaher were recommended for nomination to the Board at the Annual Meeting by the Nominating and Corporate Governance Committee of the Board. If elected at the Annual Meeting, each of these nominees would serve until the 2025 annual meeting of stockholders and until his or her successor has been duly elected and qualified, or, if sooner, until his or her death, resignation or removal. It is the Company’s policy to invite directors and nominees for director to attend the Annual Meeting. All of the Company’s then-serving directors attended the 2021 Annual Meeting of Stockholders.
Directors are elected by a plurality of the votes of the holders of shares present by virtual attendance or represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of Drs. Stein, Bassler and Gollaher. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the Company. Each of Drs. Stein, Bassler and Gollaher has agreed to serve if elected. The Company’s management has no reason to believe that any nominee will be unable to serve.
NOMINEES
The Nominating and Corporate Governance Committee seeks to assemble a Board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct the Company’s business. To that end, the Nominating and Corporate Governance Committee has identified and evaluated nominees in the broader context of the Board’s overall composition, with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the Nominating and Corporate Governance Committee views as critical to effective functioning of the Board. The brief biographies below include information, as of the date of this proxy statement
regardingas a Reverse Split Amendment) is illustrated in the
specifictable below: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Amendment
No.1 (see
Appendix 1) | | | Amendment
No.2 (see
Appendix 2) | | | Amendment
No.3 (see
Appendix 3) | | | Amendment
No.4 (see
Appendix 4) | | | Amendment
No.5 (see
Appendix 5) | | | Amendment
No.6 (see
Appendix 6) | |
Reverse Stock Split ratio | | | 10:1 | | | | 11:1 | | | | 12:1 | | | | 13:1 | | | | 14:1 | | | | 15:1 | |
Number of authorized shares of common stock | | | 40,000,000 | | | | 36,363,636 | | | | 33,333,332 | | | | 30,769,230 | | | | 28,571,428 | | | | 26,666,666 | |
| | | | | | | | | | | | | | | | | | | | |
| | | Amendment
No.7 (see
Appendix 7) | | | Amendment
No.8 (see
Appendix 8) | | | Amendment
No.9 (see
Appendix 9) | | | Amendment
No.10 (see
Appendix 10) | | | Amendment
No.11 (see
Appendix 11) | |
Reverse Stock Split ratio | | | 16:1 | | | | 17:1 | | | | 18:1 | | | | 19:1 | | | | 20:1 | |
Number of authorized shares of common stock | | | 25,000,000 | | | | 23,529,410 | | | | 22,222,222 | | | | 21,052,630 | | | | 20,000,000 | |
The effectiveness of any one of these amendments and particular experience, qualifications, attributes or skills of each director or nominee that led the Nominating and Corporate Governance Committee to believe that that nominee should continue to serve on the Board. However, eachabandonment of the membersother amendments, or the abandonment of the Nominating and Corporate Governance Committee may have a varietyall of reasons why he or she believes a particular person wouldthese amendments, will be an appropriate nominee for the Board, and these views may differ from the views of other members.
Nominees for Election for a Three-year Term Expiring at the 2025 Annual Meeting
Jeffrey Stein, Ph.D., 67, has served as a member of our Board and as President and Chief Executive Officer since January 2014. In addition to serving on the board of Cidara, Dr. Stein is currently a director of Paratek Pharmaceuticals (PRTK) and Ideaya Biosciences (IDYA). Prior to co-founding Cidara, Dr. Stein was Chief Executive Officer of Trius Therapeutics from its founding in 2007 until its acquisition by Cubist Pharmaceuticals in September of 2013. Dr. Stein was also the founding Chairman and President of the Antibiotics Working Group. Previously, Dr. Stein was a Venture Partner and Kauffman Fellow with Sofinnova Ventures and opened the firm’s San Diego office in 2005. Prior to joining Sofinnova, Dr. Stein was co-founder and Chief Scientific Officer of Quorex Pharmaceuticals which was acquired by Pfizer Pharmaceuticals in 2005. He has also served as a Principal Scientist with Diversa Corporation and the Agouron Institute. Dr. Stein conducted his postdoctoral research as an Alexander Hollaender Distinguished Postdoctoral Fellow at the California Institute of Technology and his graduate work as a NASA Graduate Student Researcher Fellow at UCSD.
Our Board believes that Dr. Stein’s expertise and experience as our President and Chief Executive Officer, his perspective and experience as a founder and executive at public and private pharmaceutical companies and his expertise in life sciences and venture capital industries provide him with the qualifications and skills to serve on our Board.
Bonnie Bassler, Ph.D., 60, has served as a member of our Board since January 2021. Dr. Bassler also currently serves in several roles at Princeton University, including, Chair of the Department of Molecular Biology since 2013, associated faculty member of the Department of Chemistry since 2010, Investigator at the Howard Hughes Medical Institute since 2005, Professor in the Department of Molecular Biology since 1994, and associate faculty member of the Princeton Environmental Institute since 1996. Previously, Dr. Bassler served as the Director of the Council on Science and Technology at Princeton University from July 2008 to June 2013. Dr. Bassler currently serves as a board member of Royalty Pharma plc, a publicly-traded biopharmaceutical company, since June 2020, as a board member of Kaleido Biosciences, Inc, publicly-traded health care company, since 2018, as a board member of Regeneron Pharmaceuticals, Inc. since 2016, a publicly-traded biotechnology company, as a Trustee of the Alfred P. Sloan Foundation, since 2014, and previously served as a board member of Sanofi, a publicly-traded global health care company, from November 2014 to September 2016. Dr. Bassler served as a board member of the American Association for the Advancement of Science, from January 2012 to December 2016. She was a member of the National Science Board from January 2010 until May 2016. Dr. Bassler has been elected to the National Academy of Sciences, the National Academy of Medicine, and the Royal Society, among other honorific organizations. She received a B.S. in biochemistry from the University of California-Davis and a Ph.D. in biochemistry from the John Hopkins University.
Our Board believes that Dr. Bassler’s expertise in molecular biology and experience serving on boards across academia and the biotech industry provide her with the qualifications and skills to serve on our Board.
David Gollaher, Ph.D., 72, has served as a member of our Board since September 2018. Dr. Gollaher was Senior Vice President of Policy and Government Affairs at Vir Biotechnology, Inc., a publicly-traded immunology company, between 2019 and 2021. From February 2014 to June 2018, he served as the head of global government affairs and policy for Gilead Sciences, Inc., a publicly-traded biopharmaceutical company (“Gilead”). Before joining Gilead, Dr. Gollaher was cofounder and Chief Executive Officer of the California Healthcare Institute from 1993 to 2013. In 2018, Dr. Gollaher was appointed a Senior Fellow at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California. He currently serves on Gilead’s Health Policy Advisory Board and the Board of Overseers for The Scripps Research Institute. Earlier in his career, Dr. Gollaher was vice president at Scripps Clinic and Research Foundation, responsible for managed care, strategy and corporate affairs. He earned his B.A. from the University of California Santa Barbara and his master’s and Ph.D. degrees, concentrating in the history of science and medicine, from Harvard University.
Our Board believes that Dr. Gollaher’s expertise and experience as an executive in the pharmaceutical industry, as a founder of a pharmaceutical company and his educational background provide him with the qualifications and skills to serve on our Board.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR” EACH NAMED NOMINEE.
Directors Continuing in Office Until the 2023 Annual Meeting
Daniel Burgess, 60, has served as a member of our Board since April 2014. Mr. Burgess is currently a venture partner at SV Health Investors, a position he has held since June 2014, and he is also Chairman and Chief Executive Officer of Pulmocide Ltd., a private biopharmaceutical company, since May 2021. Mr. Burgess also served as President and Chief Executive Officer of Therini Bio, Inc., a private biotechnology company, on a part-time basis from May 2019 to December 2021. From June 2011 until its acquisition in December 2013 by The Medicines Company, now a subsidiary of Novartis AG, a publicly-traded pharmaceutical company, he was the President and Chief Executive Officer of Rempex Pharmaceuticals, Inc. (“Rempex”), a private biopharmaceutical company. From December 2013 until June 2014, he ran the Rempex subsidiary of The Medicines Company. Prior to that, Mr. Burgess was President and Chief Executive Officer of Mpex Pharmaceuticals, Inc. (“Mpex”), a private biopharmaceutical company, from May 2007 until its acquisition by Aptalis Pharma Inc., now a subsidiary of Allergan plc, a publicly-traded pharmaceutical company, in April 2011. Prior to joining Mpex, Mr. Burgess held positions at Hollis-Eden Pharmaceuticals, Inc., Nanogen, Inc., Gensia Sicor, Inc., Castle & Cooke, Inc. and Smith Barney, Harris Upham and Company. Mr. Burgess currently serves as a director of Arbutus Biopharma Corporation, since March 2017, and chairman of the board of Nabriva Therapeutics plc, since June 2017, each of which is a publicly-traded biopharmaceutical company, as well as a director of several private biotechnology companies. From July 2004 until its acquisition in January 2014 by Salix Pharmaceuticals, Inc., now a subsidiary of Bausch Health Companies Inc., a publicly-traded global health care company, Mr. Burgess served on the board of directors of Santarus, Inc., a publicly-traded biopharmaceutical company. Mr. Burgess holds a B.A. in economics from Stanford University and an M.B.A. from Harvard Business School.
Our Board believes Mr. Burgess’s expertise and experience as an executive in the pharmaceutical industry and his educational background provide him with the qualifications and skills to serve on our Board.
Theodore R. Schroeder, 67, has served as a member of our Board since April 2014. From June 2015, Mr. Schroeder served as President, Chief Executive Officer and a member of the board of directors of Zavante Therapeutics, Inc., a private biopharmaceutical company, until its acquisition by Nabriva Therapeutics plc, a publicly-traded biopharmaceutical company, in July 2018, where he continues to serve as Chief Executive Officer and a member of the board of directors. Mr. Schroeder co-founded Cadence Pharmaceuticals, Inc., a publicly-traded biopharmaceutical company, in May 2004 and served as its President and Chief Executive Officer, and a member of the board of directors, until its acquisition in March 2014 by Mallinckrodt plc, a publicly-traded global biopharmaceutical company. From August 2002 to February 2004, Mr. Schroeder served as Senior Vice President, North American Sales and Marketing, of Elan Pharmaceuticals, Inc. (“Elan”), a neuroscience-based pharmaceutical company. From October 2000 to August 2002, Mr. Schroeder served as General Manager of the Hospital Products Business Unit at Elan. From May 1999 to October 2000, Mr. Schroeder held the position of Senior Director of Marketing Hospital Products at Dura Pharmaceuticals, Inc. (“Dura”), a specialty respiratory pharmaceutical and pulmonary drug delivery company, until its acquisition by Elan. Prior to joining Dura, Mr. Schroeder held a number of hospital-related sales and marketing positions with Bristol-Myers Squibb Company, a global pharmaceutical company. Mr. Schroeder is the former chairman of Biocom, the California life sciences trade association. Mr. Schroeder currently serves as a director of Otonomy, Inc., a public biopharmaceutical company, since August 2015, and chairman of the board of the Antimicrobial Working Group, a not-for-profit 501(c)(6) organization, since May 2021. Mr. Schroeder previously served as a director of Collegium Pharmaceutical, a publicly-traded pharmaceutical company. He also served on the board of directors of Hyperion Therapeutics, Inc., Incline Therapeutics, Inc. and Trius Therapeutics, Inc. until their respective acquisitions. Mr. Schroeder received a B.S. in management from Rutgers University.
Our Board believes that Mr. Schroeder’s expertise and experience as an executive in the pharmaceutical industry, as a founder of a pharmaceutical company and his educational background provide him with the qualifications and skills to serve on our Board.
Directors Continuing in Office Until the 2024 Annual Meeting
Carin Canale-Theakston, 48, has served as a member of our Board since January 2021. Ms. Canale-Theakston currently serves as Chief Executive Officer of Canale Communications Inc., a life sciences communications company that she founded in May 2010. Prior to founding Canale Communications, Ms. Canale-Theakston served as President of the life sciences division of Porter Novelli, an international public relations firm, from May 2005 until May 2010. Prior to Porter Novelli, Ms. Canale-Theakston was a Partner and Managing Director of Atkins + Associates, a life sciences communication firm, from February 2000 until it was acquired by Porter Novelli in May 2005. She has also served as a member of the CONNECT (previously San Diego Venture Group) board since
January 2007, including as its Chair in 2011-2012. Since January 2007, Ms. Canale-Theakston has served as a member and vice chair of the board of directors of Biocom and is currently chair of the nominating-governance committee. Ms. Canale-Theakston currently serves on the advisory board for Abintus Bio, Inc., a private biotechnology company, and Epitracker Inc., a private life sciences company. Ms. Canale-Theakston holds a B.A. in communications and marketing from the University of Tulsa.
Our Board believes that Ms. Canale-Theakston’s experience with business and communication strategies for life science companies provide her with the qualifications and skills to serve on our Board.
Timothy R. Franson, M.D., 70, has served as a member of our Board since March 2015. Currently, Dr. Franson is a Principal in Faegre Drinker Consulting, in the Health and FDA Practice sectors. From April 2014 to July 2019, Dr. Franson served as the Chief Medical Officer for YourEncore, Inc., a consultancy that helps global life sciences and consumer health companies accelerate new product pipelines and bring safer, more effective products to consumers. Dr. Franson was Vice President of Global Regulatory Affairs at Lilly Research Laboratories, a part of Eli Lilly and Company (“Eli Lilly”), a publicly-traded pharmaceutical manufacturing company. He joined Eli Lilly and Company in 1986 and retired in 2008. Dr. Franson served as the President of the US Pharmacopeial Convention, which establishes drug quality standards enforced by regulators such as the FDA, from 2010 to 2015, and continued to serve on the organization’s Board of Trustees, as immediate Past President until 2020. Dr. Franson currently serves on the board of directors of Paratek Pharmaceuticals, a publicly-traded biopharmaceutical company, and as past Chair of the Board of the Critical Path Institute, which collaborates with FDA and industry in innovation advances. Dr. Franson has authored more than 50 articles in the fields of infectious disease, epidemiology, pharmacoeconomics and antibiotic utilization, as well as four book chapters relating to innovation policy topics. Dr. Franson currently serves as Adjunct Professor of Medicine in the Division of Clinical Pharmacology of the Indiana University School of Medicine. He also served as a director of Myrexis, Inc. (formerly Myriad Pharmaceuticals, Inc.), from 2010 to 2012. Dr. Franson holds a B.S. in pharmacy from Drake University and an M.D. from the University of Illinois, College of Medicine. He is Board Certified in Internal Medicine and Infectious Diseases.
Our Board believes that Dr. Franson’s extensive expertise in the areas of pharmaceutical development and regulatory affairs provide him with the qualifications and skills to serve on our Board.
Chrysa Mineo, 57,has served as a member of our Board since March 2018. From 2009 to 2015, Ms. Mineo led corporate development at Receptos, Inc. (“Receptos”), a biotechnology company acquired by Celgene Corporation in 2015. Prior to Receptos, from 1997 to 2009 Ms. Mineo held roles of increasing business development responsibility at Neurocrine Biosciences, Inc. (“Neurocrine”), a publicly-traded biotechnology company. Prior to Neurocrine, Ms. Mineo served in various capacities in research, marketing and business development for such companies as Amgen Inc., a publicly-traded biotechnology company, DNAX Research Institute, Schering-Plough Corporation, now a subsidiary of Merck & Co., Inc., a publicly-traded global health care company, and Baxter Biotech. Ms. Mineo holds a B.S. in Zoology from the University of California, Davis and an M.B.A. from Duke University’s Fuqua School of Business. In addition, Ms. Mineo is a co-founder of Alume Biosciences, Inc., a private biotechnology company, a member of the Director’s Council at the Scripps Institution of Oceanography, and a member of the Board of Directors at the San Diego Natural History Museum.
Our Board believes that Ms. Mineo’s expertise and experience as an executive in the pharmaceutical industry, particularly with respect to evaluation and execution of strategic transactions, provide her with the qualifications and skills to serve on our Board.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
INDEPENDENCE OF THE BOARD OF DIRECTORS
As required under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board consults withfollowing the Company’s counselSpecial Meeting and prior to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management, and its independent auditors, the Board has affirmatively determined that all of our directors, except Dr. Stein who is not considered independent because he is an executive officer of the Company, are independent directors as defined by Rule 5605(a)(2) of the Nasdaq Listing Rules. In making this determination, the Board found that none of these directors had a material or other disqualifying relationship with the Company.
BOARD LEADERSHIP STRUCTURE
Daniel Burgess currently serves as the Chairman of our Board, and has authority, among other things, to call and preside over Board meetings, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, the Chairman has substantial ability to shape the work of the Board. We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the Board in its oversight of our business and affairs. In addition, we have a separate chair for each committee of the Board. The chair of each committee is expected to report to the Board from time to time, or whenever so requested by the Board, on the activities of his or her committee in fulfilling its responsibilities as detailed in its respective charter or specify any shortcomings should that be the case. In addition, we believe that having a separate Chairman creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in the best interests of Cidara and our stockholders. As a result, we believe that having a separate Chairman can enhance the effectiveness of the Board as a whole.
ROLE OF THE BOARD IN RISK OVERSIGHT
One of the key functions of our Board is informed oversight of our risk management process. Our Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board, as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee has the responsibility to consider and discuss our major financial and other significant risk exposures, such as cybersecurity risk, and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee reviews cybersecurity risk, as part of its review of our cybersecurity framework, measures, tools, and compliance, on at least an annual basis. The Audit Committee also monitors compliance with legal and regulatory requirements. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance practices, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
BOARD DIVERSITY
In August 2021, the SEC approved a Nasdaq Stock Market proposal to adopt new listing rules relating to board diversity and disclosure. As approved by the SEC, the new Nasdaq listing rules will require all Nasdaq listed companies to disclose consistent, transparent diversity statistics regarding their boards of directors. The rules will also require most Nasdaq listed companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an under-represented minority or LGBTQ+. In this regard, 38% of the positions on our Board are held by women and 25% of our directors are from either an under-represented minority or LGBTQ+. Accordingly, the Company is in compliance with Nasdaq’s diversity requirement. The Board Diversity Matrix below presents the Board’s diversity statistics in the format prescribed by the Nasdaq rules.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Board Diversity Matrix (As of April 12, 2022) |
| Total Number of Directors | | 8 | | | | | | |
| | Female | | Male | | Non-Binary | | Did Not Disclose Gender |
| Part I: Gender Identity | | | | | | | | |
| Directors | | 3 | | 5 | | 0 | | 0 |
| Part II: Demographic Background | | | | | | | | |
| African American or Black | | 0 | | 0 | | 0 | | 0 |
| Alaskan Native or Native American | | 0 | | 0 | | 0 | | 0 |
| Asian | | 0 | | 0 | | 0 | | 0 |
| Hispanic or Latinx | | 0 | | 0 | | 0 | | 0 |
| Native Hawaiian or Pacific Islander | | 0 | | 0 | | 0 | | 0 |
| White | | 3 | | 4 | | 0 | | 0 |
| Two or More Races or Ethnicities | | 0 | | 1 | | 0 | | 0 |
| LGBTQ+ | | 1 |
| Did not Disclose Demographic Background | | 0 |
MEETINGS OF THE BOARD OF DIRECTORS
The Board met five times and acted by unanimous written consent ten times during 2021. All directors attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served during 2021.
In 2021, the Company’s independent directors met five times in an executive session at which only independent directors were present.
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS
December 15, 2023. The Board has an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and a Science and Technology Committee. The Board has adopted a written charter for each committee all of which are available to stockholders on the Company’s website at www.cidara.com. The information on our website is not incorporated by reference into this Proxy Statement or our Annual Report for fiscal year 2021. The following table provides current membership information and fiscal year 2021 meeting and consent information for each ofrecommended that these committees of the Board:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Audit | | Compensation | | Nominating and Corporate Governance | | Science and Technology Committee |
| Bonnie Bassler | | | | | | X | | X* |
| Daniel Burgess | | X* | |
| | X | | |
| Carin Canale-Theakston | | | | X | | | | |
| Timothy R. Franson, M.D. | |
| | X | | X* | | X |
| David Gollaher, Ph.D. |
|
|
|
|
| X | | X |
| Chrysa Mineo | | X | | X | | | | |
| Theodore R. Schroeder | | X | | X* | |
| | |
| Jeffrey Stein, Ph.D | | | | | | | | X |
| Total meetings and consents in 2021 | | 5 | | 14 | | 2 | | 1 |
* Committee Chairperson
Below is a description of each committee of the Board. 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 has determined that each member of each committee meets the applicable rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company.
Audit Committee
The Audit Committee of the Board was established by the Board in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to oversee the Company’s corporate accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions, including, among other things:
•evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain our existing independent auditors or engage new independent auditors;
•reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services;
•monitoring the rotation of partners of our independent auditors on our engagement team as required by law;
•prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonablyproposed amendments be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor;
•reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management;
•reviewing, with our independent auditors and management, significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls;
•reviewing with management and our independent auditors any earnings announcements and other public announcements regarding material developments;
•establishing procedures for the receipt, retention and treatment of complaints received by us regarding financial controls, accounting or auditing matters and other matters;
•preparing the report that the SEC requires in our annual proxy statement;
•reviewing and providing oversight of any related-party transactions in accordance with our related-party transaction policy and reviewing and monitoring compliance with legal and regulatory responsibilities, including our code of business conduct and ethics;
•reviewing and discussing with management and our auditors, as appropriate, our guidelines and policies with respect to risk assessment and risk management, including our major financial risk exposures, and the steps taken by management to identify, monitor and control exposures to strategic, financial, operational, regulatory and other risks inherit in our business, such as cybersecurity risks and vulnerabilities;
•reviewing, on a periodic basis, our investment policy; and
•reviewing and evaluating, on an annual basis, the performance of the Audit Committee and the Audit Committee charter.
The Audit Committee is currently composed of three directors: Messrs. Burgess (Chair) and Schroeder and Ms. Mineo.
The Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of the Company’s Audit Committee are independent (as independence is currently defined in the applicable Nasdaq listing standards and Rule 10A-3 of the Exchange Act).
The Board has also determined that Mr. Burgess qualifies as an “audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative assessment of Mr. Burgess’ level of knowledge and experience based on a number of factors, including his formal education and previous and current experience in financial roles.
Report of the Audit Committee of the Board of Directors*
The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2021 with management of the Company. The Audit Committee has discussed with the 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 (“PCAOB”). The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the 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 has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
| | | | | |
| Daniel D. Burgess (Chair) |
| Theodore R. Schroeder |
| Chrysa Mineo |
* The material in this report is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference in any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Compensation Committee
The Compensation Committee of the Board was comprised of four directors for 2021: Mr. Schroeder (Chair), Dr. Franson and Mses. Canale-Theakston and Mineo. Our Board has determined that each of the members of our Compensation Committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act and satisfies the Nasdaq independence requirements.
The Compensation Committee acts on behalf of the Board to review, adopt or recommend to the Board for adoption, and oversee the Company’s compensation strategy, policies, plans and programs. For this purpose, the Compensation Committee performs several functions, including, among other things:
•reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full Board regarding) our overall compensation strategy and policies;
•making recommendations to the full Board regarding the compensation and other terms of employment of our Chief Executive Officer;
•reviewing, modifying and approving (or if it deems appropriate, making recommendations to the full Board regarding) the compensation and other terms of employment of our other executive officers;
•reviewing and making recommendations to the full Board regarding performance goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives;
•reviewing and approving (or if it deems it appropriate, making recommendations to the full Board regarding) the equity incentive plans, compensation plans and similar programs advisable for us, as well as modifying, amending or terminating existing plans and programs;
•evaluating risks associated with our compensation policies and practices and assessing whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us;
•reviewing and making recommendations to the full Board regarding the type and amount of compensation to be paid or awarded to our non-employee board members;
•establishing policies with respect to votes by our stockholders to approve executive compensation to the extent required by Section 14A of the Exchange Act and, if applicable, determining our recommendations regarding the frequency of advisory votes on executive compensation;
•reviewing and assessing the independence of compensation consultants, legal counsel and other advisers as required by Section 10C of the Exchange Act;
•administering our equity incentive plans;
•establishing policies with respect to equity compensation arrangements;
•reviewing the competitiveness of our executive compensation programs and evaluating the effectiveness of our compensation policy and strategy in achieving expected benefits to Cidara;
•reviewing with management and approving our disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC, to the extent such caption is included in any such report or proxy statement; and
•reviewing and evaluating, on an annual basis, the performance of the Compensation Committee and the Compensation Committee charter.
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets approximately three to four times per year and with greater frequency, if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with management. 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. The Chief Executive Officer does not participate in, and is not present during, any deliberations or determinations of the Compensation Committee regarding his 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 its charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from internal and external legal, accounting or other advisers 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 advisers engaged for the purpose of advising the Compensation Committee. In particular, the Compensation Committee has the sole authority to retain 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 its charter, to the extent required by SEC and Nasdaq rules, 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.
In 2021, the Company engaged Radford, a business unit of Aon plc (“Radford”), as its compensation consultant. Radford was retained to provide an assessment of the Company’s executive and director compensation programs in comparison to executive and director compensation programs at selected publicly-traded peer companies. As part of its engagement, Radford was requested by the Compensation Committee to develop the peer group of comparative companies and to perform analyses of compensation levels for that group. Radford developed peer group and related recommendations that were presented to the Compensation CommitteeCompany’s stockholders for its consideration.
The Compensation Committee holds one or more meetings during the first quarterapproval.Upon receiving stockholder approval of the year
to discuss and make recommendations tothis Proposal 1, the Board for annual compensation adjustments, annual bonuses, annual equity awards, and new corporate performance objectives. However,will have the Compensation Committee also considers matters relatedsole discretion, until December 15, 2023, to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the effectiveness of the Company’s compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at periodic meetings throughout the year on an as-needed basis. Generally, the Compensation Committee’s process comprises two related elements: the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Compensation Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of his performance is conducted by the Compensation Committee, which determines recommendations to the Board regarding any
adjustments to his compensation as well as awards to be granted. For all executives and directors as part of its deliberations, the Compensation Committee may review and consider, as appropriate, materials such as financial reports and projections, operational data, executive stock ownership information, company stock performance data, analyses of historical executive compensation levels and current Company-wide compensation levels, compensation data from comparative companies, compensation surveys, and recommendations of any compensation consultant, if applicable.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee of the Board is responsible for identifying, reviewing and evaluating candidates to serve as directors of the Company (consistent with criteria approved by the Board), reviewing and evaluating incumbent directors, selecting or recommending to the Board for selection candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board, and developing a set of corporate governance principles for the Company.
The Nominating and Corporate Governance Committee was comprised of four directors for 2021: Drs. Franson (Chair), Bassler and Gollaher and Mr. Burgess. All members of the Nominating and Corporate Governance Committee are independent (as independence is currently defined under applicable Nasdaq listing standards). The functions of this committee include, among other things:
•identifying, reviewing and evaluating candidates to serve on our Board;
•determining the minimum qualifications for service on our Board;
•evaluating director performance on the Board and applicable committees of the Board and determining whether continued service on our Board is appropriate;
•nominating and recommending individuals for membership on our Board;
•evaluating nominations by stockholders of candidates for election to our Board;
•considering and assessing the independence of members of our Board;
•developing, if and when it deems appropriate, a set of corporate governance policies and principles and recommending to our Board any changes to such policies and principles;
•considering questions of possible conflicts of interest of directors as such questions arise; and
•reviewing and evaluating on an annual basis the performance of the Nominating and Corporate Governance Committee and the Nominating and Corporate Governance Committee charter.
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 and possessing the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also considers 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, 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 the Company’s 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, the operating requirements of the Company and the long-term interests of stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity of skills, background and perspective (such as age, gender, race and specialized experience) and such other factorsselect, as it deems appropriate, given the current needs of the Board and the Company,determines to maintain a balance of knowledge, experience and capability. 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 the Company 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. 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 compiles 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. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and selects candidates 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: Cidara Therapeutics, Inc., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121, Attn: Corporate Secretary, no later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. Submissions must include the name and address of the Company stockholder on whose behalf the submission is made; the number of Company shares that are owned beneficially by such stockholder as of the date of the submission; the full name of the proposed candidate; a description of the proposed candidate’s business experience for at least the previous five years; complete biographical information for the proposed candidate; and a description of the proposed candidate’s qualifications as a director. 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.
Science and Technology Committee
In March 2021, our Board formed the Science and Technology Committee, which is comprised of four directors for 2021: Drs. Bassler (Chair), Franson, Gollaher and Stein. The Science and Technology Committee acts on behalf of our Board of Directors to, among other things, review and evaluate the Company’s scientific research programs on behalf of our Board and make recommendations to our Board regarding strategic and tactical scientific issues and decisions regarding advancement of our technology. The functions of this committee include, among other things:
•developing and participating in a process for periodic review of our scientific research programs and technology;
•evaluating the long-term strategic value of the Company’s scientific research programs and technology, making recommendations to the Board regarding acquisition, disposition and/or development of our scientific and technology assets and advising the Board on scientific aspects of business development matters;
•reviewing and evaluating on an annual basis the performance of the Science and Technology Committee and the Science and Technology Committee charter; and
•upon request, assisting in setting annual scientific research performance goals and assessing achievement of such goals.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Company’s Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders who wish to communicate with the Board may do so by sending written communications addressed to the Corporate Secretary of Cidara Therapeutics, Inc., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121. These communications will be reviewed by the Corporate Secretary of Cidara, who will determine whether the communication is appropriate for presentation to the Board or the relevant director. The purpose of this screening is to allow the Board to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications).
CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics that applies to all officers, directors and employees. The Code of Business Conduct and Ethics is available on the Company’s website at www.cidara.com. If the Company makes any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the code to any executive officer or director, the Company will promptly disclose the nature of the amendment or waiver on its website. The information on our website is not incorporated by reference into this proxy statement or our Annual Report.
HEDGING POLICY
All employees, including our named executive officers, and non-employee directors are prohibited from engaging in short sales of our securities, establishing margin accounts, pledging our securities as collateral for a loan, buying or selling puts or calls on our securities or otherwise engaging in hedging transactions that offset any decrease in the market value involving our securities held by such persons (such as zero-cost dollars, exchange funds, and forward sale contracts).
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022 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. Ernst & Young has audited the Company’s financial statements since 2013. Representatives of Ernst & Young 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 the Company’s Bylaws nor other governing documents or law require stockholder ratification of the selection of Ernst & Young as the Company’s independent registered public accounting firm. However, the Audit Committee is submitting the selection of Ernst & Young 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.
stockholders, any Reverse Split Amendment. The
affirmative voteBoard believes that stockholder approval of these reverse split ratios (as opposed to approval of a single reverse split ratio) provides the Board with maximum flexibility to achieve the purposes of a Reverse Stock Split and, therefore, is in the best interests of the
Company and its stockholders. The corresponding alternative reductions in the authorized common stock for reverse stock split ratios in the range of 1-for-10 to 1-for-20 are designed to ensure that the Company does not have what some stockholders might view as an unreasonably high number of authorized shares of common stock that are unissued or reserved for issuance.If the Board determines to effect one of the alternative Reverse Stock Splits by filing the applicable Reverse Split Amendment with the Secretary of State of the State of Delaware, the Certificate of Incorporation would be amended accordingly, and all other Reverse Split Amendments will be abandoned. The text of the form of Reverse Split Amendment, one of which would be filed with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, are set forth in Appendices 1 through 11 to this proxy statement. However, such text is subject to amendment to include such changes as may be required by the office of the Secretary of State of the State of Delaware or as the Board deems necessary and advisable.
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If the Board elects to effect a Reverse Stock Split following stockholder approval, for Reverse Stock Splits in the range of 1-for-10 to 1-for-20, the number of issued and outstanding shares of common stock would be reduced in accordance with a reverse split ratio selected by the Board from among those set forth in this Proposal 1. Except for adjustments that may result from the treatment of fractional shares as described below, each stockholder will hold the same percentage of outstanding common stock immediately following the Reverse Stock Split as such stockholder held immediately prior to the Reverse Stock Split.
If the Board does not implement any of the Reverse Stock Splits before December 15, 2023, further stockholder approval would be required prior to implementing any reverse stock split.
Purposes and Effect of the Reverse Stock Split
Although the proposed Reverse Stock Split will not have the effect of increasing the Company’s equity market capitalization, we believe that implementing the Reverse Stock Split will provide benefits to the Company and our existing stockholders in a number of ways, including:
Compliance with Nasdaq Listing Requirements. Our common stock is listed on the Nasdaq Capital Market, which has as one of its continued listing requirements a minimum bid price of at least $1.00 per share (the “Minimum Bid Price Requirement”). On February 28, 2022, we received a letter (the “Letter”), from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we failed to comply with the Minimum Bid Price Requirement for the 30 consecutive business days preceding the date of the Letter. To regain compliance, the closing bid price of our common stock must be at least $1.00 for a minimum of 10 consecutive business days.
On August 30, 2022, we received a notice from Nasdaq stating that because we had not regained compliance with the Minimum Bid Price Requirement, our common stock would be subject to delisting unless we timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”) on or before September 6, 2022.
On September 6, 2022, we requested a hearing before the Panel, which stayed any delisting action in connection with the notice and allowed the continued listing of our common stock on the Nasdaq Capital Market until the Panel renders a decision subsequent to the hearing. On September 16, 2022, we submitted a pre-hearing submission in which we presented a plan to regain compliance with the Minimum Bid Price Requirement and request that the Panel allow us additional time within which to regain compliance.
The hearing was conducted on October 6, 2022, and on October 18, 2022, the Panel granted our request for continued listing on the Nasdaq Capital Market, pursuant to an extension, through February 27, 2023, to regain compliance with the Minimum Bid Price Requirement. The extension is subject to certain specified conditions and our submission of certain interim updates to the Panel. To evidence compliance with the Minimum Bid Price Requirement, we must report a closing bid price of at least $1.00 per share for a minimum of ten consecutive trading days on or before February 27, 2023.
If we do not regain compliance with the Minimum Bid Price Requirement, our common stock will be subject to delisting. The delisting of our common stock by Nasdaq could adversely affect the liquidity of our common stock, create increased volatility in our common stock, and result in a loss of current or future coverage by certain sell-side analysts and/or a diminution of institutional investor interest. Delisting could also cause a loss of confidence of our collaborators, vendors and employees, which could harm our business and future prospects. If our common stock is delisted by Nasdaq, our common stock may be eligible to trade on the OTC Bulletin Board, OTC-QB or another over-the-counter market. Any such alternative would likely result in it being more difficult for us to raise additional capital through the public or private sale of equity securities and for investors to dispose of or obtain accurate quotations as to the market value of our common stock. Moreover, if our common stock is delisted, it may come within the definition of “penny stock” under the Securities Exchange Act of 1934, as amended, which imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors. These requirements may reduce trading activity in the
secondary market for our common stock and may impact the ability or willingness of broker-dealers to sell our
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securities which could limit the ability of stockholders to sell their securities in the public market and limit our ability to attract and retain qualified employees or raise additional capital in the future.
The Reverse Stock Split would decrease the total number of shares of our common stock outstanding and should, absent other factors, proportionately increase the market price of our common stock above $1.00 per share. Therefore, the Board believes that the Reverse Stock Split is an effective means for us to regain compliance with the Minimum Bid Price Requirement.
Increasing Authorized but Unissued Shares of Common Stock. A second purpose of the Reverse Stock Split is to increase the percentage of authorized but unissued shares of common stock. In addition to the 71,618,091 shares of common stock outstanding as of November 8, 2022, we have also reserved 12,517,328 shares for issuance upon the exercise of outstanding warrants, 18,184,720 shares for issuance upon the conversion of outstanding shares of preferred stock, 9,842,083 shares for issuance upon the exercise of outstanding stock options and restricted stock units, and 4,941,101 shares for issuance pursuant to our equity incentive and employee stock purchase plans, meaning that we presently have 82,896,677 authorized shares available for issuance (in each case these amounts are before any adjustment for any Reverse Stock Split), which the Board believes is insufficient to meet our needs in connection with future financings and properly incentivizing our key personnel.
The Board believes that an increase in the percentage of authorized but unissued shares of common stock is necessary in order to provide us with the appropriate flexibility to issue additional shares in the future on a timely basis in connection with potential financings, business combinations or other corporate purposes, enabling us to take advantage of market conditions, the availability of more favorable financing, and opportunities for business combinations and other strategic transactions, without the potential delay and expense associated with convening a special stockholders’ meeting, although there are currently no plans or arrangements to issue the additional authorized but unissued shares of common stock that will result in the event that our stockholders approve, and we implement, the Reverse Stock Split. In addition, our success also depends in part on our continued ability to attract, retain and motivate highly qualified management and key personnel. If this proposal is not approved by our stockholders, the lack of sufficient unissued and unreserved authorized shares of common stock to provide future equity incentive opportunities could adversely impact our ability to achieve this objective.
Stock Price Volatility. We have been advised that a higher stock price may increase the acceptability of our common stock to a number of long-term investors who may not find our shares attractive at their current prices due to the trading volatility often associated with stocks below certain prices.
Stock Price Requirements. We understand that many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers or by restricting or limiting the ability to purchase such stocks on margin.
Transaction Costs. Investors also may be dissuaded from purchasing stocks below certain prices because the brokerage commissions, as a percentage of the total transaction value, tend to be higher for such low-priced stocks.
In summary, if our stockholders do not approve this Proposal 1, we will likely not be able to access the capital markets, complete corporate collaborations or partnerships, attract, retain and motivate employees, and pursue other business opportunities integral to our growth and success.
Reasons for the Decrease in Authorized Shares
As a matter of Delaware law, implementation of any of the Reverse Stock Splits does not require a change in the total number of shares of our common stock authorized under our Certificate of Incorporation. However, for Reverse Stock Splits in the range of 1-for-10 to 1-for-20, the proposed corresponding alternative reductions in
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the authorized common stock are designed to ensure that the Company does not have what some stockholders might view as an unreasonably high number of authorized but unissued shares of common stock.
Board Discretion to Implement the Reverse Split Amendments
The Board believes that stockholder approval of a range of Reverse Stock Split ratios (rather than a single ratio) is in the best interests of our stockholders because it provides the Board with the flexibility to achieve the desired results of the Reverse Stock Split and because it is not possible to predict market conditions at the time the Reverse Stock Split would be implemented. If stockholders approve this proposal, the Board would carry out a Reverse Stock Split only upon the Board’s determination that a Reverse Stock Split would be in the best interests of our stockholders at that time. The Board would then select one Reverse Stock Split approved by stockholders as it determines to be advisable and in the best interests of the stockholders considering relevant market conditions at the time the Reverse Stock Split is to be implemented. In determining the Reverse Stock Split ratio, following receipt of stockholder approval, the Board may consider numerous factors including:
the historical and projected performance of our common stock;
general economic and other related conditions prevailing in our industry and in the marketplace;
the projected impact of the Reverse Stock Split ratio on trading liquidity in our common stock and our ability to maintain continued listing on the Nasdaq Capital Market;
our capitalization (including the number of shares of common stock issued and outstanding);
the then-prevailing trading price for our common stock and the volume level thereof; and
the potential devaluation of our market capitalization as a result of the Reverse Stock Split.
The Board intends to select a Reverse Stock Split ratio that it believes would be most likely to achieve the anticipated benefits of the Reverse Stock Split.
Certain Risks Associated with the Reverse Stock Split
Before voting on this Proposal 1, stockholders should consider the following risks associated with effecting a Reverse Stock Split:
Although we expect that a Reverse Stock Split will result in an increase in the market price of our common stock, we cannot assure you that a Reverse Stock Split, if effected, will increase the market price of our common stock in proportion to the reduction in the number of shares of our common stock outstanding or result in a permanent increase in the market price. The effect that a Reverse Stock Split may have upon the market price of our common stock cannot be predicted with any certainty, and the history of similar reverse stock splits for companies in similar circumstances to ours is varied. The market price of our common stock is dependent on many factors, including our business and financial performance, general market conditions, prospects for future growth and other factors detailed from time to time in the reports we file with the SEC. Accordingly, the total market capitalization of our common stock after a Reverse Stock Split may be lower than the total market capitalization before a Reverse Stock Split and, in the future, the market price of our common stock following a Reverse Stock Split may not exceed or remain higher than the market price prior to a Reverse Stock Split.
Even if our stockholders approve a Reverse Stock Split and the Reverse Stock Split is effected, we cannot assure you that we will continue to meet the continued listing requirements of the Nasdaq Capital Market.
A Reverse Stock Split may result in some stockholders owning “odd lots” of less than 100 shares of common stock on a post-split basis. These odd lots may be more difficult to sell, or require greater transaction costs per share to sell, than shares in “round lots” of even multiples of 100 shares.
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Although the Board believes that the decrease in the number of shares of common stock outstanding as a consequence of a Reverse Stock Split and the anticipated increase in the market price of common stock could encourage interest in our common stock and possibly promote greater liquidity for stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the Reverse Stock Split.
Principal Effects of the Reverse Stock Split
If this Proposal 1 is approved and a Reverse Split Amendment is effected, each holder of common stock outstanding immediately prior to the effectiveness of the Reverse Stock Split will own a reduced number of shares of common stock upon effectiveness of the Reverse Stock Split. The Reverse Stock Split would be effected simultaneously for all outstanding shares of common stock at the same ratio. Except for adjustments that may result from the treatment of fractional shares (as described below), the Reverse Stock Split would affect all stockholders uniformly and would not change any stockholder’s percentage ownership interest in the Company. The relative voting rights and other rights and preferences that accompany the shares of common stock will not be affected by the Reverse Stock Split. Shares of common stock issued pursuant to the Reverse Stock Split will remain fully paid and nonassessable.
Because no fractional shares will be issued, holders of our common stock could be eliminated in the event that the proposed Reverse Stock Split is implemented. However, we are not proposing the Reverse Stock Split as the first step in a “going private” transaction.
The proposed increase in the relative number of authorized but unissued shares of common stock by way of the Reverse Stock Split will not, by itself, have an immediate dilutive effect on our current stockholders. However, the future issuance of additional shares of common stock or securities convertible into our common stock may occur at times or under circumstances that could result in a dilutive effect on the earnings per share, book value per share, voting power and percentage interest of the present holders of our common stock, some of whom have preemptive rights to subscribe for additional shares that we may issue.
Effect on Stock Awards, Equity Compensation Plans, Warrants and Convertible Preferred Stock
Under the terms of our outstanding equity awards and warrants, the proposed Reverse Stock Split would adjust and proportionately reduce the number of shares of common stock issuable upon exercise or vesting of such awards and warrants in the same ratio of the Reverse Stock Split (which may include rounding the number of shares of common stock issuable down to the nearest whole share) and, correspondingly, would proportionately increase the per share exercise or purchase price, if any, of all such awards and warrants. The Reverse Stock Split would also reduce the number of shares of common stock available for issuance under the Company’s equity compensation plan in proportion to the reverse split ratio of the Reverse Stock Split selected by the Board.
Pursuant to the terms of the Series X Convertible Preferred Stock, the proposed Reverse Stock Split would adjust and proportionately reduce the number of shares of common stock issuable upon conversion of the Series X Convertible Preferred Stock in proportion to the reverse split ratio of the Reverse Stock Split selected by the Board and, correspondingly, would proportionately increase the per share conversion price of such Series X Convertible Preferred Stock.
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The following table contains approximate information relating to our common stock under certain of the Reverse Split Amendments, based on share information as of November 8, 2022, without giving effect to the treatment of fractional shares.
| | | | | | | | | | | | | | | | |
| | | November 8, 2022 | | | 1-for-10 | | | 1-for-15 | | | 1-for-20 | |
Number of authorized shares of common stock | | | 200,000,000 | | | | 40,000,000 | | | | 26,666,666 | | | | 20,000,000 | |
| | | | | | | | | | | | | | | | |
Number of outstanding shares of common stock | | | 71,618,091 | | | | 7,161,809 | | | | 4,774,539 | | | | 3,580,904 | |
Number of shares of common stock reserved for conversion of outstanding Series X Convertible Preferred Stock | | | 18,184,720 | | | | 1,818,472 | | | | 1,212,314 | | | | 909,236 | |
Number of shares of common stock reserved for issuance upon exercise of outstanding warrants | | | 12,517,328 | | | | 1,251,732 | | | | 834,488 | | | | 625,866 | |
Number of shares of common stock reserved for issuance upon exercise of outstanding stock options and the vesting of outstanding restricted stock units | | | 9,842,083 | | | | 984,208 | | | | 656,138 | | | | 492,104 | |
Number of shares of common stock reserved for issuance in connection with future awards under our equity compensation plans | | | 4,941,101 | | | | 494,110 | | | | 329,406 | | | | 247,055 | |
| | | | | | | | | | | | | | | | |
Total number of outstanding and reserved shares of common stock | | | 117,103,323 | | | | 11,710,331 | | | | 7,806,885 | | | | 5,855,165 | |
Number of authorized and unreserved shares of common stock not outstanding | | | 82,896,677 | | | | 28,289,669 | | | | 18,859,781 | | | | 14,144,835 | |
Authorized but unissued and unreserved shares of common stock as a percentage of total authorized shares of common stock | | | 41.45 | % | | | 70.72 | % | | | 70.72 | % | | | 70.72 | % |
Potential Anti-Takeover Effect
An increase in the number of authorized but unissued shares of common stock relative to the number of outstanding shares of common stock may also, under certain circumstances, be construed as having an anti-takeover effect. Although not designed or intended for such purposes, the effect of the proposed Reverse Stock Split might be to render more difficult or to discourage a merger, tender offer, proxy contest or change in control of us and the removal of management, which stockholders might otherwise deem favorable. For example, the authority of the Board to issue common stock might be used to create voting impediments or to frustrate an attempt by another person or entity to effect a takeover or otherwise gain control of us because the issuance of additional common stock would dilute the voting power of the common stock and preferred stock then outstanding. Our common stock could also be issued to purchasers who would support the Board in opposing a takeover bid which our board determines not to be in our best interests and those of our stockholders.
In addition to the Reverse Split Amendment, our Certificate of Incorporation and Amended and Restated Bylaws also include other provisions that may have an anti-takeover effect. These provisions, among other things, permit our board to issue preferred stock with rights senior to those of the common stock without any further vote or action by the stockholders, provide that special meetings of stockholders may only be called by the Board and some of our officers, and do not provide for cumulative voting rights, which could make it more difficult for stockholders to effect certain corporation actions and may delay or discourage a change in control.
The Board is not presently aware of any attempt, or contemplated attempt, to acquire control of us and the Reverse Split Amendment is not part of any plan by the Board to recommend or implement a series of anti-takeover measures.
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Accounting Matters
The Reverse Stock Split will not affect the par value per share of common stock, which will remain unchanged at $0.0001 per share. As a result of the Reverse Stock Split, at the effective time, the stated capital on our balance sheet attributable to the common stock, which consists of the par value per share of the common stock multiplied by the aggregate number of shares of the common stock issued and outstanding, will be reduced in proportion to the ratio of the Reverse Stock Split. Correspondingly, the additional paid-in capital account, which consists of the difference between the stated capital and the aggregate amount paid upon issuance of all currently outstanding shares of common stock, will be credited with the amount by which the stated capital is reduced. The stockholders’ equity, in the aggregate, will remain unchanged. In addition, the per share net income or loss of common stock, for all periods, will be restated because there will be fewer outstanding shares of common stock.
Mechanics of the Reverse Stock Split
No Fractional Shares
We will not issue fractional shares in connection with the reverse stock split. Instead, any fractional share resulting from the reverse stock split because a stockholder owns a number of shares not evenly divisible by the ratio would be paid in cash. The cash amount to be paid to each stockholder would be equal to the resulting fractional interest in one share of our common stock to which the stockholder would otherwise be entitled, multiplied by the closing trading price of our common stock on the Nasdaq Capital Market on the effective date of the Reverse Stock Split. The ownership of a fractional interest will not give the holder thereof any voting, dividend or other right except to receive the cash payment therefore. Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where we are domiciled and where the funds will be deposited, sums due for fractional interests that are not timely claimed after the effective time may be required to be paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds may have to seek to obtain them directly from the state to which they were paid. We do not anticipate that the aggregate cash amount paid by the Company for fractional interests will be material to the Company.
Effect on Beneficial Holders of Common Stock (i.e., stockholders who hold in “street name”)
Upon the effectiveness of the Reverse Stock Split, we intend to treat shares of common stock held by stockholders in “street name,” through a bank, broker or other nominee, in the same manner as registered stockholders whose shares of common stock are registered in their names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding the common stock in “street name.” However, these banks, brokers or other nominees may have different procedures than registered stockholders for processing the Reverse Stock Split and making payment for fractional shares. If a stockholder holds shares of common stock with a bank, broker or other nominee and has any questions in this regard, stockholders are encouraged to contact their bank, broker or other nominee.
Effect on Registered “Book-Entry” Holders of Common Stock (i.e., stockholders that are registered on the transfer agent’s books and records but do not hold certificates)
Most of our registered holders of common stock hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders do not have stock certificates evidencing their ownership of the common stock. They are, however, provided with a statement reflecting the number of shares registered in their accounts.
If a stockholder holds registered shares in book-entry form with the transfer agent, no action needs to be taken to receive post-Reverse Stock Split shares or cash payment in lieu of any fractional share interest, if applicable. If a stockholder is entitled to post-Reverse Stock Split shares, a transaction statement will automatically be sent to the stockholder’s address of record indicating the number of shares of common stock held following the Reverse Stock Split.
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If a stockholder is entitled to a cash payment in lieu of any fractional share interest, a check will be mailed to the stockholder’s registered address as soon as practicable after the effective date of the Reverse Stock Split. By signing and cashing the check, stockholders will warrant that they owned the shares of common stock for which they received a cash payment. The cash payment is subject to applicable federal and state income tax and state abandoned property laws.
Effect on Certificated Shares
Upon the Reverse Stock Split, our transfer agent will act as our exchange agent and act for holders of common stock in implementing the exchange of their certificates.
After the effective date of a Reverse Stock Split, stockholders holding shares in certificated form will be sent a transmittal letter by the transfer agent for our common stock. The letter of transmittal will contain instructions on how a stockholder should surrender his or her old certificates to the transfer agent in exchange for certificates representing the appropriate number of whole shares of post-Reverse Stock Split common stock (the “New Certificates”). No New Certificates will be issued to a stockholder until that stockholder has surrendered all existing certificates, together with a properly completed and executed letter of transmittal, to the transfer agent. No stockholder will be required to pay a transfer or other fee to exchange the stockholder’s existing certificates.
Stockholders will then receive a New Certificate(s) representing the number of whole shares of common stock to which they are entitled as a result of the Reverse Stock Split. Until surrendered, we will deem outstanding existing certificates held by stockholders to be canceled and represent only the number of whole shares of post-Reverse Stock Split common stock to which these stockholders are entitled. Any certificates submitted for exchange, whether because of a sale, transfer or other disposition of stock, will automatically be exchanged for New Certificates. If any existing certificates have a restrictive legend on the back of the existing certificates, the New Certificate(s) will be issued with the same restrictive legends that are on the back of the existing certificates. If a stockholder is entitled to a payment in lieu of any fractional share interest, such payment will be made as described below under “No Fractional Shares.” Stockholders should not destroy any stock certificate(s) and should not submit any certificate(s) until requested to do so.
No Dissenters’ or Appraisal Rights
Under the General Corporation Law of the State of Delaware, our stockholders are not entitled to any dissenters’ or appraisal rights with respect to the Reverse Stock Split, and we will not independently provide stockholders with any such right.
Material U.S. Federal Income Tax Considerations
The following is a summary of certain material U.S. federal income tax considerations of the Reverse Stock Split that are generally expected to be applicable to U.S. Holders (as defined below) of our common stock who hold their common shares as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”), (generally property held for investment). This summary is based upon the provisions of the Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as in effect as of the date hereof, and all of which are subject to change and differing interpretations, possibly with retroactive effect. Changes in these authorities or their interpretation may result in the U.S. federal income tax considerations of the Reverse Stock Split differing substantially from the considerations summarized below.
This summary is for general information purposes only and does not address all aspects of U.S. federal income taxation that may be relevant to U.S. Holders in light of their particular circumstances or to stockholders that may be subject to special tax rules, including, without limitation: banks, insurance companies, or other financial institutions; tax-exempt organizations; retirement plans; dealers in securities or commodities; regulated investment companies or real estate investment trusts; partnerships (including entities or arrangements treated as
14
partnerships or disregarded entities for U.S. federal income tax purposes and persons holding our common stock through such entities); persons who hold our common stock through individual retirement or other tax-deferred accounts; persons who are not U.S. Holders; traders in securities that elect to use the mark-to-market method of accounting; persons whose “functional currency” is not the U.S. dollar; persons holding our common stock in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction; persons who acquired our common stock in connection with the exercise of employee stock options or otherwise as compensation; persons who hold our common stock as qualified small business stock within the meaning of Section 1202 of the Code or Section 1244 stock for purposes of Section 1244 of the Code; or persons who acquired their stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code.
In addition, this summary of certain U.S. federal income tax considerations does not address (i) the tax consequences of the Reverse Stock Split arising under the laws of any foreign, state or local jurisdiction or any U.S. federal tax consequences other than U.S. federal income taxation (such as U.S. federal estate and gift tax consequences), (ii) the tax consequences of transactions effectuated before, after or at the same time as the Reverse Stock Split, whether or not they are in connection with the Reverse Stock Split, (iii) the alternative minimum tax, the Medicare contribution tax on net investment income, or the special tax accounting rules under Section 451(b) of the Code, or (iv) the tax consequences to holders of options, warrants or similar rights to acquire our common stock. If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our common stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partnerships holding our common stock and the partners therein should consult their tax advisors regarding the tax consequences to them of the Reverse Stock Split.
We have not sought, and will not seek, an opinion of counsel or a ruling from the Internal Revenue Service (the “IRS”), regarding the U.S. federal income tax consequences of the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge.
For purposes of this discussion, a “U.S. Holder” means a beneficial owner of shares of our common stock that is any of the following:
an individual who is a citizen or resident of the United States or someone treated as a U.S. citizen or resident for U.S. federal income tax purposes;
a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) are authorized or have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes.
EACH STOCKHOLDER SHOULD CONSULT ITS TAX ADVISORS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH STOCKHOLDER.
Taxation of Stockholders
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. We believe that because the Reverse Stock Split is not part of a plan to increase periodically a stockholder’s proportionate interest in our assets or earnings and profits, the Reverse Stock Split should have the following federal income
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tax effects. As a recapitalization, except as described below with respect to cash received in lieu of fractional shares, a U.S. Holder should not recognize gain or loss as a result of the Reverse Stock Split. A U.S. Holder’s aggregate tax basis in the shares of the common stock received pursuant to the Reverse Stock Split should equal the U.S. Holder’s aggregate tax basis in the shares of the common stock surrendered, and such U.S. Holder’s holding period in the shares of the common stock received should include the holding period of the shares of the common stock surrendered. Treasury regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of shares of common stock surrendered pursuant to the Reverse Stock Split to shares of common stock received pursuant to the Reverse Stock Split. U.S. Holders holding shares of common stock that were acquired on different dates or at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
A U.S. Holder who receives cash in lieu of a fractional share of common stock as a result of the Reverse Stock Split should generally recognize gain or loss equal to the difference, if any, between the amount of the cash received in lieu of the fractional share and the portion of the stockholder’s adjusted tax basis allocable to the fractional share. Such gain or loss will be a capital gain or loss and will be short term if the pre-reverse split shares were held for one year or less and long term if held more than one year. Long-term capital gains of non-corporate U.S. Holders are generally subject to preferential tax rates. There are limitations on the deductibility of capital losses under the Code. A U.S. Holder’s aggregate tax basis in the reduced number of shares of common stock should equal the U.S. Holder’s aggregate tax basis in its old shares of common stock decreased by the basis allocated to the fractional share for which such U.S. Holder is entitled to receive cash. Stockholders should consult their tax advisors regarding the tax effects to them of receiving cash in lieu of fractional shares based on their particular circumstances.
Taxation of the Company
The Company should not recognize any gain or loss as a result of the Reverse Stock Split.
Vote Required
Approval of the Reverse Stock Split Proposal requires “FOR” votes, cast either online by virtual attendance of the Special Meeting or by proxy, of a majority of the outstanding shares present online or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify the selection of Ernst & Young.our common stock. Abstentions will have the same effect as an “against” vote on this proposal. Broker As noted above, the NYSE has informed us this proposal should be considered a “routine” matter and, as a result, we do not expect there to be any broker non-votes on this proposal. If, however, a broker non-vote occurs (or if your shares are not affirmatively voted in favor of this proposal for any other reason), it will have no effect.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table represents aggregate fees billed to the Company by Ernst & Young for the fiscal years ended December 31, 2021 and 2020:
| | | | | | | | | | | |
| Fiscal Year Ended
December 31, |
| 2021 | | 2020 |
Audit Fees (1) | $ | 693,000 | | | $ | 544,117 | |
| Audit Related Fees | — | | | — | |
| Tax Fees | — | | | — | |
| All Other Fees | — | | | — | |
| Total Fees | $ | 693,000 | | | $ | 544,117 | |
(1) Audit fees consist of fees billed for professional services by Ernst & Young for audit and quarterly review of our financial statements and review of our registration statements and other documents in connection with our follow-on public offering and at the market offerings and related issuances of consents, and related services that are normally provided in connection with statutory and regulatory filings or engagements.
All fees described above were pre-approved by the Audit Committee.
In connection with the audit of the 2021 financial statements, the Company entered intosame effect as an engagement agreement with Ernst & Young that sets forth the terms by which Ernst & Young will perform audit services for the Company.
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 the Company’s independent registered public accounting firm, Ernst & Young. 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“against” vote 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 Ernst & Young is compatible with maintaining the principal accountant’s independence.
this proposal.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE
“FOR” FOR THE REVERSE STOCK SPLIT PROPOSAL 2.(PROPOSAL 1).16
ADVISORY VOTE ON2APPROVAL OF AN ADJOURNMENT OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
At our 2021 AnnualSPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIESGeneral
If the Special Meeting of Stockholders, the stockholders indicated their preference that we solicitis convened and a non-binding advisory vote on the compensation of our named executive officers, commonly referred to as a “say-on-pay vote,” every year.
The Board has adopted a policy thatquorum is consistent with that preference. In accordance with that policy, this year, wepresent, but there are again asking the stockholdersnot sufficient votes to approve on an advisory basis,Proposal 1 or if there are insufficient votes to constitute a quorum, our proxy holders may move to adjourn the compensation of our named executive officers as disclosedSpecial Meeting at that time in this proxy statement in accordance with SEC rules.This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. The compensation of our named executive officers is disclosed in the compensation tables, and the related narrative disclosure contained in this proxy statement. We believe that our compensation policies and decisions are based on principles that reflect a pay-for-performance philosophy and are strongly aligned with our stockholders’ interests and consistent with current market practices. Compensation of our named executive officers is designedorder to enable usthe Board to attract and retain talented and experienced executives to lead us successfully in a competitive environment.
Accordingly, our Board issolicit additional proxies.In this proposal, we are asking our stockholders to indicate their support forauthorize the compensationholder of any proxy solicited by the Board to vote in favor of adjourning the Special Meeting to another time and place, if necessary or appropriate (as determined in good faith by the Board), to solicit additional proxies in the event there are not sufficient votes to approve Proposal 1. If our named executive officers, as described instockholders approve this proxy statement, by casting a non-binding advisory vote “FOR”proposal, we could adjourn the following resolution:
“RESOLVED, thatSpecial Meeting and any adjourned or postponed session of the stockholders of Cidara Therapeutics, Inc. (the “Company”) approve, on an advisory basis,Special Meeting and use the compensation paidadditional time to the Company’s named executive officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K,solicit additional proxies, including the compensation tables, narrative disclosures, andsolicitation of proxies from our stockholders that have previously voted. Among other related disclosure.”
Vote Required
Advisorythings, approval of this
proposal could mean that, even if we had received proxies representing a sufficient number of votes to defeat Proposal
31, we could adjourn the Special Meeting without a vote on such proposal and seek to convince our stockholders to change their votes in favor of such proposal.If it is necessary or appropriate (as determined in good faith by the Board) to adjourn the Special Meeting, no notice of the adjourned meeting is required to be given to our stockholders, other than an announcement at the Special Meeting of the time and place to which the Special Meeting is adjourned, so long as the meeting is adjourned for 30 days or less and no new record date is fixed for the adjourned meeting. At the adjourned meeting, we may transact any business which might have been transacted at the original meeting.
Vote Required
Approval of the Adjournment Proposal requires the vote of“FOR” votes from the holders of a majority of the shares present onlinerepresented at the AnnualSpecial Meeting or represented by proxy and entitled to vote thereon.
on the subject matter. Abstentions will have the same effect as an “against” vote on this proposal. As noted above, the NYSE has informed us this proposal should be considered a “routine” matter and, as a result, we do not expect there to be any broker non-votes on this proposal. If, however, your shares are represented at the Special Meeting and your broker fails to vote your shares on this proposal, it will have no effect on this proposal.THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE
“FOR” THE FOR APPROVAL ON AN ADVISORY BASIS, OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.ADJOURNMENT PROPOSAL (PROPOSAL 2).17
EXECUTIVE OFFICERS
Jeffrey Stein, Ph.D. has served as our President, Chief Executive Officer and a member of our Board of Directors since January 2014. For additional information regarding Dr. Stein’s industry experience and education, see above under “Nominees for Election for a Three-year Term Expiring at the 2025 Annual Meeting.”
Paul Daruwala, 53, joined us as Chief Commercial Officer in December 2014 and became our Chief Operating Officer in January 2018. From September 2012 to October 2014 he was the Vice President of the U.S. Viral Hepatitis Franchise (HCV and HBV) at Bristol-Myers Squibb Company, a global pharmaceutical company. Before joining Bristol-Myers Squibb, Mr. Daruwala founded Delta Sage, a private consulting practice, in February 2012. From May 2010 to February 2012, Mr. Daruwala served as Vice President of Commercial and Strategic Management for HCV at Vertex Pharmaceuticals Incorporated, a biotechnology company, where he was responsible for the therapeutic area strategy, marketing, patient services, and a national field team of health care provider support. From 1992 to May 2010 Mr. Daruwala served in a number of roles at Merck & Co. (“Merck”), a global pharmaceutical company, including: the U.S. lead for HCV, Global Lead for Antiviral New Products, Global Lead for the Hospital Antifungal Franchise, and Director of Marketing and Strategic Planning for the Anti-inflammatory and Analgesic Franchise. Mr. Daruwala spent several years in a business development role, leading commercial and strategic assessments which culminated in preclinical through Phase 2 transactions in oncology, infectious diseases, immunology, and metabolic diseases. He started his career in sales, sales management, and managed markets in Merck's U.S. division. Mr. Daruwala received his degree in pharmacy from The University of Kentucky.
Taylor Sandison, M.D., 50, has been with Cidara since October 2015 and became our Chief Medical Officer in January 2017. Prior to joining the Company, he served as senior medical director at Merck and prior to that held the same position at Cubist Pharmaceuticals, Inc. Dr. Sandison has also held positions at Trius Therapeutics, Inc., a publicly-traded biopharmaceutical company, and Novartis Diagnostics, and served as a member of the faculty in the Department of Medicine at both Stanford University and the University of Washington. He received B.S. and B.A. degrees from Dartmouth College, M.D. and M.P.H. degrees from the University of Washington, and a Diploma in Tropical Medicine and Hygiene from the London School of Hygiene and Tropical Medicine. He completed internal medicine residency training at the University of Colorado and infectious diseases fellowship training at the University of Washington. Dr. Sandison currently holds board certifications in Infectious Diseases and Internal Medicine.
Leslie Tari, Ph.D., 55, has served as our Chief Scientific Officer since July 2021. Previously, he served as our Senior Vice President, Research from March 2019 to July 2021, and as our Vice President, Discovery, from July 2014 to March 2019. Prior to joining Cidara, Dr. Tari held various leadership positions at Trius Therapeutics, Inc., a publicly-traded biopharmaceutical company, from March 2007 until its acquisition by Cubist Pharmaceuticals, Inc. in September 2013. Prior to Trius Therapeutics, Dr. Tari co-founded and served as a Director of Structural Biology at ActiveSight, Inc. from 2003 to 2007. From 2001 until 2003, Dr. Tari served as Associate Director of Structural Biology at Syrrx Inc. Dr. Tari also served as a Professor and Alberta Heritage Foundation Scholar for Medical Research at the University of Calgary from 1998 to 2001, where he conducted research focused on antibiotic discovery. Dr. Tari received a B.S. degree in Chemistry and a Ph.D. in Chemistry and Structural Biology from the University of Manitoba.
Preetam Shah, Ph.D., MBA, 49, has served as our Chief Financial Officer and Chief Business Officer since September 2021. Prior to joining the Company, Dr. Shah served as Executive Vice President, Chief Financial Officer and Treasurer at Brainstorm Cell Therapeutics, Inc. (“Brainstorm”), a publicly-traded biotechnology company, since September 2019. Prior to Brainstorm, Dr. Shah spent over six years as an investment banker advising healthcare companies on equity, debt and M&A transactions; holding senior roles at banks, including Barclays Capital PLC., from June 2016 to September 2019, and Canaccord Genuity Inc., from July 2013 to May 2016. From 2010 to 2013, Dr. Shah founded Saisarva LLC, a healthcare consulting firm. During this period, he also acted as a consultant for healthcare-focused private equity firms and hedge funds. From 2006 to 2009, Dr. Shah served as Vice President, U.S. Operations and Investments at Reliance Capital USA Ventures LLC, an affiliate of Reliance ADA Group Companies, where he was responsible for making early-stage venture investments in healthcare companies. Dr. Shah completed his post-doctoral fellowship in Infectious Diseases from Stanford University School of Medicine. He holds a Ph.D. in Microbiology from the University of Mississippi Medical Center, an M.B.A. in Finance from the Wharton School, University of Pennsylvania, and a B.A. in Mathematics and in Biology from McDaniel College.
Shane Ward, 47, has served as our Chief Legal Officer and Corporate Secretary since August 2021. From December 2020 to August 2021, Mr. Ward was an independent biotechnology consultant.From May 2018 to December 2021, he served as the Chief Legal and Strategy Officer for Bellicum Pharmaceuticals, Inc. a publicly-traded biopharmaceutical company.From April 2015 to May 2018, Mr. Ward served as Senior Vice President and General Counsel for Versartis, Inc., a clinical-stage biotechnology company. From November 2012 to March 2015, he served as Vice President and Associate General Counsel for Dynavax Technologies Corporation, a publicly-traded biopharmaceutical company. Earlier in his career, Mr. Ward was a senior in-house attorney with commercial pharmaceutical companies Gilead Sciences, Abbott Laboratories and Human Genome Sciences. He began his legal career as an associate for the international law firm Sidley Austin LLP. Mr. Ward earned his B.A from the University of Virginia, and his J.D. from Georgetown University Law Center.
DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s 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 the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended December 31, 2021, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with, except for the Form 4s for:
(1) Mr. Daruwala, an officer of the Company, and Neil Abdollahian and Jessica Oien, both former officers of the Company, relating to shares sold on January 5, 2021 to cover tax withholding obligations in connection with the vesting of restricted stock units. The Form 4s were filed on April 5, 2021.
(2) Dr. Stein, Mr. Daruwala and Dr. Sandison, each an officer of the Company, and Neil Abdollahian and Jessica Oien, both former officers of the Company, relating to a performance restricted stock unit that vested upon the achievement of a certain milestone event that occurred on March 31, 2021. The Form 4s were filed on April 5, 2021.
(3) Dr. Stein, Mr. Daruwala, Brady Johnson, Dr. Sandison and Dr. Tari, each an officer of the Company, relating to a performance restricted stock unit that vested upon the achievement of a certain milestone event that occurred on December 29, 2021. The Form 4s were filed on January 7, 2022.
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of the Company’s common stock as of April 25,September 30, 2022 by: (i) each director; (ii) each of our named executive officers; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than 5% of its common stock.
The following table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G or 13D filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes 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 69,049,49771,181,197 shares outstanding on April 25,September 30, 2022, adjusted as required by rules promulgated by the SEC. Unless otherwise indicated, the address for the following stockholders is: c/o Cidara Therapeutics, Inc., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121.
| | | | | | | | | | | | | | |
| | Beneficial Ownership |
| Beneficial Owner | | Number of Shares
(#) | | Percent of Total
(%) |
| Greater than 5% stockholders | | | | |
Biotechnology Value Fund, L.P. and its affiliates (1)
44 Montgomery Street, 40th Floor
San Francisco, CA 94104 | | 6,902,142 | | | 9.99 | % |
Nantahala Capital Management, LLC (2)
130 Main Street, 2nd Floor
New Canaan, CT 06840 | | 5,270,458 | | | 7.63 | % |
Mundipharma AG (3)
St. Alban-Rheinweg 74
Basel 4020, Switzerland | | 4,781,408 | | | 6.92 | % |
Point72 Asset Management, L.P. and its affiliates (4)
72 Cummings Point Road
Stamford, CT 06902 | | 4,318,040 | | | 6.25 | % |
| | | | |
| Named Executive Officers and Directors | | | | |
| Jeffrey Stein, Ph.D. (5) | | 3,003,783 | | | 4.23 | % |
| Taylor Sandison, M.D., M.P.H. (6) | | 480,675 | | | * |
| Leslie Tari, Ph.D. (7) | | 299,115 | | | * |
| Daniel Burgess (8) | | 119,511 | | | * |
| Theodore R. Schroeder (9) | | 116,511 | | | * |
| Timothy R. Franson, M.D. (10) | | 116,685�� | | | * |
| Chrysa Mineo (11) | | 77,000 | | | * |
| David Gollaher, Ph.D. (12) | | 66,000 | | | * |
| Bonnie Bassler, Ph.D. (13) | | 34,339 | | | * |
| Carin Canale-Theakston (14) | | 34,027 | | | * |
| All current executive officers and directors as a group (13 persons) (15) | | 4,908,921 | | | 6.78 | % |
* Less than one percent.
(1) Based upon a Schedule 13G/A filed with the SEC on December 16, 2021 by Biotechnology Value Fund, L.P., on behalf of itself, BVF I GL LLC, Biotechnology Value Fund II, L.P., BVF II GP LLC, Biotechnology Value Trading Fund OS LP, BVF Partners OS Ltd., BVF GP Holdings, LLC, BVF Partners L.P., BVF Inc., and Mark N. Lampert. Represents 6,861,127 shares of common stock. Excludes 18,184,720 shares of common stock issuable upon conversion of 1,818,472 shares of Series X Preferred Stock and 7,458,987 shares issuable upon exercise of warrants that are not convertible or exercisable, as applicable, due to a 9.99% beneficial ownership limit as outlined in the Certificate of Designation of Preferences, Rights and Limitations of Series X Convertible Preferred Stock filed as Exhibit 3.1 to our Form 8-K filed with the SEC on May 21, 2018 and the applicable warrants. Biotechnology Value Fund, L.P., BVF I GP LLC, Biotechnology Value Fund II, L.P., BVF II GP LLC, Biotechnology Value Trading Fund OS LP, BVF Partners OS Ltd., BVF GP Holdings, LLC, BVF Partners L.P., BVF Inc., and Mark N. Lampert have shared voting and investment power over the shares and warrants.
(2) Based upon a Schedule 13G filed with the SEC on February 14, 2022 by Nantahala Capital Management, LLC. Represents 5,270,458 shares of common stock held by Nantahala Capital Management, LLC.
(3) Based upon a Schedule 13G filed with the SEC on September 13, 2019 by Mundipharma AG. Represents 4,781,408 shares of common stock held by Mundipharma AG.
(4) Based upon a Schedule 13G/A filed with the SEC on February 14, 2022. Represents 4,200,000 shares of common stock held by certain investment funds managed by Point72 Asset Management, L.P. and 118,040 shares of common stock held by certain investment funds managed by Cubist Systematic Strategies, LLC. The principal business address of Cubist Systematic Strategies, LLC is 55 Hudson Yards, New York, New York 10001.
(5) Includes 1,972,537 shares of common stock that Dr. Stein has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of 1,722,537 stock options under the 2015 equity incentive plan and 250,000 shares of common stock issuable upon exercise of warrants held by Dr. Stein; also includes 231,602 shares of common stock held by the Jeff Stein and Catherine Naughton Revocable Trust, 757,635 shares of common stock held by Dr. Stein and 42,009 shares of common stock held by Dr. Stein’s son.
(6) Includes 105,631 shares of common stock held by Dr. Sandison and 375,044 shares of common stock that Dr. Sandison has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(7) Includes 7,400 shares of common stock held by Dr. Tari, 13,298 shares of common stock held by Dr. Tari’s spouse and 278,417 shares of common stock that Dr. Tari has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(8) Includes 3,000 shares of common stock held by Mr. Burgess’ spouse and 116,511 shares of common stock that Mr. Burgess has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(9) Represents 116,511 shares of common stock that Mr. Schroeder has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(10) Includes 11,000 shares of common stock held by Dr. Franson and 105,685 shares of common stock that Dr. Franson has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(11) Represents 77,000 shares of common stock that Ms. Mineo has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(12) Represents 66,000 shares of common stock that Dr. Gollaher has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(13) Includes 312 shares of common stock held by Dr. Bassler and 34,027 shares of common stock that Dr. Bassler has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(14) Represents 34,027 shares of common stock that Ms. Canale-Theakston has the right to acquire from us within 60 days of April 25, 2022 pursuant to the exercise of stock options.
(15) Includes the shares reflected in footnotes (5) – (14) above and (a) 55,298 shares of common stock held by Mr. Daruwala and 389,308 shares of common stock that Mr. Daruwala has the right to acquire from us within 60 days of April 25, 2022, (b) 61,181 shares held by Dr. Shah and 5,694 shares of common stock that Dr. Shah has the right to acquire from us within 60 days of April 25, 2022, and (c) 45,905 shares held by Mr. Ward and 3,889 shares of common stock that Mr. Ward has the right to acquire from us within 60 days of April 25, 2022.
EXECUTIVE AND DIRECTOR COMPENSATION
Our named executive officers for the year ended December 31, 2021, which consist of our principal executive officer and our two other most highly compensated executive officers, are:
•Jeffrey Stein, Ph.D., our President and Chief Executive Officer;
•Taylor Sandison, M.D., M.P.H., our Chief Medical Officer; and
•Leslie Tari, Ph.D., our Chief Scientific Officer.
Summary Compensation Table
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| NAME AND PRINCIPAL POSITION | | YEAR | | SALARY | | | | STOCK AWARDS (1) | | OPTION AWARDS (2) | | NON-EQUITY INCENTIVE PLAN COMPENSATION (3) | | ALL OTHER COMPENSATION (4) | | TOTAL |
Jeffrey Stein, Ph.D.
President and
Chief Executive Officer | | 2021 | | $ | 565,500 | | | | | $ | — | | | $ | 794,220 | | | $ | 268,000 | | | $ | 2,900 | | | $ | 1,630,620 | |
| 2020 | | $ | 542,000 | | | | | $ | — | | | $ | 451,902 | | | $ | 292,680 | | | $ | 2,850 | | | $ | 1,289,432 | |
Taylor Sandison, M.D., M.P.H.
Chief Medical Officer | | 2021 | | $ | 445,900 | | | | | $ | 337,344 | | | $ | 219,356 | | | $ | 149,100 | | | $ | 2,900 | | | $ | 1,154,600 | |
| 2020 | | $ | 432,000 | | | | | $ | — | | | $ | 198,563 | | | $ | 159,000 | | | $ | 2,850 | | | $ | 792,413 | |
Leslie Tari, Ph.D.
Chief Scientific Officer | | 2021 | | $ | 359,050 | | | | | $ | 331,520 | | | $ | 208,656 | | | $ | 124,100 | | | $ | 2,900 | | | $ | 1,026,226 | |
| | | | | | | | | | | | | | | |
(1) The amount reported in this column for 2021 represents the aggregate grant date fair value of restricted stock unit awards granted to Drs. Sandison and Tari during the fiscal year ended December 31, 2021 under our 2015 Plan, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of these equity awards reported in this column are set forth in Note 7 to our audited consolidated financial statements included in our 2021 Annual Report. This amount does not reflect the actual economic value that may be realized by Drs. Sandison and Tari.
(2) In accordance with SEC rules, this column reflects the aggregate grant date fair value of the option awards granted during 2021 computed in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in Note 7 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.
(3) Reflects amounts earned pursuant to our annual performance-based cash bonus program for fiscal year 2021. Dr. Stein elected to receive restricted stock units (“RSUs”) in lieu of a cash bonus and in March 2022 we granted Dr. Stein 321,844 fully vested RSUs, of which 110,935 RSUs were withheld to satisfy the associated withholding tax obligation.
(4) Includes Company 401(k) plan matching contributions to each named executive officer.
Compensation Program Overview
Our compensation program for executive officers is designed to encourage our management team to achieve our short-term and long-term corporate objectives while effectively managing business risks and challenges. We provide what we believe is a competitive total compensation package to our management team through a combination of base salary, an annual performance-based bonus and long-term equity-based incentives.
The compensation of our named executive officers other than our Chief Executive Officer is generally determined and approved by the Compensation Committee of our Board, and the compensation of our Chief Executive Officer is approved by our Board based upon the recommendations of the Compensation Committee.
Annual Base Salary
Base salaries established for our named executive officers are paid to attract and retain talent and are set at a level that is commensurate with each executive’s duties and authority, contributions, prior experience and sustained performance. The 2021 base salaries for our named executive officers were as follows:
| | | | | | | | |
| NAME | 2021 BASE SALARY ($) | |
| Jeffrey Stein, Ph.D. | $ | 565,500 | | (1) |
| Taylor Sandison, M.D., M.P.H. | $ | 445,900 | | (1) |
| Leslie Tari, Ph.D. | $ | 359,050 | | (2) |
(1) Drs. Stein and Sandison received base salary increases in March 2021 which were applied retroactively to January 1, 2021.
(2) Dr. Tari received a base salary increase to $347,100 effective as of January 1, 2021 and an additional, mid-year base salary increase to $371,000 on a go-forward basis due to his promotion to Chief Scientific Officer. The total for 2021 was $359,050, as reflected in the Summary Compensation Table.
Annual Bonus Opportunity
In addition to base salaries, our named executive officers are eligible to receive annual performance-based cash bonuses, which are designed to provide appropriate incentives to our named executive officers to achieve defined annual corporate and individual goals and to reward them for achievement towards these goals. The annual performance-based bonus that each named executive officer is eligible to receive is generally based on the extent to which we achieve the corporate goals the Board establishes each year, the extent to which the executive achieves any related individual goals and each executive’s target bonus opportunity.
The target bonus percentages that Drs. Stein, Sandison and Tari were eligible for under the bonus plan for 2021 were 60%, 40% and 40% of their base salaries, respectively. Dr. Stein’s bonus award was weighted 100% for our achievement of corporate goals established by the Board. The bonus awards for Drs. Sandison and Tari were weighted 80% for our achievement of corporate goals and 20% for achievement of individual goals approved by our Chief Executive Officer. Our corporate goals for 2021, established by our Board upon recommendation of the Compensation Committee, were a mix of clinical, research and development and financial goals. For our executive officers, including our named executive officers, the actual bonus award for any year, if any, may be more or less than the applicable target, depending primarily on the Board’s determination of the extent to which we achieved the corporate goal component, and, other than for Dr. Stein, the executive’s individual performance with respect to such corporate goals. There is no minimum bonus percentage or amount established for the named executive officers and, as a result, the bonus amounts vary from year to year based on corporate and/or individual performance. Payments under the bonus plan may be made in cash, through the issuance of stock, stock options or another form of equity award, or by a combination thereof. The Compensation Committee has the right to terminate or change the bonus plan at any time and for any reason.
In March 2022, our Board, upon recommendation of the Compensation Committee, reviewed our corporate goals and unanimously determined that on an overall basis, we achieved 79% of our corporate goals for 2021. Upon the recommendation of the Compensation Committee having reviewed and approved the individual performances in the case of Drs. Sandison and Tari, the Board awarded the bonuses, in the form of RSUs for Dr. Stein and in the form of cash for Drs. Sandison and Tari, in the Summary Compensation Table above.
Equity-Based Incentive Awards
Our equity-based incentive awards are designed to align the interests of our employees, including our named executive officers, with our stockholders’ interests. The Compensation Committee is responsible for approving equity grants, other than those for our Chief Executive Officer and directors which are approved by our Board based upon the recommendation of the Compensation Committee. Our executives generally are awarded an initial new hire equity grant upon commencement of employment. Additional annual grants may also be made at the discretion of the Compensation Committee or Board in order to specifically incentivize executives with respect to achieving certain corporate goals, reward executives for exceptional performance, or to ensure executives’ equity holdings are consistent with our compensation philosophy.
Prior to our initial public offering, we granted all equity awards pursuant to our 2013 Stock Option and Grant Plan (the “2013 Plan”). Upon and following our initial public offering, all equity awards are granted under our 2015 Equity Incentive Plan (the “2015 Plan”) and, starting in December 2020, new hire equity awards to individuals who were not previously employees or directors of the Company, may be granted under our 2020 Inducement Incentive Plan (the “2020 Plan”). The terms of our 2013 Plan, 2015 Plan and 2020 Plan are described below under “Equity Benefit Plans.” All options are granted with a per share exercise price equal to the fair market value of a share of our common stock on the date of the grant of such award, as determined by the Compensation Committee or the Board. Generally, our new hire equity awards vest over a four-year period and our annual equity awards vest over a three-year period, in each case subject to the holder’s continuous service to Cidara.
We granted annual equity awards to each of our named executive officers in March 2021. Our annual equity awards for Drs. Stein, Sandison and Tari consisted of stock options. In addition, we granted Dr. Tari stock options in July 2021 upon his promotion to Chief Scientific Officer, and in September 2021 we granted Drs. Sandison and Tari RSUs as part of a retention incentive program. All stock options were granted and approved on the same date with an exercise price equal to the fair value of the Company’s common stock on the date of grant. All stock options are time-based awards, which vest monthly, on a pro-rata basis, over three years, and have a term of ten years. The RSUs vest in three annual installments on September 10, 2022, 2023, and 2024, contingent on each officer’s continued employment with the Company through the applicable vesting date.
Agreements with our Named Executive Officers
In September 2016 we entered into an amended and restated employment agreement with Dr. Stein. In March 2017 we entered into an amended and restated employment agreement with Dr. Sandison. In July 2021 we entered into an amended and restated employment agreement with Dr. Tari. The agreements govern the terms of their at-will employment with us and provide for certain severance and change of control benefits, the terms of which are described below under “—Potential Payments Upon Termination or Change of Control.”
Potential Payments Upon Termination or Change of Control
Regardless of the manner in which a named executive officer’s service terminates, the named executive officer is entitled to receive amounts earned during his term of service, including salary and unused vacation pay. In addition, each of our named executive officers is eligible to receive certain benefits pursuant to his agreement with us. The benefits described below are contingent on the officer’s execution and non-revocation of a general release of claims against us and certain related parties.
Dr. Stein
In the event that we terminate the employment of Dr. Stein other than for cause or if Dr. Stein resigns with good reason, in each case as defined in Dr. Stein’s amended and restated employment agreement and provided such event occurs outside of the period beginning three months before and ending 12 months after a change of control transaction involving us, Dr. Stein will receive 12 months of salary, payable in a lump sum, and 12 months of health care benefits continuation at our expense.
In the event that we terminate the employment of Dr. Stein other than for cause or if Dr. Stein resigns with good reason, in each case as defined in Dr. Stein’s amended and restated employment agreement and provided such event occurs during the period beginning three months before and ending 12 months after a change of control transaction involving us, Dr. Stein will receive 18 months of salary, payable in a lump sum, 1.5 times the amount of Dr. Stein’s target bonus level for the year in which the termination occurs, and 18 months of health care benefits continuation at our expense. In addition, all of Dr. Stein’s unvested stock awards will immediately become vested on the date of termination.
In addition, in the event we undertake a change of control transaction in which Dr. Stein is subject to excise taxes under Section 280G of Internal Revenue Code of 1986, as amended (the “Code”), Dr. Stein will receive a gross-up payment, payable in a lump sum, to fully compensate Dr. Stein for any such taxes imposed by Section 280G of the Code.
Drs. Sandison and Tari
In the event that we terminate the employment of Drs. Sandison and Tari other than for cause or if such executive resigns with good reason, in each case as defined in his amended and restated employment agreement and provided such event occurs outside of the period beginning three months before and ending 12 months after a change of control transaction involving us, such executive will receive nine months of salary, payable in a lump sum, and nine months of health care benefits continuation at our expense.
In the event we terminate the employment of Drs. Sandison and Tari other than for cause or if such executive resigns with good reason, in each case as defined in his amended and restated employment agreement and provided such event occurs during the period beginning three months before and ending 12 months after a change of control transaction involving us, such executive will receive 12 months of salary, payable in a lump sum, an amount equal to his target bonus level for the year in which the termination occurs, and 12 months of health care benefits continuation at our expense. In addition, all of such executive’s unvested stock awards will immediately become vested on the date of termination.
In addition, in the event we undertake a change of control transaction in which Drs. Sandison and Tari is subject to excise taxes under Section 280G of the Code, Drs. Sandison and Tari, as applicable, will receive a gross-up payment, payable in a lump sum, to compensate such executive officer for any taxes imposed by Section 280G of the Code, provided that each such gross-up payment will be capped at $1 million.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information regarding equity awards granted to our named executive officers that remain outstanding as of December 31, 2021:
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| | | | | | OPTION AWARDS (1) | | STOCK AWARDS |
| NAME | | GRANT DATE | | VESTING COMMENCE-
MENT DATE | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS
(#) EXERCISABLE | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS
(#)
UNVESTED AND UNEXERCISABLE | | OPTION EXER-
CISE PRICE
($) | | OPTION EXPIR-
ATION DATE | | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED
(#) | | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (2) | | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS, OR OTHER RIGHTS THAT HAVE NOT VESTED
(#) | | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) (2) |
| Jeffrey Stein, Ph.D. | | 9/9/2014 | (3) | 5/30/2014 | | 153,443 | | | — | | | $ | 2.29 | | | 9/8/2024 | | | | | | | | |
| 2/19/2015 | (4) | 2/19/2015 | | 205,511 | | | — | | | $ | 6.86 | | | 2/18/2025 | | | | | | | | |
| | 3/16/2016 | (4) | 3/16/2016 | | 159,000 | | | — | | | $ | 9.89 | | | 3/15/2026 | | | | | | | | |
| | 3/31/2017 | (4) | 3/31/2017 | | 220,000 | | | — | | | $ | 7.80 | | | 3/30/2027 | | | | | | | | |
| | 3/29/2018 | (4) | 3/29/2018 | | 235,000 | | | — | | | $ | 4.00 | | | 3/28/2028 | | | | | | | | |
| | 1/31/2019 | (5) | | | | | | | | | | | | | |
| 20,000 | | | $ | 25,400 | |
| | 3/21/2019 | (4) | 3/21/2019 | | 242,917 | | | 22,083 | | | $ | 2.61 | | | 3/20/2029 | | | | |
| | | |
| | 3/19/2020 | (4) | 3/19/2020 | | 192,500 | | | 137,500 | | | $ | 1.98 | | | 3/18/2030 | | | | | | | | |
| | 3/17/2021 | (4) | 3/17/2021 | | 131,250 | | | 393,750 | | | $ | 2.55 | | | 3/16/2031 | | | | | | | | |
| Taylor Sandison, M.D., M.P.H. | | 9/18/2017 | (5) | 9/18/2017 | | | | | | | | | | | | | | 12,500 | | | $ | 15,875 | |
| 3/29/2018 | (4) | 3/29/2018 | | 70,000 | | | — | | | $ | 4.00 | | | 3/28/2028 | | | | |
| | | |
| | 1/31/2019 | (5) | 1/31/2019 | | | | | | | | | | | | | | 6,300 | | | $ | 8,001 | |
| | 1/31/2019 | (6) | 1/31/2019 | | | | | | | | | | 2,000 | | | $ | 2,540 | | | | | |
| | 3/21/2019 | (4) | 3/21/2019 | | 59,583 | | | 5,417 | | | $ | 2.61 | | | 3/20/2029 | | | | |
| | | |
| | 12/18/2019 | (7) | 12/18/2019 | | 61,925 | | | — | | | $ | 2.45 | | | 12/17/2026 | | | | |
| | | |
| | 12/18/2019 | (8) | 12/18/2019 | | 2,716 | | | 1,359 | | | $ | 2.45 | | | 12/17/2026 | | | | | | | | |
| | 3/19/2020 | (4) | 3/19/2020 | | 84,583 | | | 60,417 | | | $ | 1.98 | | | 3/18/2030 | | | | | | | | |
| | 3/17/2021 | (4) | 3/17/2021 | | 36,250 | | | 108,750 | | | $ | 2.55 | | | 3/16/2031 | | | | | | | | |
| | 9/30/2021 | (9) | 9/30/2021 | | | | | | | | | | 150,600 | | | $ | 191,262 | | | | | |
| Leslie Tari, Ph.D. | | 9/9/2014 | (3) | 9/9/2014 | | 30,708 | | | — | | | $ | 2.29 | | | 9/8/2024 | | | | |
| | | |
| 1/31/2019 | (5) | 1/31/2019 | | | | | | | | | | | | | | 1,574 | | | $ | 1,999 | |
| | 1/31/2019 | (6) | 1/31/2019 | | | | | | | | | | 750 | | | $ | 953 | | | | | |
| | 12/18/2019 | (7) | 12/18/2019 | | 73,960 | | | — | | | $ | 2.45 | | | 12/17/2026 | | | | |
| | | |
| | 12/18/2019 | (8) | 12/18/2019 | | 36,667 | | | 18,333 | | | $ | 2.45 | | | 12/17/2026 | | | | |
| | | |
| | 3/19/2020 | (4) | 3/19/2020 | | 49,583 | | | 35,417 | | | $ | 1.98 | | | 3/18/2030 | | | | | | | | |
| | 3/17/2021 | (4) | 3/17/2021 | | 30,000 | | | 90,000 | | | $ | 2.55 | | | 3/16/2031 | | | | | | | | |
| | 7/30/2021 | (4) | 7/1/2021 | | 4,167 | | | 25,833 | | | $ | 1.52 | | | 7/29/2031 | | | | | | | | |
| | 9/30/2021 | (9) | 9/30/2021 | | | | | | | | | | 148,000 | | | $ | 187,960 | | | | | |
(1) Options granted prior to April 2015 were granted under the 2013 Plan, options granted after April 2015 were granted under the 2015 Plan. Options granted under the 2013 Plan are immediately exercisable subject to a repurchase right held by us, which lapses as the shares vest. Options granted under the 2015 Plan become exercisable as they vest. The terms of the 2013 Plan and 2015 Plan are described below under “Equity Benefit Plans.” All equity award vesting is subject to continued service of the executive.
(2) The amount shown is determined by multiplying the number of unvested RSUs by $1.27, the closing price of the Company's common stock on December 31, 2021, the last trading day of the Company’s fiscal year.
(3) Stock options have a four-year vesting schedule, with 25% vesting on the one-year anniversary of the vesting commencement date, and monthly thereafter in equal increments over the remaining 36 months.
(4) Stock options have a three-year vesting schedule, vesting in equal monthly increments.
(5) Awards include performance restricted stock units (“PRSUs”) that are subject to performance-based vesting conditions and are scheduled to vest on the achievement of various clinical and corporate milestones, subject to the officer’s continued service with the Company through the satisfaction of such performance conditions.
(6) Represents RSUs that are subject to time-based vesting conditions and are scheduled to vest in full on January 1, 2022, contingent on the officer’s continued service with the Company through the applicable vesting date.
(7) Represents stock options granted in our 2019 Option Exchange described in our proxy statement for our 2020 Annual Meeting of Stockholders, which vested in full on the first anniversary of the grant date.
(8) Represents stock options granted in our 2019 Option Exchange, which vest over three years, with 1/3 vesting on the one-year anniversary of the vesting commencement date, and monthly thereafter in equal increments over the remaining 24 months.
(9) Represents RSUs that are subject to time-based vesting conditions and are scheduled to vest in three equal installments on September 10, 2022, 2023 and 2024, contingent on the officer’s continued service with the Company through the applicable vesting date.
Option Repricings
We did not engage in any repricings, modifications or cancellations of any of our named executive officers’ outstanding equity awards during the year ended December 31, 2021.
Perquisites Health, Welfare and Retirement Benefits
All of our named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, group life, disability and accidental death and dismemberment insurance plans, in each case on the same basis as our other employees. We also provide a 401(k) plan to our employees, including our named executive officers, as discussed in the section below entitled “401(k) Plan.”
We do not provide any other perquisites or personal benefits to our named executive officers. We do, however, pay the premiums for term life insurance and disability insurance for all of our employees, including our current named executive officers.
401(k) Plan
We maintain a defined contribution employee retirement plan (the “401(k) Plan”), for our employees. Our named executive officers are eligible to participate in the 401(k) Plan on the same basis as our other employees. The 401(k) Plan is intended to qualify as a tax-qualified plan under Section 401(k) of the Code. The 401(k) plan provides that each participant may contribute a portion of his or her eligible compensation, up to the statutory annual limit, which was $19,500 for employees under age 50 and was $26,000 for employees age 50 and over in 2021. All contributions made by participants are either pre-tax contributions or after-tax “Roth 401(k) contributions,” as elected by the participant. The plan permits us to make discretionary contributions, including matching contributions and discretionary profit sharing contributions. In 2021 we made an employer matching contribution for 2020 employee pre-tax and Roth 401(k) contributions of twenty-five cents for every employee dollar electively deferred under the 401(k) Plan, limited to four percent of the participant’s compensation and further subject to any limitations set forth by the Internal Revenue Service. The 401(k) Plan currently does not offer the ability to invest in Cidara’s securities.
Nonqualified Deferred Compensation
None of our named executive officers participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. The Board may elect to provide our officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.
Tax Deductibility of Executive Compensation
Under Section 162(m) of the Internal Revenue Code, or Section 162(m), compensation paid to each of our “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date.
Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions and retains the flexibility to provide compensation for the Company’s named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its stockholders, which may include providing for compensation that is not deductible by the Company due to the deduction limit under Section 162(m). The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.
Equity Benefit Plans
2020 Inducement Incentive Plan
Our Board adopted the 2020 Plan in December 2020.
Eligible Award Recipients. Grantees under the 2020 Plan must be individuals who were not previously employees or directors of the Company, or who are returning to employment following a bona fide period of non-employment with the Company.
Stock Awards. The 2020 Plan provides for the grant of nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards to eligible employees as an inducement material to such persons entering into employment with the Company.
Administration. Our Board administers the 2020 Plan. Awards may be granted under the 2020 Plan by either a majority of the Board’s independent members or the independent members of the Compensation Committee. Subject to the terms of the 2020 Plan, our Board or the authorized committee, referred to herein as the plan administrator, determines recipients, dates of grant, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and the vesting schedule applicable to a stock award. Subject to the limitations set forth below, the plan administrator will also determine the exercise price, strike price or purchase price of awards granted and the types of consideration to be paid for the award.
The plan administrator has the authority to modify outstanding awards under our 2020 Plan. Subject to the terms of our 2020 Plan, the plan administrator may not reduce the exercise, purchase or strike price of any outstanding stock award, but may cancel any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.
Stock Options. Nonstatutory stock options (“NSOs”) are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions of the 2020 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2020 Plan vest at the rate specified by the plan administrator.
The plan administrator determines the term of stock options granted under the 2020 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. The option term may be extended in the event that exercise of the option following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, options generally terminate immediately upon the termination of the individual for cause. In no event may an option be exercised beyond the expiration of its term.
Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1) cash, check, bank draft or money order, (2) a broker-assisted cashless exercise, (3) the tender of shares of our common stock previously owned by the optionholder, (4) a net exercise of the option, and (5) other legal consideration approved by the plan administrator.
Unless the plan administrator provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic relations order. An optionholder may designate a beneficiary, however, who may exercise the option following the optionholder’s death.
Restricted Stock Unit Awards. RSU awards are granted pursuant to restricted stock unit award agreements adopted by the plan administrator. RSU awards may be granted in consideration for any form of legal consideration. An RSU award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by an RSU award. Except as otherwise provided in the applicable award agreement, RSUs that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.
Corporate Transactions. In the event of certain specified significant corporate transactions, the plan administrator has the discretion to take any of the following actions with respect to stock awards:
•arrange for the assumption, continuation or substitution of a stock award by a surviving or acquiring entity or parent company;
•arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiring entity or parent company;
•accelerate the vesting of the stock award and provide for its termination at or prior to the effective time of the corporate transaction;
•arrange for the lapse of any reacquisition or repurchase right held by us;
•cancel or arrange for the cancellation of the stock award in exchange for such cash consideration, if any, as the Board may deem appropriate; or
•make a payment equal to the excess of (1) the value of the property the participant would have received upon exercise of the stock award over (2) the exercise price otherwise payable in connection with the stock award.
Our plan administrator is not obligated to treat all stock awards, even those that are of the same type, in the same manner.
Under the 2020 Plan, a corporate transaction is generally the consummation of (1) a sale or other disposition of all or substantially all of our consolidated assets, (2) a sale or other disposition of at least 90% of our outstanding securities, (3) a merger, consolidation or similar transaction following which we are not the surviving corporation, or (4) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.
Change of Control. The plan administrator may provide, in an individual award agreement or in any other written agreement between a participant and us, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change of control. For example, certain of our employees may receive an award agreement that provides for vesting acceleration upon the individual’s termination without cause or resignation for good reason (including a material reduction in the individual’s base salary, duties, responsibilities or authority, or a material relocation of the individual’s principal place of employment with us) in connection with a change of control. Under the 2020 Plan, a change of control is generally (1) the acquisition by a person or entity of more than 50% of our combined voting power other than by merger, consolidation or similar transaction; (2) a consummated merger, consolidation or similar transaction immediately after which our stockholders cease to own more than 50% of the combined voting power of the surviving entity; or (3) a consummated sale, lease or exclusive license or other disposition of all or substantially of our consolidated assets.
Amendment and Termination. Our Board has the authority to amend, suspend, or terminate our 2020 Plan, subject to shareholder approval.
2015 Equity Incentive Plan
Our Board adopted the 2015 Plan in March 2015 and our stockholders approved the 2015 Plan in April 2015. The 2015 Plan became effective upon the execution and delivery of the underwriting agreement related to our initial public offering. Once the 2015 Plan became effective, no further grants were made under the 2013 Plan.
Stock Awards. The 2015 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, stock appreciation rights, restricted stock awards, RSUs, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of us and our affiliates. Additionally, the 2015 Plan provides for the grant of performance cash awards. ISOs may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants.
Administration. Our Board, or a duly authorized committee thereof, has the authority to administer the 2015 Plan. Our Board may also delegate to one or more of our officers the authority to (1) designate employees (other than other officers) to be recipients of certain stock awards, and (2) determine the number of shares of common stock to be subject to such stock awards. Subject to the terms of the 2015 Plan, our Board or the authorized committee, referred to herein as the plan administrator, determines recipients, dates of
grant, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and the vesting schedule applicable to a stock award. Subject to the limitations set forth below, the plan administrator will also determine the exercise price, strike price or purchase price of awards granted and the types of consideration to be paid for the award.
The plan administrator has the authority to modify outstanding awards under our 2015 Plan. Subject to the terms of our 2015 Plan, the plan administrator has the authority to reduce the exercise, purchase or strike price of any outstanding stock award, cancel any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.
Stock Options. ISOs and NSOs are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions of the 2015 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2015 Plan vest at the rate specified by the plan administrator.
The plan administrator determines the term of stock options granted under the 2015 Plan, up to a maximum of ten years. Unless the terms of an optionholder’s stock option agreement provide otherwise, if an optionholder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. The option term may be extended in the event that exercise of the option following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If an optionholder’s service relationship with us or any of our affiliates ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, options generally terminate immediately upon the termination of the individual for cause. In no event may an option be exercised beyond the expiration of its term.
Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1) cash, check, bank draft or money order, (2) a broker-assisted cashless exercise, (3) the tender of shares of our common stock previously owned by the optionholder, (4) a net exercise of the option if it is an NSO, and (5) other legal consideration approved by the plan administrator.
Unless the plan administrator provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic relations order. An optionholder may designate a beneficiary, however, who may exercise the option following the optionholder’s death.
Restricted Stock Unit Awards. RSU awards are granted pursuant to restricted stock unit award agreements adopted by the plan administrator. RSU awards may be granted in consideration for any form of legal consideration. An RSU award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by an RSU award. Except as otherwise provided in the applicable award agreement, RSUs that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.
Corporate Transactions. In the event of certain specified significant corporate transactions, the plan administrator has the discretion to take any of the following actions with respect to stock awards:
•arrange for the assumption, continuation or substitution of a stock award by a surviving or acquiring entity or parent company;
•arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiring entity or parent company;
•accelerate the vesting of the stock award and provide for its termination at or prior to the effective time of the corporate transaction;
•arrange for the lapse of any reacquisition or repurchase right held by us;
•cancel or arrange for the cancellation of the stock award in exchange for such cash consideration, if any, as the Board may deem appropriate; or
•make a payment equal to the excess of (1) the value of the property the participant would have received upon exercise of the stock award over (2) the exercise price otherwise payable in connection with the stock award.
Our plan administrator is not obligated to treat all stock awards, even those that are of the same type, in the same manner.
Under the 2015 Plan, a corporate transaction is generally the consummation of (1) a sale or other disposition of all or substantially all of our consolidated assets, (2) a sale or other disposition of at least 90% of our outstanding securities, (3) a merger, consolidation or similar transaction following which we are not the surviving corporation, or (4) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.
Change of Control. The plan administrator may provide, in an individual award agreement or in any other written agreement between a participant and us, that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change of control. For example, certain of our employees may receive an award agreement that provides for vesting acceleration upon the individual’s termination without cause or resignation for good reason (including a material reduction in the individual’s base salary, duties, responsibilities or authority, or a material relocation of the individual’s principal place of employment with us) in connection with a change of control. Under the 2015 Plan, a change of control is generally (1) the acquisition by a person or entity of more than 50% of our combined voting power other than by merger, consolidation or similar transaction; (2) a consummated merger, consolidation or similar transaction immediately after which our stockholders cease to own more than 50% of the combined voting power of the surviving entity; or (3) a consummated sale, lease or exclusive license or other disposition of all or substantially of our consolidated assets.
Amendment and Termination. Our board of directors has the authority to amend, suspend, or terminate our 2015 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No ISOs may be granted after the tenth anniversary of the date our Board adopted our 2015 Plan.
2013 Stock Option Plan
Our Board initially adopted and our stockholders approved the 2013 Plan in February 2013. The 2013 Plan provides for the grant of stock options (ISOs and NSOs), restricted stock awards, unrestricted stock awards and RSU awards to our employees, directors, and consultants. Only stock options were awarded under the 2013 Plan. Our Board, or a duly authorized committee thereof, has the authority to administer the 2013 Plan. Subject to the terms of the 2013 Plan, our Board determined recipients, dates of grant, the number of and types of awards granted and the terms and conditions of awards made, including any applicable vesting schedule. Awards under the 2013 Plan were granted pursuant to award agreements adopted by the plan administrator. No additional awards may be granted under the 2013 Plan. However, any outstanding awards already granted under the 2013 Plan will remain outstanding, subject to the terms of such plan and the applicable award agreements, until such outstanding awards are exercised or until they terminate or expire by their terms.
2015 Employee Stock Purchase Plan
Our Board adopted the 2015 Employee Stock Purchase Plan, or the ESPP, in March 2015 and our stockholders approved the ESPP in April 2015. The ESPP became effective immediately upon the execution and delivery of the underwriting agreement related to our initial public offering. The purpose of the ESPP is to retain the services of new employees and secure the services of new and existing employees while providing incentives for such individuals to exert maximum efforts toward our success and that of our affiliates.
Administration. Our Board has delegated its authority to administer the ESPP to our Compensation Committee. The ESPP is implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, we may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances.
Payroll Deductions. Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, up to 15% of their earnings for the purchase of our common stock under the ESPP. Unless otherwise determined by our Board, common stock will be purchased for
accounts of employees participating in the ESPP at a price per share equal to the lower of (1) 85% of the fair market value of a share of our common stock on the first date of an offering or (2) 85% of the fair market value of a share of our common stock on the date of purchase.
Corporate Transactions. In the event of certain significant corporate transactions, including the consummation of: (1) a sale of all our assets, (2) the sale or disposition of 90% of our outstanding securities, (3) a merger or consolidation where we do not survive the transaction and (4) a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction, any then-outstanding rights to purchase our stock under the ESPP may be assumed, continued or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue or substitute for such purchase rights, then the participants’ accumulated payroll contributions will be used to purchase shares of our common stock within ten business days prior to such corporate transaction, and such purchase rights will terminate immediately.
Plan Amendments, Termination. Our Board has the authority to amend or terminate our ESPP, provided that except in certain circumstances any such amendment or termination may not materially impair any outstanding purchase rights without the holder’s consent. We will obtain stockholder approval of any amendment to our ESPP as required by applicable law or listing requirements.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides certain information with respect to all of the Company’s equity compensation plans in effect as of December 31, 2021.
| | | | | | | | | | | | | | | | | |
| Equity Compensation Plan Information |
| Plan Category | (a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights | | (b) Weighted-average exercise price of outstanding options, warrants and rights (3) | | (c) Number of securities remaining available for issuance under equity compensation plans, excluding securities reflected in column (a) (4) |
| Equity compensation plans approved by security holders: | 8,361,328 | | (1) | $ | 3.36 | | | 2,851,062 | |
| Equity compensation plans not approved by security holders: | 1,108,850 | | (2) | $ | 2.15 | | | 266,150 | |
| Total | 9,470,178 | | | | | 3,117,212 | |
(1)Includes 7,291,741 shares subject to outstanding stock options and 1,069,587 shares subject to outstanding RSUs under our 2015 Plan and 2013 Plan.
(2)Includes 1,004,350 shares subject to outstanding stock options and 104,500 shares subject to outstanding RSUs under our 2020 Plan.
(3)The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs or PRSUs, which have no exercise price.
(4)Includes our 2013 Plan, our 2015 Plan, our 2020 Plan, and our ESPP. 680,228 shares in “Equity compensation plans approved by security holders” under column (c) were subject to purchase under our ESPP.
Non-Employee Director Compensation
We maintain a non-employee director compensation policy approved by our Board based on the recommendation of the Compensation Committee. The policy originally became effective in 2015 and was amended by the Board, upon the recommendation of the Compensation Committee, in December 2016, in December 2019, in December 2020, in March 2021 (added Science and Technology Committee compensation), and in December 2021.
Prior to December 2021, the policy provided that each non-employee director would receive the following compensation for service on the Board:
•an annual cash retainer of $40,000, or $70,000 for the Chairman of the Board;
•an additional annual cash retainer of $9,000, $7,500, $4,000 and $4,000 for service as a member of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee, respectively;
•an additional annual cash retainer of $18,000, $15,000, $8,000 and $8,000 for service as Chairman of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee, respectively (in lieu of the committee member retainer above);
•an initial option grant to purchase 35,000 shares of our common stock on the date of each non-employee director’s initial appointment to the Board, with 1/3rd of the shares vesting on the first anniversary of the date of grant and the remaining shares vesting in equal monthly installments over the next two years, subject to acceleration of vesting in full upon a change of control; and
•an annual option grant to purchase 17,500 shares of our common stock on the date of each of our annual stockholder meetings, which vests in one installment on the earlier of the first anniversary of the date of grant and the day prior to the date of our first annual stockholder meeting held after the date of grant, subject to acceleration of vesting in full upon a change of control.
The policy, as amended in December 2021, provides that each non-employee director will receive the following compensation for service on the Board:
•an annual cash retainer of $40,000, or $70,000 for the Chairman of the Board;
•an additional annual cash retainer of $9,000, $7,500, $4,000 and $4,000 for service as a member of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee, respectively;
•an additional annual cash retainer of $18,000, $15,000, $8,000 and $8,000 for service as Chairman of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Science and Technology Committee, respectively (in lieu of the committee member retainer above);
•an initial option grant to purchase 56,000 shares of our common stock on the date of each non-employee director’s initial appointment to the Board, with 1/3rd of the shares vesting on the first anniversary of the date of grant and the remaining shares vesting in equal monthly installments over the next two years, subject to acceleration of vesting in full upon a change of control; and
•an annual option grant to purchase 28,000 shares of our common stock on the date of each of our annual stockholder meetings, which vests in one installment on the earlier of the first anniversary of the date of grant and the day prior to the date of our first annual stockholder meeting held after the date of grant, subject to acceleration of vesting in full upon a change of control.
We provide reimbursement to all of our non-employee directors for their travel, lodging and other reasonable expenses incurred in attending meetings of the Board and committees of the Board.
The following table sets forth in summary form information concerning the compensation that was earned by each of our non-employee directors during the year ended December 31, 2021:
| | | | | | | | | | | | | | | | | | | | |
| NAME | | FEES EARNED OR PAID IN CASH | | OPTION AWARDS ($)(1) | | TOTAL ($) |
| Bonnie Bassler | | $ | 47,516 | | | $ | 71,537 | | | $ | 119,053 | |
| Carin Canale-Theakston | | $ | 44,819 | | | $ | 71,537 | | | $ | 116,356 | |
| Chrysa Mineo | | $ | 56,500 | | | $ | 19,583 | | | $ | 76,083 | |
| Daniel Burgess | | $ | 92,000 | | | $ | 19,583 | | | $ | 111,583 | |
| David Gollaher, Ph.D. | | $ | 47,000 | | | $ | 19,583 | | | $ | 66,583 | |
| Theodore R. Schroeder | | $ | 64,000 | | | $ | 19,583 | | | $ | 83,583 | |
| Timothy R. Franson, M.D. | | $ | 58,500 | | | $ | 19,583 | | | $ | 78,083 | |
| | | | | | | | |
| | | Beneficial Ownership | |
Beneficial Owner | | Number of Shares
(#) | | | Percent of Total
(%) | |
Greater than 5% stockholders | | | | | | | | |
Biotechnology Value Fund, L.P. and its affiliates (1) 44 Montgomery Street, 40th Floor San Francisco, CA 94104 | | | 7,138,734 | | | | 9.99 | % |
Nantahala Capital Management, LLC (2) 130 Main Street, 2nd Floor New Canaan, CT 06840 | | | 5,270,458 | | | | 7.40 | % |
Mundipharma AG (3) St. Alban-Rheinweg 74 Basel 4020, Switzerland | | | 4,781,408 | | | | 6.72 | % |
Point72 Asset Management, L.P. and its affiliates (4) 72 Cummings Point Road Stamford, CT 06902 | | | 4,318,040 | | | | 6.07 | % |
| | |
Named Executive Officers and Directors | | | | | | | | |
Jeffrey Stein, Ph.D. (5) | | | 3,172,367 | | | | 4.33 | % |
Taylor Sandison, M.D., M.P.H. (6) | | | 571,129 | | | | * | |
Leslie Tari, Ph.D. (7) | | | 389,154 | | | | * | |
Daniel Burgess (8) | | | 119,511 | | | | * | |
Theodore R. Schroeder (9) | | | 116,511 | | | | * | |
Timothy R. Franson, M.D. (10) | | | 116,685 | | | | * | |
Chrysa Mineo (11) | | | 77,000 | | | | * | |
David Gollaher, Ph.D. (12) | | | 66,000 | | | | * | |
Bonnie Bassler, Ph.D. (13) | | | 39,201 | | | | * | |
Carin Canale-Theakston (14) | | | 38,889 | | | | * | |
All current executive officers and directors as a group (13 persons) (15) | | | 5,559,873 | | | | 7.41 | % |
| | | | | | | | |
| (1) | Based upon a Schedule 13G/A filed with the SEC on December 16, 2021 by Biotechnology Value Fund, L.P., on behalf of itself, BVF I GL LLC, Biotechnology Value Fund II, L.P., BVF II GP LLC, Biotechnology Value Trading Fund OS LP, BVF Partners OS Ltd., BVF GP Holdings, LLC, BVF Partners L.P., BVF Inc., and Mark N. Lampert. Represents 6,861,127 shares of common stock. Excludes 18,184,720 shares of common stock issuable upon conversion of 1,818,472 shares of Series X Preferred Stock and 7,222,395 shares issuable upon exercise of warrants that are not convertible or exercisable, as applicable, due to a 9.99% beneficial ownership limit as outlined in the Certificate of Designation of |
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| The amounts reported reflect the aggregate grant date fair valuePreferences, Rights and Limitations of each equity award grantedSeries X Convertible Preferred Stock filed as Exhibit 3.1 to our non-employee directors duringForm 8-K filed with the fiscal year ended December 31, 2021, as computed in accordanceSEC on May 21, 2018 and the applicable warrants. Biotechnology Value Fund, L.P., BVF I GP LLC, Biotechnology Value Fund II, L.P., BVF II GP LLC, Biotechnology Value Trading Fund OS LP, BVF Partners OS Ltd., BVF GP Holdings, LLC, BVF Partners L.P., BVF Inc., and Mark N. Lampert have shared voting and investment power over the shares and warrants. |
| (2) | Based upon a Schedule 13G filed with FASB ASC 718. Assumptions used in the calculationSEC on February 14, 2022 by Nantahala Capital Management, LLC. Represents 5,270,458 shares of these amounts are included in Note 7 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. As of December 31, 2021, the aggregate number of optionscommon stock held by our non-employee directors was as follows: Ms. Bassler, 52,500; Ms Canale-Theakston, 52,500;Nantahala Capital Management, LLC. |
| (3) | Based upon a Schedule 13G filed with the SEC on September 13, 2019 by Mundipharma AG. Represents 4,781,408 shares of common stock held by Mundipharma AG. |
| (4) | Based upon a Schedule 13G/A filed with the SEC on February 14, 2022. Represents 4,200,000 shares of common stock held by certain investment funds managed by Point72 Asset Management, L.P. and 118,040 shares of common stock held by certain investment funds managed by Cubist Systematic Strategies, LLC. The principal business address of Cubist Systematic Strategies, LLC is 55 Hudson Yards, New York, New York 10001. |
| (5) | Includes 2,137,121 shares of common stock that Dr. Stein has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of 1,887,121 stock options under the 2015 equity incentive plan and 250,000 shares of common stock issuable upon exercise of warrants held by Dr. Stein; also includes 231,602 shares of common stock held by the Jeff Stein and Catherine Naughton Revocable Trust, 761,635 shares of common stock held by Dr. Stein and 42,009 shares of common stock held by Dr. Stein’s son. |
| (6) | Includes 141,353 shares of common stock held by Dr. Sandison and 429,776 shares of common stock that Dr. Sandison has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (7) | Includes 42,575 shares of common stock held by Dr. Tari, 13,298 shares of common stock held by Dr. Tari’s spouse and 333,281 shares of common stock that Dr. Tari has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (8) | Includes 3,000 shares of common stock held by Mr. Burgess’ spouse and 116,511 shares of common stock that Mr. Burgess has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (9) | Represents 116,511 shares of common stock that Mr. Schroeder has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (10) | Includes 11,000 shares of common stock held by Dr. Franson and 105,685 shares of common stock that Dr. Franson has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (11) | Represents 77,000 shares of common stock that Ms. Mineo 77,000; Mr. Burgess, 116,511;has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (12) | Represents 66,000 shares of common stock that Dr. Gollaher 66,000;has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (13) | Includes 312 shares of common stock held by Dr. Bassler and 38,889 shares of common stock that Dr. Bassler has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (14) | Represents 38,889 shares of common stock that Ms. Canale-Theakston has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
| (15) | Includes the shares reflected in footnotes (5) - (14) above and (a) 83,099 shares of common stock held by Mr. Schroeder, 116,511;Daruwala and 418,259 shares of common stock that Mr. Daruwala has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options, (b) 99,539 shares held by Dr. Franson, 105,685.Shah and 110,888 shares of common stock that Dr. Shah has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options, and (c) 49,905 shares held by Mr. Ward and 91,736 shares of common stock that Mr. Ward has the right to acquire from us within 60 days of September 30, 2022 pursuant to the exercise of stock options. |
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
RELATED-PERSON TRANSACTIONS POLICY AND PROCEDURES
We have adopted a written related-person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration and oversight of “related-person transactions.” For purposes of our policy only, a “related-person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds $120,000.
Transactions involving compensation for services provided to us as an employee, consultant or director are not considered related-person transactions under this policy. A related person is any executive officer, director or a holder of more than 5% of our common stock, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, where a transaction has been identified as a related-person transaction, management must present information regarding the proposed related-party transaction to our Audit Committee (or, where review by our Audit Committee would be inappropriate, to another independent body of our Board) for review. The presentation must include a description of, among other things, all of the parties, the direct and indirect interests of the related parties, the purpose of the transaction, the material facts, the benefits of the transaction to us and whether any alternative transactions are available, an assessment of whether the terms are comparable to the terms available from unrelated third parties and management’s recommendation. To identify related-party transactions in advance, we rely on information supplied by our executive officers, directors and certain significant stockholders. In considering related-party transactions, our Audit Committee or another independent body of our Board takes into account the relevant available facts and circumstances including, but not limited to:
•the risks, costs and benefits to us;
•the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;
•the terms of the transaction;
•the availability of other sources for comparable services or products; and
•the terms available to or from, as the case may be, unrelated third parties.
In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval.
CERTAIN RELATED-PERSON TRANSACTIONS
The following includes a summary of transactions since January 1, 2020 to which we have been a party, in which the amount involved in the transaction exceeded the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years. Since January 1, 2020, the Company has engaged in the following transactions with related persons:
Employment Arrangements
We currently have written employment agreements with our executive officers. For information about our employment agreements with our named executive officers, refer to “Executive and Director Compensation— Agreements with our Named Executive Officers.”
Stock Options Granted to Executive Officers and Directors
We have granted stock options to our executive officers and directors. For information about our stock option awards to our named executive officers and our directors, refer to “Executive and Director Compensation—Outstanding Equity Awards at Fiscal Year-End.”
Indemnification Agreements
We have entered, and intend to continue to enter, into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our amended and restated bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services at our request. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may decline in value to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.
DIRECTOR INDEPENDENCE
For information regarding our director and committee member independence, please see the sections above headed “Information Regarding the Board of Directors and Corporate Governance—Independence of the Board of Directors” and “Information Regarding Committees of the Board of Directors,” which are incorporated into this section headed “Transactions with Related Persons”
by reference.
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 Meetingproxy materials with respect to two or more stockholders sharing the same address by delivering a single Noticeset of Internet Availability of Proxy Materials or other Annual Meetingproxy 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,For this meeting, a number of brokers with account holders who are Cidara stockholders will be “householding” the Company’s proxy materials. A single Noticeset of Internet Availability of Proxy Materialsproxy materials will be delivered to multiple stockholders sharing an address in one envelope 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 Noticeset of Internet Availability of Proxy Materials,Special Meeting materials, please notify your broker or Cidara. Direct your written request to Cidara Therapeutics, Inc., Attn: Corporate Secretary, 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121 or call us at (858) 752-6170, and we will promptly provide you a separate Notice Regarding the Availabilityset of Proxy Materials.Special Meeting material. Stockholders who currently receive multiple copies of the Noticeset of Internet Availability of Proxy MaterialsSpecial Meeting materials at their addresses and would like to request “householding” of their communications should contact their brokers.
The Board of Directors knows of no other matters that will be presented for consideration at the AnnualSpecial Meeting. If any other matters are properly brought before the meeting,Special Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
| | | | | |
| By Order of the Board of Directors |
| |
| /s/ Jeffrey Stein, Ph.D. |
| Jeffrey Stein, Ph.D. |
| President and Chief Executive Officer |
San Diego, California
November 10, 2022
20
April 29, 2022
A copyAppendix 1
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Annual ReportCertificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 50,000,000 shares. 40,000,000 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 10 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the Securitiesstockholders of the Company for their approval, and Exchange Commissionwas duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on Form 10-Kfile with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 2
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 46,363,636 shares. 36,363,636 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 11 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 3
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 43,333,332 shares. 33,333,332 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 12 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 4
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 40,769,230 shares. 30,769,230 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 13 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
| By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 5
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 38,571,428 shares. 28,571,428 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 14 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
| By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 6
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 36,666,666 shares. 26,666,666 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 15 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
| By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 7
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 35,000,000 shares. 25,000,000 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 16 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
| By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 8
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 33,529,410 shares. 23,529,410 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 17 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 9
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 32,222,222 shares. 22,222,222 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 18 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 10
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 31,052,630 shares. 21,052,630 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 19 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
| | |
| Cidara Therapeutics, Inc. |
| |
By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
Appendix 11
CERTIFICATE OF AMENDMENT TO
THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
CIDARA THERAPEUTICS, INC.
Cidara Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
First: The name of the Company is Cidara Therapeutics, Inc. The Company’s Certificate of Incorporation was originally filed with the Secretary of State of the State of Delaware on December 6, 2012, under the name of K2 Therapeutics, Inc.
Second: The Amended and Restated Certificate of Incorporation of the Company (the “Charter”) was filed with the Secretary of State of the State of Delaware on April 20, 2015.
Third: The Board of Directors of the Company (the “Board”), acting in accordance with the provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions to amend the Charter as follows:
| 1. | Article IV, Section A shall be amended and restated to read in its entirety as follows: |
“The Company is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Company is authorized to issue is 30,000,000 shares. 20,000,000 shares shall be Common Stock, each having a par value of $0.0001. 10,000,000 shares shall be Preferred Stock, each having a par value of $0.0001.”
| 2. | Effective as of 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware, each 20 shares of Common Stock, par value $0.0001 per share, issued and outstanding shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one share of Common Stock, par value $0.0001 per share; provided, however, that the Company shall issue no fractional shares as a result of the actions set forth herein but shall instead pay to the holder of such fractional share a sum in cash equal to such fraction multiplied by the closing sales price of the Common Stock as reported on the Nasdaq Capital Market on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware. |
Fourth: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted at an annual meeting of the stockholders of the Company, in accordance with the provisions of Section 242 of the DGCL.
Fifth: All other provisions of the Charter as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
IN WITNESS WHEREOF, the Company on has caused this Certificate of Amendment to be signed by its Chief Executive Officer this day of , 2022.
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| Cidara Therapeutics, Inc. |
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By: | | |
| | Name: Jeffrey Stein, Ph.D. Title: President and Chief Executive Officer |
SCAN TO VIEW MATERIALS & VOTE CIDARA THERAPEUTICS, INC. 6310 NANCY RIDGE DRIVE - SUITE 101 SAN DIEGO, CA 92121 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 12/14/2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During the meeting - Go to www.virtualshareholdermeeting.com/CDTX2022SMYou may attend the meeting via the internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 12/14/2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY The Board of Directors recommends you vote FOR proposals 1 and 2. For Against Abstain 1. Approval of a series of alternate amendments to the Company's Amended and Restated Certificate of Incorporation, to effect, at the discretion of the Company's Board of Directors: (i) a reverse split of the Company's common stock, whereby each outstanding 10, 11, 12, 13, 14, 15, 16, 17, 18, 19 or 20 shares of common stock would be combined and converted into one share of common stock; and (ii) for reverse splits in the range of 1-for-10 to 1-for-20, a reduction in the number of authorized shares of common stock from 200,000,000 to 40,000,000, 36,363,636, 33,333,332, 30,769,230, 28,571,428, 26,666,666, 25,000,000, 23,529,410, 22,222,222, 21,052,630 or 20,000,000 shares, respectively. 2. Approval of the adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of the foregoing proposal. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000583500_1 R1.0.0.3
Important Notice Regarding the Availability of Proxy Materials for the fiscal year ended December 31, 2021Special Meeting: The Notice and Proxy Statement is available without charge upon written request to: Corporate Secretary, Cidara Therapeutics, Inc.at www.proxyvote.com CIDARA THERAPEUTICS, INC. Special Meeting of Shareholders December 15, 2022 8:00 AM PST This proxy is solicited by the Board of Directors The undersigned hereby appoints Jeffrey Stein, Ph.D. and Preetam Shah, Ph.D., 6310 Nancy Ridge Drive, Suite 101, San Diego, CA 92121.MBA, and each of them, with full power of substitution and power to act alone, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the reverse side of this ballot, all of the shares of Common Stock of CIDARA THERAPEUTICS, INC. that the undersigned is entitled to vote as the Special Meeting of Shareholders to be held at 8:00 AM, PST on December 15, 2022, at the Virtual Meeting at: www.virtualshareholdermeeting.com/CDTX2022SM, and any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. 0000583500_2 R1.0.0.3 Continued and to be signed on reverse side
