| Meeting Details | |
| Virtual Meeting | To participate in the Annual Meeting virtually via the Internet, please visit: www.proxydocs.com/VANI. To access the Annual Meeting, you will need the control number included on your Notice of Internet Availability of Proxy Materials, included on your proxy card, or provided through your broker. Stockholders will be able to vote and submit questions during the Annual Meeting. |
| Record Date | April 29, 2024 |
| Shares Outstanding | There were 54,978,465 shares of common stock outstanding and entitled to vote as of the Record Date. |
| Eligibility to Vote | Holders of our common stock at the close of business on the Record Date are entitled to notice of, and to vote at, the Annual Meeting. Each stockholder is entitled to one vote for each share held as of the Record Date. |
| Quorum | The holders of a majority of the shares of common stock outstanding and entitled to vote, by proxy or via live webcast, as of the Record Date constitutes a quorum. A quorum is required to transact business at the Annual Meeting. |
| Voting Methods | Stockholders whose shares are registered in their names with Vstock Transfer, LLC, our transfer agent (referred to as “Stockholders of Record”) may vote by proxy via the Internet, phone, or mail by following the instructions on the accompanying proxy card. Stockholders of Record may also vote at the virtual Annual Meeting. Stockholders whose shares are held in “street name” by a broker, bank or other nominee (referred to as “Beneficial Owners”) must follow the voting instructions provided by their brokers or other nominees. See “What is the difference between holding shares as a Stockholder of Record and as a Beneficial Owner?” and “How do I vote and what are the voting deadlines?” below for additional information. |
| Inspector of Elections | We will appoint an independent Inspector of Elections to determine whether a quorum is present, and to tabulate the votes cast by proxy or at the Annual Meeting via live webcast. |
| Voting Results | We will announce preliminary results at the Annual Meeting. We will report final results on a Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) and post results at www.vivani.com as soon as practicable after the Annual Meeting. |
| Proxy Solicitation Costs | We will bear the costs of soliciting proxies from our stockholders. These costs include preparing, assembling, printing, mailing and distributing notices, proxy statements, proxy cards and Annual Reports. Our directors, officers and other employees may solicit proxies personally or by telephone, e-mail or other means of communication, and we will reimburse them for any related expenses. We will also reimburse brokers and other nominees for their reasonable out-of-pocket expenses for forwarding proxy materials to the Beneficial Owners of the shares that the nominees hold in their names. |
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ABOUT THE ANNUAL MEETING: QUESTIONS AND ANSWERS
Second Sight Medical Products, Inc.
12744 San Fernando Road, Suite 400
Sylmar, California 91342
(818) 833-5000What matters am I voting on?
PROXY STATEMENTYou will be voting on:
| ● | A proposal to elect six directors to hold office until the 2025 annual meeting of stockholders (the “2025 Annual Meeting”) or until their successors are duly elected and qualified; |
| ● | A proposal to ratify the appointment by the Audit Committee of our Board of Directors of BPM LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024; |
| ● | A proposal to approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers; and |
| ● | Any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof. |
ANNUAL MEETING OF STOCKHOLDERSHow does our board of directors recommend that I vote?
TO BE HELD AT 9:00 A.M. ON MAY 10, 2016
Our board of directors recommends that you vote:
INTRODUCTION
This
| ● | FOR the election of the six directors nominated by our board of directors and named in this Proxy Statement as directors to serve for one-year terms; |
| ● | FOR the ratification of the appointment by the Audit Committee of our Board of Directors of BPM LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024; |
| ● | FOR, on a non-binding advisory basis, the approval of the compensation of our named executive officers. |
Why did I receive a notice in the mail regarding the Internet availability of proxy materials?
Instead of mailing printed copies to each of our stockholders, we have elected to provide access to our proxy materials over the Internet under the SEC’s “notice and access” rules. These rules allow us to make our stockholders aware of the Annual Meeting and the accompanyingavailability of our proxy materials by sending the Notice of Internet Availability of Proxy Card is first being mailedMaterials, or the Notice, which provides instructions for how to access the full set of proxy materials through the Internet or make a request to have printed proxy materials delivered by mail. Accordingly, on or about April 18, 2016. We are sending it29, 2024, we mailed the Notice to you to solicit proxies for voting at the Annual Meetingeach of our stockholders.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
Proxy Materials
Q: Why am I being asked The Notice contains instructions on how to review these materials?
A: Second Sight Medical Products, Inc., also referred to herein as “Second Sight”, the “Company” or “we”, is providing theseaccess our proxy materials, to you in connection with the solicitation of proxies by the Company’s Board of Directors for use at an Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held at the Hyatt Regency Valencia, 24500 Town Center Drive, Valencia, California, USA, 91355, at 9:00 a.m., Pacific Standard Time on May 10, 2016. If necessary the meeting may be continued at a later time. Stockholders are invited to attend the Annual Meetingincluding our Proxy Statement and are requested to vote on the proposals described in this proxy statement.
Q: What information is contained in these materials?
A: The proxy materials include:
• our proxy statement for the Annual Meeting of Stockholders;
• our 2015 Annual Report, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2015;2023, each of which is available at www.proxydocs.com/VANI. The Notice also provides instructions on how to vote your shares through the Internet, by telephone, by mail or virtually at the Annual Meeting.
What is the purpose of complying with the SEC’s “notice and access” rules?
• aWe believe compliance with the SEC’s “notice and access” rules allows us to provide our stockholders with the materials they need to make informed decisions, while lowering the costs of printing and delivering those materials and reducing the environmental impact of our Annual Meeting. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials electronically unless you elect otherwise.
Will there be any other items of business on the agenda?
If any other items of business or other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named on the proxy card with respect to those items of business or a voting instructionother matters. The persons named on the proxy card forintend to vote the Annual Meeting.
Q: What information is containedproxy in this proxy statement?
A: The information in this proxy statement relatesaccordance with their best judgment. Our Board does not intend to the proposalsbring any other matters to be voted on at the Annual Meeting, the voting process, the Board and Board committees, the compensationwe are not currently aware of our directors and certain executive officersany matters that may be properly presented by others for fiscal 2015 and other required information.
Q: How may I obtain a paper copy of the proxy materials?
A: You may request paper copies of the proxy materials foraction at the Annual Meeting by telephoning (818) 833-5000, or by sending an e-mail to investors@secondsight.com.
Q: I share an address with another stockholder, and we received more than one paper copy of the proxy materials. How do we obtain a single copy in the future?
A: Stockholders of record sharing an address who are receiving multiple copies of the proxy materials and who wish to receive a single copy of such materials in the future may contact our transfer agent whose contact information is provided below. Beneficial owners of shares held through a broker, trustee or other nominee sharing an address who are receiving multiple copies of the proxy materials and who wish to receive a single copy of such materials in the future may contact Tom Miller at:
Meeting.
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Second Sight Medical Products, Inc.12744 San Fernando Road, Suite 400Sylmar, California 91342
Q: What does it mean if I received more than one proxy or voting instruction form?
A: You may receive more than one notice, or more than one paper copy of the proxy materials, including multiple paper copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate notice or a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one notice, or more than one proxy card. To vote all of your shares by proxy, you must complete, sign, date and return each proxy card and voting instruction card that you receive to vote the shares represented by each notice that you receive (unless you have requested and received a proxy card or voting instruction card for the shares represented by one or more of those notices).
Q: How may I obtain a copy of the Company’s 2015 Form 10-K and other financial information?
A: Stockholders may request a free copy of our 2015 Annual Report, which includes our 2015 Form 10-K, from:
Second Sight Medical Products, Inc.
12744 San Fernando Road, Suite 400
Sylmar, California 91342
Alternatively, a copy of our Form 10-K is available at the Investor Relations section of our website:http://investors.secondsight.com/sec.cfm
We also will furnish any exhibit to our Form 10-K for 2015 if specifically requested.
Voting Information
Q: What matters will the Company stockholders vote on at the Annual Meeting?
A: There are four proposals to be considered and voted on at the meeting. The proposals to be voted on are:
Proposal 1 — To elect six directors to serve until the 2017 Annual Meeting of Stockholders or until the election and qualification of their successors;
Proposal 2 — To approve an amended Second Sight 2011 Equity Incentive Plan that will (i) increase the maximum number of shares of common stock that may be issued under the Plan from 6 million shares to 7.5 million shares of common stock, (ii)allow issuance of Restricted Stock Units , and (iii) permit repricing and exchanges of options;
Proposal 3 — To ratify the appointment of Gumbiner Savett Inc. as our independent registered public accounting firm for the fiscal year ending December 31, 2016; and
Proposal 4 — To transact such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof.
For a more detailed discussion of each of these proposals, please see the information included elsewhere in the proxy statement relating to these proposals.
Q: What are the Board’s voting recommendations?
A: The Board of Directors recommends that you vote your shares as follows:
• “FOR” the election of the nominated directors (see Proposal 1);
• “FOR” ratification of an amended 2011 Equity Incentive Planthat will (i) increase the maximum number of shares of common stock that may be issued under the Plan from 6 million shares to 7.5 million shares of common stock, (ii)allow issuance of Restricted Stock Units , and (iii) permit repricing and exchanges of options (Proposal 2); and
• “FOR” the ratification of Gumbiner Savett Inc. as our independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal 3).
With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.
Q: Who is entitled to vote at the Annual Meeting?
A: Each holder of sharesHolders of our common stock issued and outstanding as ofat the close of business on April 7, 2016, the record date for the Annual Meeting, isRecord Date are entitled to cast onenotice of, and to vote per share on all items being voted upon at, the Annual Meeting. You may cumulate your votes in favorEach stockholder is entitled to one vote for each share of one or more director nominees. Please see “Is cumulative voting permittedour common stock held as of the Record Date.
A complete list of the stockholders entitled to vote at the Annual Meeting will be available at our headquarters, located at 1350 S. Loop Road, Alameda, CA 94502, during regular business hours for the election of directors” below on page 7. Youten days prior to the Annual Meeting. This list will also be available during the Annual Meeting at this location. Stockholders may vote all shares owned by you as of this time, including shares heldexamine the list for you asany legally valid purpose related to the beneficial owner through a broker, trustee or other nominee.Annual Meeting.
On the record date, the Company had approximately36,019,086 shares of common stock issued and outstanding.
Q: What is the difference between a stockholder of record and a stockholder who holds stock in street name?
A: Most of our stockholders hold theirholding shares throughas a broker, trustee or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.
• Stockholder of Record and as a Beneficial Owner?—
Stockholders of Record. If, at the close of business on the Record Date, your shares are registered directly in your name with Vstock Transfer, LLC, our transfer agent, you are considered the Stockholder of Record with respect to those shares, the “stockholder of record.”shares. As the stockholderStockholder of record,Record, you have the right to grant your voting proxy directly to the Company or to a third party,individuals listed on the proxy card or to vote your shares duringat the meeting.Annual Meeting via live webcast.
• Beneficial Owner—Owners. If your shares are held in a stock brokerage account or by a trusteebank or by anotherother nominee (that is, in “street name”),on your behalf, you are considered the “beneficial owner”Beneficial Owner of those shares.shares held in “street name.” As the beneficial owner of those shares,Beneficial Owner, you have the right to direct your broker trustee or nominee how to vote or to vote your shares during the Annual Meeting (which must be voted prior to the Annual Meeting).
Q: If I hold my shares in street name through my broker, will my broker vote these shares for me?
A: If you provide instructions on how to vote by following the voting instructions provided to you by your broker your broker will vote your shares as you have instructed. Ifor other nominee provides. In general, if you do not provide your broker or nominee with voting instructions your broker willon how to vote your shares, only if the proposal is a “routine” management proposal on which your broker hasor nominee may, in its discretion, to vote. Under Nasdaq Stock Market Business Conduct Rules, to which your broker is subject, your broker may refrain from voting uninstructed shares for elections of directors and other matters such as those involving the proposals in this proxy statement without instruction from you, in which case a broker non-vote will occur andvote your shares willwith respect to routine matters (e.g., the ratification of the appointment of our independent auditor), but may not vote your shares with respect to any non-routine matters (e.g., the election of directors). Please see “What if I do not specify how my shares are to be voted on these matters.voted?” for additional information.
Q: How docan I vote?
A: You may vote over the Internet, by mail orparticipate in person at the Annual Meeting. Please be aware that if you vote overMeeting?
Our stockholders may participate in the Internet, you may incur costs such as Internet access charges for which you will be responsible.
VoteAnnual Meeting by Internet. You can vote viavisiting the Internet by following the instructions on your proxy card.website: www.proxydocs.com/VANI. You will need to use the control number appearingincluded on your proxy card to vote via the Internet. You can use the Internet to transmit your votinginstructions up until 11:59 p.m. Eastern Time on Monday, May 9, 2016. Internet voting is available 24 hours a day. If you vote via the Internet, you do not need to vote in person or return a proxy card.
Vote by Mail. If you received a printed proxy card, you can vote by marking, datingattend and signing it, and returning it in the postage-paid envelope that is provided. Please mail your proxy card promptly to ensure that it is received before closing of the polls at the Annual Meeting.
Vote in Person at the Meeting. If you attend the Annual Meeting and plan to vote in person, we will provide you with a ballot at the Annual Meeting. If you are the Beneficial Owner of your shares, are registered directlyyour control number may be included in the voting instructions form that accompanied your name,proxy materials. If your nominee did not provide you are consideredwith a control number in the stockholdervoting instructions form that accompanied your proxy materials, you may be able to log onto the website of record and youyour nominee prior to the start of the Annual Meeting, which will automatically populate your control number in the virtual Annual Meeting interface. Stockholders who have obtained a control number as described above may vote or submit questions while participating in the right to vote in person atlive webcast of the Annual Meeting. If your shares are held in the name of your broker or other nominee, you are considered the beneficial owner of shares held in street name. As a beneficial owner,However, even if you wish to vote at the Annual Meeting, you will need to bring to the Annual Meeting a legal proxy from your broker or other nominee authorizing you to vote those shares.
If you vote by Internet or by mail, you will be designating Will McGuire, our President and Chief Executive Officer, and/or Tom Miller, our Chief Financial Officer and Corporate Secretary, as your proxy(ies). They may act together or individually on your behalf, and will have the authority to appoint a substitute to act as proxy.
Submitting a proxy will not affect your rightplan to attend the Annual Meeting andvirtually, we recommend that you vote in person. If your shares in advance, so that your vote will be counted if you later decide not to attend the Annual Meeting via live webcast.
How do I vote and what are the voting deadlines?
Stockholders of Record. Stockholders of Record can vote by proxy or by attending the Annual Meeting virtually by visiting www.proxydocs.com/VANI, where votes can be submitted via live webcast. If you vote by proxy, you can vote by Internet, telephone or by mail as described below.
| ● | You may vote via the Internet or by telephone. To vote via the Internet or by telephone, follow the instructions provided in the Notice or in the proxy card that accompanies this proxy statement. If you vote via the Internet or by telephone, you do not need to return a proxy card by mail. Internet and telephone voting are available 24 hours a day. Votes submitted through the Internet or by telephone must be received by 10:00 a.m. Pacific Time on June 27, 2024. Alternatively, you may request a printed proxy card by following the instructions provided in the Notice. |
| ● | You may vote by mail. If you would like to vote by mail, you need to complete, date and sign the proxy card that accompanies this Proxy Statement and promptly mail it in the enclosed postage-paid envelope so that it is received no later than June 26, 2024. You do not need to put a stamp on the enclosed envelope if you mail it from within the United States. The persons named on the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter to be voted on at the Annual Meeting, the persons named on the proxy card will vote the shares you own in accordance with the recommendations of our board of directors. Our board of directors recommends that you vote FOR each of Proposal Nos. 1, 2 and 3. |
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| ● | You may vote at the Annual Meeting. If you choose to vote at the Annual Meeting virtually, you will need the control number included on your Notice or on your proxy card. If you are the beneficial owner of your shares, your control number may be included in the voting instructions form that accompanied your proxy materials. If your nominee did not provide you with a control number in the voting instructions form that accompanied your proxy materials, you may be able to log onto the website of your nominee prior to the start of the Annual Meeting, on which you will need to select the stockholder communications mailbox link through to the Annual Meeting, which will automatically populate your control number in the virtual Annual Meeting interface. The method you use to vote will not limit your right to vote at the virtual Annual Meeting. All shares that have been properly voted and not revoked will be voted at the Annual Meeting. |
Beneficial Owners. If you are the Beneficial Owner of shares held in the name of record by a bank, broker or other nominee, you will receive separate voting instructions from your bank,broker or other nominee. You must follow the voting instructions provided by your broker or other nominee describingin order to instruct your broker or other nominee how to vote your shares. The availability of telephone and Internet voting options will depend on the voting process of your bank, broker or other nominee. Please check withAs discussed above, to vote during the Annual Meeting, beneficial owners must obtain a valid legal proxy from your broker, bank, broker or other nominee and followagent giving you the voting instructions it provides.
Q:What is a proxy?
A: A proxy is a person you appointright to vote on your behalf. By usingshares during the methods discussed above, you willAnnual Meeting. Contact your broker, bank, or other agent to request a legal proxy. To be appointing Will McGuire, our President and Chief Executive Officer, and/or Tom Miller, our Chief Financial Officer and Corporate Secretary, as your proxies. They may act together or individuallyable to vote during the Annual Meeting, you must submit a valid legal proxy via email to dsmsupport@betanxt.com with the subject line “Legal Proxy” by 5:00 p.m., Eastern Time, on your behalf,June 26, 2024, and will have the authority to appoint a substitute to act as proxy. If you are unablemust also register to attend the Annual Meeting, pleaseas described above. If you have a valid legal proxy, you may submit your vote via the Internet or by telephone, as instructed by your broker, bank, or other agent, at any time prior to the closing of the polls during the Annual Meeting
May I change my vote or revoke my proxy?
Stockholders of Record. If you are a Stockholder of Record, you may revoke your proxy soor change your proxy instructions at any time before your proxy is voted at the Annual Meeting by:
| ● | entering a new vote by Internet or telephone; |
| ● | signing and returning a new proxy card with a later date; |
| ● | delivering a written revocation to our Secretary at the address listed on the front page of this proxy statement; or |
| ● | attending the Annual Meeting and voting via live webcast. |
Beneficial Owners. If you are the beneficial owner of your shares, you must contact the broker or other nominee holding your shares and follow their instructions to change your vote or revoke your proxy.
What is the effect of giving a proxy?
Proxies are solicited by and on behalf of our board of directors. The persons named on the proxy card have been designated as proxy holders by our board of directors. When a proxy is properly dated, executed and returned, the shares represented by the proxy will be voted at the Annual Meeting in accordance with the instruction of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our board of directors (as shown on the first page of the proxy statement). If any matters not described in the proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote your shares. If the Annual Meeting is postponed or adjourned, the proxy holders can vote your shares on the new meeting date, unless you have properly revoked your proxy, as described above.
What if I do not specify how my shares are to be voted?
Stockholders of Record. If you are a Stockholder of Record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:
| ● | FOR the election of the six directors nominated by our board of directors and named in this Proxy Statement as directors to serve for one-year terms (Proposal No. 1); |
| ● | FOR the ratification of the appointment by the Audit Committee of our Board of Directors of BPM LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024 (Proposal No. 2); |
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| ● | FOR, on a non-binding advisory basis, the approval of the compensation of our named executive officers (Proposal No. 3); and |
In the discretion of the named proxy holders regarding any other matters properly presented for a vote at the Annual Meeting.
Beneficial Owners. If you are a Beneficial Owner and you do not provide your broker or other nominee that holds your shares with voting instructions, your broker or other nominee will determine if it has discretion to vote on each matter. In general, brokers and other nominees do not have discretion to vote on non-routine matters. Each of Proposal No. 1 (election of directors) and Proposal No. 3 (endorsement of executive compensation) is a non-routine matter, while Proposal No. 2 (ratification of appointment of independent registered public accounting firm) is a routine matter. As a result, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee cannot vote your shares with respect to Proposal Nos. 1 and 3, which would result in a “broker non-vote,” but may, in its discretion, vote your shares with respect to Proposal No. 2. For additional information regarding broker non-votes, see “What are the effects of abstentions and broker non-votes?” below.
What is a quorum?
A quorum is the minimum number of shares required to be present at the Annual Meeting for the meeting to be properly held under our bylaws and Delaware law. The holders of a majority of the shares of common stock outstanding and entitled to vote, by proxy or at the Annual Meeting via live webcast, constitutes a quorum for the transaction of business at the Annual Meeting. As noted above, as of the Record Date, there were at total of 54,978,465 shares of common stock outstanding, which means that at least 27,489,233 shares of common stock must be represented by proxy or virtually via live webcast at the Annual Meeting to have a quorum. If there is no quorum, a majority of the shares present at the Annual Meeting may adjourn the meeting to a later date.
Abstentions and broker non-votes will be counted towards the quorum requirement.
What are the effects of abstentions and broker non-votes?
An abstention represents a stockholder’s affirmative choice to decline to vote on a proposal. Abstentions will be counted for purposes of determining the presence or absence of a quorum.
The outcome of Proposal No. 1 (election of directors) will be determined by a plurality of the votes properly cast on the election of directors at the Annual Meeting, thus abstentions will have no effect on the outcome of the proposal. The outcome of Proposal Nos. 2 and 3 will be determined by the affirmative vote of a majority of the votes properly cast, thus abstentions will have no effect on the outcome of each of the proposals.
A broker non-vote occurs when a broker or other nominee holding shares for a Beneficial Owner does not vote on a particular proposal, because the broker or other nominee does not have discretionary voting power with respect to such proposal and has not received voting instructions from the Beneficial Owner of the shares. Broker non-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but will not be counted for purposes of determining the number of votes cast. Therefore, a broker non-vote will make a quorum more readily attainable, but will not affect the outcome of the vote on Proposal Nos. 1, 2 or 3.
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How many votes are needed for approval of each proposal?
| Proposal | Vote Required | Effect of Withheld Votes or Abstentions | Routine or Non-routine; Effect of Broker Non-Votes |
| Proposal No. 1— Election of directors | Plurality of votes cast | No effect | This is not a routine matter. Broker non-votes will have no effect. |
| Proposal No. 2— Ratification of the appointment of the independent registered public accounting firm | Majority of votes cast | No effect | This is a routine matter. Broker non-votes, if any, will have no effect. |
| Proposal No. 3— Endorsement of the compensation of executive officers | Majority of votes cast | No effect | This is not a routine matter. Broker non-votes will have no effect. |
With respect to Proposal No. 1, you may vote (i) FOR any or all of the nominees, or (ii) WITHHOLD your vote as to any or all nominees. The six nominees receiving the highest number of FOR votes will be elected. If you WITHHOLD your vote as to all nominees, your vote will have no effect on the outcome of the vote of Proposal No. 1.
If you ABSTAIN from voting on Proposal Nos. 2 or 3, the abstention will have no effect on the outcome of the respective proposal.
How are proxies solicited for the Annual Meeting and who is paying for the solicitation?
The board of directors is soliciting proxies for use at the Annual Meeting by means of this proxy statement. We will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. Copies of solicitation materials will also be made available upon request to brokers and other nominees to forward to the Beneficial Owners of the shares held of record by the brokers or other nominees. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending these proxy materials to Beneficial Owners.
This solicitation of proxies may be voted.supplemented by solicitation by telephone, electronic communication, or other means by our directors, officers, employees or agents. No additional compensation will be paid to these individuals for any such services, although we may reimburse such individuals for their reasonable out-of-pocket expenses in connection with such solicitation. We do not plan to retain a proxy solicitor to assist in the solicitation of proxies.
Q: Is my vote confidential?
A:Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within the CompanyVivani or to third parties, except: (1)except as necessary to meet applicable legal requirements; (2)requirements, to allow for the tabulation of votes and certification of the vote; and (3)vote, or to facilitate a successful proxy solicitation. Occasionally, stockholders provide on their proxy card written comments, which are then forwarded to management.
Q: How are votes counted, and what effect do abstentions and broker non-votes have onWill members of the proposals?
A: In the electionboard of directors you may vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each of the nominees. If you elect to abstain in the election of directors, the abstention will not impact the election of directors. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted. You also may cumulate your votes as described below.
For the other items of business, you may vote “FOR,” “AGAINST” or “ABSTAIN.”
If you are the beneficial owner of shares held in the name of a broker, trustee or other nominee and do not provide that broker, trustee or other nominee with voting instructions, your shares may constitute “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. Under the rules of the New York Stock Exchange, brokers, trustees or other nominees may generally vote on routine matters but cannot vote on non-routine matters. Only Proposal No. 3 (ratifying the appointment of the independent registered public accounting firm) is considered a routine matter. The other proposals are not considered routine matters, and without your instructions, your broker cannot vote your shares. In tabulating the voting results for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal. Thus, broker non-votes will not affect the outcome of any matter being voted on at the meeting. If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you vote by proxy card or voting instruction card and sign the card without giving specific instructions, your shares will be voted in accordance with the recommendations of the Board (FOR all of our nominees to the Board, FOR the approval of an amended 2011 Equity Incentive Plan thatwill (i) increase the maximum number of shares of common stock that may be issued under the Plan from 6 million shares to 7.5 million shares of common stock, (ii)allow issuance of Restricted Stock Units, and (iii) permit repricing and exchanges of options,and FOR ratification of the appointment of our independent registered public accounting firm).
Q: What is the voting requirement to approve each of the proposals?
A: In the election of directors, each director will be elected by the vote of the majority of votes cast with respect to that director nominee. A majority of votes cast means that the number of votes cast for a nominee’s election must exceed the number of votes cast against such nominee’s election. Each nominee receiving more votes “for” his or her election than votes “against” his or her election will be elected. Approval of each of the other proposals requires the affirmative vote of a majority of the shares present, in person or represented by proxy, and entitled to vote on that proposal atattend the Annual Meeting.Meeting?
Q: Is cumulative voting permitted for the election of directors?
A: Yes, you may chooseWe encourage our board members to cumulate your vote in the election of directors. Cumulative voting applies only to the election of directors and allows you to allocate among the director nominees, as you see fit, the total number of votes equal to the number of director positions to be filled multiplied by the number of shares you hold. For example, if you own 100 shares of stock and there are 6 directors to be elected at the Annual Meeting, you may allocate 600 “FOR” votes (6 times 100) among as few or as many of the 6 nominees to be voted on at the Annual Meeting as you choose. You may not cumulate your votes against a nominee.
If you are a stockholder of record and choose to cumulate your votes, you will need to submit a proxy card and make an explicit statement of your intent to cumulate your votes by so indicating in writing on the proxy card. If you hold shares beneficially through a broker, trustee or other nominee and wish to cumulate votes, you should contact your broker, trustee or nominee.
If you vote by proxy card or voting instruction card and sign your card with no further instructions, Will McGuire or Tom Miller, as proxy holders, may cumulate and cast your votes in favor of the election of some or all of the applicable nominees in their sole discretion, except that none of your votes will be cast for any nominee as to whom you vote against or abstain from voting.
Q: What percentage of our common stock do our directors and officers own?
A: As of March 31, 2016, our current directors and executive officers beneficially owned approximately 34.7% of our common stock outstanding. See the discussion under the heading “Security Ownership of Certain Beneficial Owners and Management” on pages 25-26 for more details.
Q: What if I have questions for our transfer agent?
A: Please contact our information agent, at the phone number or address listed below, with questions concerning stock certificates, dividend checks, transfer of ownership or other matters pertaining to your stock account.
VStock Transfer, LLC
18 Lafayette Place
Woodmere, New York 11598
Phone: (212) 828-8436
Q: What happens if I abstain?
A: Abstentions are counted as present at the meeting for purposes of determining whether there is a quorum but are not counted as votes cast.
Q: May I change my vote or revoke my proxy?
A: You may change your vote or revoke your proxy at any time prior to the vote during the Annual Meeting.
If you are the stockholder of record, you may change your vote by: (1) granting a new proxy bearing a later date (which automatically revokes the earlier proxy); (2) providing a written notice of revocation to the Corporate Secretary at the address below prior to your shares being voted; or (3) participating in the Annual Meeting and voting your shares electronically duringattend the Annual Meeting. Participation in the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. For shares you hold beneficially in the name of a broker, trustee or other nominee, you may change your vote by submitting new voting instructions to your broker, trustee or nominee, or by participating in the meeting and electronically voting your shares during the Annual Meeting.
Corporate Secretary
Second Sight Medical Products, Inc.
12744 San Fernando Road, Suite 400
Sylmar, California 91342
Annual Meeting Information
Q: How can I attend the Annual Meeting?
A: You are invited to attendBecause this year’s Annual Meeting that will be held at Hyatt Regency Valencia, 24500 Town Center Drive, Valencia, California, USA, 91355. You are entitledcompletely virtual, those board members who do attend will not be available to participate in the Annual Meetinganswer questions from stockholders.
I share an address with another stockholder, and we received only if you were the Company’s stockholder or joint holder as of the close of business on April 7, 2016 or if you hold a valid proxy for the Annual Meeting.
Q: What are the quorum requirements for the meeting?
A: The quorum requirement for holding the Annual Meeting and transacting business is that holders of a majority of shares of the Company common stock entitled to vote must be present in person or represented by proxy. Both abstentions and broker non-votes are counted for the purpose of determining the presence of a quorum.
Q: What if a quorum is not present at the Annual Meeting?
A: If a quorum is not present at the scheduled time of the Annual Meeting, then either the chairman of the Annual Meeting or the stockholders by vote of the holders of a majority of the stock present in person or represented by proxy at the Annual Meeting are authorized by our Bylaws to adjourn the Annual Meeting until a quorum is present or represented.
Q: What happens if additional matters are presented at the Annual Meeting?
A: Other than the four items of business described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, the persons named as proxy holders, Will McGuire and Tom Miller, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason any of the nominees named in this proxy statement is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board.
Q: Who will count the votes?
A: Our Chief Financial Officer and Corporate Secretary, Tom Miller, will act as the inspector of election and tabulate all votes, affirmative and negative, as well as abstentions and broker non-votes.
Q: Where can I find the voting results of the Annual Meeting?
A: We intend to announce preliminary voting results at the Annual Meeting and publish final results in a Current Report on Form 8-K to be filed with the SEC within four business days of the Annual Meeting.
Stockholder Proposals, Director Nominations and Related Bylaw Provisions
Q: What is the deadline to propose actions (other than director nominations) for consideration at next year’s Annual Meeting of stockholders?
A: You may submit proposals for consideration at future stockholder meetings. For a stockholder proposal to be considered for inclusion in our proxy statement for the Annual Meeting next year, the Corporate Secretary must receive the written proposal at our principal executive offices no later than December 19, 2016. Such proposals also must comply with SEC regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:
Corporate Secretary
Second Sight Medical Products, Inc.
12744 San Fernando Road, Suite 400
Sylmar, California 91342
Deadlines for the nomination of director candidates are discussed below.
Q: How may I recommend individuals to serve as directors and what is the deadline for a director recommendation?
A: You may recommend director candidates for consideration by the Nominating and Governance Committee of the Board. Any such recommendations should include verification of the stockholder status of the person submitting the recommendation and the nominee’s name and qualifications for Board membership and should be directed to the Corporate Secretary at the address of our principal executive offices set forth above. See “Proposal No. 1—Election of Directors—Director Nominee Experience and Qualifications” for more information regarding our Board membership criteria.
A stockholder may send a recommended director candidate’s name and information to the Board at any time. Generally, such proposed candidates are considered at the first or second Board meeting prior to the issuanceone paper copy of the proxy statement for our Annual Meeting.
Q:materials. How may I obtain aan additional copy of the provisions of our Bylaws regarding stockholder proposals and director nominations?proxy materials?
A: You may contact the Corporate Secretary at our principal executive offices forWe have adopted an SEC-approved procedure called “householding,” under which we can deliver a single copy of the relevant Bylaws provisions regardingNotice and, if applicable, the requirements for makingproxy materials to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing and mailing costs. Stockholders of Record who participate in householding will be able to access and receive separate proxy cards. Upon written or oral request, we will promptly deliver a separate copy of the Notice and, if applicable, the proxy materials to any stockholder proposals and nominating director candidates.
Our Bylaws alsoat a shared address to which we delivered a single copy of these documents. To receive a separate copy, or, if you are available on the SEC website as Exhibit 3.2 to our Registration Statement on Form S-1 filed on August 12, 2014.
receiving multiple
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copies, to request that Vivani only send a single copy of the next year’s Notice and, if applicable, the proxy materials, you may contact us as follows:
Vivani Medical, Inc.
1350 S. Loop Road
Alameda, CA 94502
(415) 506-8462
Stockholders who hold shares in street name may contact their brokerage firm, bank, broker-dealer or other nominee to request information about householding.
Further Questions
Q: Who can help answer my questions?
A:If you have any questions about the Annual Meeting or how to vote or revoke your proxy, you should contact Adam Mendelsohn, our Corporate Secretary and Chief FinancialExecutive Officer Tom Miller.at adam.mendelsohn@vivani.com.
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GOVERNANCE OF THE COMPANY
Our business, property and affairs are managed by, or under the direction of, our Board, in accordance with the California Corporations CodeGeneral Corporation Law of Delaware and our Bylaws. Members of the Board are kept informed of our business through discussions with the Chief Executive Officer and other key members of management, by reviewing materials provided to them by management, and by participating in regular and special meetings of the Board and its Committees.
Stockholders may communicate with the members of the Board, either individually or collectively, or with any independent directors as a group by writing to the Board at 12744 San Fernando1350 S. Loop Road, Suite 400, Sylmar, California 91342.Alameda, CA 94502. These communications will be reviewed by the office of the Corporate Secretary who, depending on the subject matter, will (a) forward the communication to the director or directors to whom it is addressed or who is responsible for the topic matter, (b) attempt to address the inquiry directly (for example, where it is a request for publicly available information or a stock related matter that does not require the attention of a director), or (c) not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic. At each meeting of the Nominating and Corporate Governance Committee, the Corporate Secretary presents a summary of communications received and will make those communications available to any director upon request.
Independence of Directors
The Nasdaq Marketplace Rules require a majority of a listed company’s Board of Directors to be comprised of independent directors. In determiningaddition, the Nasdaq Marketplace Rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934 (the “Exchange Act”).
Under Rule 5605(a)(2) of the Nasdaq Marketplace Rules, a director will only qualify as an “independent director” if, in the opinion of our Board of Directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In order to be considered independent for purposes of Rule 10A-3 of the Exchange Act, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board of Directors, or any other Board committee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwise be an affiliated person of the listed company or any of its subsidiaries.
Our Board of Directors has reviewed the composition of our Board of Directors and the independence of each director. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our directors, we apply the definition of “independent director” provided under the listing rules of The NASDAQ Stock Market LLC (“NASDAQ”). After considering all relevant facts and circumstances, the Board affirmativelyhas determined that alleach of the directors currently serving on the Board including those nominated for election at the Annual Meeting with the exception of Will McGuire,Adam Mendelsohn who is employed as our Chief Executive Officer of the Company, and President, and Robert J. Greenberg,Aaron Mendelsohn, who is employed as our Chairman of the Board,Adam Mendelsohn’s father, are independent directors under NASDAQ’s rules.
Our Board of Directors also determined that the directors who serve on our audit committee, our compensation committee, and our nominating and corporate governance committee satisfy the independence standards for such committees established by the SEC and the Nasdaq Marketplace Rules, as applicable. In making such determinations, our Board of Directors considered the relationships that each such non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining independence, including the beneficial ownership of our capital stock by each non-employee director.
Board Diversity
Our Nominating and Corporate Governance Committee believes that backgrounds and qualifications of the directors considered as a group should provide a significant breadth of experience, knowledge and abilities that shall assist the Board in fulfilling its responsibilities. Although the Nominating and Corporate Governance Committee does not have a formal diversity policy and does not follow any ratio or formula with respect to diversity in order to determine the appropriate composition of the Board, the Nominating and Corporate Governance Committee is committed to creating a Board that promotes our strategic objectives and fulfills its responsibilities to our stockholders, and considers diversity (including diversity of gender, race, ethnicity, age, sexual orientation and gender identity) education, professional experience, and differences in viewpoints and skills when evaluating proposed director candidates.
We comply with Nasdaq Rule 5605 by having one diverse director who self-identifies as female. As required by Nasdaq Rule 5606, we are providing additional information about the gender and demographic diversity of our directors in the format
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required by such rule. The information in the matrix below is based solely on information provided by our directors about their gender and demographic self-identification.
Board Diversity Matrix (As of April 29, 2024) | ||||||||
Total Number of Directors | 6 | |||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||
| Part I: Gender Identity | ||||||||
| Directors | 1 | 5 | ||||||
| Part II: Demographic Background | ||||||||
| African American or Black | ||||||||
| Alaskan Native or Native American | ||||||||
| Asian | ||||||||
| Hispanic or Latinx | ||||||||
| Native Hawaiian or Pacific Islander | ||||||||
| White | 1 | 5 | ||||||
| Two or More Races or Ethnicities | ||||||||
| LGBTQ+ | ||||||||
| Did Not Disclose Demographic Background | ||||||||
Board Meetings and Committees of our Board
The Board has three standing committeeseach of which has the composition described below and responsibilitiesthat satisfy the independence standards of the Securities Exchange Act of 1934 and NASDAQ’s rules: the Audit Committee, the Compensation Committee, and the Nominating and Governance Committee. Mr. Pfeffer is Chairman of the Audit Committee, Mr. Link is Chairman of the Compensation Committee, and Mr. Link is Chairman of the Nominating and Corporate Governance Committee. During the year ended December 31, 2015,2023, the Board held five5 meetings, the Audit Committee held four4 meetings, the Compensation Committee held one meeting,5 meetings, and the NominationNominating and Corporate Governance Committee held no meetings.1 meeting. Each of our directors attended at least 75% of the aggregatecombined Board meetings and meetings of the Board committee(s) of which he is a member, with exception of Matthew Pfeffer and Will McGuire who were appointed to our Board May 28, 2015 and August 18, 2015 respectively. Mr. Pfeffer and Mr. McGuire attended 100% of the Board meetings and the meetings of the committee(s)committees of which they are members.a member. We do not have a policy with regard to Board attendance at the Annual Meeting.
Committees of the Company’s Board of Directors
Our Board of Directors has an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance and Nominating Committee, each of which has the composition and the responsibilities described below.
Audit Committee
The Audit Committee consistsis comprised of Matthew Pfeffer, William Link, Gregg WilliamsDean Baker, as chair, Daniel Bradbury and Aaron Mendelsohn, since his appointment on September 3, 2015, four non-employee directors, allAlexandra Larson, each of whom areis “independent” as defined under section 5605 (a)5605(a)(2) of the NASDAQNasdaq Listing Rules. Mr. Pfeffer is a chair of the Audit Committee. Alfred E. Mann served as chair of the audit committee until he was replaced by Matthew Pfeffer upon Mr.Mann's resignation as the chair, tendered on May 28, 2015. Mr. Mann tendered his resignation as director on February 9, 2016. In addition, the Boardboard of directors has determined that Mr. Pfeffer, qualifies asBaker is an “audit committee financial expert” as defined in the rulesItem 407(d)(5)(ii) of Regulation S-K promulgated under the Securities and Exchange Commission (SEC). The Audit Committee operates pursuant to a charter, which can be viewed on our website at www.secondsight.com (under “Investors”). The Audit Committee met four times during 2015 with all members in attendance at the meeting.Act. The role of the Audit Committee is to:
| ● | oversee management’s preparation of Vivani’s financial statements and management’s conduct of the accounting and financial reporting processes; |
| ● | oversee management’s maintenance of internal controls and procedures for financial reporting; |
| ● | oversee Vivani’s compliance with applicable legal and regulatory requirements, including without limitation, those requirements relating to financial controls and reporting; |
| ● | select a firm to serve as the independent registered public accounting firm to audit Vivani’s financial statements; |
| ● | oversee the independent auditor’s qualifications and independence; |
| ● | oversee the performance of the independent auditors, including the annual independent audit of Vivani’s financial statements; |
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| ● | oversee management, monitoring, and mitigation of risk to the business including cybersecurity risks; |
| ● | prepare the report required by the rules of the SEC to be included in Vivani’s Proxy Statement; and |
| ● | discharge such duties and responsibilities as may be required of the Committee by the provisions of applicable law, rule or regulation. |
A copy of the independent auditors, including the annual independent audit of our financial statements;
website at www.vivani.com (under “Investors – Governance”).
Compensation Committee
The Compensation Committee consistsis comprised of William Link,Dean Baker, as chair, Alexandra Larson and Gregg Williams, and Matthew Pfeffer, three non-employee directors, alleach of whom arewe deem to be “independent” as defined in section 5605(a)(2) of the NASDAQNasdaq Listing Rules. The Compensation Committee met once during 2015.
The role of the Compensation Committee is to:
| ● | review annually Vivani’s overall compensation strategy, including base salary, incentive compensation and equity-based grants, to assure that it promotes stockholder interests and supports Vivani’s strategic and tactical objectives; |
| ● | review annually and approve the factors to be considered in determining the compensation of the Chief Executive Officer of Vivani and Vivani’s other executive officers; |
| ● | review, approve or recommend to the Board the annual compensation (base salary, bonus, equity compensation and other benefits) for Vivani’s Chief Executive Officer and other executive officers; |
| ● | review, annually, and, if necessary, approve or recommend to the Board the aggregate number of equity awards to be granted to employees below the executive level; |
| ● | oversee Vivani’s compliance with regulatory requirements associated with compensation matters; and |
| ● | prepare certain portions of Vivani’s annual Proxy Statement, including an annual report on executive compensation. |
A copy of the charter of the Compensation Committee is available on ourVivani’s website at www.secondsight.comwww.vivani.com (under “About Us – Corporate “Investors—Governance”).
The Compensation Committee may form and delegate a subcommittee consisting of one or more members to perform the functions of the Compensation Committee. To date, the Compensation Committee has not delegated any such authority. The Compensation Committee may engage outside advisers, including outside auditors, attorneys and consultants, as it deems necessary to discharge its responsibilities. The Compensation Committee has sole authority to retain and terminate any compensation expert or consultant to be used to provide advice on compensation levels or assist in the evaluation of director, President/Chief Executive Officer and/or senior executive compensation, including sole authority to approve the fees of any expert or consultant and other retention terms. We have utilized a compensation consultant, Compensia, LLC., with expertise in the healthcare sector, including the biotechnology market, to help assess director, executive and employee compensation and to help inform our compensation strategy. Compensia, LLC reports directly to our Compensation Committee. Our Compensation Committee annually assesses the independence of Compensia, LLC and has concluded that the engagement of Compensia, LLC did not raise any conflict of interest. In addition, the Compensation Committee considers, but is not bound by, the recommendations of ourVivani’s Chief Executive Officer with respect to the compensation packages of our other executive officers.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consistsis comprised of William Link and Gregg Williams, two non-employee directors, bothas chair, Dean Baker and Alexandra Larson, each of whom arewe deemed to be “independent” as defined in section 5605(a)(2) of the NASDAQNasdaq Listing Rules. The Nominating and Governance Committee did not meet during 2015.
The role of the Nominating and Corporate Governance Committee is to:
| ● | evaluate from time to time the appropriate size (number of members) of the Board and recommend any increase or decrease; |
| ● | determine the desired skills and attributes of members of the Board, considering the needs of the business and listing standards; |
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| ● | establish criteria for prospective members, conduct candidate searches, interview prospective candidates, and oversee programs to introduce the candidate to Vivani, Vivani’s management, and operations; |
| ● | review planning for succession to the position of Chairman of the Board and Chief Executive Officer and other senior management positions; |
| ● | annually recommend to the Board persons to be nominated for election as directors; |
| ● | recommend to the Board the members of all standing Committees; |
| ● | adopt or develop for Board consideration corporate governance principles and policies; and |
| ● | periodically review and report to the Board on the effectiveness of corporate governance procedures and the Board as a governing body. |
A copy of the charter of the Nominating and Corporate Governance Committee is available on ourVivani’s websitewww.secondsight.com www.vivani.com (under “About Us – Corporate“Investors — Governance”).
Policy with Regard to Security Holder Recommendations
The Nominating and Corporate Governance Committee does not presently havehas a policy with regardregards to consideration of any director candidates recommended by security holders. Nostockholders. For the recommendation of a security holder (other than membersto be considered under this policy, the recommending stockholder or group of stockholders must have held at least three percent of Vivani’s voting common stock for at least one year as of the date the recommendation was made. For each annual meeting of stockholder, the Nominating and Corporate Governance Committee) has recommended a candidate to date.Committee will accept for consideration only one recommendation from any stockholder or affiliated group of stockholders. The Nominating and Corporate Governance Committee planswill also consider the extent to adoptwhich the stockholder making the nominating recommendation intends to maintain its ownership interest in Vivani. Any director nominated must represent the interests of all stockholders and not serve for the purpose of favoring or advancing the interests of any particular stockholder group or other constituency. All recommendations submitted by stockholders will be considered in the same manner and under the same process as any other recommendations submitted from other sources.
All stockholder nominating recommendations must be in writing. Submissions must be made by mail, courier or personal delivery, addressed to the Nominating and Corporate Governance Committee care of Vivani’s corporate secretary at Vivani’s principal offices. Recommendations must include certain information regarding the recommending stockholder(s) and the proposed nominee(s). The recommending stockholder(s) must state whether, in the view of the stockholder(s), the nominee(s), if elected, would represent all stockholders and not serve for the purpose of advancing or favoring any particular stockholder(s) or other constituency of Vivani. The nominating recommendation must be accompanied by the written consent of the proposed nominee(s) to: (a) be considered by the Nominating and Corporate Governance Committee and interviewed, and (b) if nominated and elected, to serve as a policydirector. Any such proposals should be submitted to our corporate secretary at our principal executive offices 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 next Annual Meetingone-year anniversary of the date of the preceding year’s annual meeting and should include appropriate biographical and background material as required by our bylaws to allow the Nominating and Corporate Governance Committee to properly evaluate the potential director candidate and the number of shares of our security holders.stock beneficially owned by the stockholder proposing the candidate. Stockholder proposals should be addressed to Vivani Medical, Inc., 1350 S. Loop Road, Alameda, California 94502, Attention: Corporate Secretary. Assuming that biographical and background material has been provided on a timely basis in accordance with our bylaws, any recommendations received from stockholders will be evaluated in the same manner as potential nominees proposed by the Nominating and Corporate Governance Committee. If our board of directors determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included on our proxy card for the next annual meeting of stockholders. See “Stockholder Proposals” for a discussion of submitting stockholder proposals.
Policy on Trading, Pledging and Hedging of Company Stock
Our board of directors have adopted an Insider Trading Policy that applies to our board of directors, our officers and employees, the officers and employees of our subsidiaries, as well as to family members, other members of a person’s household, and entities controlled by a persons covered under the Insider Trading Policy. Certain transactions in our securities (such as purchases and sales of publicly traded put and call options, and short sales) create a heightened compliance risk or could create the appearance
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of misalignment between management and stockholders. In addition, securities held in a margin account or pledged as collateral may be sold without consent if the owner fails to meet a margin call or defaults on the loan, thus creating the risk that a sale may occur at a time when an officer or director is aware of material, non-public information or otherwise is not permitted to trade in Company securities. Therefore, as part of our Insider Trading Policy, we expressly prohibit the above-mentioned persons from engaging in certain prohibited transactions, including short sales, purchases or sales of derivative securities or hedging transactions, the use of our securities as collateral in a margin account, and pledging of our securities.
Director Qualifications and Diversity
The Board seeks independent directors who represent a diversity of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions.decisions who each will represent the best interests of Vivani and its stockholders. Candidates should have substantial experience with one or more publicly traded companies or should have achieved a highprominent level of distinction in their chosen fields. The Board is particularly interested in maintaining a mix that includes individuals who are active or retired executive officers and senior executives, particularly those with experience in medical devices, bio-technology,biotechnology, intellectual property, early stage highearly-stage technology companies, research and development, strategic planning, business development, compensation, finance, accounting or banking.
The Board believes that the directors nominated collectively have the experience and banking.skills effectively to oversee the management of Vivani, including a high level of personal and professional integrity, an ability to exercise sound business judgement on a broad range of issues, sufficient experience and background to have an appreciation of the issues facing Vivani, and a willingness to devote the necessary time to Board duties.
In evaluating nominationsCompensation Recovery Policy
Our board of directors adopted a Compensation Recovery Policy effective as of August 11, 2023 (the “Compensation Recovery Policy”), in compliance with the Nasdaq listing rules, which requires recovery from executive officers of incentive-based compensation that is earned, granted or vested based on the achievement of a financial reporting measure in the event of a required accounting restatement of previously issued financial statements. The recoverable compensation includes any compensation received after the effective date of the Compensation Recovery Policy and in the three-year fiscal period preceding the date we were required to prepare the accounting restatement that is in excess of the amount that would have been earned, paid or vested had it been calculated based on the restated financial statements. Recovery is required regardless of fault or a covered officer’s role in the financial reporting process. The Compensation Recovery Policy has been filed as Exhibit 97.1 to our Annual Report on Form 10-K for the year ended December 31, 2023. At no time during or after the year ended December 31, 2023, was the Company required to prepare an accounting restatement that required recovery of erroneously awarded compensation pursuant to the Compensation Recovery Policy, nor was there, on December 31, 2023, an outstanding balance of erroneously awarded compensation to be recovered from the application of the policy to a prior restatement.
Role of Board of Directors,in Risk Oversight
Enterprise risks are identified and prioritized by management and each prioritized risk is assigned to a board committee or the full board for oversight as follows:
Full Board — Risks and exposures associated with strategic, financial and execution risks and other current matters that may present material risk to Vivani’s operations, plans, prospects or reputation.
Audit Committee — Risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, investment guidelines, cybersecurity and credit and liquidity matters.
Nominating and Corporate Governance Committee also looks for certain personal attributes, such as integrity, ability — Risks and willingnessexposures relating to apply sound and independent business judgment, comprehensive understanding of a director’s role in corporate governance availability for meetings and consultation on Company matters,management and the willingnessdirector succession planning.
Compensation Committee — Risks and exposures associated with leadership assessment and compensation programs and arrangements, including incentive plans that compare to assumemarket and carry out fiduciary responsibilities. The Nominatingtarget employee retention, and Governance Committee took these specifications into account in formulating and re-nominating its present Board members.succession planning.
Compensation Committee Interlocks and Insider Participation
During 2015, Alfred E. Mann, William Link,2023, Dean Baker, Ph.D., Alexandra Larson, J.D., M.B.A., and Gregg Williams and Matthew Pfeffer, since his appointment on September 3, 2015, served on the Compensation Committee. Mr. Mann tendered his resignation as director on February 9, 2016.Company’s compensation committee. None of these individualsthe members of Vivani’s compensation committee has everat any time during the prior three years been an executive officerone of Vivani’s officers or employeeemployees. None of ours. In addition, none of ourVivani’s executive officers servescurrently serve, or in the past fiscal year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a memberon our board of our Boarddirectors or the Compensation Committee.compensation committee.
Code of Business Conduct and Ethics
WeThe Company adopted a Code of Business Conduct and Ethics (“Code of Ethics”) applicable to ourits principal executive officer and principal financial and accounting officer and any persons performing similar functions.officer. In addition, the Code of Ethics applies to ourVivani’s employees, officers, directors, agents and representatives. The Code of Ethics requires, among other things, that ourVivani’s employees avoid conflicts of interest, comply with all laws and other legal requirements, conduct business in an honest and ethical manner, and otherwise act with integrity and in our best interest. The Code of Ethics is available on our website at www.secondsight.comwww.vivani.com (under “About Us –“Investors — Governance — Governance Documents — Code of Business Conduct and Ethics”).
Risk Oversight
Enterprise risks are identified and prioritized by management and each prioritized risk is assigned to a Board committee or the full Board for oversight as follows:
Full Board — Risks and exposures associated with strategic, financial and execution risks and other current matters that may present material risk to our operations, plans, prospects or reputation.
Audit Committee — Risks and exposures associated with financial matters, particularly financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies, investment guidelines and credit and liquidity matters.
Governance Committee — Risks and exposures relating to corporate governance and management and director succession planning.
Compensation Committee — Risks and exposures associated with leadership assessment, and compensation programs and arrangements, including incentive plans.
Board Leadership Structure
The Chairman of the Board presides at all meetings of the Board.
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Review, Approval or Ratification of Transactions with Related PersonsPROPOSALS
The Nominating and Corporate Governance Committee reviews issues involving potential conflicts of interest, other than Related Party transactions, which are reviewed by the Audit Committee.
Compliance with Section 16 of the Exchange Act
Based solely upon a review of Forms 3 and 4 furnished to the Company, the Company believes that all of its directors, officers and applicable stockholders timely filed these reports.
PROPOSALS
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH OF
PROPOSALS Nos. 1, THROUGH 42, and 3 BELOW.
PROPOSAL No. 1 — ELECTION OF DIRECTORS
Nominees for Election
The Company’s Board of Directors currently has six members. Our Board has nominated eachsix of our incumbent directors for re-electionelection at the Annual Meeting. Each nominee has agreed, ifMeeting with terms expiring at the 2025 annual meeting of stockholders and until their successors are duly elected and qualified, subject to serve a one-year termearlier resignation or until the election and qualification of his successor.removal. If any nominee is unable or declines to stand for election, which circumstance we do not anticipate, the Board may designate a substitute. In the latterthat event, shares represented by proxies may be voted for a substitute nominee.
Our Director Qualifications and Diversity guidelines contain the current Board membership criteria that apply to nominees recommended for a position on the Board. Under those criteria, members of the Board should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, government, education, technology or public service. They should be committed to enhancing stockholder value and should have sufficient time to carry outperform their duties and to provide insight and practical wisdom based on experience. In addition, the Nominating and Corporate Governance Committee takes into accountconsiders a potential director’s ability to contribute to the diversity of background and experience represented on the Board, and it reviews its effectiveness in balancing these considerations when assessing the composition of the Board. Directors’ service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties. Each director must represent the interests of all of our stockholders. Although the Board uses these and other criteria as appropriate to evaluate potential nominees, it has no stated minimum criteria for nominees.
The Board believes that all the nominees named below are highly qualified and have the skills integrity,and experience and sound judgment required for effective service on the Board. The nominees’ individual biographies below contain information aboutfollowing table identifies our director nominees and sets forth their principal occupation and business experience qualificationsduring the last five years and skills that led the Board to nominate them:age as of April 1, 2024.
Name | Age | Year First | Position with the Company | |||
| Gregg Williams (2)(3*) | 65 | 2009 | Independent Director, Chairman of the Board | |||
| Aaron Mendelsohn | 72 | 1998 | Director | |||
| Dean Baker(1*)(2*)(3) | 81 | 2021 | Independent Director | |||
| Alexandra Larson(1)(2)(3) | 44 | 2021 | Independent Director | |||
| Adam Mendelsohn | 42 | 2022 | Director, Chief Executive Officer | |||
| Daniel Bradbury(1) | 62 | 2024 | Independent Director |
| (1) | |||||
Will McGuire, 53, Chief Executive Officer, President and Director
Biographical information for Mr. McGuire is set forth under “Executive Compensation and Related Information”. Our board believes that Mr. McGuire’s executive and managerial experience together with his leadership skills make him well qualified to continue serving as one of our directors.
Robert J. Greenberg, 48, Chairman of the Board of Directors
Biographical information for Dr. Greenberg is set forth under “Executive Compensation and Related Information”. Our board believes that Dr. Greenberg’s extensive scientific and technical expertise, his executive and managerial experience together with his leadership skills and familiarity with our business as one of our founders, make him well qualified to continue serving as one of our directors.
| (2) | Member of the Compensation Committee of the Board of Directors |
| (3) | Member of the Nominating and Corporate Governance Committee of the Board of Directors |
| (4) | Date of the directors appointment to the Company’s board. (including any predecessors thereof). |
William J. Link, 70, Director and Chairman of the Compensation Committee
| * | Chair of the respective committee. |
Gregg Williams:Mr. LinkWilliams has beenserved as a member of our Board of Directors since 2003. Mr. Linkis a co-founder and managing directorthe Merger of Versant Ventures, a venture capital firm specializingour predecessor Second Sight Medical Products, Inc. (“Second Sight”) with Nano Precision Medical, Inc. (“NPM”) (the “Merger”) in early-stage investing in healthcare companies, since its inception in 1999.2022. Prior to co-founding Versant Ventures,that Mr. Link was a general partner at Brentwood Venture Capital from 1998 to present. Mr. Link also founded and served as chairman and CEO of Chiron Vision, a subsidiary of Chiron Corporation specializing in ophthalmic surgical products, from 1986 to 1997 which was sold to Bausch and Lomb in 1997. Prior to Chiron Vision, Mr. Link founded in 1978 and served as President of American Medical Optics (AMO), a division of American Hospital Supply Corporation, which was sold to Allergan in 1986. Mr. Link alsoWilliams served on the Boardboard of AMO’s successor company, Advanced Medical Optics (AMO) whichSecond Sight since June 2009 and was acquired by Abbottappointed Chairman of the Second Sight board in 2009, from 2002 to 2009.March 2018. Mr. LinkWilliams was an Assistant Professoralso a member of the board of directors of NPM until the Merger in 2022. Mr. Williams is the Chairman, President, and Chief Executive Officer at Williams International Co., LLC (“Williams International”) (www.williams-int.com), a leading developer and manufacturer of gas turbine engines and one of the largest privately owned companies in the Departmentaviation industry, positions he has held since July 1999. Previously, Mr. Williams held several key managerial positions within Williams International including serving as its President and Chief Operating Officer, Vice President, Advanced Technology, Director, Program Management and Director, Engineering. In addition, Mr. Williams is Chairman and majority
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owner of Surgery atRamos Arizpe Manufacturing (www.ram-mx.com), a high-volume automotive engine parts manufacturing company located in Mexico. Mr. Williams received a Bachelor of Science in Mechanical Engineering from the Indiana University School of Medicine from 1973Utah and holds numerous patents related to 1976.gas turbine engines, turbo machinery, rocket engines and control systems. He is a board member of General Aviation Manufacturers Association and former member of the Henry Ford Hospital Board. We believe Mr. Link receivedWilliams is qualified to serve on our Board due to his BSc, MScbusiness and Ph.D. from Purdue University. Our boardsenior management experience, extensive knowledge of our operations and deep background in technology-focused manufacturing companies which is highly relevant to us.
Aaron Mendelsohn, J.D.: Mr. Mendelsohn has concluded that Mr. Link’s senior executive history withserved as a focus on medical products as well as his extensive financial and other experience with technology companies in general, including his experience of serving on other boards of directors make him a qualified and valued member of our board.
Aaron Mendelsohn, 64, Director
Mr. Mendelsohn isBoard of Directors since the Merger in 2022. He was a founder and has beenpreviously served as a director of Second Sight since inception.its inception in 2003 till the Merger in 2022. He was also a founder and director of NPM from 2011 till the Merger in 2022. Mr. Mendelsohn served on the board of Advanced Bionics, a global leader in developing advanced cochlear implant systems, since shortly after its founding in 1993 until its sale in 2004.2004 to Boston Scientific Corp. Mr. Mendelsohn was also a founder and director of MRGMedical Research Group, Inc., a company that designed and manufactured implantable technologies primarily for the treatment of diabetes, from its inception in 1998 until its sale in 2001 to Medtronic, Inc. Mr. Mendelsohn servespreviously served on the board of directors for the Alfred E. Mann Institute for Biomedical Engineering at the University of Southern California since its inception in 1998 and is a member of its Executive Committee.until 2016. Mr. Mendelsohn is a founder and since 2007 a director of Nanoprecision Holding Company, Inc., a world leader in manipulating materials at nanometer scale. He is also a founder and director of Nanoprecision Medical, Inc, a drug delivery company working in nanotechnology, since its inception in 2011. Mr. Mendelsohn is a founder and serveshas served as Chairman of the Maestro Foundation since it was organized in 1983. The Maestro Foundation is a leading non-profit musical philanthropic organization which hosts a premier chamber music series and lends professional-level instruments and bows to young, career-bound classical musicians. Mr. Mendelsohn received his B.A. from UCLA and J.D. from The Loyola University School of Law School Los Angeles at Loyola Marymount University. Our board believesAngeles. We believe that Mr. Mendelsohn’s business experience, including his experience as a founder, board member and executive officer of medical device companies, combined with his financial experience, business acumen, and judgment provide our Board with valuable managerial and operational expertise and leadership skills making him wellprofessionally qualified to continue serving as one of our directors.
Gregg Williams, 57, Director
Mr. WilliamsDean Baker, Ph.D.: Dr. Baker has beenserved as a member of our Board of Directors since June 2009.the Merger in 2022. Dr. Baker has served on the Board of Directors of NPM from 2013 till the Merger in 2022 and currently serves on the Board of Directors of MUST Imaging, a medical imaging startup, since 2018. Mr. WilliamsBaker served on the Board of Directors of Advanced Bionics, a global leader in developing advanced cochlear implant systems, prior to its sale to Boston Scientific, a manufacturer of medical devices. In addition, he was the founding director of the Alfred E. Mann Institute for Biomedical Engineering at USC and served for nine years on the Board of Directors (including serving on compensation, audit, and governance committees) for Semtech, a publicly traded semiconductor company. Dr. Baker was also a vice president of Northrop Grumman, a multinational aerospace and defense technology company, for 16 years from 1983 to 1999 including overseeing a division with $1 billion in annual sales. He has a PhD degree in electrical engineering from Carnegie-Mellon University. We believe Dr. Baker is qualified to serve on our Board because of his experience as a director on multiple boards and his scientific and management background.
Alexandra L.P. Larson, J.D., M.B.A.: Ms. Larson has beenserved as a member of our Board of Directors since the Merger in 2022. She was previously a director at Second Sight from 2021 until the Merger in 2022. Ms. Larson retired in March 2024 as Senior Vice President and General Counsel of Williams International, a privately held designer and manufacturer in the aerospace and defense industry, since January 2019. Ms. Larson continues to serve as a consultant to Williams International, and also serves on several non-profit boards. Prior to Williams International, from 2013 to January 2019, Ms. Larson was Legal Director and Associate General Counsel at Amcor, a global packaging company. Ms. Larson also served as Corporate Counsel at Compuware Corporation, a software company with products aimed at the information technology departments of large businesses, from 2012 to 2013, and Associate in the mergers & acquisitions practice of the global law firm Baker and McKenzie, in its New York office, from 2008 to 2012. Ms. Larson has also held roles at the New York Stock Exchange, and the United States Department of Justice, Antitrust Division. Ms. Larson is a graduate of the University of Michigan Law School (Ann Arbor), Hamilton College in Clinton, New York, and the University of Tennessee, Knoxville Haslam College of Business’s Aerospace & Defense MBA Program. We believe Ms. Larson is qualified to serve on our Board due to her legal and business experience, and leadership skills.
Adam Mendelsohn, Ph.D.: Dr. Mendelsohn has served as our Chief Executive Officer and as a member of our Board of Directors since the Merger in 2022. Prior to this, Dr. Mendelsohn served as the Chief Executive Officer of NPM from 2009 till 2022. Dr. Mendelsohn received his Ph.D. in bioengineering at Williams International Corporation, a leading developerthe UC San Francisco/UC Berkeley Joint Graduate Group in Bioengineering, Class of 2011, during which he was awarded an NSF fellowship to perform research at Kyoto University and manufacturerpublished multiple peer-reviewed articles describing new treatment options for Type 1 diabetes through the immuno-isolated transplantation of small gas turbine engines, since April 2005. Mr. Williams servesinsulin-producing cells under the direction of Professor Tejal A. Desai. While in graduate school, Dr. Mendelsohn served as the director for the Venture Innovation Program in Life Sciences and completed his certificate in Management of Technology with the Haas School of Business. Dr. Mendelsohn has served as a Technical Advisor to the
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Alfred E. Mann Institute for Biomedical Engineering at USC, a fellow of the Startup Leadership Program, the President of UCSF’s Graduate Division Alumni Association and is currently a board member of the Maestro Foundation. We believe Dr. Mendelsohn is qualified to serve on our Board because of his scientific background and his senior management experience in the biotechnology industry.
Daniel Bradbury: Mr. Bradbury is the Managing Member of BioBrit, LLC, a Life Sciences Consulting and Investment Firm and is the Executive Chairman and PresidentCo-Founder of Williams International CorporationEquillium, Inc., a publicly traded biopharmaceutical company, focused on developing products to treat severe autoimmune and inflammatory disorders with high unmet medical need. He served as the Chief Executive Officer of Equillium until January 2020. Mr. Bradbury is the former President, Chief Executive Officer, and Director of Amylin Pharmaceuticals, Inc., a biopharmaceutical company which focused on the development of drug candidates for the treatment of serious metabolic diseases. He served as Amylin’s Chief Executive Officer from March 2007 until its Chief Operating Officer.acquisition by Bristol-Myers Squibb Company in August 2012. Before joining Amylin, he worked in marketing and sales roles for 10 years at SmithKline Beecham Pharmaceuticals. Mr. Williams receivedBradbury serves on the board of directors of Castle Biosciences, Inc. (NASDAQ: CSTL), Equillium, Inc. (NASDAQ: EQ) and several private companies and philanthropic organizations. He earned a Bachelor of SciencePharmacy degree from Nottingham University and a Diploma in EngineeringManagement Studies from the University of UtahWest London in 1982. Our board believes thatthe United Kingdom. We believe Mr. William’s executive and managerial experience together with his leadership skills make him wellBradbury is qualified to continue serving as oneserve on our Board because of our directors.his business and industry experience.
Matthew Pfeffer, 57, DirectorVote Required and ChairmanRecommendation
Each of Audit Committee
Mr. Pfeffer serves as Chief Executive Officer and Chief Financial Officer of MannKind Corporation since January 2016. Previously, he served as the Corporate Vice President and Chief Financial Officer of MannKind Corporation from April 2008 until January 2016. Mr. Pfeffer served as Chief Financial Officer and Senior Vice President of Finance and Administration of VaxGen, Inc. from March 2006 until April 2008, with responsibility for finance, tax, treasury, human resources, IT, purchasing and facilities functions. Prior to VaxGen, Mr. Pfeffer served as Chief Financial Officer of Cell Genesys, Inc. During his nine year tenure at Cell Genesys, Mr. Pfeffer served as Director of Finance before being named Chief Financial Officerdirector nominees in 1998. Prior to that, Mr. Pfeffer served in a variety of financial management positions at other companies, including roles as Corporate Controller, Manager of Internal Audit and Manager of Financial Reporting. Mr. Pfeffer began his career at Price Waterhouse. Mr. Pfeffer graduated fromthis Proposal No. 1 is elected by the University of California, Berkeley and is a Certified Public Accountant.Our board believes that Mr. Pfeffer’s experience as a chief executive officer, chief financial officer and directoraffirmative vote of a publicly traded company as well as his other managerial, operational, financial and accounting expertise make him well qualified to continue serving as oneplurality of our directors.
Vote Required
Each director nominee who receives more “FOR”the votes than “AGAINST” votes representing sharesproperly cast on the election of our common stock present in person or represented by proxy and entitled to be voteddirectors at the Annual MeetingMeeting. This means that the six director nominees receiving the highest number of affirmative votes will be elected.elected as directors. Withholding authority to vote your shares with respect to one or more director nominees will have no effect on the election of those nominees. Broker non-votes will have no effect on the election of the nominees. It is anticipated that Proposal No. 1 will be considered non-routine under the rules of NYSE.
All of the nominees have indicated to us that they will be available to serve as directors. In the event that any nominee should become unavailable, the proxy holders, Will McGuireAdam Mendelsohn or Tom Miller,Brigid Makes will vote for a nominee or nominees designated by the Board.
ThereApart from Aaron Mendelsohn and Adam Mendelsohn who are family members, there are no family relationships among our executive officers and directors. Aaron Mendelsohn is the father of Adam Mendelsohn.
If you sign your proxy or voting instruction card but do not give instructions with respect to voting for directors, your shares will be voted by Will McGuireAdam Mendelsohn or Tom Miller,Brigid Makes, as proxy holders. If you wish to give specific instructions with respect to voting for directors, you may do so by indicating your instructions on your proxy or voting instruction card.
You may cumulate your votes in favor of one or more of the director nominees. If you wish to cumulate your votes, you will need to indicate explicitly your intent to cumulate your votes among the five persons who will be voted upon at the Annual Meeting. See “Questions and Answers—Voting Information—Is cumulative voting permitted for the election of directors?” for further information about how to cumulate your votes. Will McGuire or Tom Miller as proxy holders, reserve the right to cumulate votes and cast such votes in favor of the election of some or all of the applicable nominees in their sole discretion, except that a stockholder’s votes will not be cast for a nominee as to whom such stockholder instructs that such votes be cast “AGAINST” or “ABSTAIN.”
Our Board recommends a vote “FOR” each of the nominees.
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Director Compensation for 2015
During 2015Non-Employee Director Compensation Program
We have adopted a non-employee director compensation policy, which is designed to enable us to attract and retain on a long-term basis, highly qualified non-employee directors. Under the policy, our non-employee directors were paid an annual retainerare eligible to receive cash retainers (which will be prorated for partial years of $50,000service) and our Chairmanequity awards as follows:
| Annual Retainer | ||||
| Board of Directors: | ||||
| All nonemployee members | $ | 35,000 | ||
| Additional retainer for Non-Executive Chairman of the Board | $ | 20,000 | ||
| Additional Retainers for Committees | ||||
| Audit Committee: | ||||
| Chairman | $ | 20,000 | ||
| Non-Chairman members | $ | 10,000 | ||
| Compensation Committee: | ||||
| Chairman | $ | 12,000 | ||
| Non-Chairman members | $ | 6,000 | ||
| Nominating Committee: | ||||
| Chairman | $ | 8,000 | ||
| Non-Chairman members | $ | 4,000 | ||
Our policy provides that a non-employee director may choose to receive the equivalent of the Board an annual cash retainer of $75,000. Each of ourfor that non-employee directors who serves asdirector in a committee chair also will receive, $6,000 per year for his or her service as committee chair and non-chair committee members will receive $4,000 per year for each committee on which he serves; provided, however, the Audit Committee chair’s additional retainer is $16,000 per year and each non-chair Audit Committee member’s additional retainer is $8,000 per year. All fees will be paid in shares of our stock on June 1 of each year and the stock price per share value shall be determined by an average closing price of our stock for the preceding twenty trading days of ouroption to buy common stock on its principal exchange. Mr. Mann resigned as Chairman and was appointed Chairman Emeritus of our Board on August 18, 2015. As Chairman Emeritus, Mr. Mann continued being paid an annual retainer of $75,000.
The following Director Compensation Table sets forth information concerning compensation for services rendered by our non-employee directors for fiscal year 2015. The amounts represented in the “Fees Earned or PaidCompany instead of in Cash” column reflectscash, provided such election must be made in accordance with the stock compensation expense recorded by the Company and does not necessarily equate to the income that will ultimately be realized by the directors for such awards in lieu of actual cash fees, as noted above.
| Name | Fees Earned or Paid in Cash ($) | Stock Award ($) | Total ($) | |||||||||
| Alfred E. Mann | 96,333 | 96,333 | ||||||||||
| William J. Link, Ph.D. | 67,083 | 67,083 | ||||||||||
| Aaron Mendelsohn | 52,000 | 52,000 | ||||||||||
| Gregg Williams | 67,583 | 67,583 | ||||||||||
| Matthew Pfeffer | 39,500 | 39,500 | ||||||||||
PROPOSAL 2 — APPROVAL OF AN AMENDed 2011 EQUITY INCENTIVE PLAN
We are asking our stockholders to consider and vote upon a proposal to approve an amended Second Sight Medical Products, Inc. 2011 Equity Incentive Plan (which, as amended from time to time, we refer to as the “Plan”).
On July 15, 2011 our Board adopted the Plan, and our stockholders approved the adoption of the Plan on July 21, 2011. The Plan was further amended in 2012 and 2015 to increase the maximum number of shares of common stock that may be issued under the Plan. On April 4, 2016, the Board adopted amendments to the Plan that, contingent on and subject to approval of our stockholders at the Annual Meeting, would among other things:
If the stockholders approve the amended Plan, it will become effective on the date of Annual Meeting, which is scheduled for May 10, 2016. If the stockholders fail to approve the amended Plan, the Plan will continue and remain as is without any changes thereto, and compensatory option grants will continue to be granted thereunder to the extent of shares of common stock available for issuance. As of March 31, 2016, approximately 1,149,000 shares of common stock remained available for issuance under the Plan (without giving effect to additional shares that may become available upon the future expiration, forfeiture, or cancellation of outstanding awards).Our Board believes that if the amended Plan is not approved, our ability to align the interests of key service providers with stockholders through equity-based compensation would be compromised, disrupting our compensation program and impairing our ability to recruit and retain key employees or requiring us to shift our compensation plan to include more cash compensation.
Summary of the Material Terms of the Plan, As Amended
A summary of the material terms of the amended Plan is set forth below. This summary is qualified in its entiretypolicy, and must be made (i) by the detailed provisionsDecember 31st of the Plan, as amended, a copy of which is attached asAppendix A to this Proxy Statement and which is incorporated by reference into this proposal. We encourage our stockholders to read and refer tocalendar year preceding the complete plan document in Appendix A for a more complete description of the Plan, as amended.
Purpose
The Plan is intended to encourage the key service providers of the Company to have a proprietary and vested interest in the growth and performance of the Company and to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the Company for the benefit of its equity owners.
Administration
The Plan is administered by the Compensation Committee, which consists of William J. Link, Gregg Williams and Matthew Pfeffer appointed by our Board. The Compensation Committee has the authority to determine the terms and conditions of awards and to interpret and administer the Plan.
Share Reserve and Limitations
The maximum number of shares of common stock reserved for issuance under the Plan is 6,000,000 shares or, if the amendment to the Plan is approved, will be increased by 1,500,000 shares to 7,500,000 shares of common stock.As of April 14, 2016 the fair market value of a share of common stock was$5.37.
No employee of the Company may be eligible to be granted options covering more than 1,000,000 shares of common stock during any calendar year.
Types of Awards; Eligibility
The Plan permits the Company to grant options and, if the amended Plan is approved as presented in this Proposal 2, RSUs (“awards”) to our employees and to employees of our controlled subsidiaries. From time to time, the Company may also elect to grant awards to non-employees who are natural persons where it is determined that such grant is in the best interests of the Company.As of the date of this Proxy Statement, approximately 115 employees of the Company and our controlled subsidiaries and approximately six non-employees are eligible to participate in the Plan.
Options
The Compensation Committee may grant options under the Plan. The term of an option may not exceed 10 years. The Compensation Committee determines the exercise price of an option. Payment of the exercise price may be made in cash, shares, or other property acceptable to the Compensation Committee, as well as other types of consideration permitted by applicable law. After the termination of service of a participant, he or she (or, if applicable, his or her estate or beneficiary) may exercise his or her option for the period of time stated in his or her award agreement. Generally, if termination is due to death or disability, the option will remain exercisable for at least six months. In all other cases, the option will generally remain exercisable for at least 30 days following the termination of service. However, in no event may an option be exercised later than the expiration of its term. Subject to the provisions of the Plan, the Compensation Committee determines the other terms of options. Unless the Compensation Committee provides otherwise, the Plan generally does not allow for the transfer of options, and only the participant may exercise an option during his or her lifetime.
RSUs
If the amended Plan is approved, the Compensation Committee may grant RSUs under the Plan. Subject to the provisions of the Plan, the Compensation Committee will determine the terms and conditions of RSUs, including the restricted period for all or a portion of the award and the restrictions and/or forfeiture events applicable to the award. RSUs may vest solely by the passage of time and/or pursuant to achievement of performance goals, and the restrictions and/or the restricted period may differ with respect to each award of RSUs. During the period, if any, when RSUs are non-transferable or forfeitable or prior to the satisfaction of any other restrictions prescribed by the Compensation Committee, a participant is prohibited from selling, transferring, assigning, pledging, or otherwise encumbering or disposing of his or her RSUs. Participants holding RSUs will have no voting or dividend rights or other rights associated with share ownership.
Adjustments to Awards
In the event of certain changes in our capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the Plan, the Compensation Committee will adjust (i) the aggregate number, class, and kind of shares that may be delivered under the Plan, in the aggregate or to any one participant, and/or (ii) the number, class, and kind of shares subject to outstanding awards and the option price of options.
Change in Control
Unless the Compensation Committee provides otherwise in an applicable award agreement, upon the occurrence of a “change in control” (as defined in the Plan): (i) the vesting of all outstanding awards shall accelerate automatically immediately prior to the consummation of the change in control and (ii) awards may either be assumed or substituted for or be cancelled in exchange for consideration. If options will be not assumed or substituted for, the Compensation Committee must provide written notice not less than 15 days prior to the effective date of the proposed change in control.
Term; Amendment and Termination
Our stockholders adopted the Plan on July 21, 2011 and no options under the Plan may be granted after May 31, 2021. Our Board has the authority to amend or terminate the Plan or an award agreement, provided such action does not impair the existing rights of any participant.
Repricing
If the amended Plan is approved, as presented in this Proposal 2, the Company may, at any time in its discretion, (i) amend the terms of outstanding options to reduce the exercise price; (ii) cancel outstanding options in exchange for or substitution of options with an exercise price that is less than the exercise price of the original options; or (iii) cancel outstanding options with an exercise price above the current fair market value in exchange for cash or other securities.
Summary of Certain Material U.S. Federal Income Tax Consequences
The U.S. federal income tax consequences of awards under the Plan for participants and the Company will depend on the type of award granted. The following summary description of certain material U.S. federal income tax consequences is intended only for the general information of our stockholders. This summary is not intended to be exhaustive, and the exact tax consequences to any participant depend upon his or her particular circumstances and other facts. Plan participants should consult their tax advisoryear with respect to any state, localcash compensation is earned, for any continuing non-employee director, and non-U.S. tax considerations(ii) within 30 days of election or relevant federal tax implications of awards granted under the Plan.
Non-qualified Stock Options. An option holder generally recognizes no U.S. federal taxable income as a result of the grant of the option. On the exercise of a non-qualified stock option, the option holder normally recognizes ordinary income in the amount equalappointment to the difference between the exercise price and the fair market value of the shares of common stock on the exercise date. Where the option holder is an employee, such ordinary income generally is subject to withholding of income and employment taxes. On the sale of shares of common stock acquired by the exercise of a non-qualified stock option,board, for any gain or loss (based on the difference between the sale price and the fair market value on the exercise date), is taxed as a capital gain or loss. If we comply with applicable reporting requirements and with the restrictions of Section 162(m) of the Internal Revenue Code of 1986, as amended, we will be entitled to a business expense deductionnew non-employee director. Any options received in the same amount and generally at the same time as the option holder recognizes ordinary income.
RSUs.A holder of RSUs generally recognizes no U.S. federal taxable income as a result of the grant of the RSUs. A holder of RSUs will be required to recognize ordinary income in an amount equal to the fair market value of shares issued, or in the case of a cash-settled award, the amountlieu of the cash paymentretainer will be made on January 1 (or as soon as administratively practicable following the date the non-employee director is appointed to the Board, if later) and will vest one-fourth at the end of each calendar quarter following the grant date, subject to continued service through such date; provided, that for such grant made to such holdera new non-employee director after January 1, the number of option shares that will vest at the end of the restrictionfirst calendar quarter following such grant shall be pro-rated based on the number of actual days served by the non-employee director during such quarter.
In addition to the cash retainers, our non-employee director compensation policy provides that, upon initial or appointment to our Board, each new non-employee director who initially joins the Board will receive a one-time grant of an option to purchase shares of our common stock with a targeted grant date fair value equal to the annual retainer fee (not including any committee retainers), or the Director Initial Grant. The Director Initial Grant will vest in monthly installments over the three-year period or, if later,following the paymentgrant date, subject to continued service through such date. If we comply with applicable reporting requirements and with the restrictions ofSection 162(m) of the Internal Revenue Code of 1986, as amended, we will be entitled to a business expense deduction in the same amount and generally at the same time as the holder recognizes ordinary income.
New Plan Benefits
The benefits or amounts that are to be allocated to any participant or group of participants are indeterminable as ofOn the date of this Proxy Statement because participationeach annual meeting of stockholders, each non-employee director then in office and the types of awards (including options) available under the Plan are subjectwho will continue to the discretion of the Compensation Committee. Therefore, no new plan benefits table can be provided at this time.
Vote Required and Recommendation
The affirmative vote of the holders of shares of common stock entitled to vote must exceed the votes cast against the proposal for the proposal to be approved.
Our Board unanimously recommends that stockholders vote “FOR” the approval of the proposed amended Planserve as described in this Proposal 2.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee shall not be deemed incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate it by reference therein.
The Audit Committeea member of the Board has:will receive a grant of an option to purchase shares of our common stock with a targeted grant date fair value equal to the annual retainer fee (not including any committee retainers), or the Director Annual Grant. The Director Annual Grant will vest in total on the earlier of (i) the first anniversary of the grant and (ii) the next annual meeting of stockholders, subject to continued service through such date.
In the event of a Sale Event (as defined in the Vivani 2022 Omnibus Incentive Plan, or the 2022 Plan,), the equity awards granted to the non-employee directors pursuant to this policy shall become 100% vested and exercisable.
For purposes of this policy, “Value” means the grant date fair value of the stock option (i.e., Black-Scholes value) determined in accordance with the reasonable assumptions and methodologies employed by us for calculating the fair value of options under Financial Accounting Standard Board, or FASB, Accounting Standards Codification Topic 718, or ASC 718.
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The maximum total cash and equity compensation for non-employee directors for their service as a member of the Board cannot exceed $750,000 per calendar year for the Board Chair. The maximum total cash and equity compensation for other non-employee directors for their services as members of the Board cannot exceed $500,000 per calendar year except for a maximum of $750,000 including the Director Initial Grant in the first calendar year an individual becomes a non-employee director. The amount of equity compensation paid in a calendar year is determined based on the grant date fair value thereof, as determined in accordance with ASC 718 or its successor provision, but excluding the impact of estimated forfeitures related to service-based vesting conditions.
2023 Non-Employee Director Compensation Table
The table below sets forth information concerning total compensation that was earned by or paid to our non-employee directors during the year ended December 31, 2015 with management;
In reliance on the review and discussions referred to above, the Audit Committee recommended to the Board that the financial statements audited by Gumbiner Savett Inc. for the fiscal year ended December 31, 2015 be includedMr. Adam Mendelsohn is set forth in the Company’s Annual Report on Form 10-K for such fiscal year.section of this Proxy Statement captioned “Executive Compensation— 2023 Summary Compensation Table” and the accompanying footnotes and narrative.
| Name (1) | Fees Earned or Paid in Cash | Option | Total | |||||||||
| Gregg Williams | $ | 79,000 | (3) | $ | 35,000 | $ | 114,000 | |||||
| Aaron Mendelsohn | $ | 35,000 | $ | 35,000 | $ | 70,000 | ||||||
| Alexandra Larson | $ | 55,000 | $ | 35,000 | $ | 90,000 | ||||||
| Dean Baker | $ | 71,000 | $ | 35,000 | $ | 106,000 | ||||||
Audit Committee of the Board
Matthew Pfeffer
Gregg Williams
William J. Link, Ph.D.
Aaron Mendelsohn
| (1) | As of December 31, 2023, Mr. Williams, Mr. Aaron Mendelsohn, Ms. Larson and Mr. Baker held outstanding options to purchase an aggregate of 765,167; 126,126; 49,508; and 122,682 shares of our common stock, respectively. |
| (2) | The amounts reported represent the aggregate grant date fair value of the stock options granted to our directors during the 2023 fiscal year, calculated in accordance with ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock options reported in this column are set forth in Note 2 of our Consolidated Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2023. The amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be received by our directors upon the exercise of the stock options or any sale of the underlying common shares. |
| (3) | Mr. Williams elected to receive stock options in lieu of his cash retainers pursuant to our non-employee director compensation policy (see discussion above in this Director Compensation section). The amount includes the value of the cash retainers forgone in lieu of such stock options, which was equal to $52,667. |
PROPOSAL 3No. 2 — RATIFICATION OFRATIFy ON ADVISORY BASIS the APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has reappointed Gumbiner Savett Inc.appointed BPM LLP as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2016. Gumbiner Savett Inc.2024. BPM LLP has served as our independent registered public accounting firm since 2014.
Stockholder ratification of the selection of Gumbiner Savett Inc.BPM LLP as our independent registered public accounting firm is on an advisory basis and is not required by our Bylaws or the California Corporations Code.otherwise. The Board seeks such ratification as a matter of good corporate practice. Should the stockholders fail to ratify the selection of Gumbiner Savett Inc.BPM LLP as our independent registered public accounting firm, the Board will reconsider whether to retain that firm for fiscal year 2016.2024. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
Principal Accounting Feesaccounting fees and Servicesservices
The following table represents aggregate fees billed to the Company for fiscal yearsyear ended December 31, 2015 and 20142023, by Gumbiner Savett Inc.:BPM LLP:
| December 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| December 31, 2023 | ||||||||||||
| Audit Fees(1) | $ | 97,500 | $ | 165,000 | $ | 358,450 | ||||||
| Audit Related Fees(2) | — | — | $ | 254,500 | ||||||||
| Tax Fees(3) | — | — | $ | — | ||||||||
| All Other Fees(4) | 5,400 | 94,356 | $ | 13,910 | ||||||||
| Total Fees | $ | 102,900 | $ | 259,356 | $ | 626,860 | ||||||
| 1. | “Audit Fees”are the aggregate fees of |
| 2. | “Audit-Related Fees”consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated and wholly owned subsidiary, Cortigent, Inc., financial statements and are not reported above under “Audit Fees.” |
| 3. | “Tax Fees”consist of fees billed for services |
| 4. | “All Other Fees”consist of fees billed for services other than the services reported in Audit Fees, Audit-Related Fees, and Tax Fees. |
Pre-Approval Policies and Procedures
The Audit Committee is required to reviewreviews and approvepre-approves all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services and tax services, as well as specifically designated non-audit services which, in advance the retentionopinion of the Audit Committee, will not impair the independence of the independent auditorsregistered public accounting firm. Pre-approval generally is provided for up to one year, and any pre-approval is detailed as to the performanceparticular service or category of all audit and lawfully permitted non-audit services and generally is subject to a specific budget. The independent registered public accounting firm and the Company’s management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, including the fees for such services. Thethe services performed to date. In addition, the Audit Committee also may delegate to onepre-approve particular services on a case-by-case basis, as necessary or more of its members the authority to grant pre-approvals for the performance of non-audit services, and any such Audit Committee member who pre-approves a non-audit service must report the pre-approval to the full Audit Committee at its next scheduled meeting. To date no such non-audit services have been requested of or performed by Gumbiner Savett, Inc.appropriate.
Gumbiner Savett Inc.BPM LLP Representatives at Annual Meeting
We expect that representatives of Gumbiner Savett Inc.BPM LLP will not be present at the Annual Meeting.
24
Vote Required and Recommendation
TheApproval of this Proposal No. 2 requires the affirmative vote of a majority of the votes cast at the annual meeting. Abstentions from voting on this matterthe proposal will have no effect on the proposal. It is required foranticipated that Proposal No. 2 will be considered routine under the ratificationrules of the appointment of Gumbiner Savett Inc. as our independent registered public accounting firm. Abstentions and brokerNYSE. Broker non-votes, if any, will nothave no effect on the proposal.
Unless otherwise directed by the stockholders, proxies will be counted as votes cast.voted FOR approval of Proposal No. 2.
The Board recommends that stockholders vote “FOR” ratification of the appointment by the Audit Committee of Gumbiner Savett Inc.our Board of Directors of BPM LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 20162024, as described in this Proposal 3.
No. 2.
25
PROPOSAL NO. 3 — NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation DiscussionIntroduction
Overview
The Compensation CommitteeUnder Section 14A of the Exchange Act, the Company’s stockholders are entitled to vote to approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement in accordance with SEC rules, commonly referred to as a “say-on-pay vote.”
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers disclosed in the “Executive Compensation” section of this Proxy Statement. The Company believes that its compensation policies and decisions are aligned with our stockholders’ interests, and that the compensation of the Company’s named executive officers is designed to enable the Company to attract and retain talented and experienced executives to lead the Company successfully in a competitive environment.
Accordingly, our Board is asking the stockholders to indicate their support for the compensation of Directors administersthe Company’s named executive officers as described in this Proxy Statement by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion, is hereby APPROVED.”
Because the vote is advisory, it is not binding on our executive compensation and benefit programs. The Compensation Committee is comprised exclusively of independent directors and oversees all compensation and benefit programs and actions that affect our executive officers.
Compensation Process and Role of Management
The Compensation Committee is responsible for determining and approving all compensation for our executive officers. Pursuant to its charter,Board, the Compensation Committee, recommendsor the Company. Nevertheless, the views expressed by the stockholders, whether through this vote or otherwise, are important to management and the full Board and, accordingly, the salary, annual incentive compensation or bonus, long-term incentive compensationBoard and the Compensation Committee intend to consider the results of this vote in making determinations in the formfuture regarding executive compensation arrangements.
Vote Required and Recommendation
Approval of stock options or stock grants,this Proposal No. 3 requires the affirmative vote of a majority of the votes cast at the annual meeting. Abstentions from voting on the proposal will have no effect on the proposal. It is anticipated that Proposal No. 3 will be considered non-routine under the rules of the NYSE. Broker non-votes will have no effect.
Unless otherwise directed by the stockholders, proxies will be voted FOR approval of Proposal No. 3.
The Board recommends a vote “FOR” the approval, on a non-binding advisory basis, of the compensation of the company’s named executive officers as disclosed in this Proposal No. 3.
26
EXECUTIVE OFFICERS
The following table identifies our executive officers and all other employment, severancekey employees, and change-in-control agreements applicablesets forth their current positions at the Company and their ages as of April 1, 2024.
Name | Positions and Offices Held with the Company | Position Held | Age | |||
| Adam Mendelsohn, Ph.D. | Chief Executive Officer and Director | 2022 | 42 | |||
| Brigid A. Makes | Chief Financial Officer | 2022 | 68 | |||
| Donald Dwyer | Chief Business Officer and Corporate Secretary | 2022 | 65 | |||
| Truc Le | Chief Operating Officer | 2022 | 71 | |||
| Lisa Porter, M.D. | Chief Medical Officer | 2022 | 60 |
You should refer to executive officers. Our“Nominees for Election” above for information about our Chief Executive Officer, assists the Compensation Committee in its deliberations with respect to the compensation payable toAdam Mendelsohn, Ph.D. Biographical information for our other executive officers and typically recommends specific compensation packagesas of April 1, 2024, is set forth below.
Brigid A. Makes, M.B.A.: Ms. Makes joined our Company as Chief Financial Officer in 2022. From 2017 to 2022, she served as an independent consultant for our executive officers based upon his assessment and evaluation of their performance.
Following the end of each fiscal year, our Chief Executive Officer evaluates executive officer performance for the prior fiscal year, other than his own performance, and discusses the results of such evaluations with the Compensation Committee. The Chief Executive Officer assesses each executive officer’s performance for the prior fiscal year based upon subjective factors concerning such officer’s individual business goals and objectives, and the contributions made by the executive officer to our overall results. The Chief Executive Officer then makes specific recommendations to the Compensation Committee for adjustments to base salary and the grant of a target bonus and/or equity award, if appropriate, as part of the compensation packages for each executive officer, other than himself, for the next fiscal year.
The Compensation Committee reviews the performance of the Chief Executive Officer and determines all compensation for the Chief Executive Officer. The Chief Executive Officer is not present at the time the Compensation Committee reviews his performance and discusses his compensation.
Executive Officers
Robert J. Greenberg, 48, Chairman of the Board
Dr. Greenberg has been Chairman of our Board from August 2015.primarily private medical device companies. Prior to that, Dr. Greenberg was a founder andMs. Makes served as Senior Vice President and Chief Financial Officer of Miramar Labs from 2011 to 2017, a global medical device company dedicated to bringing innovative applications to the President, Chief Executive Officer and Directoraesthetic marketplace, which was acquired by Sientra in July 2017. From 2006 to 2011, Ms. Makes served in the same roles for AGA Medical, a medical device company specializing in the treatment of Second Sightstructural heart defects, which was acquired by St. Jude Medical, Products, Inc. since its inception until August 2015.in November 2010. Prior to the formationAGA Medical, from 1999 to 2006, Ms. Makes served in a variety of Second Sight, Dr. Greenberg worked co-managing the Alfred E. Mann Foundation and since February 2007 he has been chairman of that foundation. From 1997 to 1998, heexecutive positions, including as Chief Financial Officer, for Nektar Therapeutics (formerly Inhale Therapeutics), a biopharmaceutical company. Ms. Makes also served as lead reviewerChief Financial Officer for IDEsOravax, a biopharmaceutical company, from 1998 to 1999 and 510(k)s at the Office of Device Evaluation at the US Food and Drug Administrationfor Haemonetics Corp, a company specializing in the Neurological Devices Division. In 1998, he received his medical degreemanagement of blood supplies, from The Johns Hopkins School of Medicine.1995 to 1998. From 1991 to 1997, Dr. Greenberg conducted pre-clinical trials demonstrating the feasibility of retinal electrical stimulation in patients with retinitis pigmentosa. This work was done at the Wilmer Eye Institute at Johns Hopkins in Baltimore and led to the granting of his Ph.D. from the Johns Hopkins Department of Biomedical Engineering. His undergraduate degree was in Electrical Engineering and Biomedical Engineering from Duke University. Dr. Greenberg currently isDecember 2019 through June 2023, Ms. Makes had also the chairman of the Board of Directors of the Southern California Biomedical Council and the Alfred Mann Foundations. In addition he isbeen a member of the board of directors of Pulse Biosciences,Mind Medicine (MindMed) Inc., a development stage medical devicepublicly traded neuro-pharmaceutical company, .where Ms. Makes served on the Audit Committee as chair. Since 2020, Ms. Makes also serves as a director of Elutia, Inc. (formerly, Aziyo Biologics), a commercial-stage regenerative medicine company. Ms. Makes chairs both the Audit and Compensation Committees and is on the Corporate Governance & Nominating Committee for Elutia. Since June 2021, Ms. Makes has served as a director and chair of the Audit Committee for Quantum-Si, Inc., a life science tools company focused on commercializing a unique protein sequencing platform. Ms. Makes also serves on the Compensation Committee. Ms. Makes holds a Bachelor of Commerce degree in Finance and International Business from McGill University and an M.B.A. from Bentley University.
Will McGuire, 53, President,Donald Dwyer, M.B.A.: Mr. Dwyer has served as the Chief Executive Officer and Director
Mr. McGuire has been our President and Chief ExecutiveBusiness Officer since August 2015.the Merger in 2022. Prior to that,this, Mr. McGuire workedDwyer was at Volcano Corporation,NPM and served as Chief Business Officer from 2021 to 2022, as consultant from 2019 to 2020 and as an observer to NPM board of directors from 2016 to 2019 (while employed at AstraZeneca). He is a science-based business leader with over 40 years of experience in the biopharmaceutical industry and a broad background in leadership across a wide range of technologies and disease areas. Mr. Dwyer has held director level positions in quality assurance/control and regulatory affairs at Rhone-Poulenc Rorer (now part of Sanofi), from 1986 to 1993 and Cephalon (now part of Teva Pharmaceuticals), from 1993 to 1995); and regulatory affairs, drug development, sales, commercial and business development at AstraZeneca, from 1995 to 2019. He also served as AstraZeneca’s observer on the Board of Directors for PhaseBio, a clinical-stage biopharmaceutical company until a successful IPO, (2014 – 2018) and NPM (2016 – 2019). At AstraZeneca, he was Executive Director Business Development and Early Asset (pre-Phase 3) Commercial lead for Cardiovascular, Renal and Metabolic Disease where he co-led the $2.7B acquisition of LOKELMA (hyperkalemia) from ZS Pharma and the $1.2B licensing and co-commercialization deal for TC-5214 (major depressive disorder) with Targacept. On the divestment side, Mr. Dwyer was Presidentalso co-lead on multiple projects including the ZOLADEX implant (cancer), Earlier in his career, he was the US commercial head for key brands including TOPROL-XL (heart failure, hypertension, angina); ATACAND (hypertension); ONGLYZA (diabetes); FARXIGA (diabetes); SEROQUEL (bipolar disorder) and ABRAXANE (cancer). Mr. Dwyer is a graduate of Americas Commercial since 2014the University of Central Connecticut (chemistry/biology) and prior to that, Senior Vice PresidentTemple University Fox School of Business (M.B.A.).
Truc Le, M.B.A.: Mr. Le brings over 35 years of manufacturing, quality, and General Manager of Coronary Imaging, Systemsoverall operations experience with devices and Program Management since 2013. Volcano, a global leader in intravascular imaging for coronary and peripheral applications and physiology, was acquired by Royal Philips in February 2015. Prior to joining Volcano,complex drug-device combination products. Mr. McGuireLe has served as Vice President and General Manager of Patient Monitoring at Covidien. He previously served as President and Chief Executive Officer of AtheroMed, Inc., a venture capital-backed peripheral atherectomy company, prior to which he wasour Chief Operating Officer at Spectranetics Corporation,since the Merger in 2022. From 2020 until the Merger in 2022, Mr. Le was the Chief Operating Officer of NPM. From 2011 to March 2020, Mr. Le was the Chief Technical Operations Officer for Dance Biopharm — a publicly-traded medical device company. In addition, Mr. McGuire held various positions at Guidant Corporation from 1998 to 2005 including General Manager of Guidant Latin America; Director of U.S. Marketing for Vascular Intervention (VI); Director of Global Marketing for VI;leader in aqueous respiratory therapy delivery with Drug and Production Manager for Coronary Stents. Prior to 1998, Mr. McGuire held positions in Finance and Production at IVAC Medical Systems. A graduate of the Georgia Institute of Technology, Mr. McGuire received his M.B.A. from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.
Device
27
Tom Miller, 60,combination products. As the Chief FinancialTechnical Operations Officer,
he built operations, R&D, quality systems, manufacturing, supply chain, product development, formulation, and IT. From 2009 to 2011, Mr. Miller has been our Chief Financial Officer since May 2014. From 2000 to 2014 he was Chief Financial Officer of Ixia, a public company engaged in the design and manufacture of network test and monitoring products for the telecommunications industry. From 1997 to 1999 heLe was the DirectorChief Operating Officer for Avid Bio Services, Inc., a leading contract development, manufacturing organization (CDMO) that specializes in clinical trials and commercial distribution of Financemonoclonal antibodies and Controller of CoCensys,recombinant proteins. From 2007 to 2009, Mr. Le served as the EVP Manufacturing and Quality for PrimaBiomed, a public biotechnologycell therapy company, engaged in the discovery and development of new drugs to treat neurological and psychiatric disorders. Mr. Miller received a Masters of Business Administration from the University of Southern California and a Bachelor of Arts, Economics from the University of California, Berkeley.
Gregoire Cosendai, 44, Vice President of European Operations
Mr. Cosendai was our Director of European Operations from 2008 to 2010 and has since 2010 been our Vice President of European Operations. Between 2005 and 2008 he acted as a consultant for Second Sight.several drug/device companies. From 2001 to 20082007, Mr. Le was Senior Vice President of Operations, Product Development, Quality, and Regulatory Affairs for Nektar Therapeutics, a biopharmaceutical company, where he was director of business developmentled the commercial formulation and device manufacturing for the Alfred E. Mann Foundation.Exubera®. From 19951999 to 2001, he was clinical engineer at the ENT clinic at the Geneva Hospital. Mr. Cosendai received a Ph.D. from EPFL Lausanne on developing new speech coding strategiesconsulted for cochlear implantsmultiple large pharmaceutical and a Master of Electrical Engineering (Ing. dipl. EPFL elec.) from EPFL Lausanne.
Edward Randolph, 58, Vice President of Manufacturing
Mr. Randolph has been our Vice President of Manufacturing since 2007. From 2003 to 2007, Mr. Randolph was Director of Manufacturing Engineering at Boston Scientific Corp., a worldwide manufacturer of medical devicesdevice companies, including Abbott, Medtronic, Baxter, and products. From 2001 to 2003, Mr. Randolph was a Director of Manufacturing Engineering at Cygnus, Inc., manufacturer of non-invasive transdermal drug delivery systems. Mr. Randolph received his Master of Science in Engineering from Stanford University and his Bachelor of Science in Architecture from Massachusetts Institute of Technology.
Stephen Okland, 52, Commercial Vice President, U.S. and Canada
Mr. Okland has been our Commercial Vice President, U.S. and Canada since March 2016. Prior to that Mr. Okland was withSanford Rose Associates – Okland Group, Inc.,Dow Chemical, where he served as President and specialized in commercial executive talent acquisitiondue-diligence, operation effectiveness, and PAI readiness. From 1981 to 1999, Mr. Le was employed for early stage to mid-cap size companies in the medical device space. Previously, he served as Vice President, Worldwide Marketing and Sales, at Miramar Labs, Inc., a division of Johnson & Johnson, a multinational company that develops manufactures, and distributes medical devices, to treat dermatologic medical conditions, where he led all commercialization activities. At Medivance, Inc., Mr. Okland servedpharmaceutical products, and consumer packaged goods, as Vice President,the Worldwide MarketingVice-President of Regulatory Compliance and U.S. Sales and directed the turnaround of all commercialization activities resulting in a $250 million acquisition by Bard Medical. At Spectranetics, Inc., as Vice President, U.S. Sales and Marketing, he directed all U.S. sales and marketing operations during a period when the company was named to Fortune’s 100 Fastest Growing Companies three years in a row. Mr. Okland also served as Chief Operating Officer of a medical device start-up company, directing and managing sales, marketing, R&D and manufacturing operations. He held positions of increasing responsibility during 12 years at Boston Scientific Corporation andQuality Systems. His work at Johnson & Johnson included more than ten years in operations, regulatory affairs, product development, manufacturing, and quality for ophthalmic products such as cataract devices and implants and drug products for ophthalmic surgery procedures. Mr. Le has a B.S. in mechanical engineering and a M.B.A. in Management. He completed numerous executive leaderships training programs, including World Class Manufacturing at Duke University, Executive Management at Harvard University, and a QSR trainer at AAMI/FDA.
Lisa Porter, M.D.: Dr. Porter has over 25 years of experience in developing medicines for metabolic diseases with a focus on bringing innovative therapies to patients with high unmet need. She serves as our Chief Medical Inc.Officer since 2022. From 2020 until the Merger in 2022, Dr. Porter was the Chief Medical Officer of NPM. Before 2020, she served as CMO, Metabolic Diseases for Eiger Biopharmaceuticals, a clinical-stage biopharmaceutical company, where she led clinical development for the orphan diseases post bariatric hypoglycemia and Hutchinson-Gilford Progeria Syndrome resulting in FDA breakthrough therapy designation for both programs. Dr. Porter worked at Eiger Biopharmaceuticals from 2017 – 2020. She served as CMO for Dance BioPharma (now Aerami Therapeutics), a company developing inhaled therapies for the treatment of severe respiratory and chronic diseases, from 2014 to 2017 and Vice President, Medical Development for Amylin Pharmaceuticals, a biopharmaceutical company, from 2009 to 2013 where he began his career. Heshe led the R&D efforts for the Amylin-Lilly Alliance, culminating in the approval of the GLP-1 agonist Bydureon, the first once weekly treatment for Type 2 diabetes. Prior to joining Amylin, Dr. Porter held progressively increasing leadership positions at GlaxoSmithKline Pharmaceuticals, a multinational pharmaceutical company, from 1999 to 2004 with responsibilities for the clinical strategy for Avandia and early obesity compounds. She was Associate Medical Director for Zeneca Pharmaceuticals, a multinational pharmaceutical and biotechnology company, from 1997 to 1999. Dr. Porter was a board member of Viacyte, Inc. from January 2022 until its acquisition by Vertex was completed in September 2022. Dr. Porter earned a Bachelor of Science degreeB.S. in Biology from the College of William & Mary, an M.D. from Duke University of Wisconsin and a Masters of Business Administration from Texas Christian University.completed fellowship training in Endocrinology and Hypertension at Brigham and Women’s Hospital.
28
EXECUTIVE COMPENSATION
2023 Summary Compensation Table for 2015
The following table provides information regarding the total compensation ofawarded to, earned by, or paid to our named executive officers, or “NEOs,” during 2015. As an emerging growth company, we have elected to comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act of 1933, as amended, or the Securities Act, which require compensation disclosure for our principal executive officerfiscal years ended 2022 and the two most highly compensated executive officers other than our principal executive officer. The amounts represented in the “Option Awards” column reflect the stock compensation expense recorded by the Company pursuant to ASC Topic 718 and does not necessarily equate to the income that will ultimately be realized by the named executive officers for such awards. Individuals listed in the table below are sometimes referred to in this report as the “Named Executive Officers” or “NEOs”.2023.
Name and Principal Position | Year | Salary | Bonus | Stock | Option | All Other | Total ($) | |||||||
| Adam Mendelsohn, Chief Executive Officer | 2023 | 597,683 | — | 93,000 | 342,000 | 11,938 | 1,044,621 | |||||||
| 2022 | 300,000 | — | — | 12,014 | 312,014 | |||||||||
| Truc Le, Chief Operating Officer | 2023 | 473,100 | 74,400 | 164,800 | 13,200 | 725,500 | ||||||||
| 2022 | 300,000 | 25,000 | 12,200 | 337,200 | ||||||||||
| Lisa Porter, Chief Medical Officer(6) | 2023 | 468,933 | — | 55,800 | 123,600 | 13,200 | 661,533 |
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Other ($) | Total ($) | ||||||||||||||||||
| (1) | (2) | (3) | (4) | |||||||||||||||||||||
| Will McGuire, | 2015 | 128,523 | 66,426 | 4,936,300 | 644 | 5,131,893 | ||||||||||||||||||
| Chief Executive Officer (5) | ||||||||||||||||||||||||
| Robert J. Greenberg, M.D., Ph.D. | 2015 | 338,821 | 62,411 | 210,000 | 8,572 | 619,804 | ||||||||||||||||||
| Chairman (5) | 2014 | 343,647 | 33,882 | 2,795,320 | 437,058 | 3,609,907 | ||||||||||||||||||
| 2013 | 336,953 | 49,343 | — | 12,309 | 398,605 | |||||||||||||||||||
| Tom Miller, | 2015 | 225,000 | 41,445 | 86,735 | 4,705 | 357,885 | ||||||||||||||||||
| Chief Financial Officer | 2014 | 130,398 | 13,993 | 728,858 | 1,549 | 874,798 | ||||||||||||||||||
| Brian Mech, former Vice President | 2015 | 91,340 | — | — | 1,809 | 93,149 | ||||||||||||||||||
| Business Development (6) | 2014 | 192,114 | 15,440 | 389,902 | 4,554 | 602,010 | ||||||||||||||||||
| 2013 | 190,757 | 28,249 | — | 3,767 | 222,773 | |||||||||||||||||||
| Anthony Moses, former | 2015 | 150,804 | — | 978,000 | 51,109 | 1,179,913 | ||||||||||||||||||
| Commercial Vice President the Americas (7) | ||||||||||||||||||||||||
| Anne-Marie Ripley, former Vice | 2015 | 216,604 | 28,618 | 42,000 | 1,880 | 289,102 | ||||||||||||||||||
| President of Clinical and | 2014 | 203,983 | 15,536 | 403,052 | 3,514 | 626,085 | ||||||||||||||||||
| Regulatory (8) | 2013 | 178,645 | 26,397 | — | 3,527 | 208,569 | ||||||||||||||||||
| Edward Randolph, Vice President | 2015 | 192,775 | 26,632 | 42,000 | 3,690 | 265,097 | ||||||||||||||||||
| of Manufacturing | 2014 | 189,734 | 14,458 | 369,728 | 3,860 | 577,780 | ||||||||||||||||||
| 2013 | 187,160 | 15,655 | — | 3,706 | 206,521 | |||||||||||||||||||
| Gregoire Cosendai, Ph.D., Vice | 2015 | 234,150 | — | 42,000 | 13,657 | 289,807 | ||||||||||||||||||
| President of European Operations | 2014 | 205,491 | 15,129 | 319,552 | 13,925 | 554,097 | ||||||||||||||||||
| 2013 | 204,272 | 19,261 | — | 13,633 | 237,166 | |||||||||||||||||||
| (1) |
| (2) | Represents the amounts |
| (3) |
| (4) |
| (5) | Includes employer matching contributions to the |
| (6) |
OUTSTANDING EQUITY AWARDS AT 2015 FISCAL YEAR-ENDNarrative Disclosure to Summary Compensation Table
Employment Agreements
None of our named executive officers have employment agreements at this time.
29
Executive Compensation Elements
Executive compensation of Vivani’s officers is primarily comprised of base salary. Vivani provides stock option and RSU grants that generally vest over four years, but some grants may be granted with special terms at the Board’s discretion. The Company offers a comprehensive benefits package to all of its employees.
Base Salaries
Our named executive officers each receive a base salary to compensate them for services rendered to our company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Base salaries are reviewed annually, typically in connection with our annual performance review process, approved by our board of directors or the compensation committee, and may be adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance, and experience.
From January 1 through 15, 2023, the annual base salaries for Dr. Mendelsohn, Mr. Le, and Dr. Porter were $300,000, $300,000, and $200,000, respectively. Effective as of January 16, 2023, the annual base salaries for Dr. Adam Mendelsohn, Mr. Le and Dr. Porter increased to $610,000, $480,000 and $480,000, respectively.
Bonuses
The Company does not sponsor a formal bonus plan and none of the NEOs received a bonus for 2023.
Equity Compensation
The Company adopted the 2022 Plan, which became effective August 30, 2022. The purpose of the 2022 Plan is to encourage and enable the officers, employees, non-employee directors and consultants of the Company and its Affiliates upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company. For details on equity awards granted during the fiscal year ended December 31, 2023, please see “Outstanding Equity Awards at 2023 Fiscal Year-End” below.
Employee Benefits Program
Executive officers, including the NEOs, are eligible to participate in all of Vivani’s employee benefit plans, including medical insurance, on the same basis as other employees, subject to applicable law. Vivani offers a choice of multiple medical, dental, and vision plans, as well as disability and life insurance. The Company also offers a 401(k) plan with a Company matching contribution which is dollar for dollar match up to 4% with a cap equal to the 401(k) guidelines, which was $13,200 in 2023.
Severance and/or Change in Control Benefits
There are no contracts, agreements, plans, or arrangements that provide executives any benefits if there is a termination of employment and/or change in control of the Company.
Outstanding Equity Awards at 2023 Fiscal Year-End
The following table sets forth certain information concerningregarding outstanding unexercised, unvested, and/or unearned equity awards that were held by our NEOs as of December 31, 20152023.
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration 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 | ||||||||||||||||||||||||||
| Adam Mendelsohn | 11/14/2018 | 60,373 | — | — | 3.15 | 12/17/2028 | — | — | — | — | ||||||||||||||||||||||||||
| 1/19/2023 | — | 200,000 | (3) | — | 1.27 | 1/18/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/6/2023 | 200,000 | (4) | 1.09 | 3/5/2033 | — | — | — | — | ||||||||||||||||||||||||||||
| 3/6/2023 | — | — | — | — | 3/05/2033 | — | — | 100,000 | (5) | 102,000 | ||||||||||||||||||||||||||
| Truc Le | 7/31/2020 | 577,848 | (6) | 25,884 | (6) | — | 3.15 | 7/30/2030 | — | — | — | — | ||||||||||||||||||||||||
| 3/8/2021 | 103,766 | (7) | 47,167 | (7) | — | 3.15 | 3/7/2031 | — | — | — | — | |||||||||||||||||||||||||
| 1/29/2023 | — | 160,000 | (3) | — | 1.27 | 1/28/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/6/2023 | — | — | — | — | 3/5/2033 | — | — | 80,000 | (5) | 81,600 | ||||||||||||||||||||||||||
| Lisa Porter | 4/4/2020 | 236,461 | (3) | 5,032 | (3) | — | 3.15 | 4/3/2030 | — | — | — | — | ||||||||||||||||||||||||
| 1/19/2023 | — | 80,000 | (3) | — | 1.27 | 1/18/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 1/19/2023 | — | 40,000 | (3) | — | 1.27 | 1/18/2033 | — | — | — | — | ||||||||||||||||||||||||||
| 3/6/2023 | — | — | — | — | 3/5/2033 | — | — | 40,000 | (5) | 40,800 | ||||||||||||||||||||||||||
| 3/6/2023 | — | — | — | — | 3/5/2033 | — | — | 20,000 | (5) | 20,400 | ||||||||||||||||||||||||||
| (1) | All grants to NEOs for 2023 were issued under the 2022 Plan. Options granted to NEOs prior to 2023 were granted under the 2014 Employee Incentive Plan, as amended from time to time. |
| (2) | The market value of the outstanding restricted stock units is based on the market price of the Company’s common stock of $1.02 per share as of December 29, 2023 (the last trading day of fiscal year 2023) multiplied by the number of units that have not vested as of December 31, 2023. |
| (3) | This option vests 25% on the one-year anniversary of the grant date, and the remainder vests in equal monthly tranches over the next three years following two- and one-half years, subject to the applicable NEO’s continued service through ach applicable vesting date. |
| (4) | This performance-based option has 4 year term. It will vest 100% if and when the Company’s stock price closes at $6.30 or higher for 3 consecutive days on NASDAQ, subject to the applicable NEO’s continued service through the applicable vesting date. In the event of a Sale Event (as defined in the 2022 Plan) and to the extent the CIC Stock Price (as defined in the applicable award agreement) meets or exceeds $6.30, the award shall fully vest immediately prior to such Sale Event, subject to the applicable NEO’s continued service through such date. |
| (5) | This performance-based RSU award has 4 year term. It will vest one-third if and when the Company’s stock price closes at $3.15 or higher for 3 consecutive days on NASDAQ. Once the stock price hurdle is achieved, one-third of the award will vest on each of the first and second anniversaries of that achievement, subject to the applicable NEO’s continued service through each applicable vesting date. In the event of a Sale Event (as defined in the 2022 Plan) where the award will be assumed, continued or substituted by a successor and to the extent that the CIC Stock Price (as defined in the applicable award agreement) meets or exceeds $3.15, one-third of the award shall vest on the date of the Sale Event and one-third of the award shall vest on each of the first and second anniversary of such date, subject to the applicable NEO’s continued service through each applicable vesting date; provided, that if the stock price hurdle is achieved and the applicable NEO is terminated without Cause or due to Good Reason (as such terms are defined in the applicable award agreement), in either case within 12 months following the Sale Event, then the award shall immediately vest. Moreover, if the stock price hurdle has been achieved, then upon the applicable NEO’s death or termination due to Disability (as defined in the applicable award agreement), the award shall immediately vest. In the event of a Sale Event where the award will not be assumed, continued or substituted by a successor and to the extent that the CIC Stock Price meets or exceeds $3.15, the award will immediately vest. |
| (6) | This option vests 50% on the grant date, 25% at six-month anniversary of the grant date and the remainder vests monthly over the following two and one half years, in each case subject to the applicable NEO’s continued service through each applicable vesting date. |
| (7) | This option vests in equal monthly installments over the first four years following the grant date, subject to the applicable NEO’s continued service through each applicable vesting date. |
31
Equity Compensation Plan Information
The following table provides information as of December 31, 2023 with respect to the shares of our common stock that may be issued under our existing equity compensation plans.
Equity Compensation Plan Information | ||||||||||||
| Plan Category | Number of | Weighted | Number of | |||||||||
Equity compensation plans approved by security holders (2) | 6,493,117 | $ | 2.60 | 3,177,071 | (3) | |||||||
| Equity compensation plans not approved by security holders | — | $ | — | — | ||||||||
| Total | 6,493,117 | $ | 2.60 | 3,177,071 | ||||||||
| (1) | The weighted average exercise price is calculated based solely on outstanding stock options. This weighted-average exercise price does not reflect shares subject to RSUs. |
| (2) | Consists of the 2022 Plan. The shares of common stock underlying any awards granted under the 2022 Plan that are forfeited, canceled, reacquired by us prior to vesting, satisfied without the issuance of stock, or otherwise terminated (other than by exercise) and the shares of common stock that are withheld upon exercise of a stock option or settlement of such award to cover the exercise price or tax withholding will be added to the shares of common stock available for issuance under the 2022 Plan. |
| (3) | Consists of shares available for future issuance under the 2022 Plan. |
32
Pay Versus Performance
As required by Item 402(v) of Regulation S-K, we are providing information about the relationship between executive compensation actually paid (as calculated in accordance with Item 402(v) of Regulation S-K) to our PEO(s), and on an average basis, our other non-PEO NEOs in each case, as determined under SEC rules and certain financial performance measures.
The following table shows the total compensation for our PEO(s) and non-PEO NEOs for the fiscal years 2022 and 2023 as set forth in the Summary Compensation Table, the “compensation actually paid” to our PEO(s), and on an average basis, our other non-PEO NEOs (in each case, as determined under SEC rules), our TSR and our net income.
| Pay Versus Performance | ||||||||||||||||||||||||||||||||||
Year (1) | Summary Compensation Table Total for PEO (2) | Compensation Actually Paid to PEO (3) | Summary Compensation Table Total for PEO 2 (2) | Compensation Actually Paid for PEO 2 (3) | Average | Average | Value of Initial Fixed $100 | Net Income | ||||||||||||||||||||||||||
| 2023 | $ | 1,044,621 | $ | 954,818 | N/A | N/A | $ | 693,517 | $ | 676,591 | $ | 24.64 | -$ | 25,652,000 | ||||||||||||||||||||
| 2022 | $ | 312,014 | $ | 292,957 | $ | 382,153 | $ | 379,269 | $ | 321,605 | -$ | 70,736 | $ | 20.52 | -$ | 13,889,000 | ||||||||||||||||||
| 1. | Adam Mendelsohn served as our PEO for the entirety of fiscal year 2023 and for the portion of fiscal year 2022 following our Merger. Scott Dunbar served as PEO 2 in fiscal year 2022 until the Merger. |
| 2. | Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the indicated fiscal year in the case of our PEO(s) and (ii) the average of the total compensation reported in the Summary Compensation Table for the Reported NEOs in the indicated year for such years. | |
| 3. | Amounts reported in these columns represent the compensation actually paid to our PEO(s) for the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on their total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the tables below: |
| 4. | Amounts reported in this column represent the compensation actually paid to the Reported NEOs in the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below: |
| 5. | Pursuant to Item 402(v) of Regulation S-K, the comparison assumes $100 was invested in our common stock on August 31, 2022 using the closing stock price on that date, the date the combined new entity of Vivani Medical first traded. Historic stock price performance is not necessarily indicative of future stock price performance. |
| 1. | Adam Mendelsohn served as our PEO for the entirety of fiscal year 2023 and for the portion of fiscal year 2022 following our Merger. Scott Dunbar served as PEO 2 in fiscal year 2022 until the Merger. |
The Company’s non-PEO NEOs (the “Reported NEOs”) for the indicated fiscal years were as follows:
| – | 2023: Truc Le and Lisa Porter |
| – | 2022: Truc Le and Brigid Makes |
| 2. | Amounts reported in these columns represent (i) the total compensation reported in the Summary Compensation Table for the indicated fiscal year in the case of our PEO(s) and (ii) the average of the total compensation reported in the Summary Compensation Table for the Reported NEOs in the indicated year for such years. |
| 3. | Amounts reported in these columns represent the compensation actually paid to our PEO(s) for the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on their total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the tables below: |
| PEO | ||||||||||||||||
| 2022 | 2023 | |||||||||||||||
| Summary Compensation Table - Total Compensation | (a) | $ | 312,014 | $ | 1,044,621 | |||||||||||
- | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | (b) | $ | 0 | $ | 435,000 | ||||||||||
| + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | (c) | $ | 0 | $ | 345,197 | ||||||||||
| + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | (d) | $ | 0 | $ | 0 | ||||||||||
| + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | (e) | -$ | 19,057 | $ | 0 | ||||||||||
| + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (f) | $ | 0 | $ | 0 | ||||||||||
| - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (g) | $ | 0 | $ | 0 | ||||||||||
| = | Compensation Actually Paid | $ | 292,957 | $ | 954,818 | |||||||||||
| PEO 2 | ||||||||||||||||
| 2022 | 2023 | |||||||||||||||
| Summary Compensation Table - Total Compensation | (a) | $ | 382,153 | N/A | ||||||||||||
| - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | (b) | $ | 3,575 | N/A | |||||||||||
| + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | (c) | $ | 1,519 | N/A | |||||||||||
| + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | (d) | $ | 0 | N/A | |||||||||||
| + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | (e) | -$ | 829 | N/A | |||||||||||
| + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (f) | $ | 0 | N/A | |||||||||||
| - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (g) | $ | 0 | N/A | |||||||||||
| = | Compensation Actually Paid | $ | 379,269 | |||||||||||||
Equity Award values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate these fair values did not materially differ from those disclosed at the time of grant.
| 4. | Amounts reported in this column represent the compensation actually paid to the Reported NEOs in the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below: |
| Non-PEO NEO Average | ||||||||||||||||
| 2022 | 2023 | |||||||||||||||
| Summary Compensation Table - Total Compensation | (a) | $ | 321,605 | $ | 693,517 | |||||||||||
| - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | (b) | $ | 50,692 | $ | 209,300 | ||||||||||
| + | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | (c) | $ | 14,826 | $ | 159,338 | ||||||||||
| + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | (d) | -$ | 312,905 | $ | 8,189 | ||||||||||
| + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | (e) | -$ | 43,210 | $ | 0 | ||||||||||
| + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | (f) | $ | 0 | $ | 24,848 | ||||||||||
| - | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | (g) | $ | 0 | $ | 0 | ||||||||||
| = | Compensation Actually Paid | -$ | 70,736 | $ | 676,591 | |||||||||||
Please see footnote 1 for the Reported NEOs included in the average for each indicated fiscal year.
Equity Award values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate these fair values did not materially differ from those disclosed at the time of grant.
| 5. | Pursuant to Item 402(v) of Regulation S-K, the comparison assumes $100 was invested in our common stock on August 31, 2022 using the closing stock price on that date, the date the combined new entity of Vivani Medical first traded. Historic stock price performance is not necessarily indicative of future stock price performance. |
Relationship Between “Compensation Actually Paid” and Performance Measures
Compensation actually paid (“CAP”), as calculated pursuant to Item 402(v) of Regulation S-K, reflects cash compensation actually paid as well as changes to the fair values of equity awards during the years shown in the table based on year-end or vesting date stock prices, and various accounting valuation assumptions. Due to how CAP is calculated, the CAP as reported for each year does not reflect the actual amounts earned by our named executive officers. Unless otherwise noted, all awards expire 10 years afterNEOs from their equity awards. CAP generally fluctuates annually due to the grant date.change in our stock price from year to year as well as varying levels of actual achievement of performance goals.
Because CAP does not reflect the actual amount earned by our NEOs on their equity compensation, we do not use this measure for understanding how NEO pay aligns with our company performance.
| Option Awards | Stock Awards | |||||||||||||||||||||||||
| Executive Officer | Option Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Stock Award Grant Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested($) | |||||||||||||||||||
| Will McGuire | 08/17/15 | — | 420,000 | (2) | 12.43 | 12/1/15 | 190,000 | (4) | 1,119,100 | |||||||||||||||||
| Robert J. Greenberg, M.D., Ph.D. | 05/01/06 | 8,223 | — | 5.00 | ||||||||||||||||||||||
| 01/01/07 | 30,625 | — | 5.00 | |||||||||||||||||||||||
| 02/01/08 | 23,750 | — | 5.00 | |||||||||||||||||||||||
| 11/01/08 | 150,000 | — | 5.00 | |||||||||||||||||||||||
| 02/01/09 | 33,750 | — | 5.00 | |||||||||||||||||||||||
| 02/01/10 | 103,750 | — | 5.00 | |||||||||||||||||||||||
| 03/01/11 | 41,563 | — | 5.00 | |||||||||||||||||||||||
| 03/01/12 | 29,063 | 9,687 | (1) | 5.00 | ||||||||||||||||||||||
| 01/01/14 | 125,000 | — | (3) | 4.25 | ||||||||||||||||||||||
| 04/01/14 | 11,719 | 35,156 | (1) | 5.00 | ||||||||||||||||||||||
| 09/26/14 | 103,665 | 310,994 | (1) | 9.00 | ||||||||||||||||||||||
| 03/25/15 | — | 31,250 | (1) | 13.09 | ||||||||||||||||||||||
| Tom Miller | 08/01/14 | 43,750 | 131,250 | (1) | 7.00 | |||||||||||||||||||||
| 03/25/15 | — | 12,907 | (1) | 13.09 | ||||||||||||||||||||||
Below are graphs showing the relationship of “Compensation Actually Paid” to our PEO(s) and the Reported NEOs for our fiscal years 2022 and 2023 to (1) our total stockholder return and (2) our net income:
34
| Option Awards | Stock Awards | |||||||||||||||||||||||||
| Executive Officer | Option Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Stock Award Grant Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested($) | |||||||||||||||||||
| Gregoire Cosendai | 11/01/08 | 20,000 | — | 5.00 | ||||||||||||||||||||||
| 02/01/09 | 5,081 | — | 5.00 | |||||||||||||||||||||||
| 05/01/09 | 10,000 | — | 5.00 | |||||||||||||||||||||||
| 02/01/10 | 14,475 | — | 5.00 | |||||||||||||||||||||||
| 06/01/10 | 2,125 | — | 5.00 | |||||||||||||||||||||||
| 12/01/10 | 25,000 | — | 5.00 | |||||||||||||||||||||||
| 03/01/11 | 6,650 | — | 5.00 | |||||||||||||||||||||||
| 03/01/12 | 5,813 | 1,937 | (1) | 5.00 | ||||||||||||||||||||||
| 04/01/14 | 2,735 | 8,202 | (1) | 5.00 | ||||||||||||||||||||||
| 09/26/14 | 12,753 | 38,256 | (1) | 9.00 | ||||||||||||||||||||||
| 03/25/15 | — | 6,250 | (1) | 13.09 | ||||||||||||||||||||||
| Edward Randolph | 08/01/07 | 50,000 | — | 5.00 | ||||||||||||||||||||||
| 02/01/08 | 2,290 | — | 5.00 | |||||||||||||||||||||||
| 11/01/08 | 25,000 | — | 5.00 | |||||||||||||||||||||||
| 02/01/09 | 6,750 | — | 5.00 | |||||||||||||||||||||||
| 02/01/10 | 20,750 | — | 5.00 | |||||||||||||||||||||||
| 03/01/11 | 8,313 | — | 5.00 | |||||||||||||||||||||||
| 03/01/12 | 5,813 | 1,937 | (1) | 5.00 | ||||||||||||||||||||||
| 04/01/14 | 2,735 | 8,202 | (1) | 5.00 | ||||||||||||||||||||||
| 09/26/14 | 16,474 | 49,421 | (1) | 9.00 | ||||||||||||||||||||||
| 03/25/15 | — | 6,250 | (1) | 13.09 | ||||||||||||||||||||||
| Anthony Moses | 05/25/15 | — | 150,000 | (2) | 12.73 | |||||||||||||||||||||
| Anne-Marie Ripley | 01/01/07 | 6,125 | — | 5.00 | ||||||||||||||||||||||
| 04/01/08 | 4,750 | — | 5.00 | |||||||||||||||||||||||
| 11/01/08 | 25,000 | — | 5.00 | |||||||||||||||||||||||
| 02/01/09 | 6,750 | — | 5.00 | |||||||||||||||||||||||
| 02/01/10 | 20,750 | — | 5.00 | |||||||||||||||||||||||
| 03/01/11 | 8,313 | — | 5.00 | |||||||||||||||||||||||
| 03/01/12 | 5,813 | 1,937 | (1) | 5.00 | ||||||||||||||||||||||
| 04/01/14 | 3,125 | 9,375 | (1) | 5.00 | ||||||||||||||||||||||
| 09/26/14 | 18,055 | 54,164 | (1) | 9.00 | ||||||||||||||||||||||
| 03/25/15 | — | 6,250 | (1) | 13.09 | ||||||||||||||||||||||
(1)Vests in equal annual tranches on the first four anniversary dates of the grant.
(2) Vests over a 4 year term, with 25% vesting on the one year anniversary date of the grant and thereafter vesting in 12 equal quarterly installments of 6.25%.
(3) Vested 100% on grant.
(4) Vests over a 4 year term, with 25% vesting on the one year anniversary of Mr. McGuire’s employment start date and thereafter vesting in 12 equal installments of 6.25% on the quarterly anniversaries of Mr. McGuire’s start date.
35
Equity Compensation Plan Information
We currently maintain equity compensation plans that provide for the issuance of our Common Stock to our officers, employees, and certain consultants upon the exercise or vesting of stock options and upon the vesting of restricted stock units. These plans are our:
The 2003 Plan, the 2011 Plan and the 2015 ESPP have been approved by our shareholders. The RSU Plan was adopted by our Board on December 1, 2015, in connection with a grant of 190,000 inducement restricted stock units granted to the Will McGuire, the Company’s President and Chief Executive Officer, upon joining the Company. In January 2014, the Company granted a stock option to its current Chairman, who at that time was the Chief Executive Officer, to purchase 125,000 shares of common stock at an exercise price of $4.25 per share, exercisable for a period of three years from the date of grant. The stock option grant was fully vested on the date of issuance and was intended to replace an earlier stock option grant with the same exercise price that had expired in January 2014. The stock option was not granted pursuant to a plan approved by shareholders.
The following table summarizes information about outstanding stock options, restricted stock units, and shares reserved for future issuance as of December 31, 2015 under the Company’s equity incentive plans described above:
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights(1) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
| (a) | (b) | (c) | ||||||||||
| Equity compensation plans approved by security holders: | ||||||||||||
| 2003 Plan (2) | 8,223 | $ | 5.00 | 0 | ||||||||
| 2011 Plan(2) | 3,338,923 | $ | 8.15 | 1,429,064 | ||||||||
| 2015 ESPP (3) | 0 | - | 197,531 | |||||||||
| 3,347,146 | $ | 8.14 | 1,626,595 | |||||||||
| Equity compensation plans not approved by security holders: | ||||||||||||
| RSU Plan | 190,000 | $ | - | 0 | ||||||||
| Other(2) | 125,000 | $ | 4.25 | 0 | ||||||||
| 315,000 | $ | 4.25 | 0 | |||||||||
| Total | 3,662,146 | $ | 8.00 | 1,626,595 | ||||||||
Employment Contracts and Termination of Employment and Change-of-Control Arrangements
We entered into an at-will Executive Employment Agreement as of June 19, 2015 with Will McGuire, our Chief Executive Officer, by which principally we agreed to:
A copy of our Executive Employment Agreement with Will McGuire is attached as an exhibit to our Form 8-K filed with the Commission on June 25, 2015 and the description above is qualified in its entirety by reference to that agreement.
All of our executive officers are at will employees. All of the option awards and stock awards granted to the Company’s executives include change-in-control arrangements whereby any unvested stock options would vest as a result of change in control.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows information known to us about beneficial ownership of our common stock by:
| ● | each of our current directors; |
| ● | each of our current named executive officers; |
| ● | all of our directors and executive officers as a group; and |
| ● | each person known by us to beneficially own 5% or more of our common stock. |
The column entitled “Percentage Beneficially Owned” is based on a total of36,019,086 54,978,465 shares of our common stock outstanding as of March 31, 2016.
2024. Beneficial ownership and percentage ownership are determined in accordance with the rules of the SEC. Under these rules, beneficial ownership generally includes any shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares that an individual or entity has the right to acquire beneficial ownership of within 60 days of March 31, 20162024 through the exercise of any option, warrant, conversion privilege or similar right. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common stock that could be issued upon the exercise of outstanding options and warrants that are exercisable within 60 days of March 31, 20162024 are considered to be outstanding. These shares, however, are not considered outstanding asand beneficially owned by the person holding those options or warrants for the purpose of March 31, 2016 when computing the percentage ownership of eachthat person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
| Name of Beneficial Owner | Number of Shares | Percentage | ||||||
| Greater than 5% Stockholders | ||||||||
| Alfred E. Mann Living Trust(1) 12744 San Fernando Road Sylmar, California 91432 | 11,310,258 | 31.1 | % | |||||
| Directors and Executive Officers: | ||||||||
| Gregg Williams(2) | 6,270,540 | 17.2 | % | |||||
| William J. Link(3) | 4,498,414 | 12.5 | % | |||||
| Aaron Mendelsohn(4) | 978,725 | 2.7 | % | |||||
| Robert J. Greenberg, M.D., Ph.D.(5) | 855,015 | 2.3 | % | |||||
| Edward Randolph(6) | 144,359 | * | ||||||
| Gregoire Cosendai, Ph.D.(7) | 112,620 | * | ||||||
| Anne-Marie Ripley(8) | 98,681 | * | ||||||
| Brian Mech, Ph.D.(9) | 64,426 | * | ||||||
| Tom Miller(10) | 46,977 | * | ||||||
| Will McGuire | — | * | ||||||
| All current directors and executive officers as a group (10 persons)(11) | 13,069,757 | 34.7 | % | |||||
| Name and address of Beneficial Owners | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
| 10% Stockholders | ||||||||
| Joachim & Yaeko Bolck(1) | 5,597,123 | 10.2 | % | |||||
| Directors and Executive Officers | ||||||||
| Gregg Williams(2) | 21,315,992 | 34.4 | % | |||||
| Adam Mendelsohn(3) | 3,822,612 | 6.9 | % | |||||
| Aaron Mendelsohn(4) | 1,180,492 | 2.1 | % | |||||
| Truc Le(5) | 772,239 | 1.4 | % | |||||
| Dean Baker(6) | 288,043 | * | ||||||
| Lisa Porter(7) | 281,492 | * | ||||||
| Alexandra Larson(8) | 11,825 | * | ||||||
| Daniel Bradbury (9) | 161,382 | * | ||||||
| Donald Dwyer(10) | 359,625 | * | ||||||
| Brigid A. Makes (11) | 97,333 | * | ||||||
| All current directors and executive officers as a group (10 persons)(12) | 28,291,035 | 44.3 | % | |||||
* Represents beneficial ownership of less than one percent.
| * | Represents less than one percent. |
| 1. |
| 2. | Includes (i) 14,404,916 shares of common stock, 6,178,030 shares of common stock issuable |
| 3. | Includes 3,695,573 shares |
| 4. | Includes (i) 1,086,487 shares of common stock controlled by Mr. Aaron Mendelsohn including those owned by MFE, LLC over which Mr. Mendelsohn has sole voting and dispositive |
| 5. | Includes |
| 6. | Includes |
| 7. | Includes |
| 8. | Includes |
| 9. | Includes |
| 10. | Includes |
| 11. | Includes |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Office Lease
We leaseOther than the transactions described below, since January 1, 2023, there has not been and there is not currently proposed, any transaction or series of similar transactions to which Vivani was, or will be, a party in which the amount involved exceeded, or will exceed, $120,000 or one percent of the average of Vivani’s total assets at year-end for the last two completed fiscal years and in which any director, executive officer, holder of five percent or more of any class of our office and laboratory space in Sylmar, California under an operating lease originally entered into with Mann Biomedical Park, LLC, an entitycapital stock or any member of the immediate family of, or entities affiliated with, Alfred Mann, oneany of our co-foundersthe foregoing persons, had, or will have, a direct or indirect material interest.
In addition to the compensation arrangements, including employment, termination of employment and former memberchange in control arrangements discussed above in the sections titled “Director Compensation” and “Executive Compensation,” Vivani describes below transactions and series of our Board. We entered into the leasesimilar transactions, as of our Sylmar facility effective February 2012, for a term of five years that was to expire on February 28, 2017. This lease included rental of additional space commencing January 1, 2013 and we obtained a five year option to renew. The lease required us to pay real estate taxes, insurance and common area maintenance each year, and was subject to periodic cost of living adjustments. In April 2014, we entered into a new lease with the term ending on February 28, 2022. The new lease provides us with a five year option to renew, requires us to pay real estate taxes, insurance and common area maintenance each year and includes automatic increases each year. In November 2014, the property of which are premises are a part was sold to non-affiliated third party. See Note 13 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for theVivani’s fiscal year ended December 31, 2015.2022, to which Vivani was a party or will be a party, in which:
| ● | the amounts involved exceeded or will exceed $120,000; and |
| ● | any of our directors, nominees for director, executive officers or holders of more than 5% of our outstanding capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest. |
Agreement and Plan of Merger with Nano Precision Medical, Inc.
As disclosed in Current Report on Form 8-K filed with the SEC on February 8, 2022, on February 4, 2022, Second Sight entered into the agreement and plan of merger (the “Merger Agreement”) with NPM, and, upon and subject to the execution of a joinder, NPM Acquisition Corp., a California corporation and a wholly-owned subsidiary of Second Sight (“Merger Sub”). Pursuant to the Merger Agreement and subject to the terms and conditions set forth therein, NPM merged with and into Merger Sub (the “Merger”), and upon consummation of the Merger, Merger Sub ceased to exist and NPM became a wholly-owned subsidiary of Second Sight. Upon completion of the Merger and subject to stockholder approval, Second Sight changed its name to Vivani and its trading symbol to “VANI”.
Subject to the terms and conditions of the Merger Agreement, after the Merger was completed, the securities of NPM were converted into the right to receive an aggregate of approximately 134,349,464 of shares of Second Sight’s common stock (the “Merger Shares”) representing approximately 77.32% of the base amount common stock of Second Sight.
The Merger involved change of control and was consummated following the approval of Second Sight’s stockholders. Second Sight filed a Registration Statement on Form S-4 in connection with the Merger to register the Merger Shares.
SAFE Agreement
On February 4, 2022, in connection with the Merger, Second Sight and NPM also entered into an agreement (“SAFE”) whereby Second Sight provided to NPM, pending closing of the Merger, an investment advance of $8.0 million which, effective upon the termination date of the Merger Agreement without completion of the Merger, will result in NPM’s issuing to Second Sight that number of shares of NPM common stock which following that issuance will equal not less than 2.133% of the issued and outstanding shares of NPM common stock assuming exercise or conversion of all outstanding vested and unvested options, warrants, and convertible securities. In the event NPM completes an equity financing at a lower valuation, Second Sight may be eligible to receive additional shares of NPM common stock as set forth in the SAFE. Following the completion of the Merger, the SAFE was terminated.
Related Parties in Connection with the Merger and SAFE
Certain of Second Sight’s directors had interests in the Merger that are different from, or in addition to, the interests of Second Sight’s stockholders generally. These interests could have presented them with actual or potential conflicts of interest.
Common Directorship
Three of Vivani’s directors, Gregg Williams, Aaron Mendelsohn, and Dean Baker were also directors of NPM.
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Securities Ownership
Three of Vivani’s directors, Gregg Williams, Aaron Mendelsohn, and Dean Baker had investments and financial interests in NPM as follows (on an as converted basis):
| Name of Director | Ownership of NPM Common Stock* | |||
| Gregg Williams | 31.84 | % | ||
| Dean Baker | 0.58 | % | ||
| Aaron Mendelsohn | 1.79 | % | ||
| * | The holdings are as of the date of the Merger/SAFE Agreement. |
Family Relationships
Vivani’s director, Aaron Mendelsohn, is the father of Adam Mendelsohn. Adam Mendelsohn, who was a co-founder, chief executive officer, director and principal stockholder of NPM, is the chief executive officer, a director and principal stockholder of Vivani following the consummation of the Merger.
Special Committee
As a result of the aforementioned actual or potential conflicts of interests, the Special Committee, consisting of members having no affiliation with NPM, was created for the purpose of evaluating the proposed Merger and determining whether the Merger Agreement and the proposed Merger are in the best interests of Second Sight and its stockholders. The Special Committee consisted of Will McGuire, Matthew Pfeffer, and Alexandra Larson.
The Special Committee was empowered to investigate the proposed transaction with NPM, negotiate the terms of the proposed transaction with NPM or elect not to pursue the proposed transaction with NPM and, in the Special Committee’s discretion, explore and evaluate potential alternative transactions. Following multiple consultations with financial and legal advisers, the Special Committee issued its recommendation for the Second Sight Board to approve the proposed merger on the terms of the Merger Agreement and the concurrently entered SAFE agreement. Notwithstanding the foregoing, there can be no assurance that the efforts of the Special Committee in connection with the proposed merger were sufficient, nor can there be an assurance that the Special Committee was aware of and considered all the relevant facts and circumstances surrounding the proposed merger. The opinion of the Special Committee was based on then-available information, as of the date of each such opinion and does not reflect any subsequent events. Therefore, there can be no assurance that the terms of the proposed merger are fair and in the best interest of Second Sight despite the opinion of management the terms of this lease are no less favorable than those that might be obtained from an unaffiliated third party.Special Committee.
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REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONSAND STOCKHOLDER PROPOSALS
Stockholder proposals submittedA stockholder who would like to us pursuant tohave a proposal considered for inclusion in our 2025 proxy statement must submit in accordance with procedures outlined Rule 14a-8 promulgated under the Exchange Act for inclusion in our Proxy Statement and form of proxy for our 2017 Annual Meeting of stockholders must beso that it is received by us no later than December 19, 2016, which is 120 calendar days before30, 2024. However, if the one-year anniversarydate of the 2024 annual meeting is changed by more than 30 days from the date on whichof the Company first mailed this Proxy Statement,previous year’s meeting, then the deadline is reasonable time before we begin to print and send proxy materials for the 2024 Annual Meeting of Stockholders. If that happens, we will publicly announce the deadline for submitting a proposal in a press release or in a document filed with the SEC. Stockholder proposals and the required notice should be addressed to Vivani Medical, Inc., 1350 S. Loop Road, Alameda, CA 94502, Attention: Corporate Secretary.
Our bylaws also provide for separate notice procedures to recommend a person for nomination as a director or to propose business to be considered by stockholders at a meeting. To be considered timely, the required notice must be in writing and received by our corporate secretary at our principal executive offices no earlier than February 27, 2025 and no later than March 29, 2025.
In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no earlier than February 27, 2025 and no later than March 29, 2025. Such notice must comply with the additional requirements of the proxy rules promulgated by the SEC.Rule 14a-19(b). Stockholder proposals and the required notice should be addressed to ourVivani Medical, Inc., 1350 S. Loop Road, Alameda, CA 94502, Attention: Corporate Secretary at 12744 San Fernando Road, Suite 400, Sylmar, California 91342.Secretary.
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Recommendations from stockholders which are received after the deadline likely will not be considered timely for consideration by the Committee for next year’s Annual Meeting.
STOCKHOLDER MATTERS
TheOur Board does not intend to bringknow of any other matters beforeto be presented at the Annual Meeting and has no reason to believeMeeting. If any other matters will be presented. If otheradditional matters properly do come before the Annual Meeting, however, it is the intention of the persons named as proxy agents in the enclosed proxy card to vote on such matters as recommended by the Board, ofor if no recommendation is given, in their own discretion.
The Company’sOur consolidated financial statements for the fiscal year ended December 31, 2023, are included in our Annual Report on Form 10-K for the year ended December 31, 2015 is being mailed with10-K. Our Annual Report and this Proxy Statement are posted on our website at www.vivani.com and are available from the SEC at its website at www.sec.gov. You may also obtain a copy of our Annual Report without charge by sending a written request to stockholders entitled to notice of the Annual Meeting.Investor Relations, Vivani Medical, Inc., 1350 S. Loop Road, Alameda, CA 94502. The Annual Report includes the financial statements and management’s discussion and analysis of financial condition and results of operations. The costs of preparing, assembling, mailing and soliciting the proxies will be borne by us. Proxies may be solicited, without extra compensation, by our officers and employees by mail, telephone, facsimile, personal interviews and other methods of communication.
If you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that your household will receive only one copy of proxy materials for each company in which you hold shares through that broker or bank. This practice of sending only one copy of proxy materials is known as householding. If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our Proxy Statement to your address. If you want to receive separate copies of the proxy materials in the future, or you are receiving multiple copies and would like to receive only one copy per household, you should contact your stockbroker, bank or other nominee record holder, or you may contact us at the address or telephone number below. In any event, if you did not receive an individual copy of this Proxy Statement,proxy statement, we will send a copy to you if you address your written request to Vivani Medical, Inc., 1350 S. Loop Road, Alameda, CA 94502, or call Tom Miller, Chief Financial Officer and Corporate Secretary of Second Sight Medical Products, Inc, 12744 San Fernando Road, Suite 400, Sylmar, California 91342, telephone number (818) 833-5000.(415) 506-8462.
It is important that your shares of our common stock be represented at the Annual Meeting, regardless of the number of shares that you hold. You are, therefore, requested to vote by telephone or by using the Internet as instructed on the enclosed proxy card or execute and return, at your earliest convenience, the enclosed proxy card in the envelope that has also been provided.
THE BOARD OF DIRECTORS
Alameda, California
April 29, 2024
Copies of the documents referred to above that appear on our website are also available upon request by any stockholder addressed to our Corporate Secretary, Second SightVivani Medical, Products, Inc, 12744 San FernandoInc., 1350 S. Loop Road, Suite 400, Sylmar, California 91342.
Alameda, CA 94502.
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DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who beneficially own more than 10% of our common stock, to file with the SEC reports about their ownership of common stock and other equity securities of the Company. Such directors, officers and 10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on our review of the reports provided to us and on representations received from our directors and executive officers, we believe that all of our executive officers, directors and persons who beneficially own more than 10% of our common stock complied with all Section 16(a) filing requirements.
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REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Board of Directors (the “Audit Committee”) has furnished this report concerning the independent audit of the Company’s consolidated financial statements. Each member of the Audit Committee meets the enhanced independence standards established by the Sarbanes-Oxley Act of 2002 and rulemaking of the Securities and Exchange Commission (the “SEC”) and the NASDAQ Stock Market regulations. A copy of the Audit Committee Charter is available on the Company’s website at http://www.vivani.com.
The Audit Committee’s responsibilities include assisting the Board of Directors regarding the oversight of the integrity of the Company’s consolidated financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, and the performance of the independent registered public accounting firm.
In fulfilling its responsibilities, the Audit Committee of the Board has:
| ● | reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2023, with management and with the Company’s independent registered public accounting firm, BPM LLP; |
| ● | discussed with the Company’s independent auditors the matters required to be discussed by Statement on Auditing Standards No. 1301, “Communications with Audit Committees”, as adopted by the Public Company Accounting Oversight Board (“PCAOB”); and |
| ● | received and reviewed the written disclosures and letter from the independent auditors required by the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence and has discussed with BPM LLP matters relating to its independence from the Company and its management. |
In addition, the Audit Committee has regularly met separately with management and with BPM LLP.
Based upon the reviews and discussions described above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
AUDIT COMMITTEE OF THE BOARD
Gregg Williams
Daniel Bradbury
Alexandra Larson
Dean Baker (Chairman)
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SECOND SIGHT MEDICAL PRODUCTS, INC.
2011 EQUITY INCENTIVE PLAN
Originally Effective June 1, 2011, and as Amended through [May 10, 2016]
1. PURPOSE. The Board of Directors of the Company has established and approved the Second Sight Medical Products, Inc. 2011 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to encourage the officers and employees of the Company to have a proprietary and vested interest in the growth and performance of the Company and to generate an increased incentive to contribute to the Company's future success and prosperity, thus enhancing the value of the Company for the benefit of its equity owners.
2. DEFINITIONS. As used in this Plan, the following terms shall have the meanings set forth below:
a. “Award” shall mean a grant of an Option or a RSU under the Plan.
b. “Award Agreement” shall mean a written agreement evidencing any Award granted by the Company hereunder and signed by both the Company and the Participant.
c. “Change in Control” shall mean, subject to Section 6(k), the occurrence of any of the following:
i. The acquisition, directly or indirectly, in one transaction or a series of related transactions, by any person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the beneficial ownership of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company; provided, however, that a Change in Control shall not result upon such acquisition of beneficial ownership if such acquisition occurs as a result of a public offering of the Company’s securities or any financing transaction or series of financing transactions;
ii. The consummation of a merger or consolidation in which the Company is not the surviving entity, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold as a result of holding Company securities prior to such transaction, in the aggregate, securities possessing at least fifty percent (50%) of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;
iii. A reverse merger in which the Company is the surviving entity but in which the holders of the outstanding voting securities of the Company immediately prior to such merger hold, in the aggregate, securities possessing less than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company or of the acquiring entity immediately after such merger; or
iv. The sale, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company, except for a transaction in which the holders of the outstanding voting securities of the Company immediately prior to such transaction(s) receive as a distribution with respect to securities of the Company, in the aggregate, securities possessing at least fifty percent (50%) of the total combined voting power of all outstanding voting securities of the acquiring entity immediately after such transaction(s).
d. “Committee” shall mean the Directors.
e. “Company” shall mean Second Sight Medical Products, Inc., a California corporation.
f. “Directors” shall mean the board of directors of the Company as the same may be constituted from time to time.
g. “Eligible Person” shall mean any employee of the Company, any employee of any other entity that is a controlled subsidiary of the Company, and any manager or officer thereof. An entity shall be considered a controlled subsidiary of the Company if the Company owns more than fifty percent (50%) of its outstanding equity securities and has more than a fifty percent (50%) voting interest.
h. “Executive Employees” shall mean the President, each head of a functional portion of the Company, including each Vice President of the Company.
i. “Fair Market Value” shall mean the amount determined under Section 5(h) hereof.
j. “Option” shall mean any right granted to a Participant hereunder to purchase Shares of the Company.
k. “Participant” shall mean an Eligible Person who is selected by the Committee to receive an Award under the Plan.
l. “RSU” shall mean a bookkeeping entry representing the equivalent of one Share granted to a Participant hereunder that may be settled, subject to the terms and conditions of the applicable Award Agreement, in Shares, cash, or a combination thereof.
m. “Share” shall mean a share of the common stock of the Company.
3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall have full power and authority to do all things necessary or desirable in connection with the administration of this Plan, including, without limitation, the following:
a. select those Eligible Persons to whom Awards may from time to time be granted hereunder;
b. determine the option price of each Option to be granted to a Participant hereunder;
c. determine the number of Shares of the Company to be covered by each Award granted hereunder;
d. determine the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder;
e. interpret and administer the Plan and any instrument or agreement entered into under the Plan;
f. establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
g. make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.
All decisions and determinations of the Committee shall be by majority vote of its members and shall be set forth in writing. Each such writing shall hereinafter be referred to as a “Committee Action.” All such Committee Actions shall promptly be submitted to the Secretary of the Company who, upon receipt, shall place a copy of same in a record book maintained by the Secretary for that purpose and which shall be available for examination by the Directors at any time and from time to time. All Committee Actions that are within the scope of the Committee’s authority hereunder shall be deemed final, conclusive, and binding upon all persons including the Company, any Participant, and any Eligible Person of the Company or of any affiliate of the Company. A majority of the members of the Committee may determine its actions and fix the time and place of its meetings.
4. LIABILITY. No members of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it. No member of the Committee shall be liable for any act or omission of any other member of the Committee or for any act or omission on such member’s part, including but not limited to the exercise of any power or discretion given to such member under the Plan, except those resulting from such member’s willful misconduct.
5. DURATION OF, AND SHARES SUBJECT TO, THE PLAN.
a. TERM. No Awards shall be granted under this Plan after May 31, 2021; provided, however, that Awards may be exercised or may vest in accordance with their terms after May 31, 2021 with respect to Awards granted prior to such date.
b. SHARES SUBJECT TO THE PLAN. The maximum number of Shares with respect to which Awards may be granted under the Plan, subject to adjustment as provided in Section 5(d) of this Plan, is 7,500,000 Shares (which takes into account 3,500,000 Shares reserved as of the original effective date, 500,000 Shares added in 2012, 2,000,000 Shares added in 2015, and 1,500,000 Shares added as of [May 10, 2016]). Said maximum shall be inclusive of, and offset and reduced by, any Awards granted under any other employee stock incentive plan maintained by the Company; provided, however, that to the extent that any awards granted under any prior plan are converted into Awards granted under this Plan, the awards that are so terminated under the prior plan and converted to new Awards granted under this Plan shall, in determining the maximum number of Awards that may be issued under this Plan, be disregarded.
c. SECTION 162(m) LIMITATION. No employee of the Company or an affiliate of the Company shall be eligible to be granted Options covering more than 1,000,000 Shares during any calendar year.
d. ADJUSTMENTS. In the event of any merger, reorganization, consolidation, recapitalization, Share split, reverse Share split, or similar transaction or other change in legal structure affecting the Shares, such adjustments and other substitutions shall be made to the Plan and to outstanding Awards as the Committee in its sole discretion deems equitable or appropriate, including without limitation such adjustments in (i) the aggregate number, class, and kind of Shares which may be delivered under the Plan, in the aggregate or to any one Participant and (ii) the number, class, and kind of Shares subject to outstanding Awards and option price of Options granted under the Plan.
e. ELIGIBILITY. Any Eligible Person shall be eligible to be selected as a Participant, except that no member of the Committee shall participate in his or her own selection as a Participant or in the grant of any Awards to him or her.
f. GRANT OF OPTIONS. From time to time the Committee may grant Options to Participants based on such criteria as may be established from time to time by the Committee. The Options shall be evidenced by an Award Agreement in such form as the Committee may from time to time approve. Any such Award Agreement shall be subject to all of the terms and conditions set forth herein and to such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Committee shall deem desirable and approve from time to time.
i. OPTION PRICE. The purchase price per Share purchasable pursuant to an Award Agreement shall be determined by the Committee in its sole discretion; provided, however, that such option price shall not be less than the Fair Market Value of the Shares on the date of the grant of the Option.
ii. OPTION PERIOD. The term of each Option shall be fixed by the Committee in its sole discretion but shall in no event exceed ten (10) years.
iii. EXERCISABILITY. Options shall be exercisable at such time or times, and based upon such vesting and other conditions, as determined by the Committee from time to time on a case by case basis. The Committee shall have the right at any time, and from time to time, to accelerate the rate of vesting set forth in any issued and outstanding Option or Options.
iv. METHOD OF EXERCISE. Subject to the other provisions of this Plan and the applicable Award Agreement, any Option may be exercised by the Participant in whole or in part at such time or times, and the Participant may make payment of the option price in such form or forms, including, without limitation, payment by delivery of cash, a promissory note or other consideration acceptable to the Committee having a Fair Market Value on the exercise date equal to the total option price, or by any combination of cash and other consideration, as the Committee may specify in the applicable Award Agreement.
g. GRANT OF RSUS. From time to time the Committee may grant RSUs to Participants based on such criteria as may be established from time to time by the Committee. The RSUs shall be evidenced by an Award Agreement in such form as the Committee may from time to time approve. Any such Award Agreement shall be subject to all of the terms and conditions set forth herein and to such additional terms and conditions, not inconsistent with the provisions of this Plan, as the Committee shall deem desirable and approve from time to time.
i. RESTRICTIONS. At the time a grant of RSUs is made, the Committee may, in its sole discretion, (1) establish a restricted period applicable to such RSUs and (2) prescribe restrictions in addition to or other than the expiration of the restricted period, including the achievement of corporate or individual performance goals, which may be applicable to all or any portion of such RSUs. RSUs may not be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such RSUs.
ii. VOTING AND DIVIDEND RIGHTS. A Participant who holds RSUs shall have no rights as a stockholder of the Company (for example, the right to receive dividend payments or distributions attributable to the Shares underlying such RSUs, to direct the voting of the Shares underlying such RSUs, or to receive notice of any meeting of the Company’s stockholders).
iii. CREDITOR’S RIGHTS. A Participant who holds RSUs shall have no rights other than those of a general unsecured creditor of the Company. RSUs represent unfunded and unsecured obligations of the Company, subject to the terms and conditions of the applicable Award Agreement.
iv. SETTLEMENT. Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to RSUs shall lapse, and, unless otherwise provided in the applicable Award Agreement, the RSU shall be settled by (1) the delivery of cash, (2) issuance of a book-entry or direct registration or a certificate evidencing ownership of Shares, free of all such restrictions, or (3) a combination of the foregoing, to the Participant or such Participant’s beneficiary or estate, as the case may be. Neither the Participant, nor the Participant’s beneficiary or estate, shall have any further rights with regard to a RSU once the cash, Shares, or combination thereof represented by such RSU have been delivered.
h. FAIR MARKET VALUE. For all purposes of the Plan and any Award Agreement, Fair Market Value shall mean that amount determined by the Committee from time to time. Such determination shall be based upon the most recent trades in any public market or, if there is no public market for the Shares, then as determined by the Committee, based on such criteria as it deems in its sole discretion to reflect the Fair Market Value, including reliance on a formal appraisal prepared by a qualified and experienced independent third party appraiser.
i. AMENDMENTS AND TERMINATION. The Committee may amend, alter, or discontinue this Plan, but no amendment, alteration, or discontinuation shall be made that would impair the rights of a Participant under an Award theretofore granted, without the Participant’s consent. The Committee may, from time to time amend, modify, or alter the Plan where such amendment, modification or alteration is required to assure that the Plan remains in compliance with the Securities Act of 1933 (the “Act”), the California Corporations Code (the “Code”), and any other then applicable federal or state securities laws. The Committee may amend the terms of any Award Agreement theretofore executed, prospectively or retroactively, but no such amendment shall impair the rights of any Participant without such Participant's written consent.
j. COMPLIANCE WITH SECURITIES LAWS. It is the intention of the Company that the Awards and the Shares thereunder being granted, offered, and sold be exempt from registration under the Act by satisfying the requirements of Rule 504, 506 and/or Rule 701, as promulgated under such Act, and be exempt from qualification under the Code by satisfying the requirements of Section 25102(o) of the Code including all rules and regulations promulgated thereunder. Unless the Company shall register the Shares under the Act, qualify the Shares under the Code, or satisfy the requirements for exemption from qualification and exemption under some other provision of the Code or Act, the aggregate option price of all Options granted within any twelve (12)-month period shall not exceed the greater of $1,000,000 or, alternatively, the amount of Shares that may be issued pursuant to Awards granted within any twelve (12)-month period shall not exceed fifteen percent (15%) of the then issued and outstanding Shares of the Company.
6. GENERAL PROVISIONS.
a. Unless the Committee determines otherwise at the time the Award is granted, no Award, and no Shares subject to Awards which have not been issued or as to which any applicable restriction, performance, or deferral period has not lapsed, may be sold, assigned, transferred, gifted, pledged, hypothecated, or otherwise encumbered, except by will or by the laws of descent and distribution or, for Options, to a revocable living trust of which the Participant is a primary beneficiary; provided that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary to exercise the rights of the Participant with respect to any Option or to receive settlement of RSUs, if applicable, upon the death of the Participant. Each Option shall be exercisable during the Participant’s lifetime only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative. Each Option shall provide that to the extent the Option is exercisable upon the date of a Participant’s termination of employment, it shall continue to be exercisable following the employment termination date for a period of at least six (6) months in the case of termination of employment on account of death or disability and at least thirty (30) days on account of termination of employment for any other reason. Unless the Award Agreement provides otherwise, upon a Participant’s termination of employment, any RSUs held by such Participant that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited.
b. The term of each Option shall be for such period of months or years from the date of its grant as may be determined by the Committee, but in no event longer than as provided herein.
c. No Eligible Person shall have any claim to be granted any Award under the Plan, and there shall be no requirement for uniformity of treatment of Eligible Persons under the Plan.
d. The prospective recipient of any Award under this Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed an Award Agreement in such form as the Committee has approved and delivered a fully executed copy thereof to the Company, and otherwise complied with the then applicable terms and conditions.
e. In the case of any involuntary transfer of an Option including, but not limited to, transfers arising from bankruptcy, other insolvency or creditor proceedings, and dissolution of marriage, all rights in and to the Option or portion of the Option so transferred shall, as determined by the Committee on a case by case basis, immediately terminate, become null and void, and of no further force or effect.
f. Except as otherwise required in any applicable Award Agreement or by the terms of this Plan, recipients of Awards under the Plan shall not be required to make any payment or provide consideration for the grant of the Award other than the rendering of services.
g. The Company shall be authorized to withhold the amount of tax withholding required by applicable law on account of, or arising out of, any exercise of the Options and vesting of the RSUs and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. Such withholding may take the form of the Participant tendering to the Company, or the Company withholding, Shares with a value equal to the withholding taxes then due (a “Tender Payment”) or, alternatively, giving up Option rights which are then vested and that have a value (based upon the difference between the then Fair Market Value and the option price of the Shares purchasable under the Option) equal to the withholding taxes then due (an “Option Redemption Payment”). In the case of either a Tender Payment or an Option Redemption Payment, the Company shall be responsible for making payment to the relevant governmental taxing agencies of the cash amount of such withholding.
h. The validity, construction, and effect of this Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of California and applicable federal law.
i. If any provision of this Plan is or becomes or is deemed invalid, illegal, or unenforceable in any jurisdiction to which it is subject, would disqualify the Plan or any Award under any law deemed applicable by the Committee or disqualify the Plan from exemption under Rule 701 of the Act or Code section 25102(o), such provision shall be construed or deemed amended to conform to applicable laws or if it cannot be construed or deemed amended without, in the sole and absolute determination of the Committee, materially altering the intent of the Plan, it shall be stricken, and the remainder of the Plan shall remain in full force and effect.
j. Awards may be granted to Eligible Persons who are foreign nationals or employed outside the United States, or both, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable in order to recognize differences in local law or tax policy. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Eligible Persons on assignments outside their home country.
k. Notwithstanding anything in this Plan to the contrary, the Plan and Awards granted hereunder are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance thereunder (“Section 409A”) to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan and Awards granted hereunder will be interpreted and administered to be in compliance with Section 409A. Any adjustments made pursuant to Article 5 to Awards (i) that are considered “deferred compensation” (within the meaning of Section 409A) shall be made in compliance with the requirements of Section 409A and (ii) that are not considered “deferred compensation” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (1) continue not to be subject to Section 409A or (2) comply with the requirements of Section 409A, and in any event, the Committee shall not have the authority to make any adjustments pursuant to Article 5 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A at the time of grant to be subject thereto.
Any payments described in the Plan that are due within the short-term deferral period (within the meaning of Section 409A) will not be treated as “deferred compensation” (within the meaning of Section 409A) unless applicable law requires otherwise. Notwithstanding any provision of the Plan to the contrary, to the extent required to avoid accelerated taxation and tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6)-month period immediately following the Participant’s separation from service (within the meaning of Section 409A) will instead be paid on the first payroll date after the six (6)-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier).
Furthermore, notwithstanding anything in the Plan to the contrary, in the case of an Award that is characterized as “deferred compensation” (within the meaning of Section 409A), and pursuant to which settlement and delivery of the cash or Shares subject to the Award is triggered based on a Change in Control, in no event will a Change in Control be deemed to have occurred for purposes of such settlement and delivery of cash or Shares if the transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). No provision of this paragraph shall in any way affect the determination of a Change in Control for purposes of vesting in an Award that is characterized as “deferred compensation” within the meaning of Section 409A.
7. EFFECTIVE DATE OF PLAN. The Plan was originally effective June 1, 2011.
8. ISSUANCE OF AWARDS TO NON-EMPLOYEES. The Plan covers the grant of Awards to employees of the Company and other service providers of the Company only. From time to time, the Company may elect to grant Awards to non-employees, including, but not limited to, vendors, suppliers, independent contractors, and lenders, but in each such case only to natural persons, where, in the discretion of the Company, it is determined that such grant is in the best interests of the Company. Any such Awards that shall be granted to non-employees of the Company shall be on such terms and conditions as mutually agreed upon between the Company and the grantee and shall not be covered by, or subject to, the Plan except to the extent that such Award shall make specific reference to the Plan or any specific provision herein.
9. CHANGE IN CONTROL. In order to preserve a Participant’s rights with respect to any outstanding Award in the event of a Change in Control of the Company:
a. Vesting of all outstanding Awards shall accelerate automatically effective as of immediately prior to the consummation of the Change in Control whether or not the Awards are to be assumed by the acquiring or successor entity (or parent or subsidiary thereof) or new awards under a new stock incentive program (“New Incentives”) of comparable value are to be issued in exchange therefore, as provided in Section 9(b) below.
b. If vesting of outstanding Awards will accelerate pursuant to Section 9(a) above, the Committee in its discretion may provide, in connection with the Change in Control transaction, for the purchase or exchange of each such Award for an amount of cash or other property having a value, for Options, equal to the difference (or “spread”) between (i) the value of the cash or other property that the Participant would have received pursuant to the Change in Control transaction in exchange for the Shares issuable upon exercise of the Option had such Option been exercised immediately prior to the Change in Control, and (ii) the option price of the Option, or having a value, for RSUs, equal to the value of the cash or other property that the Participant would have received pursuant to the Change in Control transaction in exchange for the Shares issuable upon vesting of the RSUs had such RSU been vested immediately prior to the Change in Control.
c. Notwithstanding Section 9(a)-(b) above, the Committee shall have the discretion to provide in each Award Agreement other terms and conditions that relate to (i) vesting of the Award in the event of a Change in Control and (ii) assumption of such Award or issuance of comparable securities or New Incentives in the event of a Change in Control. The aforementioned terms and conditions may vary in each Award Agreement and may be different from and have precedence over the provisions set forth in Section 9(a)-(b) above.
d. Outstanding Awards shall terminate and cease to be exercisable upon consummation of a Change in Control except to the extent that the Awards are assumed by the successor entity (or parent or subsidiary thereof) pursuant to the terms of the Change in Control transaction.
e. If outstanding Options will not be assumed by the acquiring or successor entity (or parent or subsidiary thereof), the Committee shall cause written notice of a proposed Change in Control transaction to be given to Participants not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction.
10. REPRICING. The Company may, at any time in its discretion, (i) amend the terms of outstanding Options to reduce the option price; (ii) cancel outstanding Options in exchange for or substitution of Options with an option price that is less than the option price of the original Options; or (iii) cancel outstanding Options with an option price above the current Fair Market Value in exchange for cash or other securities.
IN WITNESS WHEREOF, the Company has duly executed this Plan, as amended, on this _____ day of April, 2016.