UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
Schedule 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
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| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
PRAXIS PRECISION MEDICINES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
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| ☒ | No fee required. |
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| ☐ | Fee paid previously with preliminary materials. |
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| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
April 28,Dear Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders (the “Special Meeting”) of Praxis Precision Medicines, Inc. (“Praxis” or the “Company”), a Delaware corporation, to be held on November 6, 2023, at 9:00 a.m. Eastern Time. The Special Meeting will be a completely virtual meeting conducted via live webcast. You will be able to attend the Special Meeting online, vote your shares electronically and submit your questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/PRAX2023SM. You will need to have your 16-digit control number included on your proxy card or the instructions that accompanied your proxy materials in order to join the Special Meeting.
During this Special Meeting, you will be asked to vote on the following items:
1.To approve amendments to the Company’s Amended and Restated Certificate of Incorporation to give the Company’s Board of Directors discretionary authority to effect a reverse stock split of all of the outstanding shares of the Company’s common stock, par value $0.0001 per share, at a ratio ranging from any whole number between 1-for-5 and 1-for-25, as determined by our Board of Directors in its discretion and included in a public announcement (the “Reverse Stock Split Proposal”); and
2.To approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Reverse Stock Split Proposal (the “Adjournment Proposal”).
Whether or not you plan to attend the Special Meeting virtually, we encourage you to vote. You may vote by telephone or online, or by completing, signing, dating, and returning the enclosed proxy card or voting instruction form. The accompanying Notice of Special Meeting of Stockholders and Proxy Statement describe the business to be conducted at the Special Meeting and specific instructions for voting.
Stockholders are referred to the proxy statement for more detailed information with respect to the matters to be considered at the Special Meeting. After careful consideration, the Board recommends a vote “FOR” the Reverse Stock Split Proposal and “FOR” the Adjournment Proposal.
Thank you for your investment in Praxis. We appreciate your support.
Sincerely,
Marcio Souza
President and Chief Executive Officer
October 16, 2023
Dear Stockholders:
Praxis continues to make significant progress toward transforming the lives of patients affected by central nervous system conditions. The year ahead of us promises to be exciting with the maturation of each of our clinical-stage assets, including our most advanced program, ulixacaltamide, which we expect to move into Phase 3 later this year for the treatment of essential tremor, or ET. More than two million people in the United States are living with an ET diagnosis, and ulixacaltimide has been one of only a few investigational drugs to successfully reach late-stage development for this disorder. The unmet need and market opportunity in ET are tremendous, and we believe that ulixacaltamide is uniquely positioned to help these patients and drive sustainable value for our stockholders. We look forward to meeting with the U.S. Food and Drug Administration shortly to discuss our Phase 2 results and a path toward potential registration.
In our rare epilepsy programs, we have successfully initiated Phase 2 studies for both PRAX-222 and PRAX-562 in severe pediatric developmental and epileptic encephalopathies, or DEEs. We believe these product candidates have the potential to fundamentally change the course of treatment for the thousands of people in the United States living with these devastating diseases. The unmet need for DEEs is undeniable and these are significant market opportunities that we see as having the potential to materialize quickly due to the rare nature of the conditions and associated regulatory framework. This creates an ideal environment to bring innovative medicines to patients in need and drive value for our stockholders.
The latest advancement in our portfolio is PRAX-628, a small molecule from our Cerebrum™ platform currently in development for the treatment of focal epilepsy. Based on preclinical data, we believe that PRAX-628 has the potential to be an innovative treatment for the approximately two million patients living with focal epilepsy in the United States. The focal epilepsy market is currently underserved by treatment options that are inadequate to address the expectations of patients and physicians, due to a combination of poor effect, safety and dose regimen. Needless to say, the potential value of PRAX-628 in focal epilepsy could be very substantial both for patients and for our stockholders.
While we are incredibly excited about what’s to come for Praxis, I would be remiss to not reflect on the challenges we had during the last twelve months. We decided to discontinue a program in depression, prioritize our resources, reduce the size of the company and continuously pressure test our portfolio, all to ensure that we are deploying capital in a highly disciplined and efficient manner. Those decisions were not simple or easy but were necessary to help us fulfill our mission and generate value for all of our stakeholders.
Once again, I would like to thank you on behalf of everyone at Praxis as we remain committed to the patients we serve and to you, our stockholders.
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Sincerely, | |
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Marcio Souza | |
President and Chief Executive Officer | |
PRAXIS PRECISION MEDICINES, INC.
99 High Street, 30th Floor
Boston, Massachusetts 02110
NOTICE OF 2023 ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 6, 2023
Special Meeting Information
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Time | | 9:00 a.m., Eastern Time |
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| Time | | | Date | | Monday, June 12, | Place |
| 9:00 a.m. Eastern Time | | | November 6, 2023 | | | Online only via live webcast at www.virtualshareholdermeeting.com/PRAX2023SM |
To Our Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Praxis Precision Medicines, Inc. (the “Company,” “we,” “us,” or “our”), a Delaware corporation, will be held on November 6, 2023, at 9:00 a.m. Eastern Time (the “Special Meeting”). The Special Meeting will be a completely virtual meeting conducted via live webcast. You will be able to attend the Special Meeting online, vote your shares electronically, and submit your questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/PRAX2023SM and entering your 16-digit control number included on your proxy card or the instructions that accompanied your proxy materials.
At the Special Meeting, stockholders will consider and vote on the following matters:
1.To approve amendments to our Amended and Restated Certificate of Incorporation, to give our Board of Directors discretionary authority to effect a reverse stock split of all of the outstanding shares of our common stock, par value $0.0001 per share, at a ratio ranging from any whole number between 1-for-5 and 1-for-25, as determined by our Board of Directors in its discretion and included in a public announcement (the “Reverse Stock Split Proposal”); and
2.To approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Reverse Stock Split Proposal.
Stockholders of record at the close of business on October 2, 2023 are entitled to notice of, and to vote at, the Special Meeting.
A complete list of stockholders of the Company will be open to the examination of any stockholder during ordinary business hours for a period of ten days prior to the Special Meeting for a purpose germane to the meeting at the Company’s principal place of business at 99 High Street, 30th Floor, Boston, Massachusetts 02110.
Your vote is important regardless of the number of shares you own. Whether or not you expect to attend the Special Meeting, we encourage you to read this Proxy Statement and submit your proxy or voting instructions as soon as possible, so that your shares may be represented at the Special Meeting. You may submit your proxy by telephone or online, or by completing, signing, dating and returning the enclosed proxy card or voting instruction form. Note that, in light of possible delays or disruptions in mail service, we encourage stockholders to submit their proxy via telephone or online. If you decide to attend the Special Meeting, you will be able to vote electronically, even if you have previously submitted your proxy.
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Place | | Online at www.virtualshareholdermeeting.com/PRAX2023 |
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Purpose | | 1.To elect Gregory Norden, Marcio Souza and William Young as Class III members of the Board of Directors, or the Board of Directors, of Praxis Precision Medicines, Inc., or the Company, to serve until the Company’s 2026 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal;
2.To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023; and
3.To transact any other business that may properly come before the meeting or any adjournment thereof.
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Record Date | | The Board of Directors has fixed the close of business on April 17, 2023 as the record date for determining stockholders entitled to notice of and to vote at the meeting. |
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Meeting Admission | | All stockholders as of the record date, or their duly appointed proxies, may attend the meeting. In order to be able to attend the meeting, you will need the 16-digit control number, which is located on your Notice, on your proxy card or in the instructions accompanying your proxy materials. Instructions on how to participate in the Annual Meeting are also posted online at www.proxyvote.com. |
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Voting by Proxy | | If you are a stockholder of record, please vote via the Internet, by telephone or by submitting a proxy card by mail. If your shares are held in street name, you will receive instructions from your broker or other nominee explaining how to vote your shares, and you may also have the choice of instructing the record holder as to the voting of your shares over the Internet or by telephone. Follow the instructions on the voting instruction form you received from your broker or nominee. |
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By orderOrder of ourthe Board of Directors, | | | |
Alex Nemiroff | |
Alex Nemiroff | |
| Corporate Secretary | | | |
Boston, MassachusettsImportant Notice Regarding the Availability of Proxy Materials for the Special Meeting:
April 28, 2023
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 12, 2023: Thethe Notice of 2023 AnnualSpecial Meeting of Stockholders, proxy statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022Proxy Statement are available for viewing, printing and downloadingfree of charge at www.proxyvote.com.
www.proxyvote.com.
PRAXIS PRECISION MEDICINES, INC.
99 High Street, 30th Floor
Boston, Massachusetts 02110
PROXY STATEMENT
FOR
For the Special Meeting of Stockholders
To Be Held on November 6, 2023
GENERAL INFORMATION ABOUT VOTING AND THE 2023 ANNUALSPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 12, 2023
GENERAL
This proxy statement contains information about the 2023 Annual Meetingand form of Stockholders, or the Annual Meeting,proxy are being furnished to stockholders of Praxis Precision Medicines, Inc. (“Praxis,” the “Company,” “we, which will” “us,” or “our”) in connection with the solicitation of proxies by our Board of Directors (the “Board”) for use in connection with the Special Meeting of Stockholders (the “Special Meeting”) to be held virtually on June 12,Monday, November 6, 2023, at 9:00 a.m. Eastern Time. You can attend and participate in the Annual Meeting online by visiting www.virtualshareholdermeeting.com/PRAX2023, where you will be able to listen to the meeting live, submit questions and vote. There will not be a physical meeting location, and stockholders will not be able to attend the Annual Meeting in person. The Board of Directors of Praxis Precision Medicines, Inc. is using this proxy statement to solicit proxies for useTime, or at the Annual Meeting. In this proxy statement, the terms “Praxis,” “the Company,” “we,” “us,” and “our” refer to Praxis Precision Medicines, Inc. The mailing address of our principal executive offices is Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110.
This proxy statement summarizes information about the proposals to be considered at the Annual Meeting and other information you may find useful in determining how to vote. We are making this proxy statement, the related proxy card and our annual report to stockholdersany adjournment, continuation or postponement thereof, for the fiscal year ended December 31, 2022, available to stockholders for the first time on or about April 28, 2023.purposes set forth herein.
We are a “smaller reporting company” as that term is used under the rules promulgated under the Securities Act of 1933, as amended, and as such have used the reduced compensation disclosure requirements applicable to smaller reporting companies in this proxy statement.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
When are this proxy statement and the accompanying materials scheduled to be sent to stockholders?
We have elected to provide access to our proxy materials to our stockholders via the Internet. Accordingly, on or about April 28, 2023, we will begin mailing a Notice of Internet Availability of Proxy Materials, or the Notice and Access Card. Our proxy materials, including the Notice of 2023 Annual Meeting of Stockholders, this proxy statement, the accompanying proxy card, and the Annual Report to Stockholders for the fiscal year ended December 31, 2022, or the 2022 Annual Report, will be mailed or made available to stockholders on the Internet on the same date.
Why did I receive a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?
Pursuant to rules adopted by the Securities and Exchange Commission, or the SEC, for most stockholders, we are providing access to our proxy materials over the Internet rather than printing and mailing our proxy materials. We believe following this process will expedite the receipt of such materials and will help lower our costs and reduce the environmental impact of our Annual Meeting materials. Therefore, the Notice and Access Card was mailed to holdersHolders of record and beneficial owners of our common stock starting on or about April 28, 2023. The Notice and Access Card provides instructions as to how stockholders may access and review our proxy materials, including the Notice of 2023 Annual Meeting of Stockholders, this proxy statement, the proxy card and our 2022 Annual Report, on the website referred to in the Notice and Access Card or, alternatively, how to request that a copy of the proxy materials, including a proxy card, be sent to them by mail. The Notice and Access Card also provides voting instructions. In addition, stockholders of record may request to receive the proxy materials in printed form by mail or electronically by e-mail on an ongoing basis for future stockholder meetings. Please note that, while our proxy materials are available at the website referenced in the Notice and Access Card and our Notice of 2023 Annual Meeting of Stockholders, this proxy statement and our 2022 Annual Report are available on our website, no other information contained on either website is incorporated by reference in, or considered to be a part of, this proxy statement.
Who is soliciting my vote?
Our Board of Directors is soliciting your vote for the Annual Meeting.
When is the record date for the Annual Meeting?
The record date for determination of stockholders entitled to vote at the Annual Meeting is the close of business on April 17, 2023.
How many votes can be cast by all stockholders?
There were 57,962,367 shares of ouroutstanding common stock, par value $0.0001 per share outstanding(the “Common Stock”) at the close of business on April 17,October 2, 2023 all of which are(the “Record Date”) will be entitled to notice of and to vote with respectat the Special Meeting and any postponement, continuation or adjournment of the Special Meeting. This proxy statement and form of proxy is being sent and made available to allour stockholders as of the Record Date on or about October 16, 2023. The matters to be acted uponvoted on at the Annual Meeting. Each stockholderSpecial Meeting are further described below. Web links and Internet addresses contained in this Proxy Statement are provided for convenience only, and the content on the referenced website does not constitute a part of recordthis Proxy Statement.
What is entitled to one vote for each share of our common stock held by such stockholder. None of our shares of undesignated preferred stock were outstanding as of April 17, 2023.
How do I vote my shares?
If you are a stockholder of record and your shares are registered directly in your name, you may vote:
•By Internet. Access the websitepurpose of the Company’s tabulator, Broadridge, at: www.proxyvote.com, using the voter control number printed on the furnished proxy card. Your sharesSpecial Meeting?
At our Special Meeting, stockholders will be voted in accordance with your instructions. If youasked to consider and vote on the Internet, you may also request electronic delivery of future proxy materials.
•By Telephone. Call 1-800-690-6903 toll-free from the United States, U.S. territories and Canada, and follow the instructions on the enclosed proxy card. Your shares will be voted in accordance with your instructions. You must specify how you want your shares voted or your telephone vote cannot be completed.
•By Mail. Complete and mail a proxy card in the enclosed postage prepaid envelope to Broadridge. Your proxy will be voted in accordance with your instructions. If you sign and return the enclosed proxy but do not specify how you want your shares voted, they will be voted in accordance with the recommendations of the Board of Directors, and will be voted according to the discretion of the proxy holder upon any other business that may properly be brought before the meeting and at all adjournments and postponements thereof. If you vote by telephone or by Internet, you do not have to return your proxy card.
•By Internet at the Annual Meeting. You can vote at the Annual Meeting online by visiting www.virtualshareholdermeeting.com/PRAX2023.
If your shares of common stock are held in street name (i.e., held for your account by a broker or other nominee), you will receive instructions from your broker or other nominee on how to vote your shares. If you would like to vote your shares online at the Annual Meeting, you should contact your broker or other nominee to obtain your 16-digit control number to attend the Annual Meeting.
How do I attend the Annual Meeting online?
We will be hosting our Annual Meeting via live webcast only. Any stockholder can attend the Annual Meeting live online at www.virtualshareholdermeeting.com/PRAX2023. The webcast will start at 9:00 a.m. Eastern Time on June 12, 2023. Stockholders may vote and ask questions while attending the Annual Meeting online. In order to be able to attend the Annual Meeting, you will need the 16-digit control number, which is located on your Notice and Access Card and on your proxy card. If your shares are held in street name, you should review any instructions accompanying your proxy materials for information on how to attend the Annual Meeting or contact your broker or other nominee to obtain that information.
What if I have technical difficulties or trouble accessing the Annual Meeting?
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.
What are the Board of Director’s recommendations on how to vote my shares?
The Board of Directors recommends a vote:
Proposal 1: FOR election of the Class III director nominees; and
Proposal 2: FOR ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023.
Who pays the cost for soliciting proxies?
We are making this solicitation and will pay the entire cost of preparing and distributing the Notice and Access Card and proxy materials and soliciting votes. If you choose to access the proxy materials or vote over the Internet, you are responsible for any Internet access charges that you may incur. Our officers and employees may, without compensation other than their regular compensation, solicit proxies through further mailings, personal conversations, facsimile transmissions, e-mails, or otherwise.
How is my vote counted?
Under our amended and restated bylaws, or our Bylaws, any proposal other than an election of directors (which is determined by a plurality of the votes properly cast on the election of directors) is decided by a majority of the votes properly cast for and against such proposal, except where a larger vote is required by law, our amended and restated certificate of incorporation, or our Certificate of Incorporation, or our Bylaws. Abstentions or a vote withheld in the case of the election of directors and broker “non-votes” are not included in the tabulation of the voting results on any such proposal and, therefore, do not have an impact on such 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 that item, and has not received instructions from the beneficial owner. If your shares are held in “street name” by a brokerage firm, your brokerage firm is required to vote your shares according to your instructions.
What does it mean if I receive more than one proxy card or voting instructions from brokers or other nominees?
It means that you have multiple accounts at the transfer agent or with brokers or other nominees. Please complete and return all proxy cards or vote on the Internet or by phone for each proxy card you received, and provide voting instruction forms to your broker or other nominee to ensure that all of your shares are voted.
Will my shares be voted if I do not return my proxy?
If your shares are registered directly in your name, your shares will not be voted if you do not vote over the Internet, by telephone, by returning your proxy or by ballot at the Annual Meeting. If your shares are held in street name, your broker or other nominee may under certain circumstances vote your shares if you do not timely return your proxy. Brokers and other nominees can vote customers’ unvoted shares on routine matters, but cannot vote such shares on non-routine matters. The election of directors (Proposal 1) is a non-routine matter. The ratification of the appointment of our independent registered public accounting firm (Proposal 2) is a routine matter. We encourage you to provide voting instructions to your broker or other nominee. This ensures that your shares will be voted at the Annual Meeting according to your instructions. You should receive directions from your broker or other nominee about how to submit your voting instructions to them at the time you receive this proxy statement. If you would like to vote your shares online at the Annual Meeting, you should contact your broker or other nominee to obtain your 16-digit control number to attend the Annual Meeting.
How do I revoke my proxy?
You may revoke your proxy by (1) following the instructions on the Notice and Access Card and entering a new vote by mail that we receive before the start of the Annual Meeting or over the Internet or by telephone, (2) attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not in and of itself revoke a proxy), or (3) by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with our Corporate Secretary. Any written notice of revocation or subsequent proxy card must be received by our Corporate Secretary prior to the taking of the vote at the Annual Meeting. Such written notice of revocation or subsequent proxy card should be sent to our principal executive offices at Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110, Attention: Corporate Secretary.
If a broker or other nominee holds your shares, you must contact such broker or nominee in order to find out how to change your vote.
How is a quorum reached?
The presence, by virtual attendance or by proxy, of holders of at least a majority of the total number of outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Shares held of record by stockholders or brokers or other nominees who do not return a signed and dated proxy, vote their shares on the Internet or by telephone or attend the Annual Meeting virtually will not be considered present or represented at the Annual Meeting and will not be counted in determining the presence of a quorum. Abstentions, votes withheld and broker non-votes, if any, will be counted for purposes of determining whether a quorum is present for the transaction of business at the meeting.
Could other matters be decided at the Annual Meeting?
The Company does not know of any other matters that may be presented for action at the Annual Meeting. Should any other business come before the meeting, the persons named on the proxy card will have discretionary authority to vote the shares represented by such proxies in accordance with their best judgment. If you hold shares through a broker or other nominee as described above, they will not be able to vote your shares on any other business that comes before the Annual Meeting unless they receive instructions from you with respect to such matter.
What happens if the Annual Meeting is postponed or adjourned?
Your proxy may be voted at the postponed or adjourned meeting. You will still be able to change your proxy until it is voted.
How can I find out the results of the voting at the Annual Meeting?
We plan to announce preliminary voting results at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K, or a Form 8-K, that we expect to file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we intend to file a Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Form 8-K to publish the final results.
PROPOSAL NO. 1 – ELECTION OF CLASS III DIRECTORS
Our Board of Directors is divided into three classes, with one class of our directors standing for election each year. The members of each class are elected to serve a three-year term with the term of office of each class ending in successive years. Gregory Norden, Marcio Souza and William Young are the directors whose terms expire at this Annual Meeting and each has been nominated for and has agreed to stand for re-election to the Board of Directors to serve as a Class III director of the Company until the 2026 Annual Meeting and until his respective successor is duly elected or until his earlier death, resignation or removal.
Our Board of Directors has nominated Gregory Norden, Marcio Souza and William Young for election as the Class III directors at the Annual Meeting. The nominees are currently directors and have each consented to serve as our directors if elected. If a nominee becomes unable or unwilling to serve, however, the proxies may be voted for a substitute nominee selected by our Board of Directors.
The biographies of the nominees and continuing directors below contain information regarding each such person’s service as a director, business experience, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee of our Board of Directors to determine that the person should serve as a director of Praxis. In addition to the information presented below regarding each such person’s specific experience, qualifications, attributes and skills that led our Board of Directors and our Nominating and Corporate Governance Committee to the conclusion that each such person should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards. Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment to service to Praxis and our Board of Directors. There are no material legal proceedings in which our nominees or any of our continuing directors is a party adverse to us or our subsidiaries or in which any such person has a material interest adverse to us or our subsidiaries.
It is intended that, unless you give contrary instructions, shares represented by proxies solicited by the Board of Directors will be voted in favor of the above nominees. However, if a nominee is unable to serve or for good cause will not serve as a director, the proxies will be voted for the election of such substitute nominee as our Board of Directors may designate.
Vote Required
The nominees for Class III directors who receive the most votes (also known as a plurality) will be elected. You may vote either FOR the nominee or WITHHOLD your vote from the nominee. Votes that are withheld will not be included in the vote tally for the election of directors. Brokerage firms do not have authority to vote your unvoted shares held by the firms in street name for the election of directors. As a result, any shares not voted by you and held by a brokerage firm will be treated as a broker non-vote. Such broker non-votes will have no effect on the results of this vote.
Recommendation of the Board of Directorsmatters:
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| Proposal 1: | |  |
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES NAMED ABOVE AS CLASS III DIRECTORS, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY. | | |
| Proposal 2: | | Approval of a proposal to adjourn the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Reverse Stock Split Proposal (the “Adjournment Proposal” or “Proposal 2”). |
The Board knows of no other matters that will be presented for consideration at the Special Meeting. Under Article I, Section 3 of our Amended and Restated Bylaws (the “Bylaws”), no business may be transacted other than the business specified in the notice of such meeting.
Why is the Company looking to effect a reverse stock split?
Our Board has unanimously adopted a resolution declaring advisable, and recommending to our stockholders for their approval, amendments to the Certificate of Incorporation (the “Reverse Stock Split Amendments”) to give our Board discretionary authority to effect a reverse stock split of all of the outstanding shares of our Common Stock at a ratio ranging from any whole number between 1-for-5 and 1-for-25, as determined
Nomineesby our Board (the “Reverse Stock Split”), and granting the Board the discretion to file a certificate of amendment to our Certificate of Incorporation containing the ratio determined by the Board with the Secretary of State of the State of Delaware (the applicable Reverse Stock Split Amendment as filed with the Secretary of State, the “Certificate of Amendment”) effecting the Reverse Stock Split and abandoning all other amendments or to abandon the Reverse Stock Split altogether. The primary purpose of the Reverse Stock Split is to improve the perception of our Common Stock as an investment security. The Reverse Stock Split could increase the per share market price of our Common Stock, which we believe could provide better value for Electionour stockholders, attract institutional investors with minimum trading price requirements and assist in our capital-raising efforts by making our Common Stock more attractive to a broader range of investors. In addition, the Reverse Stock Split will increase the number of authorized shares of our Common Stock available for issuance, providing additional shares available for use as Class III Directors
our Board deems appropriate or necessary. The following table identifiesReverse Stock Split will not affect the number of authorized shares of our director nominees, and is followed by biographical information asCommon Stock, which will remain at 150,000,000 shares. Although the number of April 26, 2023.
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| Name | | Positions and Offices Held with Praxis | | Director Since | | Age |
| Gregory Norden | | Director | | 2019 | | 65 |
| Marcio Souza | | President, Chief Executive Officer, Director | | 2020 | | 44 |
| William Young | | Director | | 2016 | | 78 |
Gregory Norden has servedauthorized shares of our Common Stock will not change as a memberresult of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in proportion to the ratio selected by the Board. Thus, the Reverse Stock Split will effectively increase the number of authorized shares of our Common Stock available for future issuance by the amount of the reduction effected by the Reverse Stock Split. We believe that an increase in the number of authorized shares of our Common Stock available for issuance provides us with greater flexibility with respect to managing our Common Stock in connection with such corporate purposes as may, from time to time, be considered advisable by our Board, including, without limitation, financing activities, public or private offerings of Directors since March 2019. Mr. NordenCommon Stock, conversions of convertible securities, issuance of options and other equity awards pursuant to our incentive plans, and strategic business development transactions.
The form of the proposed Reverse Stock Split Amendments is attached to this Proxy Statement as Annex A. By approving and adopting the former Chief Financial OfficerReverse Stock Split Amendments, the stockholders are approving separate amendments to the Certificate of Wyeth Pharmaceuticals Inc.Incorporation reflecting each possible variation of Reverse Stock Split ratio ranging from any whole number between 1-for-5 and has served1-for-25. The Board will determine which, if any, of the Reverse Stock Split Amendments to file with the Secretary of State. The Certificate of Amendment will effect the Reverse Stock Split by reducing the number of outstanding shares of Common Stock as compared to the number of outstanding shares immediately prior to the effectiveness of the Reverse Stock Split, but will not increase the par value of Common Stock, and will not change the number of authorized shares of our capital stock. Stockholders are urged to carefully read Annex A. If implemented, the number of shares of our Common Stock owned by each of our stockholders will be reduced by the same proportion as the Managing Directorreduction in the total number of G9 Capital Group LLC, which investsshares of our Common Stock outstanding, so that the percentage of our outstanding Common Stock owned by each of our stockholders will remain approximately the same, except to the extent that the Reverse Stock Split could result in early stage venturessome of our stockholders receiving cash in lieu of a fractional share. The Board can only authorize the filing of one Reverse Stock Split Amendment and provides corporate advisory services, since 2010. Mr. Norden currently servesall other Reverse Stock Split Amendments will be abandoned. The Board also has the authority to abandon all Reverse Stock Split Amendments.
Who can vote at the Special Meeting?
Holders of record of our Common Stock at the close of business on the boardsRecord Date are entitled to receive notice of directors of Zoetis Inc. (NYSE: ZTS), NanoString Technologies, Inc. (NASDAQ: NSTG) and Royalty Pharma plc (NASDAQ: RPRX). Mr. Norden is a former director of Human Genome Sciences, Univision and Welch Allyn. Mr. Norden received a B.S. in Management and Economics fromto vote their shares at the State University of New York at Plattsburgh and an M.S. in Accounting from LIU Post. We believe Mr. Norden is qualified to serve on our Board of Directors because of his background in finance and experience as a senior executive inSpecial Meeting or any adjournment, continuation or postponement thereof. On the global healthcare and pharmaceutical industries, as well as his public company board experience.
Marcio Souza has served as a memberRecord Date, 128,547,336 shares of our BoardCommon Stock were issued and outstanding. Each share of Directors and our President and Chief Executive Officer since April 2020. PriorCommon Stock entitles the holder thereof to joining us, Mr. Souza wasone vote with respect to all matters submitted to stockholders at PTC Therapeutics, Inc., or PTC, where he served as its Chief Operating Officer from May 2017the Special Meeting. We have no other securities entitled to April 2020 and its Senior Vice President and Headvote at the Special Meeting.
Stockholder of Product Strategy from July 2016 to May 2017. Prior to joining PTC, Mr. Souza servedRecord: Shares Registered in positions of increasing responsibility at NPS Pharmaceuticals, Inc., Shire Human Genetic Therapies Inc. and Sanofi Genzyme Corporation. Mr. Souza has servedYour Name
If on the boardRecord Date, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A., then you are a stockholder of directorsrecord. As a stockholder of Aeglea BioTherapeutics, Inc. (NASDAQ: AGLE) since June 2021. From May 2019record, you may vote online at the Special Meeting or vote by proxy. Whether or not you plan to May 2020, Mr. Souza also servedvirtually attend the Special Meeting, we urge you to fill out and return the proxy card that may be mailed or made available to you or vote by proxy over the telephone or on the board of directors of Clearpoint Neuro, Inc. (NASDAQ: CLPT) (previously MRI Interventions, Inc.). Mr. Souza received a degree in pharmacy and biochemistry with a specialization in toxicology and clinical analysis from the University of São Paulo and an M.B.A. from Fundação Dom Cabral. We believe Mr. SouzaInternet as instructed below to ensure your vote is qualified to serve on our Board of Directors because of his business and leadership experience in the life sciences industry and his scientific background.counted.
William Young has served as a member of our Board of Directors since December 2016. Mr. Young is a Senior Advisor with Blackstone Life Sciences, which he joined in November 2018. Prior to its acquisition by Blackstone, Mr. Young joined Clarus Ventures LLC in March 2010 and held various roles, including Venture Partner, Senior Advisor and portfolio company board member. Prior to joining Clarus, Mr. Young was chairman of the board of directors and Chief Executive Officer of Monogram Biosciences Inc. from 2000 until its acquisition by Laboratory Corporation of America Holdings in 2009. Previously, Mr. Young spent 20 years at Genentech, Inc. in roles of increasing responsibility, culminating as Chief Operating Officer from 1997 to 1999. Mr. Young currently serves as the chairman of the board of directors of NanoString Technologies, Inc. (NASDAQ: NSTG), and as a member of the board of directors of Theravance BioPharma, Inc. (NASDAQ: TBPH) and Autolus Therapeutics plc (NASDAQ: AUTL). Mr. Young also served as the chairman of the board of directors of Annexon, Inc. (NASDAQ: ANNX) from March 2017 to February 2021, and as a member of the boards of directors of Vertex Pharmaceuticals Inc. (NASDAQ: VRTX) from May 2015 to June 2020 and BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) from September 2010 to November 2015. Mr. Young was elected to the National Academy of Engineering in 1993 for his contributions to biotechnology. Mr. Young received a B.S. in Chemical Engineering from Purdue University and an M.B.A. from Indiana University in Marketing and Finance and holds an honorary doctorate in Engineering from Purdue University. We believe Mr. Young is qualified to serve on our Board of Directors because of his scientific background, business experience and his service on the board of directors of other life sciences companies.
Directors Continuing in Office
The following table identifies our continuing directors, and is followed by biographical information about each of them as of April 26, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Positions and Offices Held with Praxis | | Director
Since | | Class and Year
in Which Term
Will Expire | | Age |
| Dean Mitchell | | Chairman, Director | | 2020 | | Class I—2024 | | 67 |
| Jill DeSimone | | Director | | 2022 | | Class I—2024 | | 67 |
| Jeffrey Chodakewitz, M.D. | | Director | | 2021 | | Class II—2025 | | 67 |
| Merit Cudkowicz, M.D. | | Director | | 2021 | | Class II—2025 | | 60 |
Class I Directors (term expires at the 2024 Annual Meeting of Stockholders)
Dean Mitchell has served as chairman of our Board of Directors since September 2020. He served as executive chairman of the board of directors of Covis Pharma Holdings S.à.r.l., a specialty pharmaceutical company, from August 2013 until its sale in March 2020 and was chairman of PaxVax Corporation, a biotechnology company from January 2016 until its sale in October 2018. Mr. Mitchell served as President and Chief Executive Officer of Lux Biosciences, Inc., a biotechnology company focusing on the treatment of ophthalmic diseases, from July 2010 to August 2013. Prior to Lux Biosciences, he served as President and Chief Executive Officer of both Alpharma, Inc., a publicly traded specialty pharmaceutical company, from 2006 until its acquisition by King Pharmaceuticals, Inc. in 2008, and Guilford Pharmaceuticals, Inc., a publicly traded pharmaceutical company focused in oncology and acute care, from 2004 until its acquisition by MGI Pharma Inc. in 2005. From 2001 to 2004, he served in various senior executive capacities in the worldwide medicines group of Bristol-Myers Squibb Company. Prior to Bristol-Myers Squibb Company, he spent 14 years at GlaxoSmithKline plc, in assignments of increasing responsibility spanning sales, marketing, general management, commercial strategy and clinical development and product strategy. Mr. Mitchell currently serves on the boards of directors of Theravance Biopharma, Inc. (NASDAQ: TBPH), ImmunoGen Inc. (NASDAQ: IMGN), Precigen Inc. (formerly Intrexon Inc.) (NASDAQ: PGEN) and Kinnate Biopharma Inc. (NASDAQ: KNTE). Mr. Mitchell holds an M.B.A. from City University London and a B.Sc. in Biology from Coventry University. We believe Mr. Mitchell is qualified to serve on our Board of Directors because of his management experience in the pharmaceutical and biotherapeutics industries and his experience as a president, chief executive officer and board member of multiple biotechnology companies.
Jill DeSimone has served as a member of our Board of Directors since May 2022. Ms. DeSimone served as President of U.S. Oncology at Merck & Co., Inc., or Merck, from 2014 to May 2022. During her time at Merck, Ms. DeSimone also temporarily served as Interim President of U.S. Pharma to help navigate the business through the COVID-19 pandemic. Prior to joining Merck, she served as Senior Vice President of Global Women’s Health at Teva Pharmaceutical Industries Ltd, or Teva, from 2012 to 2014. Prior to her time at Teva, Ms. DeSimone served in several roles of increasing responsibility at Bristol Myers Squibb from 1980 to 2012, including Senior Vice President of Oncology and Senior Vice President of Commercial Operations. Ms. DeSimone serves on the board of directors of Oncternal Therapeutics (NASDAQ: ONCT), Kinnate Biopharma Inc. (NASDAQ: KNTE) and Affini-T Therapeutics, Inc., a private company. She also serves as a board member for the Florida Cancer Specialists Foundation, a nonprofit organization that helps individuals with their essential living expenses while they undergo treatment for cancer. Ms. DeSimone received a B.S. in pharmacy from Northeastern University and completed a fellowship with the Wharton School of the University of Pennsylvania. We believe Ms. DeSimone is qualified to serve on the Board because of her leadership and extensive business experience in the pharmaceutical industry.
Class II Directors (term expires at the 2025 Annual Meeting of Stockholders)
Jeffrey Chodakewitz, M.D., has served as a member of our Board of Directors since April 2021. Dr. Chodakewitz has served as an external senior advisor for Ascenta Capital, a life sciences investment firm, since December 2022. He previously served as a senior advisor to Blackstone Life Sciences, a life sciences private equity firm from March 2019 to January 2022. From April 2018 through March 2019, he served as Executive Vice President, Clinical Medicine and External Innovation, at Vertex Pharmaceuticals, Inc., or Vertex. Prior to that role, Dr. Chodakewitz held the roles of Chief Medical Officer and Executive Vice President, Global Medicines Development and Medical Affairs at Vertex from January 2014 to April 2018 and was a member of the Vertex Executive Committee. Prior to Vertex, Dr. Chodakewitz spent over 20 years at Merck & Co. serving in several positions, including leadership roles as Head of Infectious Diseases and Vaccines Global Development, Senior Vice President of Global Scientific Strategy (infectious disease, respiratory & immunology), Vice President of Early-Stage Development and Senior Vice President of Late-Stage Development. Dr. Chodakewitz currently serves on the boards of directors of Adicet Bio, Inc. (NASDAQ: ACET), Freeline Therapeutics Holdings plc (NASDAQ: FRLN) and Schrödinger, Inc. (NASDAQ:SDGR). Dr. Chodakewitz received a B.S. in Biochemistry cum laude from Yale University and an M.D. from the Yale University School of Medicine. We believe Dr. Chodakewitz is qualified to serve on our Board of Directors because of his extensive business and leadership experience working in the biotechnology industry.
Merit Cudkowicz, M.D., has served as a member of our Board of Directors since April 2021. Dr. Cudkowicz has served as the Chief of Neurology at Massachusetts General Hospital since 2012 and is the Director of the Sean M. Healey & AMG Center for ALS and Director and the Julieanne Dorn Professor of Neurology at Harvard Medical School. A member of the National Academy of Medicine, she has led innovations to accelerate the development of treatments for people with neurological disorders such as ALS, including the first platform trial in ALS, and serving in a senior roleBeneficial Owner: Shares Registered in the researchName of a Broker, Bank or Nominee
If on the Record Date, your shares were held, not in your name, but rather in an account at a brokerage firm, bank or other similar organization, then you are the beneficial owner of shares held in “street name,” and development of the first antisense oligonucleotide treatment for a neurological disorder. Dr. Cudkowicz is also the principal investigator of the Clinical Coordination Center for the National Institute of Neurological Disorders and Stroke’s Neurology Network of Excellence in Clinical Trials, or NeuroNEX. Dr. Cudkowicz received a B.S. in Chemical Engineering from Massachusetts Institute of Technology, an M.D. from Harvard Medical School and a MSc. in Clinical Epidemiology from Harvard School of Public Health. We believe Dr. Cudkowicz is qualified to serve on our Board of Directors because of her extensive medical background and experience.
Executive Officers
The following table identifies our executive officers, and is followed by biographical information about each of them as of April 26, 2023.
| | | | | | | | | | | | | | | | | | | | |
| Name | | Position Held with Praxis | | Officer Since | | Age |
| Timothy Kelly | | Chief Financial Officer | | 2021 | | 50 |
| Alex Nemiroff, J.D. | | General Counsel, Corporate Secretary | | 2020 | | 44 |
| Marcio Souza(1) | | President, Chief Executive Officer, Director | | 2020 | | 44 |
(1)Mr. Souza is also a director of the Company and his biographical information appears under “Nominees for Election as Class III Directors” above.
Timothy Kelly has served as our Chief Financial Officer since May 2021. Prior to his role as Chief Financial Officer, Mr. Kelly served as Chief Financial Officer of Foundation Medicine, Inc. from 2019 to April 2021. In this position, he led the finance and corporate management teams, providing strategic leadership and oversight for the corporate functions, which included accounting and tax, billing and reimbursement, procurement, corporate development, project management and financial planning and analysis. Prior to his time at Foundation Medicine, Mr. Kelly served in several finance roles of increasing responsibility at the F. Hoffman-La Roche AG, or Roche, and Genentech (before being acquired by Roche in 2009) from 2003 to 2019, including finance and corporate services director for Roche Pharma in the United Kingdom from 2017 to 2019 and head of group strategic planning for the Roche Group in Switzerland from 2013 to 2017. Mr. Kelly holds a B.A. in economics from the College of William and Mary and an M.B.A. from the Columbia Business School.
Alex Nemiroff, J.D., has served as our General Counsel since June 2020. Prior to his role as General Counsel, Mr. Nemiroff served as our Vice President of Legal from January 2020 to June 2020. Mr. Nemiroff was also a co-founder of RogCon, Inc. and RogCon U.R., Inc., and he has served as both entities’ Chief Executive Officer since inception in November 2015. Mr. Nemiroff has experience working in commercial and securities litigation while at Greenberg Traurig LLP, and served as law clerk to the Honorable Paul C. Huck of the United States District Court for the Southern District of Florida. Mr. Nemiroff received a B.B.A from the University of Michigan’s Ross School of Business, and a J.D. from Northwestern University School of Law.
PROPOSAL NO. 2 – RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP
Praxis’ stockholdersthese proxy materials are being askedmade available to ratify the appointmentyou by the Audit Committee of our Board of Directors of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since 2019.
that organization. The Audit Committeeorganization holding your account is solely responsible for selecting the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023. Stockholder approval is not required to appoint Ernst & Young LLP as the Company’s independent registered public accounting firm. However, our Board of Directors believes that submitting the appointment of Ernst & Young LLP to our stockholders for ratification is good corporate governance. If the stockholders do not ratify this appointment, the Audit Committee will reconsider whether to retain Ernst & Young LLP. If the selection of Ernst & Young LLP is ratified, the Audit Committee, at its discretion, may direct the appointment of a different independent registered public accounting firm at any time it decides that such a change would be in the best interest of Praxis and its stockholders.
A representative of Ernst & Young LLP is expected to be present at the Annual Meeting and will have an opportunity to make a statement if he or she desires to do so and to respond to appropriate questions from our stockholders.
Vote Required
This proposal requires the affirmative vote of the holders of a majority in voting power of the votes properly cast affirmatively or negatively. Abstentions and broker non-votes are considered to be votes cast and, accordingly,the stockholder of record for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your bank, broker or nominee how to vote the shares in your account. You are also invited to virtually attend the Special Meeting; however, in order to vote your shares online at the Special Meeting, you will have no effect onneed a 16-digit control number, which you can request from your bank, broker or nominee if you did not initially receive with your proxy materials.
How can you vote your shares?
If you are the outcomerecord holder of theyour shares, you may vote by authorizing a proxy to vote on this proposal.
Recommendation ofyour behalf at the Board of DirectorsSpecial Meeting. Specifically, you may authorize a proxy over the Internet, by telephone, or by mail, or if you attend the Special Meeting via the Internet, you may vote your shares electronically during the Special Meeting.
| | | | | |
| OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANT, AND PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE ON THE PROXY. |
CORPORATE GOVERNANCE
Board Composition
Our Board of Directors currently consists of seven members. In accordance with the terms of our Certificate of Incorporation and Bylaws, our Board of Directors is divided into three classes—Class I, Class II and Class III—with members of each class serving staggered three-year terms. The members of the classes are divided as follows:
•the Class I directors are Dean Mitchell and Jill DeSimone, and their terms will expire at the annual meeting of stockholders to be held in 2024;
•the Class II directors are Jeffrey Chodakewitz, M.D., and Merit Cudkowicz, M.D., and their terms will expire at the annual meeting of stockholders to be held in 2025; and
•the Class III directors are Gregory Norden, Marcio Souza and William Young, and their terms will expire at the Annual Meeting.
Our Certificate of Incorporation and Bylaws provide that the authorized number of directors may be changed only by resolution of our Board of Directors. Our Certificate of Incorporation also provides, subject to certain rights, if any, of any series of our preferred stock, that our directors may be removed only for cause by the affirmative vote of the holders of not less than two-thirds (2/3) of the outstanding shares of capital stock then entitled to vote in an election of directors, and that any vacancy on our Board of Directors, including a vacancy resulting from an enlargement of our Board of Directors, may be filled only by the affirmative vote of a majority of our directors then in office, even if less than a quorum of the Board of Directors.
Director Independence
Applicable Nasdaq Stock Market LLC, or Nasdaq, rules require a majority of a listed company’s board of directors to be comprised of independent directors. In addition, the Nasdaq 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 Exchange Act and that compensation committee members satisfy additional independence criteria set forth in the Nasdaq rules. Under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s 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. The Nasdaq independence definition also includes a series of objective tests, including that the director is not, and has not been for at least three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In order to be considered independent for purposes of Rule 10A-3, 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. In addition, in affirmatively determining the independence of any director who will serve on a company’s compensation committee, the Nasdaq rules require that a company’s board of directors must consider all factors specifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including: the source of compensation to the director, including any consulting, advisory or other compensatory fee paid by such company to the director, and whether the director is affiliated with the company or any of its subsidiaries or affiliates.
Our Board of Directors has determined that all members of our Board of Directors, except Mr. Souza, are independent directors, including for purposes of the rules of Nasdaq and the SEC. In making such independence determination, our Board of Directors considered the relationships that each non-employee director has with us and all other facts and circumstances that our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. In considering the independence of the directors listed above, our Board of Directors considered the association of our directors with the holders of more than 5% of our common stock. There are no family relationships among any of our directors or executive officers. Mr. Souza is not an independent director under these rules because he is an executive officer of the Company.
Board of Directors Meetings and Attendance
Our Board of Directors held seven meetings during 2022. Each of the directors attended at least 75% of the meetings of the Board of Directors and the committees of the Board of Directors on which he or she served during the fiscal year ended December 31, 2022 (in each case, which were held during the period for which he or she was a director and/or a member of the applicable committee). The Company encourages directors to attend the annual meeting of stockholders. Six out of eight of our then-incumbent directors attended our annual meeting of stockholders held in 2022.
Board of Directors Committees
Our Board of Directors established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee operates under a charter that satisfies the applicable standards of the SEC and Nasdaq. Each such committee reviews its respective charter at least annually. A current copy of the charter for each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee is posted on the corporate governance section of our website, https://investors.praxismedicines.com/corporate-governance/governance-overview.
In addition, our Board of Directors established a Science and Technology Committee to advise the members of our management and provide oversight and input regarding our research and clinical development strategies. The Science and Technology Committee operates pursuant to the authority granted to it by our Board of Directors. Our Board of Directors may from time to time establish other special or standing committees to facilitate the management of Praxis or to discharge specific duties delegated by the full Board of Directors.
The table below shows current membership for each of the standing committees of our Board of Directors. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Audit Committee | |
Compensation Committee | | Nominating and Corporate Governance Committee | | Science and Technology Committee | By Internet | | | | | | By Telephone | | | | | | By Mail | | | During the Meeting |
Gregory Norden*You may submit your proxy from any location in the world at www.proxyvote.com (you will need your 16-digit control number). | | William Young* | You may submit your proxy by calling 1-800-690-6903 and following the instructions on the proxy card. | | Jeffrey Chodakewitz, M.D.* | You may submit a proxy by mail by completing, dating and signing the proxy card and mailing the proxy card in the enclosed postage-paid envelope provided to you. | | Merit Cudkowicz, M.D.* | If you wish to vote your shares electronically at the Special Meeting, you will need to visit www.virtualshareholdermeeting.com/PRAX2023SM during the Special Meeting while the polls are open (you will need your 16-digit control number). |
Merit Cudkowicz, M.D. | | Jill DeSimone | | Jill DeSimone | | Jeffrey Chodakewitz, M.D. |
Jill DeSimone | | Dean Mitchell | | William Young | | Dean Mitchell |
Internet and telephone voting facilities will be available 24 hours a day and will close at 11:59 p.m., Eastern Time, on November 5, 2023, for the voting of shares held by stockholders of record as of the Record Date. Proxy cards with respect to shares held of record must be received no later than November 5, 2023. Note that, in light of possible delays or disruptions in mail service, we encourage stockholders to submit their proxy via telephone or online.
If the shares you own are held in “street name” by your broker, bank or other nominee, you should contact your bank, broker or other nominee to obtain your 16-digit control number (if you did not initially receive with your proxy materials) or otherwise submit voting instructions to your bank, broker or other nominee. Please refer to information from your bank, broker or other nominee on how to submit voting instructions.
How do I attend the Special Meeting online?
The Special Meeting will convene at 9:00 a.m., Eastern Time, on Monday, November 6, 2023. You may virtually attend the Special Meeting by visiting www.virtualshareholdermeeting.com/PRAX2023SM. Please have your 16-digit control number to join the Special Meeting.
Even if you plan to attend the live webcast of the Special Meeting, we encourage you to submit a proxy in advance by Internet, telephone, or mail so that your shares will be voted even if you later decide not to attend the Special Meeting.
What if there are technical difficulties during the Special Meeting?
In the event of a technical malfunction or other problem that disrupts the Special Meeting, the Company may postpone, continue or adjourn the Special Meeting, or take such other action that the Company deems appropriate considering the circumstances. Representatives of Broadridge Financial Solutions will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any
difficulties accessing the virtual Special Meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual stockholder meeting page.
Can I ask questions during the Special Meeting?
As part of the Special Meeting, we will hold a live Q&A session, during which we intend to answer questions submitted online during the meeting that are pertinent to the matters being voted on, as time permits. Only stockholders that have accessed the Special Meeting as a stockholder by following the procedures outlined above will be permitted to submit questions during the Special Meeting. Each stockholder is limited to no more than two questions. Questions should be succinct and only cover a single topic. We will not address questions that are, among other things:
•irrelevant to the business of the Special Meeting;
•related to any material non-public information of the Company;
•related to personal grievances;
•substantially repetitious of statements already made by another stockholder;
•out of order or not otherwise suitable for the conduct of the Special Meeting as determined by the Chair or the Corporate Secretary in their reasonable judgment.
Additional information regarding the Q&A session will be available in the “Rules of Conduct” available on the Special Meeting webpage for stockholders that have accessed the Special Meeting as a stockholder (rather than a “Guest”) by following the procedures outlined above.
What are the Board of Directors’ recommendations on how I should vote my shares?
At the Special Meeting, our stockholders will be asked to vote on the proposals set forth below. Our Board unanimously recommends that you vote your shares:
| | Gregory Norden | | | | | | |
| | “FOR” the Reverse Stock Split Proposal. |
| | “FOR” the Adjournment Proposal. |
* Denotes committee chair
Audit Committee
Gregory Norden, Merit Cudkowicz, M.D.,If you return a properly completed proxy card, or submit your proxies by telephone or over the Internet, your shares will be voted on your behalf as you direct. If you return a properly completed proxy card and Jill DeSimone servedo not specify how to vote on the Audit Committee, which is chairedproposal, the shares of Common Stock represented by Gregory Norden. Our Boardthe proxies will be voted in accordance with the Board’s recommendation as described above for the proposal.
YOUR VOTE AND PARTICIPATION IN THE COMPANY’S AFFAIRS ARE IMPORTANT. See "Proposal 1 - Approval of Directors has determined that Gregory Norden, Merit Cudkowicz, M.D.,Amendments to our Amended and Jill DeSimone are “independent” Restated Certificate of Incorporation to Effect a Reverse Stock Split" for audit committee purposes as that term is defined inadditional information on the rulespurpose of the SEC andReverse Stock Split Proposal.
What are broker non-votes?
If you are a beneficial owner whose shares are held in “street name,” meaning your shares are held of record by a bank, broker or other nominee, you must instruct such bank, broker or other nominee how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any proposal on which the bank, broker or other nominee does not have discretionary authority to vote, which are generally considered “non-routine” matters under applicable Nasdaq rules, and each has sufficient knowledge in financial and auditingstock exchange rules. This is called a “broker non-vote.” In these cases, the broker can register your shares as being present at the Special Meeting for purposes of determining the presence of a quorum but will be unable to vote on those matters to serve onfor which the Audit Committee. Our Board of Directors has designated Gregory Norden as an “audit committee financial expert,” as definedbeneficial owner’s authorization is required under the applicable rulesstock exchange rules.
Each of the SEC.Reverse Stock Split Proposal and the Adjournment Proposal are considered “routine” matters under applicable stock exchange rules. Accordingly, without specific instructions from you, your bank, broker or other nominee will have discretionary authority to vote your shares on each of the proposals. However, we understand that certain brokerage firms have elected not to vote even on “routine” matters without your voting instructions. If your bank, broker or other nominee has made this decision, and you do not provide voting instructions, your vote will not be cast. Accordingly, we urge you to direct your bank, broker or other nominee how to vote by returning your voting materials as instructed or by obtaining a proxy from your broker or other nominee in order to vote your shares in person at the Special Meeting.
What is the vote required to approve each proposal?
Proposal 1 - The Audit Committee’s responsibilities include:Reverse Stock Split Proposal
As a Delaware corporation, we are subject to the Delaware General Corporation Law (the “DGCL”). Effective as of August 1, 2023, the DGCL was amended to add new Section 242(d)(2), which, among other things, provides that the voting standard for stockholders to approve an amendment to the certificate of incorporation to implement certain reverse stock splits is a majority of the votes cast.
Therefore, pursuant to Section 242(d)(2) of the DGCL, the affirmative vote of the holders of a majority of the votes cast at the Special Meeting on the Reverse Stock Split Proposal is required to approve Proposal 1. Your failure to vote or marking “ABSTAIN” on your proxy or ballot with respect to the Reverse Stock Split Proposal are not deemed votes “cast” and will, therefore, not affect the outcome of the Reverse Stock Split Proposal. Although brokers, banks and other nominees have discretion to vote uninstructed shares on the Reverse Stock Split Proposal, if your broker, bank or other nominee has elected not to vote without your voting instructions as described above, your shares will not be voted and will, therefore, not affect the outcome of Proposal 1.
Proposal 2 - The Adjournment Proposal
The affirmative vote of the holders of shares of our Common Stock cast affirmatively or negatively at the Special Meeting on the Adjournment Proposal is required to approve Proposal 2. Your failure to vote or marking “ABSTAIN” on your proxy or ballot with respect to the Adjournment Proposal are not deemed votes “cast” and will, therefore, not affect the outcome of the Adjournment Proposal. Although brokers, banks and other nominees have discretion to vote uninstructed shares on the Adjournment Proposal, if your broker, bank or other nominee has elected not to vote without your voting instructions as described above, your shares will not be voted and will, therefore, not affect the outcome of Proposal 2.
We urge you to direct your bank, broker or other nominee how to vote by returning your voting materials as instructed or by obtaining a proxy from your broker, bank or other nominee in order to vote your shares in person at the Special Meeting.
Can I change my vote after submitting my proxy?
Submitting a proxy over the Internet or by telephone or execution of a proxy card will not in any way affect a stockholder’s right to attend the Special Meeting and vote electronically. A proxy may be revoked before it is used to cast a vote at the Special Meeting. If you are a stockholder of record, you can revoke your proxy by doing one of the following:
•appointing, approvingfiling with our Corporate Secretary, at or before the compensationtaking of and assessing the independencevote at the Special Meeting, a written notice of our independent registered public accounting firm;revocation bearing a later date than the proxy;
•pre-approving auditingsubmitting a proxy by Internet or telephone at a later time than your previous vote and permissible non-audit services, andbefore the termsclosing of such services, to be provided by our independent registered public accounting firm;those voting facilities at 11:59 p.m., Eastern Time, on November 5, 2023;
• reviewingduly executing a later-dated proxy relating to the overall audit plan withsame shares and delivering it to our independent registered public accounting firm and membersCorporate Secretary before the taking of management responsible for preparing our financial statements;the vote; or
•reviewingattending the Special Meeting and discussingvoting in person electronically. However, your attendance at the Special Meeting will not automatically revoke your proxy unless you vote again at the Special Meeting.
Any written notice of revocation or subsequent proxy should be sent to our principal place of business at Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110, Attention: Corporate Secretary.
If the shares you own are held in “street name”, you will need to follow the directions provided to you by your broker, bank or other nominee on how to revoke or submit new voting instructions.
What is the quorum requirement?
A quorum must be present at the Special Meeting for any business to be conducted. In accordance with managementour Bylaws, a majority of the outstanding shares entitled to vote, present in person or represented by proxy, shall constitute a quorum. Abstentions and “broker non-votes” are counted as present for purposes of determining a quorum.
How many votes do I have?
Each outstanding share of Common Stock is entitled to one vote. On each matter to be voted upon at the Special Meeting, you have one vote for each share of Common Stock you own as of the Record Date.
Who counts the votes?
A representative of Broadridge Financial Solutions, Inc., our independent registered public accounting firm our annualinspector of election, will tabulate and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;certify the votes.
•coordinatingWhere can I find the oversight and reviewingvoting results?
The Company plans to publish the adequacy of our internal control over financial reporting;
•establishing policies and procedures for the receipt and retention of accounting-related complaints and concerns;
•recommending based upon the Audit Committee’s review and discussions with management and our independent registered public accounting firm whether our audited financial statements shall be includedvoting results in our Annuala Current Report on Form 10-K;
•monitoring8-K, which it expects to file with the integrity of our financial statementsSecurities and our compliance with legal and regulatory requirements as they relate to our financial statements and accounting matters;
•preparingExchange Commission within four business days following the Audit Committee report required by SEC rules to be included in our annual proxy statement;
•reviewing all related person transactions for potential conflict of interest situations and approving all such transactions; and
•reviewing quarterly earnings releases.
During the fiscal year ended December 31, 2022, the Audit Committee met six times.Special Meeting.
Compensation CommitteePROPOSAL 1 - APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED
William Young, Jill DeSimone, Dean Mitchell and Gregory Norden serve on the Compensation Committee, which is chaired by William Young. CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT
General
Our Board has approved and, subject to stockholder approval, adopted the Reverse Stock Split Amendments to effect a Reverse Stock Split to all of Directors hasthe outstanding shares of our Common Stock at a ratio ranging from any whole number between 1-for-5 and 1-for-25, with the exact ratio within such range to be determined that William Young, Jill DeSimone, Dean Mitchell and Gregory Norden are “independent” as defined inby the applicable Nasdaq rules. The Compensation Committee’s responsibilities:
•annually reviewing and approving corporate goals and objectives relevantBoard at its discretion, subject to the compensation of our chief executive officer;
•evaluatingBoard’s authority to determine when to file the performance of our chief executive officer in lightamendment and to abandon the other amendments notwithstanding prior stockholder approval of such corporate goalsamendments, directing that such proposed amendments to our Certificate of Incorporation be submitted to our stockholders for their approval and objectives and determining the compensation of our chief executive officer;
•reviewing and approving the compensation of our other executive officers;
•reviewing and establishing our overall management compensation, philosophy and policy;
•overseeing and administering our compensation and similar plans;
•evaluating and assessing potential and current compensation advisors in accordance with the independence standards identified in the applicable Nasdaq rules;
•retaining and approving the compensation of any compensation advisors;
•reviewing and approving our policies and procedures for the grant of equity-based awards;
•evaluating director compensation and making recommendations on director compensation to the Board of Directors;
•preparing the compensation committee report required by SEC rules to be included in our annual proxy statement, if required; and
•reviewing and approving the retention or termination of any consulting firm or outside advisor to assist in the evaluation of compensation matters.
During the fiscal year ended December 31, 2022, the Compensation Committee met four times. Refer to “Executive Compensation” below for information regarding the role of executive officers and the compensation committee’s use of compensation consultants in setting executive compensation.
Nominating and Corporate Governance Committee
Jeffrey Chodakewitz, M.D., Jill DeSimone and William Young serve on the Nominating and Corporate Governance Committee, which is chaired by Jeffrey Chodakewitz, M.D. Our Board of Directors has determined that Jeffrey Chodakewitz, M.D., Jill DeSimone and William Young are “independent” as defined in the applicable Nasdaq rules. The Nominating and Corporate Governance Committee’s responsibilities include:
•developingadoption, and recommending to the Board of Directors criteria for boardthat our stockholders approve and committee membership;
•establishing procedures for identifying and evaluating board of director candidates, including nominees recommended by stockholders;
•reviewing the size and composition of the Board of Directors to ensure that it is composed of members containing the appropriate skills and expertise to advise us;
•identifying individuals qualified to become members of the Board of Directors;
•recommending to the Board of Directors the persons to be nominated for election as directors and toadopt each of the Boardproposed amendments. The text of Directors’ committees;the form of Reverse Stock Split Amendments, one of which would be filed with the Secretary of State of the State of Delaware by means of the Certificate of Amendment to effect the Reverse Stock Split, are set forth in Annex A to this Proxy Statement.
•developingBy approving this proposal, stockholders will approve alternative amendments to our Certificate of Incorporation pursuant to which a number of outstanding shares of our Common Stock between 5 and recommending to25, inclusive, would be combined into one share of our Common Stock. The number of shares of Common Stock underlying outstanding equity awards and available for future awards under our equity incentive plans, as well as the number of shares issuable upon exercise of outstanding warrants would also be proportionately reduced in the same manner as a result of the Reverse Stock Split. Upon receiving stockholder approval, the Board will have the authority, but not the obligation, in its sole discretion, to elect, without further action on the part of Directorsthe stockholders, whether to effect the Reverse Stock Split and, if so, to determine the Reverse Stock Split ratio from among the approved range described above and to effect the Reverse Stock Split by filing a codeCertificate of business conductAmendment with the Secretary of State of the State of Delaware to be effective as of the Effective Time (defined below), and ethicsall other amendments will be abandoned.
The Board’s decision as to whether and when to effect the Reverse Stock Split will be based on a setnumber of corporate governance guidelines;factors, including, without limitation, the anticipated impact of the Reverse Stock Split on the trading price and
•overseeing the evaluation trading volume of our Common Stock, the anticipated impact on our market capitalization and our need for shares of Common Stock to fulfill our corporate purposes, financing activities, and general market and economic conditions. Although our stockholders may approve the Reverse Stock Split, we will not effect the Reverse Stock Split if the Board does not deem it to be in the best interests of Directorsthe Company and management.its stockholders.
DuringPurpose of the fiscal year ended December 31, 2022,Reverse Stock Split
Trading, Investor Interest and Liquidity
The Board submits the NominatingReverse Stock Split Proposal to our stockholders for approval and Corporate Governance Committee met one time.
Director Nomination Processadoption with the primary purpose of improving the perception of our Common Stock as an investment security, resetting our stock price to more normalized trading levels in the face of potentially extended market dislocation and decreasing price volatility for our Common Stock, as small price movements currently may cause relatively large percentage changes in our stock price.
Our NominatingBoard also considered that the Reverse Stock Split and Corporate Governance Committee is responsiblethe resulting increase in the per share price of our Common Stock could encourage increased investor interest in our Common Stock and promote greater liquidity for identifying individuals qualifiedour stockholders. Many brokerage houses and institutional investors have internal policies and practices that prohibit them from investing in low-priced stocks or tend to servediscourage individual brokers from recommending low-priced stocks to their customers, further limiting the liquidity of our Common Stock. These factors could result in lower prices and larger spreads in the bid and ask prices for our Common Stock. Additionally, investors may be dissuaded from purchasing lower priced stocks because the brokerage commissions, as directors, consistent with criteria approved by our Boarda percentage of Directors, and recommending such personsthe total transaction, tend to be nominatedhigher for election as directors, except where we are legally required by contract, lawsuch stocks. Moreover, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks. A greater price per share of our Common Stock could allow a broader range of institutions to provide third parties with the right to nominate.invest in our Common Stock.
The process followed by our Nominating and Corporate Governance Committee to identify and evaluate director candidates includes soliciting recommendations from any orFor all of these reasons, we believe the following sources: non-management directors, the ChiefReverse Stock Split could potentially help to stabilize trading in our Common Stock and increase marketability, trading volume and liquidity.
Increase in Number of Authorized Shares of Common Stock Available for Future Issuance
Executive Officer, other executive officers, third-party search firms or any other sourceIn addition, the Board submits the Reverse Stock Split Proposal to increase our Nominatingnumber of authorized shares of Common Stock available for future issuance. Under the Certificate of Incorporation, we have 150,000,000 authorized shares of Common Stock and Corporate Governance Committee deems appropriate. The qualifications, qualities10,000,000 authorized shares of preferred stock, par value $0.0001 per share (“Preferred Stock,” and skills thattogether with the Common Stock, the “Capital Stock”). As of the Record Date, there were 128,547,336 shares of Common Stock issued and outstanding and no shares of Preferred Stock issued and outstanding. Because the Reverse Stock Split will decrease the number of outstanding shares of our Nominating and Corporate Governance Committee believes must be metCommon Stock by a committee-recommended nomineeratio in the range of 1-for-5 to 1-for-25 but would not effect a decrease to the number of shares of Common Stock that we will be authorized to issue, the proposed Reverse Stock Split Amendments would result in a relative increase in the number of unissued shares of our Common Stock. See “ –Principal Effects of the Reverse Stock Split-Issued and Outstanding Shares of Common Stock” below.
Our Board believes it is in the best interests of the Company and our stockholders to increase our number of authorized shares of Common Stock available for a position onfuture issuance in order to have additional shares available for use as our Board deems appropriate or necessary. As such, the Reverse Stock Split will provide the Company with greater flexibility with respect to managing its Common Stock in connection with such corporate purposes as may, from time to time, be considered advisable by our Board. These corporate purposes could include, without limitation, financing activities, public or private offerings of Directors areCommon Stock, issuance of options and other equity awards pursuant to our incentive plans, and strategic business development transactions. Having an increased number of authorized but unissued shares of Common Stock would allow us to take prompt action with respect to corporate opportunities that develop, without the delay and expense of convening a special meeting of stockholders for the purpose of approving an increase in our capitalization.
In light of the factors mentioned above, our Board unanimously approved the proposed Reverse Stock Split Amendments to effect the Reverse Stock Split as follows: our best means of building value for our stockholders.
Board Discretion to Implement the Reverse Stock Split
The Board believes that stockholder approval of a range of ratios (as opposed to a single reverse stock split ratio) is in the best interests of our Company and stockholders because it is not possible to predict market conditions at the time the Reverse Stock Split would be effected. We believe that a range of Reverse Stock Split ratios provides us with the most flexibility to achieve the desired results of the Reverse Stock Split. The Reverse Stock Split ratio to be selected by our Board will be a whole number in a range of 1-for-5 to 1-for-25. The Board can only authorize the filing of one Reverse Stock Split Amendment and all other Reverse Stock Split Amendments will be abandoned. The Board also has the authority to abandon all Reverse Stock Split Amendments.
In determining the Reverse Stock split ratio and whether and when to effect the Reverse Stock Split following the receipt of stockholder approval, the Board will consider a number of factors, including, without limitation:
•Nominees should demonstrate high standardsthe number of personalauthorized shares needed to fulfill our current and professional ethics and integrity.anticipated corporate purposes;
•Nominees should have proven achievementthe historical trading price and competence in the nominee’s field and the ability to exercise sound business judgment.trading volume of our Common Stock;
•Nominees should have skills that are complementary to those of the existing board.
•Nominees should have the ability to assist and support management and make significant contributions to Praxis’ success.
•Nominees should have an understanding of the fiduciary responsibilities that are required of a member of our Board of Directors and the commitment of time and energy necessary to diligently carry out those responsibilities, which may include, but not be limited to, limiting service on other boards of directors to the extent such service is deemed to interfere with the time and energy required to serve our Board of Directors.
Stockholders may recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential director candidates. 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 one-year anniversary of the date of the preceding year’s annual meeting and should include appropriate biographical and background material to allow the Nominating and Corporate Governance Committee to properly evaluate the potential director candidate and the number of shares of our stock beneficially owned byCommon Stock outstanding immediately before and after the stockholder proposing Reverse Stock Split;
•the candidate. Assumingthen-prevailing trading price and trading volume of our Common Stock and the anticipated impact of the Reverse Stock Split on the trading price and trading volume of our Common Stock;
•the anticipated impact of a particular ratio on our market capitalization; and
•prevailing general market and economic conditions.
We believe that biographicalgranting our Board the authority to set the ratio for the Reverse Stock Split is essential because it allows us to take these factors into consideration and background material has been provided on a timely basis in accordance with our By-laws, any recommendations received from stockholders will be evaluated in the same manner as potential nominees proposed by the Nominating and Corporate Governance Committee.to react to changing market conditions. If our Board of Directors determineschooses to nominateimplement the Reverse Stock Split, we will make a stockholder-recommended candidate and recommends his or her election, then his or her name will be included on our proxy card forpublic announcement regarding the next annual meeting of stockholders. Refer to “Stockholder Proposals” below for a discussion regarding submitting stockholder proposals.
Board Diversity
We do not have a formal policy regarding board diversity at this time. In selecting board members, we prioritize identifying members who will further the interests of our stockholders through their established record of professional accomplishment, their ability to contribute positively to the collaborative culture among board members and their knowledge of our business and understandingdetermination of the competitive landscape. The diversity demographic information summarized below is based on voluntary self-identification by each director. Stated as percentages, approximately 28% of our directors self-identify as female and approximately 14% are racially or ethnically diverse.
| | | | | | | | | | | |
| Board Diversity Matrix (as of April 26, 2023) |
| Total Number of Directors | 7 |
| Female | Male |
| Part I: Gender Identity |
| Directors | 2 | 5 |
| Part II: Racial/Ethnic Background |
| Hispanic or Latino | 0 | 1 |
| White | 2 | 4 |
Policy on HedgingRisks Associated with the Reverse Stock Split
There are risks associated with the Reverse Stock Split, including that:
•the market price per share of Company Securitiesour Common Stock after the Reverse Stock Split will not rise in proportion to the reduction in the number of shares of our Common Stock outstanding immediately before the Reverse Stock Split;
Our Insider Trading Policy prohibits•even if the market price per share of our officers and directors from engagingCommon Stock after the Reverse Stock Split rises, such market price may not be sustained;
•the Reverse Stock Split may not result in any transactions involving any hedging or derivatives of Company securities, includingmore normalized trading in futuresour Common Stock or decrease the market volatility of our Common Stock;
•the Reverse Stock Split may not result in a per share price that will increase the level of investment in our Common Stock by institutional investors or increase analyst and derivative securitiesbroker interest in our Company; and engaging
•the authorized shares of Common Stock that will become available as a result of the Reverse Stock Split will not be sufficient for us to fulfill our current and anticipated corporate purposes.
You should consider that, although our Board believes that a Reverse Stock Split will in hedging activities relatingfact increase the price of our Common Stock, in many cases, because of variables outside of a company’s control (such as market volatility, investor response to our securities (including exchange traded options, puts, calls, collars, forward sale contracts, equity swapsthe news of a proposed reverse stock split and exchange funds, or otherwise engaging in transactions that are designed to hedge or offset decreases inthe general economic environment), the market price of a company’s shares of common stock could decline in value after a reverse stock split. You should also keep in mind that the implementation of a Reverse Stock Split does not have an effect on the actual or intrinsic value of our equity securities, providedbusiness or a stockholder’s proportional ownership in our Company. However, should the overall value of our Common Stock decline after the proposed Reverse Stock Split, then the actual or intrinsic value of the shares of our Common Stock held by you will also proportionately decrease as a result of the overall decline in value. Furthermore, even if an increased per share price can be maintained, the Reverse Stock Split may not achieve the desired results that have been outlined above under “–Purpose of the Reverse Stock Split.”
We believe that the Reverse Stock Split may also result in greater liquidity for our stockholders. However, it is also possible that such liquidity could be adversely affected by the reduced number of shares outstanding after the Reverse Stock Split, particularly if the price of our Common Stock does not limit directorincrease as a result of the Reverse Stock Split.
Additionally, if the Reverse Stock Split is implemented, it will increase the number of stockholders who own “odd lots” of less than 100 shares of common stock. A purchase or sale of less than 100 shares (an “odd lot” transaction) may result in incrementally higher trading costs through certain brokers, particularly “full service” brokers. Therefore, those stockholders who own fewer than 100 shares of our Common Stock following the Reverse Stock Split may be required to pay higher transaction costs if they sell their shares of our Common Stock.
Principal Effects of the Reverse Stock Split
Issued and officer participationOutstanding Shares of Common Stock
If the Reverse Stock Split is approved and effected, each holder of our Common Stock outstanding immediately prior to the effectiveness of the Reverse Stock Split will own a reduced number of shares of our Common Stock upon effectiveness of the Reverse Stock Split. The Reverse Stock Split would be effected simultaneously at the same exchange ratio for all outstanding shares of Common Stock, as required by our Certificate of Incorporation. Except for adjustments that may result from the treatment of fractional shares (as described below), the Reverse Stock Split would affect all stockholders uniformly and would not change any stockholder’s relative percentage ownership interest in our stock option program). This prohibition applies to Company, equity securitiesvoting rights, or other rights that are (i) grantedaccompany shares of our Common Stock. Shares of our Common Stock issued pursuant to the officer or director byReverse Stock Split will remain fully paid and non-assessable, and the Company as partpar value per share of their compensation or (ii) held, directly or indirectly, byCommon Stock will remain $0.0001.
Relative Increase in Number of Authorized Shares of Common Stock for Issuance
The Reverse Stock Split will not affect the officernumber of authorized shares or the director.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the code is posted on the corporate governance sectionpar value of our website,capital stock, which is locatedwill remain at https://investors.praxismedicines.com/corporate-governance/governance-overview. If we make any substantive amendments to, or grant any waivers from, the code150,000,000 shares of business conductCommon Stock and ethics for any officer or director, we will disclose the nature10,000,000 shares of such amendment or waiver on our website or in a Form 8-K.
Board of Directors Leadership Structure and Board’s Role in Risk Oversight
Board of Directors Leadership Structure
The positions of our chairman of the board and chief executive officer are separated, with Mr. Souza serving as our Chief Executive Officer and Mr. Mitchell serving as the chairman of our Board of Directors. Separating these positions allows Mr. Souza to focus on our day-to-day business, while allowing Mr. Mitchell to lead the Board of Directors in its fundamental role of providing advice to and independent oversight of management. Our Board of Directors recognizes the time, effort and energy that Mr. Souza, as our Chief Executive Officer, must devote to his position in the current business environment, as well as the commitment required by Mr. Mitchell to serve as our chairman, particularly as the Board of Directors’ oversight responsibilities continue to grow. Our Board of Directors also believes that this structure ensures a greater role for the independent directors in the oversight of our company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our Board of Directors. Our Board of Directors believes its administration of its risk oversight function has not affected its leadership structure. Our Board of Directors believes that having separate positions is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance.
Role of the Board of Directors in Risk Oversight
Our Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through the standing committees of the Board of Directors that address risks inherent in their respective areas of oversight. In particular, our Board of Directors is responsible for monitoring and assessing strategic risk exposure, including program and franchise risks and business continuity risks. Our Audit Committee is responsible for overseeing our major financial and cybersecurity risk exposures and the steps our management has taken to monitor and control these exposures, as well as monitoring compliance with legal and regulatory requirements, including consideration and approval or disapproval of any related person transactions. Our Board of Directors believes that full and open communication between management and the Board of Directors is essential for effective risk management and oversight.
Communication with the Directors of Praxis
Any interested party with concerns about our company may report such concerns to our Board of Directors or the chair of our Board of Directors and Nominating and Corporate Governance Committee, by submitting a written communication to the attention of such director at the following address:
c/o Praxis Precision Medicines, Inc.
Attn: [Director]
99 High Street, 30th Floor
Boston, Massachusetts 02110
United States
You may submit your concern anonymously or confidentially by postal mail. You may also indicate whether you are a stockholder, customer, supplier, or other interested party.
A copy of any such written communication may also be forwarded to Praxis’ legal counsel and a copy of such communication may be retained for a reasonable period of time. The director may discuss the matter with Praxis’ legal counsel, with independent advisors, with non-employee directors, or with Praxis’ management, or may take other action or no action as the director determines in good faith, using reasonable judgment, and applying his or her own discretion.Preferred Stock.
CommunicationsAlthough the number of authorized shares of our Capital Stock will not change as a result of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in proportion to the ratio selected by the Board. Thus, the Reverse Stock Split will effectively increase the number of authorized and unissued shares of our Common Stock available for future issuance by the amount of the reduction effected by the Reverse Stock Split.
If the proposed Reverse Stock Split Amendments are approved, all or any of the authorized and unissued shares of our Common Stock may be forwardedissued in the future for such corporate purposes and such consideration as the Board deems advisable from time to time, without further action by the stockholders of our Company and without first offering such shares to our stockholders. When and if additional shares of our Common Stock are issued, these new shares would have the same voting and other directorsrights and privileges as the currently issued and outstanding shares of Common Stock, including the right to cast one vote per share.
Except pursuant to incentive awards issued under the Company’s equity incentive plans and outstanding warrants, the Company presently has no plan, commitment, arrangement, understanding, or agreement regarding the issuance of Common Stock. However, the Company regularly considers its capital requirements and may conduct securities offerings, including equity and/or equity linked offerings, in the future. Any shares issuable pursuant to such incentive awards or warrants will be subject to the Reverse Stock Split ratio determined by the Board.
Because our stockholders have no preemptive rights to purchase or subscribe for any of our unissued shares of Common Stock, the future issuance of additional shares of Common Stock will reduce our current stockholders’ percentage ownership interest in the total outstanding shares of Common Stock. In the absence of a proportionate increase in our future earnings and book value, an increase in the number of our outstanding shares of Common Stock would dilute our projected future earnings per share, if they relate to important substantive mattersany, and include suggestions or comments that maybook value per share of all our outstanding shares of Common Stock. If these factors were reflected in the price per share of our Common Stock, the potential realizable value of a stockholder’s investment could be important for other directors to know. In general, communications relating to corporate governanceadversely affected. An issuance of additional shares could therefore have an adverse effect on the potential realizable value of a stockholder’s investment.
Equity Compensation Plans and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances,Outstanding Equity-Based Awards
The Company maintains the Praxis Precision Medicines, Inc. 2017 Stock Incentive Plan (as amended, the “2017 Plan”), the Praxis Precision Medicines, Inc. 2020 Stock Option and matters as to which we tend to receive repetitive or duplicative communications.
The Audit Committee oversees the procedures for the receipt, retention, and treatment of complaints received by Praxis regarding accounting, internal accounting controls, or audit matters,Incentive Plan (the “2020 Plan”) and the confidential, anonymous submission byPraxis Precision Medicines, Inc. 2020 Employee Stock Purchase Plan (the “ESPP”, and together with the 2017 Plan and the 2020 Plan, the “Plans”), which provide stock-based awards to employees of concerns regarding questionable accounting, internal accounting controls or auditing matters, or potential violationsand other individual service providers of the federal securities laws, including any rules and regulations thereunder, or the U.S. Foreign Corrupt Practices Act. Praxis has also established a toll-free telephone number for the reporting of such activity, which is 877-306-7933.
EXECUTIVE COMPENSATION
Overview
Our compensation programs are designed to:
•provide a fair, flexible and market-based total compensation package;
•attract, motivate, incentivize and retain key management personnel who contribute to our short and long-term success;
•emphasize performance-based total compensation that is aligned with the external market and rewards the achievement of our business objectives and key results; and
•effectively align the interests of our executives with those of our stockholders by focusing on long-term equity incentives that correlate to the growth of sustainable long-term value for our stockholders.
The Compensation Committee of our Board of Directors, which is comprised entirely of independent directors, is responsible for discharging our Board of Directors’ responsibilities relating to compensation of our executive officers, overall compensation structure, policies and programs, and our processes and procedures for the consideration and determination of executive compensation. The Chief People Officer and Chief Executive Officer develop preliminary recommendations regarding compensation matters with respect to all executive officers, other than the Chief Executive Officer, and provide these recommendations to the Compensation Committee. The Compensation Committee reviews management’s preliminary recommendations and makes final compensation decisions.
Our Compensation Committee is authorized to retain the services of one or more executive compensation advisors, as it sees fit, in connection with the establishment of our executive compensation programs and related policies. The Compensation Committee engaged Frederic W. Cook & Co., Inc., or FW Cook, as its independent compensation consultant to provide objective analysis, advice and recommendations on executive officer pay in connection with the Compensation Committee’s decision-making process for 2022. During 2022, FW Cook did not provide services to us other than the services to our Compensation Committee described herein. Our Compensation Committee performs an annual assessment of its compensation consultants’ independence to determine whether the consultants are independent. Based on its evaluation, the Compensation Committee has determined that FW Cook is independent and that its work has not raised any conflicts of interest.
The compensation provided to our named executive officers for the fiscal year ended December 31, 2022 is detailed in the 2022 Summary Compensation Table and accompanying footnotes and narrative that follow. Our named executive officers for the fiscal year ended December 31, 2022 were:
•Marcio Souza, our President and Chief Executive Officer;
•Timothy Kelly, our Chief Financial Officer;
•Nicole Sweeny, our former Chief Commercial Officer; and
•Bernard Ravina, M.D., our former Chief Medical Officer.
Company. We are a “smaller reporting company” as that term is used under the rules promulgated under the Securities Act of 1933, as amended, and as such have used the reduced compensation disclosure requirements applicable to smaller reporting companies consistent with SEC rules.
2022 Summary Compensation Table
The following table sets forth information regarding compensation awarded to, earned by or paid to our named executive officers for services rendered to us in all capacities during the fiscal years indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Year | | Salary ($) | | Bonus
($) | | Stock
Awards
($)(1) | | Option
Awards
($)(1) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other
Compensation
($)(3) | | Total ($) |
Marcio Souza President and Chief Executive Officer | | 2022 | | 625,000 | | — | | 1,340,140 | | 3,649,420 | | 375,000 | | 38,518 | | 6,028,078 |
| | 2021 | | 570,834 | | — | | 2,773,584 | | 6,883,800 | | 646,875 | | 30,727 | | 10,905,820 |
Timothy Kelly Chief Financial Officer | | 2022 | | 465,000 | | — | | 434,640 | | 1,235,085 | | 148,800 | | 19,688 | | 2,303,213 |
Nicole Sweeny Former Chief Commercial Officer (4) | | 2022 | | 450,000 | | — | | 434,640 | | 1,235,085 | | 144,000 | | 20,031 | | 2,283,756 |
| | 2021 | | 393,334 | | — | | 882,504 | | 2,193,280 | | 240,000 | | 18,738 | | 3,727,856 |
Bernard Ravina, M.D. Former Chief Medical Officer(5) | | 2022 | | 287,249 | | 416,667(6) | | 431,366 | | 1,226,158 | | — | | 402,314 | | 2,763,754 |
| | 2021 | | 466,667 | | — | | 1,287,616 | | 2,451,050 | | 285,000 | | 18,838 | | 4,509,171 |
_________________________
(1)The amounts reported represent the aggregate grant date fair value of the stock options and restricted stock units awarded to the named executive officers during the year indicated, calculated in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, 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 11 to our consolidated financial statements in our 2022 Annual Report. The amounts reported in this column reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by the named executive officers upon the exercise of the stock options, vesting or settlement of restricted stock units or any sale of the underlying shares of common stock. For Dr. Ravina, the 2022 amount reported also includes $32,946 in the Stock Awards column and $85,433 in the Option Awards column, representing the incremental fair value attributable to modifications made to his equity awards in 2022.
(2)The amounts reported represent actual bonuses earned for performance during the applicable year by our named executive officers based upon the achievement of our corporate objectives for such year, as described under “Narrative to Summary Compensation Table — Annual Bonus.” For 2022, the Board of Directors elected to offer the named executive officers the ability to receive up to 100% of their 2022 annual bonuses in the form of fully vestedgranted options to purchase shares of our commonCommon Stock under the Plans and restricted stock issuedunits (“RSUs”) under ourthe 2020 Stock OptionPlan.
Our Board generally has the discretion to determine the appropriate adjustment to the Plans and Incentive Plan. Mr. Souza elected to receive 100% of his 2022 annual bonusoutstanding awards in the formevent of a reverse stock split. Accordingly, if the Reverse Stock Split is approved and effected, consistent with the terms of the Plans and outstanding award agreements, the total number of shares of Common Stock issuable upon exercise or vesting of such awards and the total number of shares of Common Stock remaining available for future awards under the Plans would be proportionately reduced based on the Reverse Stock Split ratio selected by our Board, and any fractional shares that may result therefrom shall be rounded down. Furthermore, the exercise price of any outstanding options would be proportionately increased based on the Reverse Stock Split ratio selected by our Board, and wasany fractional cents that may result therefrom shall be rounded up. Our Board has authorized the Company to effect any changes necessary, desirable or appropriate to give effect to the Reverse Stock Split under the Plans, including any applicable technical, conforming changes thereunder.
Warrants
We have also issued an optionpre-funded warrants to purchase 213,975 shares on January 12, 2023. Mr. Kelly elected to receive 50% of his 2022 annual bonus in the formCommon Stock. As of options and was issued an optionSeptember 30, 2023, pre-funded warrants to purchase 42,4557,050,000 shares on January 12, 2023. Ms. Sweeny elected to receive 50% of her 2022 annual bonus inCommon Stock at an exercise price per share of $0.0001 were outstanding.
If the formReverse Stock Split is approved and effected, under the terms of optionsthe pre-funded warrants, the exercise price per share for the pre-funded warrants shall be increased by multiplying the exercise price by a fraction, the numerator of which shall be the number of shares of Common Stock issued and wasoutstanding immediately before the Reverse Stock Split and the denominator of which shall be the number of shares of Common Stock issued an option to purchase 41,085 shares on January 12, 2023.
(3)Amounts reported for 2022 include cell phone reimbursement, tax gross ups on taxable long-term disability and a tax gross up for wellness benefits, as well as discretionary matching company contributions under our 401(k) plan. For Mr. Souza, the amounts reported also include reimbursement for premiums and a tax gross up on a supplemental long-term disability and life insurance policy owned by him. For Dr. Ravina, the 2022 amount reported also includes the Company paid portion of his premiums for continued participation in the Company's group health plans following his resignation and a cash payment equal to nine months of base salary in accordance with his transition agreement with the Company, as described under “Narrative to Summary Compensation Table - Employment Arrangements with our Named Executive Officers.”
(4)Ms. Sweeny ceased serving as our Chief Commercial Officer and as an employee effective March 31, 2023.
(5)Dr. Ravina resigned as our Chief Medical Officer effective August 1, 2022. The amount reported in the salary column for 2022 is comprised of $287,249 in base salary earned by Dr. Ravina prior to his resignation.
(6)Dr. Ravina received a retention bonus pursuant to a retention incentive award letter agreement, as described under “Narrativeoutstanding immediately after the Reverse Stock Split, rounding to the 2022 Summary Compensation Table.”
Narrativenearest one-millionth of one cent. The number of shares of Common Stock that may be issued upon exercise of the pre-funded warrants shall be decreased proportionately, so that after the Reverse Stock Split, the aggregate exercise price payable under the pre-funded warrants for such decreased number of shares of Common Stock shall be the same as the aggregate exercise price in effect immediately prior to the 2022 Summary Compensation TableReverse Stock Split, rounding to the nearest share.
Base SalariesIllustration
Each named executive officer’s base salaryFor purposes of illustration, the following table contains approximate information relating to our Common Stock if the Reverse Stock Split is effected at a fixed componentratio of annual compensation1-for-5, 1-for-10, 1-for-15, 1-for-20 or 1-for-25 based on share information as of the close of business on September 30, 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Pre-Reverse Split | | 1-for-5 | | 1-for-10 | | 1-for-15 | | 1-for-20 | | 1-for-25 |
| Authorized | | 150,000,000 | | | 150,000,000 | | | 150,000,000 | | | 150,000,000 | | | 150,000,000 | | | 150,000,000 | |
| Outstanding | | 128,547,336 | | | 25,709,467 | | | 12,854,733 | | | 8,569,822 | | | 6,427,366 | | | 5,141,893 | |
| Reserved for future issuance pursuant to employee benefit plans | | 3,377,062 | | | 675,412 | | | 337,706 | | | 225,137 | | | 168,853 | | | 135,082 | |
| Reserved for future issuance pursuant to outstanding equity-based awards | | 10,509,871 | | | 2,101,974 | | | 1,050,987 | | | 700,658 | | | 525,493 | | | 420,394 | |
| Number of shares issuable upon exercise of outstanding warrants | | 7,050,000 | | | 1,410,000 | | | 705,000 | | | 470,000 | | | 352,500 | | | 282,000 | |
| Authorized but unissued and unreserved | | 515,731 | | | 120,103,147 | | | 135,051,574 | | | 140,034,383 | | | 142,525,788 | | | 144,020,631 | |
Procedure for performing specific dutiesEffecting the Reverse Stock Split and functions,Exchange of Stock Certificates, if Applicable
If the proposed Reverse Stock Split Amendments are approved by the Company’s stockholders and has been established by our Board of Directors or Compensation Committee taking into account each individual’s role, responsibilities, skills and expertise. Base salaries are reviewed annually, typically in connection with our annual performance review process, approved by our Compensation Committee or our Board of Directors and adjusted fromdetermines to effect the Reverse Stock Split, the Reverse Stock Split will become effective at 5:00 p.m., Eastern time, to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Effective January 1, 2022, the annual base salaries for Mr. Souza, Mr. Kelly, Ms. Sweeny and Dr. Ravina were $625,000 (increased from $575,000), $465,000 (increased from $425,000), $450,000 (increased from $400,000), and $489,250 (increased from $475,000), respectively.
Annual Bonus
For the fiscal year ended December 31, 2022, each of our named executive officers was eligible to earn an annual bonus based on the achievementdate the Certificate of certain pre-determined corporate performance objectives and individual performance. ForAmendment is filed with the 2022 annual bonus program, corporate performance objectives generally related to delivering on financial and compliance performance milestones, establishing a leading central nervous system portfolio, generating a neurology pipeline anchored on human genetics and continuing our transformation as a best-in-class biotechnology company, as well as incorporating individual objectives associated with an executive’s areaSecretary of primary responsibility within our organization.
During 2022, the target annual bonuses for Mr. Souza, Mr. Kelly, Ms. Sweeny and Dr. Ravina were 75%, 40%, 40% and 40% of their base salary, respectively. The annual bonus earned by each named executive officer with respect to the fiscal year ended December 31, 2022 is reported under the “Non-Equity Incentive Plan Compensation” column in the “2022 Summary Compensation Table” above and was determined based upon achievementState of the corporate performance objectives at 80%State of target and achievement of individual performance objectives.
Equity Compensation
We believe that equity grants provide our executives with a strong link to our long-term performance, bolster an ownership culture and help to alignDelaware (the “Effective Time”). At the interests of our executives and our stockholders. In addition, we believe that equity grants promote executive retention because they incentivize our executive officers to remain in our employment during the vesting period. Accordingly, our Compensation Committee or Board of Directors periodically reviews the equity incentive compensation of our named executive officers and considers equity awards to be a key component of the annual compensation program, representing long-term alignment with stockholders. Our named executive officers have been granted certain options to purchaseEffective Time, shares of our common stockCommon Stock issued and restricted stock units relating to our common stock, as describedoutstanding immediately prior thereto will be combined, automatically and without any action on the part of the stockholders, into new shares of Common Stock, in more detailaccordance with the Reverse Stock Split ratio contained in the “Outstanding Equity Awards at 2022 Fiscal Year-End” table below.Certificate of Amendment.
Employment Arrangements withRegistered “Book-Entry” Holders of Common Stock
As soon as practicable after the Effective Time, stockholders will be notified by our Named Executive Officersexchange agent that the Reverse Stock Split has been effected. As all of the outstanding shares of our Common Stock are held in book-entry form, you will not need to take any action to receive post-Reverse Stock Split shares of our Common Stock. As soon as practicable after the Effective Time, our exchange agent will send to your registered address a corporate actions statement indicating the number of post-Reverse Stock Split shares of Common Stock you hold. If applicable, a check representing a cash payment in lieu of fractional shares will also be included in this mailing as soon as practicable after the Effective Time. See “—Fractional Shares” below).
WeBeneficial Holders of Common Stock
Upon the implementation of the Reverse Stock Split, we intend to treat shares of Common Stock held by stockholders in “street name” (i.e., through a bank, broker or other nominee), in the same manner as registered “book-entry” holders of Common Stock. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our Common Stock in “street name”. However, these banks, brokers or other nominees may have employment agreements with Messrs. Souzadifferent procedures than registered stockholders for processing the Reverse Stock Split and Kelly, which we refer to as the Employment Agreements. The Employment Agreements providemaking payment for specified payments and benefits in connectionfractional shares. If a stockholder holds shares of our Common Stock with a termination of employmentbank, broker or other nominee and has any questions in certain circumstances. The material terms of the Employment Agreements with Messrs. Souza and Kellythis regard, stockholders are summarized below.
Marcio Souza. Under the Employment Agreement with Mr. Souza, Mr. Souza has continuedencouraged to serve as our President and Chief Executive Officer on an at-will basis. Mr. Souza’s current annual base salary is $625,000, which is subject to annual review, and he is eligible to earn an annual bonus with a target amount equal to 75% of his base salary. Mr. Souza is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.
Tim Kelly. Under the Employment Agreement with Mr. Kelly, Mr. Kelly has continued to serve as our Chief Financial Officer on an at-will basis. Mr. Kelly’s current annual base salary is $465,000, which is subject to annual review, and he is eligible to earn an annual bonus with a target amount equal to 40% of his base salary. Mr. Kelly is also eligible to participate in the employee benefit plans available to our employees, subject to the terms of those plans.
Pursuant to the Employment Agreements, in the event that Mr. Souza’scontact their bank, broker or Mr. Kelly’s employment is terminated by us without “cause” or Mr. Souza or Mr. Kelly resigns for “good reason” (as defined in the Employment Agreements), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, Mr. Souza or Mr. Kelly, as applicable, (i) will be entitled to receive base salary continuation for nine months (12 months for Mr. Souza) following termination, and (ii) subject to the executive’s co-payment of premium amounts at the applicable active employees’ rate and proper election to continue COBRA health coverage, we will cover the portion of the premium amount equal to the amount thatother nominee.
weFractional Shares
No scrip or fractional shares would have paid to provide health insurance to the executive had such executive remained employed with us until the earliest of (A) nine months (12 months for Mr. Souza) following termination, (B) the executive’s eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the endbe issued if, as a result of the executive’s COBRA health continuation period.
In lieuReverse Stock Split, a stockholder would otherwise become entitled to a fractional share because the number of shares of Common Stock they hold before the payments and benefits described inReverse Stock Split is not evenly divisible by the preceding sentence, insplit ratio ultimately determined by the event Mr. Souza’s or Mr. Kelly’s employment is terminated by us without cause or Mr. Souza or Mr. Kelly resigns for good reason, in either case on or within 12 months following a “change of control” (as defined in the Employment Agreements), subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, (i) the executiveBoard. Instead, each stockholder will be entitled to receive a lump sumcash payment in lieu of such fractional share. The cash payment to be paid will be equal to one times (1.5 timesthe fraction of a share to which such holder would otherwise be entitled multiplied by the closing price per share of Common Stock on the trading day immediately preceding the Effective Time as reported by The Nasdaq Global Select Market (as adjusted to give effect to the Reverse Stock Split). No transaction costs would be assessed to stockholders for Mr. Souza) the sumcash payment. Stockholders would not be entitled to receive interest for their fractional shares for the period of (A)time between the executive’sEffective Time and the date payment is received.
After the Reverse Stock Split, then-current annual base salary (orstockholders would have no further interest in our Company with respect to their fractional shares. A person entitled to a fractional share would not have any voting, dividend or other rights in respect of their fractional share except to receive the executive’s annual base salarycash payment as described above. Such cash payments would reduce the number of post-Reverse Stock Split stockholders to the extent that there are stockholders holding fewer than that number of pre-Reverse Stock Split shares within the Reverse Stock Split ratio that is determined by the Board as described above. Reducing the number of post-Reverse Stock Split stockholders, however, is not the purpose of this proposal.
Stockholders should be aware that, under the escheat laws of the various jurisdictions where stockholders reside, where we are domiciled and where the funds for fractional shares would be deposited, sums due to stockholders in payment for fractional shares that are not timely claimed after the Effective Time may be required to be paid to the designated agent for each such jurisdiction. Thereafter, stockholders otherwise entitled to receive such funds may have to seek to obtain them directly from the state to which they were paid.
No Appraisal Rights
Under the DGCL, our stockholders will not be entitled to appraisal rights with respect to the Reverse Stock Split, and we do not intend to independently provide stockholders with any such right.
No Going Private Transaction
Notwithstanding the decrease in the number of outstanding shares following the Reverse Stock Split, the Board does not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Interests of Certain Persons in the Proposal
Certain of our officers and directors have an interest in this proposal as a result of their ownership of shares of our Common Stock, as set forth below in the section entitled “Security Ownership of Certain Beneficial Owners and Management.” However, our officers or directors do not have interests in this proposal that are different from or greater than those of any of our other stockholders.
Anti-takeover Effects of Proposed Amendment
Release No. 34-15230 of the staff of the Securities and Exchange Commission (the “SEC”) requires disclosure and discussion of the effects of any action, including the proposed Reverse Stock Split Amendments discussed herein, that may be used as an anti-takeover mechanism. The Reverse Stock Split would result in an increase in the relative amount of authorized but unissued shares of Common Stock, which may, under certain circumstances, be construed as having an anti-takeover effect. Although not designed or intended for such purposes, the effect of the increased available shares might be to make more difficult or to discourage an attempt to take over or otherwise acquire control of the Company (for example, by permitting issuances that would dilute the stock ownership of a person or entity seeking to effect a change in the composition of our Board or contemplating a tender offer or other change in control transaction). In addition, our Certificate of Incorporation and our Bylaws include provisions that may have an anti-takeover effect. These provisions, among things, permit the Board to issue
Preferred Stock with rights senior to those of the Common Stock without any further vote or action by the stockholders and do not provide for cumulative voting rights, which could make it more difficult for stockholders to effect certain corporate actions and may delay or discourage a change in control.
Our Board is not presently aware of any attempt, or contemplated attempt, to acquire control of the Company, and the Reverse Stock Split Proposal is not part of any plan by our Board to recommend or implement a series of anti-takeover measures.
Accounting Treatment of the Reverse Stock Split
If the Reverse Stock Split is effected, the par value per share of our Common Stock will remain unchanged at $0.0001. Accordingly, at the Effective Time, the stated capital on our consolidated balance sheets attributable to our Common Stock will be reduced in proportion to the size of the Reverse Stock Split ratio, and the additional paid-in-capital account will be increased by the amount by which the stated capital is reduced. Our stockholders’ equity, in the aggregate, will remain unchanged. Per share net income or loss will be increased because there will be fewer shares of Common Stock outstanding. We do not anticipate that any other accounting consequences, including changes to the amount of stock-based compensation expense to be recognized in any period, will arise as a result of the Reverse Stock Split.
Certain U.S. Federal Income Tax Consequences of the Reverse Stock Split
The following discussion is a summary of certain U.S. federal income tax consequences of the Reverse Stock Split to that may be relevant to U.S. Holders (as defined below) of our Common Stock, but does not purport to be a complete analysis of all potential tax effects. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or non-U.S. tax laws are not discussed. This summary is based upon the provisions of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, published rulings and administrative pronouncements of the U.S. Internal Revenue Service (“IRS”) and judicial decisions, all as in effect immediately prioras of the date hereof, and all of which are subject to change and differing interpretations, possibly with retroactive effect. Changes in these authorities or their interpretation may result in the changeU.S. federal income tax consequences of control, if higher) plus (B) the executive’s target annual cash incentive compensationReverse Stock Split differing substantially from the consequences summarized below. We have not sought, and will not seek, an opinion of counsel or a ruling from the IRS regarding the U.S. federal income tax consequences of the Reverse Stock Split, and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or that a court would not sustain any such challenge.
This discussion is limited to U.S. Holders that hold our Common Stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion is for general information purposes only and does not address all aspects of U.S. federal income taxation that may be relevant to a U.S. Holder’s particular circumstances, including the yearimpact of termination (or the executive’s target annual cash incentive compensation in effect immediately priorMedicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to the change of control, if higher), (ii)U.S. Holders subject to special tax rules, including, without limitation:
•persons that are not U.S. Holders (as defined below);
•persons subject to the executive’s co-paymentalternative minimum tax;
•U.S. Holders (as defined below) whose functional currency is not the U.S. dollar;
•persons holding our common stock as part of premium amountsa hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
•banks, insurance companies, and other financial institutions;
•real estate investment trusts or regulated investment companies;
•brokers, dealers, or traders in securities;
•S corporations or partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
•tax-exempt organizations or governmental organizations;
•persons deemed to sell our common stock under the constructive sale provisions of the Code;
•persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;
•tax-qualified retirement plans; and
•“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.
If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of our Common Stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner, the activities of the partnership, and certain determinations made at the applicable active employees’ ratepartner level. Partnerships holding our Common Stock and properthe partners in such partnerships should consult their tax advisors regarding the tax consequences to them of the Reverse Stock Split.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. HOLDERS OF OUR COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS, AS WELL AS TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT ARISING UNDER OTHER U.S. FEDERAL TAX LAWS (INCLUDING ESTATE AND GIFT TAX LAWS), OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION.
This summary addresses only stockholders that are U.S. Holders. For purposes of this discussion, a “U.S. Holder” is any beneficial owner of our Common Stock that, for U.S. federal income tax purposes, is or is treated as any of the following:
•an individual who is a citizen or resident of the United States;
•a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia;
•an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
•a trust that (i) is subject to the primary supervision of a U.S. court and all substantial decisions of which are subject to the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (ii) has a valid election in effect to continue COBRA health coverage, we will coverbe treated as a United States person for U.S. federal income tax purposes.
The Reverse Stock Split should constitute a “recapitalization” for U.S. federal income tax purposes. As a result, a U.S. Holder generally should not recognize gain or loss upon the Reverse Stock Split, except as described below with respect to cash received in lieu of fractional shares. A U.S. Holder’s aggregate tax basis in shares of Common Stock received pursuant to the Reverse Stock Split should equal such holder’s aggregate tax basis in the shares of Common Stock surrendered (excluding any portion of such basis that is allocated to any fractional share of Common Stock), and such holder’s holding period in the premiumshares of Common Stock received should include the holding period of the shares of Common Stock surrendered. Treasury Regulations promulgated under the Code provide detailed rules for allocating the tax basis and holding period of the shares of Common Stock surrendered to the shares of Common Stock received pursuant to the Reverse Stock Split. U.S. Holders holding shares of Common Stock that were acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.
A U.S. Holder who receives cash in lieu of a fractional share of Common Stock should be treated as first receiving such fractional share and then receiving cash in redemption of such fractional share. A U.S. Holder who receives cash in lieu of a fractional share in the Reverse Stock Split should recognize capital gain or loss in an amount equal to the difference between the amount of the cash received and the portion of such stockholder’s adjusted tax basis in the shares of Common Stock surrendered that we would have paid to provide health insuranceis allocated to the executive had such executive remained employed with us untilfractional share. Such capital gain or loss should be long-term capital gain or loss if the earliest of (A) 12 months (18 monthsU.S. Holder’s holding period for Mr. Souza) following termination, (B)Common Stock surrendered exceeded one year at the executive’s eligibility for group medical plan benefits under any other employer’s group medical plan or (C) the endEffective Time of the executive’s COBRA health continuation period, and (iii) the vestingReverse Stock Split. The deductibility of 100% of all stock options and other stock-based awards subject solely to time-based vesting held by the executive shall be accelerated.
The payments and benefits provided to each of the executives in connection with a change of control may not be eligible for a federal income tax deduction for the company pursuant to Section 280G of the Code and may subject the executive to an excise tax under Section 4999 of the Code. If the payments or benefits payable to the executive in connection with a change of control would becapital losses is subject to limitations. U.S. Holders should consult their tax advisors regarding the excise tax effects to them of receiving cash in lieu of fractional shares based on golden parachutes imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to the executive.
Bernard Ravina, M.D. Under our employment agreement with Dr. Ravina as in effect for 2022, Dr. Ravina was entitled to the same severance and change of control benefits as Mr. Kelly described above. Dr. Ravina resigned as our Chief Medical Officer effective August 1, 2022 and transitioned to a role as strategic advisor to the Company. In connection with his resignation, and subject to the Company’s receipt of a general release of claims and pursuant to the terms of a transition agreement, Dr. Ravina is entitled to receive (i) a cash payment equal to nine months of his base salary, to be paid in equal installments over the nine-month period ending May 1, 2023; (ii) continued time-based vesting of the unvested portions of Dr. Ravina’s outstanding equity awards during the period in which Dr. Ravina provides advisory services to the Company; and (iii) continued health insurance coverage (to the extent permitted under applicable law and the terms of the Company’s health insurance plan) during the period in which Dr. Ravina provides advisory services to the Company at the same cost as immediately before his resignation.
On August 30, 2021, we entered into a retention incentive award letter agreement with Dr. Ravina pursuant to which Dr. Ravina was entitled to receive a retention bonus, subject to Dr. Ravina’s continued employment with the Company, among other specified conditions. Pursuant to the agreement, Dr. Ravina received a lump sum payment of $333,333 in April 2022 and $27,778 per month for each of the three months thereafter that he was employed by us. Dr. Ravina forfeited his rights to any unearned portion of the retention bonus when he resigned in August 2022.
Nicole Sweeny. Under our employment agreement with Ms. Sweeny as in effect for 2022, Ms. Sweeny was entitled to the same severance and change of control benefits as Mr. Kelly described above. In connection with Ms. Sweeny’s cessation of employment effective March 31, 2023, she entered into a separation letter agreement with the Company. Under the separation letter agreement, subject to the Company’s receipt of a general release of claims and her continued compliance with certain restrictive covenants, Ms. Sweeny is entitled to receive (i) her base salary for a period of nine months from the separation date and (ii) continued health insurance coverage (to the extent permitted under applicable law and the terms of the Company’s health insurance plan) for a period of nine months from the separation date at the same cost as immediately before her separation.
their particular circumstances.
Outstanding Equity AwardsU.S. Holders (other than corporations and certain other exempt recipients) may be subject to information reporting with respect to any cash received in exchange for a fractional share of Common Stock in the Reverse Stock Split. U.S. Holders who are subject to information reporting and who do not provide a correct taxpayer identification number and other required information (such as by submitting a properly completed IRS Form W-9) may also be subject to backup withholding at 2022 Fiscal Year-Endthe applicable rate. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against the U.S. Holder’s U.S. federal income tax liability, if any, provided that the required information is properly furnished in a timely manner to the IRS. U.S. Holders should consult their tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.
The following table sets forth information regarding outstanding equity awards held by our named executive officersVote Required
Effective as of December 31, 2022. EachAugust 1, 2023, the DGCL was amended to add new Section 242(d)(2), which, among other things, provides that the voting standard for stockholders to approve an amendment to the certificate of incorporation to implement certain reverse stock splits is a majority of the awards set forth in the table below was granted under our 2017 Stock Incentive Plan or our 2020 Stock Option and Incentive Plan.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Option Awards | | Stock Awards |
| Name | | Vesting
Commencement
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(1) | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1) | | Option
Exercise
Price ($) | | Option
Expiration
Date | | Number of shares or units of stock that have not vested (#)(2) | | Market Value of shares of units of stock that have not vested ($) |
| Marcio Souza | | 04/20/2020 | | 636,897 | | 318,452 | | 5.59 | | 06/04/2030 | | — | | — |
| | 09/08/2020 | | 578,264 | | 449,773 | | 8.91 | | 09/13/2030 | | — | | — |
| | 02/12/2021 | | 84,700 | | 100,100 | | 52.53 | | 02/12/2031 | | 39,600 | | 94,248 |
| | 01/07/2022 | | — | | 259,000 | | 18.11 | | 01/07/2032 | | 74,000 | | 176,120 |
| | 06/22/2022 | | — | | 100,000 | | 2.12 | | 06/22/2032 | | — | | — |
| Tim Kelly | | 05/25/2021 | | 79,166 | | 120,834 | | 19.46 | | 05/25/2031 | | — | | — |
| | 01/07/2022 | | — | | 84,000 | | 18.11 | | 01/07/2032 | | 24,000 | | 57,120 |
| | 06/22/2022 | | — | | 65,000 | | 2.12 | | 06/22/2032 | | — | | — |
| Nicole Sweeny | | 08/10/2020 | | 133,618 | | 95,447 | | 8.27 | | 08/18/2030 | | — | | — |
| | 02/12/2021 | | 26,986 | | 31,894 | | 52.53 | | 02/12/2031 | | 12,600 | | 29,988 |
| | 01/07/2022 | | — | | 84,000 | | 18.11 | | 01/07/2032 | | 24,000 | | 57,120 |
| | 06/22/2022 | | — | | 65,000 | | 2.12 | | 06/22/2032 | | — | | — |
| Bernard Ravina, M.D. | | 08/21/2018 | | 44,644 | | — | | 2.27 | | 10/16/2028 | | — | | — |
| | 05/28/2020 | | 51,990 | | 28,517 | | 5.59 | | 06/03/2030 | | — | | — |
| | 09/08/2020 | | 52,569 | | 40,888 | | 8.91 | | 09/12/2030 | | — | | — |
| | 02/12/2021 | | 30,158 | | 35,642 | | 52.53 | | 02/12/2031 | | 14,100 | | 33,558 |
| | 01/07/2022 | | — | | 77,000 | | 18.11 | | 01/07/2032 | | 22,000 | | 52,360 |
| | 06/22/2022 | | — | | 65,000 | | 2.12 | | 06/22/2032 | | — | | — |
_________________________
(1)The stock options vest over four years, with 25%votes cast. Therefore, approval of the total shares vesting onReverse Stock Split Proposal requires the first anniversaryaffirmative vote of the vesting commencement date and the remainder vesting in 36 approximately equal monthly installments.
(2)Represents restricted stock units that vest in equal annual installments on eachholders of a majority of the first four anniversariesvotes cast at the Special Meeting.
Recommendation of the vesting commencement date.
Pay Versus Performance
In accordance with the SEC’s disclosure requirements regarding pay versus performance, or PVP, this section presents the SEC-defined “Compensation Actually Paid,” or CAP. Also required by the SEC, this section compares CAP to various measures used to gauge performance at Praxis.
Compensation decisions at Praxis are made independentlyBoard of disclosure requirements. CAP is a supplemental measure to be viewed alongside performance measures as an addition to the philosophy and strategy of compensation-setting discussed elsewhere in the overview of the executive compensation program, not in replacement.
Pay Versus Performance Table - Compensation Definitions
Salary, Bonus, Non-Equity Incentive Plan Compensation, and All Other Compensation are each calculated in the same manner for purposes of both CAP and SCT, or Summary Compensation Table, values. The primary difference between the calculation of CAP and SCT total compensation is “Stock Awards” and “Option Awards.”Directors
| | | | | | | | | | | | | | | | | |
| | SCT Total | | CAP | |
Stock and Option Awards | | Grant date fair value of stock and option awards granted during the year | | Year over year change in the fair value of stock and option awards that are unvested as of the end of the year, or vested or were forfeited during the yearOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF AMENDMENTS TO OUR AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT. |
Pay Versus Performance Table
In accordance with the SEC’s new PVP rules, the following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2021 and 2022, and our financial performance for each such fiscal year:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year (1) | |
Summary Compensation Table Total for PEO ($) | |
Compensation Actually Paid to PEO ($)(2)(3) | | Average Summary Compensation Table Total for Non-PEO NEOs ($) | |
Average Compensation Actually Paid to Non-PEO NEOs ($)(2)(3) | | Value of Initial Fixed $100 Investment Based on: Total Shareholder Return ($) | |
GAAP
Net Income ($)(4) |
| 2022 | | 6,028,078 | | -17,643,206 | | 2,450,241 | | -1,656,422 | | 4.33 | | -214 |
| 2021 | | 10,905,820 | | -62,152,872 | | 4,118,514 | | -6,315,773 | | 35.81 | | -167 |
_________________________
(1)The PEO (CEO) in both reporting years is Marcio Souza. The non-PEO NEOs in the 2022 reporting year are Tim Kelly, Nicole Sweeny and Bernard Ravina. The non-PEO NEOs in the 2021 reporting year are Nicole Sweeny and Bernard Ravina.
(2)The CAP was calculated beginning with the PEO’s SCT total. The following amounts were deducted from and added to the applicable SCT total compensation:
| | | | | | | | | | | | | | | | | |
| 2022 | | 2021 |
| PEO ($) | Average Non-PEO NEOs ($) | | PEO ($) | Average Non-PEO NEOs ($) |
| |
| |
| Summary Compensation Table Total | 6,028,078 | 2,450,241 | | 10,905,820 | 4,118,514 |
Less Change in Pension Value Reported in Summary Compensation Table | 0 | 0 | | 0 | 0 |
Less values of Stock Awards and Option Awards Reported in Summary Compensation Table for the Covered Year | 4,989,560 | 1,665,658 | | 9,657,384 | 3,407,225 |
Plus Fair Value of Equity Awards Granted During Fiscal Year that are Outstanding and Unvested at End of Year | 735,325 | 262,809 | | 3,730,538 | 1,314,489 |
Plus (Less) Change in Fair Value of Equity Awards Granted in Any Prior Fiscal Year that are Outstanding and Unvested at End of Year | -13,095,416 | -1,762,663 | | -43,901,234 | -5,177,507 |
Plus Fair Value at Vesting Date of Equity Awards Granted and Vested During the Fiscal Year | 0 | 0 | | 0 | 0 |
Plus (Less) Change in Fair Value of Equity Awards granted in Prior Years that Vested During the Fiscal Year | -6,321,633 | -941,151 | | -23,230,612 | -3,164,044 |
Less Fair Value of Equity Awards Granted in Prior Year that were Forfeited During the Fiscal Year | 0 | 0 | | 0 | 0 |
Plus Value of Dividends or Other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | 0 | 0 | | 0 | 0 |
| Compensation Actually Paid | -17,643,206 | -1,656,422 | | -62,152,872 | -6,315,773 |
(3)The fair value of stock options reported for CAP purposes in columns (C) and (E) is estimated using a Black-Scholes option pricing model for the purposes of this PVP calculation in accordance with the SEC rules. This model uses both historical data and current market data to estimate the fair value of options and requires several assumptions. The assumptions used in estimating fair value for awards granted during 2021-2022 are as follows:
| | | | | | | | | | | | | | |
| Grant Year | | 2022 | | 2021 |
| Volatility | | 86.34 – 90.35% | | 86.71 – 92.49% |
| Expected life (in years) | | 2.16 – 9.02 years | | 2.80 – 9.12 years |
| Expected dividend yield | | 0.00% | | 0.00% |
| Risk-free rate | | 1.21 – 4.22% | | 0.29 – 1.50% |
(4)Values shown are in millions.
Narrative DisclosurePROPOSAL 2 - APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING TO A LATER DATE OR DATES, IF NECESSARY OR APPROPRIATE, TO PERMIT FURTHER SOLICITATION AND VOTE OF PROXIES IN THE EVENT THAT THERE ARE INSUFFICIENT VOTES FOR, OR OTHERWISE IN CONNECTION WITH, THE APPROVAL OF PROPOSAL 1
General
If the number of shares of Common Stock voted in favor of Proposal No. 1 is insufficient to Pay Versus Performance
Relationship between Pay and TSR
The graphs below reflectapprove the relationship betweenReverse Stock Split, the PEO and Average Non-PEO NEO CAP andBoard believes it is in the best interests of the Company’s cumulative indexed Total Shareholder Return,stockholders to enable the Board to continue to seek to obtain a sufficient number of additional votes to approve Proposal No. 1.
In the Adjournment Proposal, we are asking stockholders to authorize the holder of any proxy solicited by the Board to vote in favor of adjourning the Special Meeting or TSR, (assuming an initial fixed investmentany adjournment or postponement thereof. If our stockholders approve this proposal, we could adjourn the Special Meeting, and any adjourned session of $100) for the fiscal years ended December 31, 2021 and 2022:Special Meeting, to use the additional time to solicit additional proxies in favor of Proposal No. 1.
CEO Pay vs Performance: Total Shareholder Return (12/31/20 to 12/31/22)Vote Required
Average Other NEO Pay vs Performance: Total Shareholder Return (12/31/20 to 12/31/22)
Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast on the matter affirmatively or negatively at the Special Meeting.
Relationship between Pay and Net Income (GAAP)
The graph below reflectsRecommendation of the relationship between the PEO and Average Non-PEO NEO CAP and the Company’s GAAP Net Income for the applicable reporting year.
Board of Directors
DIRECTOR COMPENSATION
Non-Employee Director Compensation Policy
Our non-employee director compensation policy enables us to attract and retain, on a long-term basis, highly qualified non-employee directors. Under the policy, each director who is not an employee is paid cash compensation as set forth below:
| | | | | | | | | | | | | | |
| Annual Retainer |
Board of Directors: | |
Members | $40,000 |
Additional retainer for non-executive chair | $35,000 |
Audit Committee: | |
Members (other than chair) | $8,000 |
Retainer for chair | $16,000 |
Compensation Committee: | |
Members (other than chair) | $6,000 |
Retainer for chair | $12,000 |
Nominating and Corporate Governance Committee: | |
Members (other than chair) | $4,000 |
Retainer for chair | $8,000 |
Science & Technology Committee: | |
Members (other than chair) | $4,000 |
Retainer for chair | $8,000OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE ADJOURNMENT OF THE MEETING IF NECESSARY. |
In addition, the non-employee director compensation policy provides that, upon initial election to our Board of Directors, each non-employee director will be granted an option to purchase a number of shares equal to 0.1% of the total number of shares of our common stock issued and outstanding on the grant date, or the Initial Grant. The Initial Grant vests in equal monthly installments over three years from the grant date, subject to continued service as a director through the applicable vesting date. Furthermore, each non-employee director who continues as a non-employee director following the Annual Meeting will be granted an annual option to purchase a number of shares equal to 0.05% of the total number of shares of our common stock issued and outstanding on the grant date, or the Annual Grant. The Annual Grant vests in 12 equal monthly installments, subject to continued service as a director through the applicable vesting date. Such awards are subject to full accelerated vesting upon the sale of the company.
We reimburse all reasonable out-of-pocket expenses incurred by non-employee directors in attending meetings of the Board of Directors and committees.
2022 Director Compensation Table
The following table presents the total compensation for each person who served as a non-employee member of our Board of Directors during the year ended December 31, 2022. Other than as set forth in the table and described more fully below, we did not pay any compensation, make any equity awards or non-equity awards to or pay any other compensation to any of the non-employee members of our Board of Directors in 2022 for their services as members of the Board of Directors.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash ($) | | Option
Awards
($)(1)(2) | | All Other
Compensation
($) | | Total ($) |
| Jeffrey Chodakewitz, M.D. | | 49,543 | | 142,821 | | — | | 192,364 |
| Merit Cudkowicz, M.D. | | 54,000 | | 142,821 | | — | | 196,821 |
| Jill DeSimone(3) | | 31,991 | | 335,325 | | — | | 367,316 |
| Dean Mitchell | | 80,000 | | 142,821 | | — | | 222,821 |
| Stefan Vitorovic(4) | | 34,543 | | 142,821 | | — | | 177,364 |
| Gregory Norden | | 62,000 | | 142,821 | | — | | 204,821 |
| William Young | | 64,000 | | 142,821 | | — | | 206,821 |
_____________________
(1)The amount reported represents the aggregate grant date fair value of stock options awarded during fiscal year 2022, calculated in accordance with FASB 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 11 of our consolidated financial statements included in our 2022 Annual Report. 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 shares of common stock.
(2)As of December 31, 2022, Dr. Chodakewitz held options to purchase 61,332 shares of our common stock, Dr. Cudkowicz held options to purchase 61,332 shares of our common stock, Ms. DeSimone held options to purchase 45,511 shares of our common stock, Mr. Mitchell held options to purchase 110,516 shares of our common stock, Mr. Norden held options to purchase 144,620 shares of our common stock and Mr. Young held options to purchase 147,250 shares of our common stock.
(3)Ms. DeSimone was appointed as a member of our Board of Directors in May 2022.
(4)Mr. Vitorovic resigned as a director in August 2022.
SECURITY OWNERSHIP OF CERTAIN RELATIONSHIPSBENEFICIAL OWNERS AND RELATED PARTY TRANSACTIONS
Other than the compensation agreements and other arrangements described under “Executive Compensation” and “Director Compensation” in this proxy statement and the transactions described below, since January 1, 2021, there has not been and there is not currently proposed, any transaction or series of similar transactions to which we were, or will be, a party in which the amount involved exceeded, or will exceed, the lesser of $120,000 or one percent of our average total assets at fiscal 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 capital stock or any member of the immediate family of, or entities affiliated with, any of the foregoing persons, had, or will have, a direct or indirect material interest.
Registration Rights
Pursuant to the terms of our Fourth Amended and Restated Investors’ Rights Agreement, dated as of July 24, 2020, as amended, or the Investors’ Rights Agreement, certain of our stockholders are entitled to rights with respect to the registration of their shares, which we refer to herein as registrable securities, under the Securities Act, including demand registration rights and piggyback registration rights.
Form S-1 Registration Rights
Under the terms of the Investors’ Rights Agreement, we are required, upon the request of holders holding at least a majority of the registrable securities then outstanding, to file a registration statement on Form S-1 registering the resale of such holders’ registrable securities and the registrable securities of such other holders who elect to have their shares registered; provided that the anticipated aggregate offering price, net of related fees and expenses, of the registrable securities registered on such registration statement would equal at least $10 million. We are required to effect only two registrations pursuant to this provision of the Investors’ Rights Agreement. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares.
Form S-3 Registration Rights
Pursuant to the Investors’ Rights Agreement, if we are eligible to file a registration statement on Form S-3, we are required, upon the request of holders holding at least a majority of the registrable securities then outstanding, to file a registration restatement on Form S-3 registering the resale of such holders’ registrable securities and the registrable securities of such other holders who elect to have their shares registered; provided that the anticipated aggregate offering price, net of related fees and expenses, of the registrable securities registered on such registration statement would equal at least $3 million. We are required to effect only two registrations in any twelve-month period pursuant to this provision of the Investors’ Rights Agreement. If the holders requesting registration intend to distribute their shares by means of an underwriting, the managing underwriter of such offering will have the right to limit the numbers of shares to be underwritten for reasons related to the marketing of the shares.
Piggyback Registration Rights
Subject to certain exceptions, if we register any of our securities either for our own account or for the account of security holders other than the holders party to the Investors’ Rights Agreements, the holders of shares of registrable securities are entitled to include their shares in the registration. If our proposed registration involves an underwriting, the managing underwriter of such offering will have the right to limit the number of shares to be underwritten for reasons related to the marketing of the shares.
Indemnification
The Investors’ Rights Agreement contains customary cross-indemnification provisions, under which we are obligated to indemnify holders of registrable securities in the event of material misstatements or omissions in the registration statement attributable to us, and they are obligated to indemnify us for material misstatements or omissions attributable to them.
Expiration of Registration Rights
The demand registration rights and short-form registration rights granted under the Investors’ Rights Agreement will terminate on the earliest to occur of: (i) the fifth anniversary of the completion of our initial public offering and (ii) as to each holder of registrable securities, such time as either Rule 144 as promulgated under the Securities Act or another similar exemption under the Securities Act is available for the sale of all of such holder’s shares without limitation during a three-month period without registration or such holder no longer holds any registrable securities.
Commercial Agreements with Related Parties
RogCon
In September 2019, we entered into a cooperation and license agreement with RogCon Inc., or RogCon, further described in our 2022 Annual Report under “Business—License Agreements.”
Alex Nemiroff, our General Counsel and Corporate Secretary, is a co-founder and Chief Executive Officer of RogCon.
Indemnification Agreements
We have entered into, and in the future plan to enter into, agreements to indemnify our directors and executive officers. These agreements, among other things, require us to indemnify these individuals for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on behalf of our company or that person’s status as a member of our Board of Directors to the maximum extent allowed under Delaware law.
Policies for Approval of Related Party Transactions
Our Board of Directors reviews and approves transactions with directors, officers and holders of five percent or more of our voting securities and their affiliates, each a related party. We have a formal written policy that our executive officers, directors, holders of more than five percent of any class of our voting securities, and any member of the immediate family of and any entity affiliated with any of the foregoing persons, are not permitted to enter into a related party transaction with us without the prior consent of our Audit Committee, or other independent members of our Board of Directors in the event it is inappropriate for our Audit Committee to review such transaction due to a conflict of interest. Any request for us to enter into a transaction with an executive officer, director, holders of more than 5% of any class of our voting securities, or any of their immediate family members or affiliates, in which the amount involved exceeds $120,000 must first be presented to our Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, our Audit Committee considers the relevant facts and circumstances available and deemed relevant to our Audit Committee, including, but not limited to, whether the transaction will be on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction.
PRINCIPAL STOCKHOLDERS
MANAGEMENT
The following table sets forth certain information known to us regarding beneficial ownership of our capital stock outstanding as of April 17,September 30, 2023 for:
•each person, or group of affiliated persons, who is known by us to be the beneficial owner of five percent or more of our outstanding common stock;Common Stock;
•each of our directors;
•each of our named executive officers; and
•all of our current directors and executive officers as a group.
We have determined beneficial ownership in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities as well as any shares of common stockCommon Stock that the person has the right to acquire within 60 days of April 17,September 30, 2023 through the exercise of stock options, vesting of restricted stock units or other rights. These shares are deemed to be outstanding and beneficially owned by the person holding those options, restricted stock units or other rights for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Each individual or entity shown on the table has furnished information with respect to beneficial ownership. Except as otherwise indicated below, the address of each officer, director and five percent stockholder listed below is c/o Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, MA 02110.
The percentage of beneficial ownership in the table below is based on 57,962,367128,547,336 shares of common stockCommon Stock deemed to be outstanding as of April 17,September 30, 2023.
| | | | | | | | | | | | | | | | | | | | |
| | | | Shares of Common Stock Beneficially Owned | | | Percentage of Common Stock Beneficially Owned |
| Greater than 5% Stockholders | | | | | | |
| Entities affiliated with Venrock(1) | | | 12,354,410 | | | 9.6% |
| Entities affiliated with Point72(2) | | | 11,427,517 | | | 8.9% |
| Cormorant Global Healthcare Master Fund, LP(3) | | | 9,500,000 | | | 7.4% |
| Entities affiliated with Sphera(4) | | | 8,764,334 | | | 6.8% |
| Entities affiliated with Adage(5) | | | 7,930,638 | | | 6.2% |
| Directors and Named Executive Officers | | | | | | |
| Dean Mitchell(6) | | | 183,964 | | | * |
| Jeffrey Chodakewitz, M.D.(7) | | | 68,052 | | | * |
Merit Cudkowicz, M.D.(8) | | | 68,052 | | | * |
| Jill DeSimone(9) | | | 34,830 | | | * |
| Gregory Norden(10) | | | 145,126 | | | * |
| William Young(11) | | | 173,073 | | | * |
| Marcio Souza(12) | | | 2,365,923.75 | | | 1.8% |
| Timothy Kelly(13) | | | 269,074 | | | * |
| All directors and executive officers as a group (7 persons)(14) | | | 3,554,739.75 | | | 2.7% |
| | | | | | | | | | | | | | | | | |
| | | COMMON STOCK BENEFICIALLY OWNED |
| | | SHARES | | PERCENTAGE |
| 5% or Greater Stockholders | | | |
| Velan Capital Master Fund LP (1) | 5,185,000 | | 8.9% |
| Clarus Lifesciences III, L.P. (2) | 4,894,109 | | 8.4% |
| Entities affiliated with Avidity (3) | 4,100,000 | | 7.1% |
| Entities affiliated with Eventide (4) | 3,518,062 | | 6.1% |
| Tri Locum Partners GP LLC (5) | 3,436,712 | | 5.9% |
| Blackrock, Inc. (6) | 2,971,762 | | 5.1% |
| Directors, Named Executive Officers and Other Executive Officers | | | |
| Dean Mitchell (7) | 165,074 | | * |
| Jeffrey Chodakewitz, M.D. (8) | 50,622 | | * |
| Merit Cudkowicz, M.D. (9) | 49,551 | | * |
| Jill DeSimone (10) | 15,170 | | * |
| Gregory Norden (11) | 125,468 | | * |
| William Young (12) | 153,085 | | * |
| Marcio Souza (13) | 2,036,083.75 | | 3.4% |
| Timothy Kelly (14) | 200,621 | | * |
| Nicole Sweeny (15) | 256,404 | | * |
| Bernard Ravina (16) | 248,799 | | * |
| All executive officers and directors as a group (9 persons) (17) | 2,984,119.75 | | 4.9% |
* Represents beneficial ownership of less than one percent.
______________________ | | |
| * Represents beneficial ownership of less than one percent. |
(1)Based solely on information contained in a Schedule 13D13G filed jointly by VelanVenrock Healthcare Capital Master Fund LP, or Velan Master,Partners III, L.P., VHCP Co-Investment Holdings III, LLC, Venrock Healthcare Capital Partners EG, L.P., VHCP Management III, LLC, VHCP Management EG, LLC (together, the "Venrock Entities"), Nimish Shah and Bong
Koh with the SEC on March 20,June 30, 2023. Velan Master directly beneficially owns 5,185,000 shares. VelanThe Venrock Entities and Messrs. Shah and Koh share voting and dispositive power with respect to 12,354,410 shares of common stock, of which (i) 1,394,530 shares and 1,853,445 shares issuable upon the exercise of immediately exercisable warrants are held by Venrock Healthcare Capital Partners III, L.P.; (ii) 139,505 shares and 185,415 shares issuable upon the exercise of warrants are held by VHCP Co-Investment Holdings III, LLC; and (iii) 3,770,375 shares and 5,011,140 shares issuable upon the exercise of warrants are held by Venrock Healthcare Capital Partners EG, L.P. VHCP Management III, LLC or Velan GP, is the general partner of Velan Master. VelanVenrock Healthcare Capital Investment Management LP, or Velan Capital, isPartners III, L.P. and the investment manager of Velan Master. Velan CapitalVHCP Co-Investment Holdings III, LLC. VHCP Management EG, LLC or Velan IM GP, is the general partner of Velan Capital. Adam MorganVenrock Healthcare Capital Partners EG, L.P. Messrs. Shah and Balaji VenkataramanKoh are Managing Membersthe voting members of VHCP Management III, LLC and VHCP Management EG, LLC. The addresses for each of Velan GPthe Venrock Entities and Velan IM GP.Messrs. Shah and Koh are 7 Bryant Park, 23rd Floor, New York, NY 10018 and 3340 HIllview Avenue, Palo Alto, CA 94304.
(2)Based solely on information contained in a Schedule 13G filed jointly by Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., Point72 Biotech Private Investments, LLC, Differentiated Ventures Investments, LLC, 72 Investment Holdings, LLC and Steven A. Cohen with the SEC on June 26, 2023. Point72 Associates, LLC directly holds 10,438,522 shares of common stock. Point72 Asset Management, L.P. maintains investment and voting power with respect to securities held by Point72 Associates, LLC. Point72 Capital Advisors, Inc. is the general partner of Point72 Asset Management, L.P and may be deemed to share beneficial ownership of the shares of common stock of which Point72 Asset Management, L.P. may be deemed the beneficial owner. Point72 Biotech Private Investments, LLC directly holds 988,995 shares of common stock. Differentiated Ventures Investments, LLC is the managing member of Point72 Biotech Private Investments, LLC and may be deemed to share beneficial ownership over the shares of common stock held by Point72 Biotech Private Investments, LLC. 72 Investment Holdings, LLC is the sole member of Differentiated Ventures Investments, LLC and may be deemed to share beneficial ownership of the shares of common stock of which Differentiated Ventures may be deemed the beneficial owner. Mr. Cohen controls each of Point72 Asset Management, L.P., Point72 Capital Advisors, Inc., Point72 Biotech Private Investments, LLC, Differentiated Ventures Investments, LLC and 72 Investment Holdings, LLC. The address of the principal business office of Velan MasterPoint72 Asset Management, L.P., Point72 Capital Advisors, Inc., Point72 Biotech Private Investments, LLC, Differentiated Ventures Investments, LLC, 72 Investment Holdings, LLC, and Mr. Cohen is 89 Nexus Way, Camana Bay, Grand Cayman KY1-9009, Cayman Islands. The address for each of Velan GP, Velan Capital, Velan IM GP and Messrs. Morgan and Venkataraman is1055b Powers Place, Alpharetta, Georgia 30009.72 Cummings Point Road, Stamford, CT 06902.
(2)(3)Based solely on information contained in a Schedule 13G/A filed jointly by Clarus Lifesciences III, L.P., or Clarus Lifesciences, BSOF ParallelCormorant Global Healthcare Master Fund, L.P., or BSOF, Clarus Ventures IIILP, Cormorant Global Healthcare GP, L.P., or Clarus Ventures, Blackstone Clarus III L.L.C., or Blackstone Clarus, Blackstone Strategic Opportunity Associates L.L.C., or Blackstone Strategic, Blackstone Alternative Solutions L.L.C., or Blackstone Alternative, Blackstone Holdings I L.P., or Holdings I, Blackstone Holdings II L.P., or Holdings II, Blackstone Holdings I/II GP L.L.C., or Holdings I/II, Blackstone Inc., or Blackstone, Blackstone GroupLLC, Cormorant Asset Management, L.L.C., or Blackstone Group,LP and Stephen A. SchwarzmanBihua Chen with the SEC on February 11, 2022. Clarus Lifesciences directly holds 4,894,109 sharesJuly 3, 2023. Each of common stockCormorant Global Healthcare Master Fund, LP (the "Master Fund"), Cormorant Asset Management, LP and BSOF holds zeroBihua Chen have shared voting and dispositive power over 9,500,000 shares of common stock. Clarus Ventures isCormorant Global Healthcare GP, LLC serves as the general partner of Clarus Lifesciences. Blackstone Clarus isthe Master Fund. Cormorant Asset Management, LP serves as the investment manager to the Master Fund. Bihua Chen serves as the managing member of Cormorant Global Healthcare GP, LLC and the general partner of Clarus. The sole member of Blackstone Clarus is Holdings. Blackstone Strategic is the general partner of BSOF. Holdings is the sole member of Blackstone Strategic. Blackstone Alternative is the investment manager of BSOF. Holdings I is the sole member of Blackstone Alternative. The general partner of Holdings I and Holdings II is Holdings I/II. The sole member of Holdings I/II is Blackstone. The sole holderCormorant Asset Management, LP. Each of the Series II preferred stockCormorant funds and Ms. Chen disclaims beneficial ownership of Blackstone is Blackstone Group. Blackstone Group is wholly-owned by its senior managing directors and controlled by its founder, Stephen A. Schwarzman. Each of such entities and Mr. Schwarzman may be deemed to beneficially own the shares of common stock beneficially owned by Clarus Lifesciences directly or indirectly controlled by it or him, but each (other than Clarusreported herein except to the extent of its direct ownership) disclaims beneficial ownership of such shares.or her pecuniary interest therein. The address for each of Clarus Lifesciences and Clarus Ventures is c/o Clarus Ventures LLC, 101 Main Street, Suite 1210, Cambridge, MA 02142. The address forthe principal business office of each of the other entitiesCormorant funds and Mr. SchwarzmanMs. Chen is c/o The Blackstone Group Inc., 345 Park Avenue, New York, NY 10154.
(3)Based solely on information contained in a Schedule 13G filed by Avidity Partners Management LP, or APM LP, with the SEC on February 2, 2023. According to this Schedule 13G, APM LP, Avidity Partners Management (GP) LLC, or APM GP, Avidity Capital Partners Fund (GP) LP, or ACPF, Avidity Capital Partners (GP) LLC, or ACP, share voting and dispositive power with respect to 4,100,000 shares, of which 3,600,234 shares are further subject to shared voting and dispositive power with Avidity Master Fund LP, or AMF and together with APM LP, APM GP, ACPF and ACP, the Avidity Funds. APM GP is the general partner of APM LP. ACP is the general partner of ACPF. ACPF is the general partner of AMF. David Witzke and Michael Gregory are Managing Members of APM GP and ACP and directly or indirectly control the Avidity Funds and as a result may be deemed to have voting and dispositive power over the securities held directly by the Avidity Funds. The address for each of the Avidity Funds, Mr. Witzke and Mr. Gregory is 2828 North Harwood200 Clarendon Street, Suite 1220, Dallas, Texas 75201.52nd Floor, Boston, MA 02116.
(4)Based solely on information contained in a Schedule 13G/A filed jointly by Eventide AssetSphera Funds Management LLCLtd., Sphera Global Healthcare GP Ltd. and Sphera Global Healthcare Management LP with the SEC on February 14, 2023. Eventide Asset Management, LLC, a Delaware limited liability company, is the beneficial ownerJune 27, 2023 who have shared voting and dispositive power over 8,764,334 shares of 3,518,062common stock. Sphera Global Healthcare Master Fund directly holds 2,000,000 shares of common stock, by virtue of being thewhich has delegated its investment advisermanagement authority to Sphera Global Healthcare Management LP (the "Management Company"). Sphera Biotech Master Fund, L.P. directly holds 6,764,334, which has delegated its investment management authority to the Eventide Gilead FundManagement Company. The Management Company is managed, controlled and operated by its general partner, Sphera Global Healthcare GP Ltd., the Eventide Healthcare & Life Sciences Fundshares of which are registered investment companies, orowned 90% by Sphera Funds Management Ltd. As a result, Sphera Global Healthcare GP Ltd. and Sphera Funds Management Ltd. may be deemed to have voting and dispositive power over the Funds. The Eventide Gilead Fund directly holds 1,051,275 shares of common stock andsecurities held by the Eventide Healthcare & Life Sciences Fund directly holds 2,466,787 shares of common stock.Management Company. The address forof the principal business office of Sphera Funds Management Ltd., Sphera Global Healthcare GP Ltd. and Sphera Global Healthcare Management LP is One International Place, Suite 4210, Boston, Massachusetts 02110.4 Itzak Sade, Building A, 29th Floor, Tel Aviv 6777504, Israel.
(5)Based solely on information contained in a Schedule 13G filed jointly by Tri LocumAdage Capital Partners, LP, or the Adviser, Tri LocumL.P., Adage Capital Partners GP, LLC, or the Adviser GPL.L.C., Adage Capital Management, L.P., Robert Atchinson and Dr. Prashanth Jayaram, or together, the Reporting Persons,Phillip Gross with the
SEC on April 27,June 30, 2023. Tri Locum Healthcare Master Fund LP, or the Fund,Adage Capital Partners, L.P. ("ACP"), Adage Capital Partners GP, L.L.C. ("ACPGP"), Adage Capital Management, L.P. ("ACM"), Robert Atchinson and separately managed accounts managed by the Adviser, or the Accounts, directly beneficially own 3,436,712Phillip Gross have shared voting and dispositive power over 7,930,638 shares of common stock asstock. ACPGP is general partner of April 17, 2023. The AdviserACP. ACM is the investment manager of the FundACP. Messrs. Atchinson and the Accounts. The Adviser GP is theGross are managing members of Adage Capital Advisors, LLC, managing member of ACPGP, and managing members of Adage Capital Partners, LLC, general partner of the Adviser. Tri Locum Healthcare GP LLC, or the Fund GP, is the general partner of the Fund. Dr. Jayaram is the managing member of the Adviser GP and the Fund GP. The Adviser, the Adviser GP and Dr. Jayaram may be deemed to beneficially own the Common Stock directly beneficially owned by the Fund and the Accounts. The Fund GP may be deemed to beneficially own the Common Stock directly beneficially owned by the Fund. Each Reporting Person disclaims beneficial ownership with respect to any Common Stock other than the Common Stock directly beneficially owned by such Reporting Person.ACM. The address of the Reporting Personsprincipal business office of each of the Adage funds and Messrs. Atchinson and Gross is 287 Park Avenue South, 2nd200 Clarendon Street, 52nd Floor, New York, New York 10010.Boston, MA 02116.
(6)Based solely on information contained in a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 1, 2023. According to this Schedule 13G/A, BlackRock, Inc. has sole voting power over 2,895,474 shares of common stock and sole dispositive power over 2,971,762 shares of common stock. The address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.
(7)Consists of (i) 75,000 shares of common stock and (ii) 90,074108,964 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(8)(7)Consists of 50,62268,052 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(9)(8)Consists of 49,55168,052 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(10)(9)Consists of 15,17034,830 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(11)(10)Consists of (i) 2,826 shares of common stock and (ii) 122,642142,300 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(12)(11)Consists of (i) 28,473 shares of common stock and (ii) 124,612144,600 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(13)(12)Consists of (i) 144,399156,086 shares of common stock held directly by Mr. Souza, (ii) 35,001.7545,001.75 shares held indirectly by Mr. Souza's spouse and (iii) 1,856,6832,164,836 shares of common stock underlying options exercisable by Mr. Souza within 60 days of April 17,September 30, 2023.
(14)(13)Consists of (i) 28,41640,099 shares of common stock and (ii) 172,205228,975 shares of common stock underlying options exercisable within 60 days of April 17,September 30, 2023.
(15)(14)Consists of (i) 12,219377,245.75 shares of common stock and (ii) 244,1853,177,494 shares of common stock underlying options exercisable within 60 days of April 17, 2023. Ms. Sweeny ceased serving as our Chief Commercial Officer and as an employee effective March 31,September 30, 2023.
(16)Consists of (i) 70,041 shares of common stock and (ii) 178,758 shares of common stock underlying options exercisable within 60 days of April 17, 2023. Dr. Ravina resigned as our Chief Medical Officer effective August 1, 2022 and transitioned to a role as strategic advisor to the Company.
(17)Consists of (i) 332,189.75 shares of common stock and (ii) 2,651,930 shares of common stock underlying options exercisable within 60 days of April 17, 2023.
INFORMATION ABOUT OUR INDEPENDENT ACCOUNTANTS
Ernst & Young LLP has served as our independent auditor since 2019. Praxis incurred the following fees from Ernst & Young LLP for the audit of the consolidated financial statements and for other services provided during the years ended December 31, 2022 and 2021.
| | | | | | | | | | | | | | | | | |
| | | For the Year Ended |
| | | 2022 | | 2021 |
| Audit fees(1) | $796,500 | | $1,143,241 |
| Audit-related fees(2) | — | | — |
| Tax fees(3) | 98,169 | | 87,730 |
| All other fees(4) | 5,180 | | 5,180 |
| Total fees | | | 899,849 | | $1,236,151 |
______________________
(1) Audit fees consist of fees for professional services rendered in connection with the audit of our annual consolidated financial statements, the review of the interim consolidated financial statements included in quarterly reports, services rendered in connection with the secondary public offering, and services that are normally provided by Ernst & Young LLP, such as comfort letters, in connection with statutory and regulatory filings or engagements.
(2) There were no audit-related fees billed in 2022 or 2021.
(3) Tax fees consist of fees for professional services rendered for tax return preparation and tax advisory services.
(4) All other fees are related to licensing fees paid to Ernst & Young LLP for access to its proprietary accounting research database.
Audit Committee Pre-Approval Policy and Procedures
The Audit Committee has adopted a policy requiring pre-approval of all audit and non-audit related services to be performed by our independent auditor regardless of amount. These services may include audit services, audit-related services, tax services and other related services. Ernst & Young LLP and management are required to periodically report to the Audit Committee regarding the extent of services provided by Ernst & Young LLP in accordance with this pre-approval and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is appointed by our Board of Directors to assist our Board of Directors in fulfilling its oversight responsibilities with respect to (1) the integrity of Praxis’ financial statements and financial reporting process and systems of internal controls regarding finance, accounting, and compliance with legal and regulatory requirements, (2) the qualifications, independence, and performance of Praxis’ independent registered public accounting firm, Ernst and Young LLP, (3) the performance of Praxis’ internal audit function, if any, and (4) other matters as set forth in the charter of the Audit Committee approved by our Board of Directors.
Management is responsible for the preparation of Praxis’ financial statements and the financial reporting process, including its system of internal control over financial reporting and its disclosure controls and procedures. Ernst and Young LLP is responsible for performing an audit of Praxis’ financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or the PCAOB, and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.
In connection with these responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements of Praxis for the fiscal year ended December 31, 2022. The Audit Committee also discussed with Ernst and Young LLP the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee received written communications and the letter from Ernst and Young LLP confirming their independence as required by the applicable requirements of the PCAOB and has discussed with Ernst and Young LLP their independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to our Board of Directors that the audited consolidated financial statements of Praxis be included in Praxis’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022, that was filed with the SEC. The information contained in this report shall not be deemed to be (1) “soliciting material,” (2) “filed” with the SEC, (3) subject to Regulations 14A or 14C of the Exchange Act, or (4) subject to the liabilities of Section 18 of the Exchange Act. This report shall not be deemed incorporated by reference into any of our other filings under the Exchange Act or the Securities Act, except to the extent that we specifically incorporate it by reference into such filing.
| | |
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF PRAXIS PRECISION MEDICINES, INC. |
|
Gregory Norden, Chair |
Merit Cudkowicz, M.D. |
Jill DeSimone |
April 28, 2023
STOCKHOLDER PROPOSALSADDITIONAL INFORMATION
Other Matters
Our Bylaws provide that only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to a notice of meeting. Accordingly, no business other than the proposals set forth herein shall be conducted at the Special Meeting.
Stockholder Recommendations for Director Nominations and Other Proposals
Stockholders intending to present a proposal at the 2024 Annual Meeting of Stockholders, but not to include the proposal in our proxy statement, or to nominate a person for election as a director, must comply with the requirements set forth in our Bylaws. Our Bylaws provide that, for nominations of persons for election to our Board of Directors or other proposals to be considered at an annual meeting of our stockholders, a stockholder must give written notice to our Corporate Secretary at Praxis Precision Medicines, Inc., 99 High Street, 30th Floor, Boston, Massachusetts 02110, which notice must be received by our Corporate Secretary not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. However, our Bylaws also provide that in the event the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice must be received by our Corporate Secretary not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Any nomination must, among other requirements as specified in our Bylaws, include all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors in election contests or is otherwise required under Regulation 14A of the Exchange Act, the person’s written consent to be named in the proxy statement and to serve as a director if elected and such information as we might reasonably require to determine the eligibility of the person to serve as a director. As to other business, the notice must include a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, the text, if any, of any resolutions or Bylaw amendment proposed for adoption, and any material interest in such business of such stockholder (and the beneficial owner). The proposal must be a proper subject for stockholder action. In addition, to make a nomination or proposal, the stockholder must be of record at the time the notice is made and must provide certain information regarding itself (and the beneficial owner), including the name and address, as they appear on our books, of the stockholder proposing such business, the class or series and number of shares of our capital stock which are, directly or indirectly, owned beneficially or of record by the stockholder proposing such business or its affiliates or associates (as such terms are defined in Rule 12b-2 promulgated under the Exchange Act) and certain additional information as specified in our Bylaws.
Requirements for Stockholder Proposals to be Considered for Inclusion in the Company’s Proxy Materials
In addition to satisfying the foregoing requirements under our Bylaws, 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 later than April 12, 2024.
In addition to the requirements stated above, any stockholder who would like to have a proposal considered for inclusion in our 2024 proxy statement must submit the proposal in accordance with the procedures outlined in Rule 14a-8 of the Exchange Act so that it is received by us no later than December 29, 2023. However, if the date of the 2024 annual meeting of stockholders is changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy materials for the 2024 annual meeting of stockholders. SEC rules set standards for eligibility and specify the types of stockholder proposals that may be excluded from a proxy statement. Stockholder proposals should be addressed to 99 High Street, 30th Floor, Boston, Massachusetts 02110, Attention: Corporate Secretary.
OTHER MATTERS
Access to Reports and Other Information
We are subject to the informational requirements of the Exchange Act, and, in accordance therewith, file annual, quarterly and current reports, proxy statements and other information with the SEC. The Company’s SEC filings are available to the public at the website maintained by the SEC at http://www.sec.gov. You may also read and copy any document the Company files with the SEC on our website at http://praxismedicines.com.
We will provide without charge to each person to whom a copy of the proxy statement is delivered, upon the written or oral request of any such persons, additional copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC. Requests for such copies should be addressed to:
Praxis Precision Medicines, Inc.
99 High Street, 30th Floor
Boston, Massachusetts 02110
(617) 300-8460
You should rely on the information contained in this document to vote your shares at the Annual Meeting. The Company has not authorized anyone to provide you with information that is different from what is contained in this document. This document is dated April 28, 2023. You should not assume that the information contained in this document is accurate as of any date other than that date, and the mailing of this document to stockholders at any time after that date does not create an implication to the contrary. This proxy statement does not constitute a solicitation of a proxy in any jurisdiction where, or to or from any person to whom, it is unlawful to make such proxy solicitations in such jurisdiction.
Important Notice Regarding Delivery of Stockholder Documents
Stockholders of Praxis common stockour Common Stock who share a single address, may receive only one copy of this proxy statement Notice of Internet Availability and our 2022 Annual Report, unless the Company has received contrary instructions from any stockholder at that address. This practice,
known as “householding,” is designed to reduce the Company’s printing and postage costs. However, if any stockholder residing at such an address wishes to receive a separate copy of this proxy statement, Notice of Internet Availability or our 2022 Annual Report, he or she may contact us at Praxis Precision Medicines, Inc. by telephone at (617) 300-8460 or by mail at 99 High Street, 30th Floor, Boston, Massachusetts 02110, Attention: Corporate Secretary, and the Companywe will deliver those documents to such stockholder promptly upon receiving the request. Any such stockholder may also contact our Corporate Secretary using the above contact information if he or she would like to receive separate proxy statements, noticenotices of internet availability of proxy material and annual reports in the future. If you are receiving multiple copies of our annual reports, notice of internet availability andthis proxy statements,statement, you may request householding in the future by contacting our Corporate Secretary.
Other MattersSolicitation of Proxies
OurThe accompanying proxy is solicited by and on behalf of our Board, whose notice of Directors does not know of any other mattersmeeting is attached to be brought before the Annual Meeting. If any other matters not mentioned in this proxy statement, are properly brought beforeand the meeting,entire cost of our solicitation will be borne by us.
In addition to the individuals nameduse of mail, proxies may be solicited by telephone, e-mail and facsimile by our directors, officers and other employees who will not be specially compensated for these services. We will also request that brokers, banks and other nominees forward soliciting materials to the beneficial owners of shares held of record by such brokers, banks and other nominees. We will reimburse such persons for their reasonable expenses in the enclosed proxy intend to use their discretionary voting authority under the proxy to vote the proxy in accordance with their best judgment on those matters.connection therewith.
We intendhave also engaged Morrow Sodali LLC to file a Proxy Statement and WHITE proxy card with the SECassist in connection with the solicitation of proxies and provide related advice and informational support for our 2023 Annual Meetinga services fee and the reimbursement of Stockholders. Stockholders may obtain our Proxy Statement (and any amendments and supplements thereto) and other documents as and when filed by us withcustomary disbursements that are not expected to exceed $20,000 in the SEC without charge from the SEC’s website at: www.sec.gov.aggregate.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING VIRTUALLY, WE URGE YOU TO SUBMIT A PROXY FOR YOUR SHARES VIA THE TOLL-FREE TELEPHONE NUMBER OR OVER THE INTERNET, OR BY SIGNING, DATING AND MAILING THE PROXY CARD IN THE ENCLOSED RETURN ENVELOPE.
ANNEX A
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PRAXIS PRECISION MEDICINES, INC.
Praxis Precision Medicines, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY THAT:
1.That the Board of Directors of the Corporation duly adopted resolutions recommending and declaring advisable that the Amended and Restated Certificate of Incorporation of the Corporation, be further amended and that such amendment be submitted to the stockholders of the Corporation for their consideration, as follows:
RESOLVED, that the following paragraph be inserted immediately prior to the first sentence of Article IV of the Amended and Restated Certificate of Incorporation:
“Effective at 5:00 p.m., Eastern time, on the date this Certificate of Amendment to the Amended and Restated Certificate of Incorporation is filed with the Secretary of State of the State of Delaware (the “Effective Time”), a one-for-[ ]1 reverse stock split of the Common Stock (as defined below) shall become effective, pursuant to which each [ ]1 share of Common Stock issued and held of record by each stockholder of the Corporation immediately prior to the Effective Time shall be reclassified and combined into one validly issued, fully paid and nonassessable share of Common Stock automatically and without any action by the holder thereof upon the Effective Time and shall represent one share of Common Stock from and after the Effective Time (such reclassification and combination of shares, the “Reverse Stock Split”). No fractional shares of Common Stock shall be issued as a result of the Reverse Stock Split and, in lieu thereof, (a) with respect to holders of one or more certificates, if any, which formerly represented shares of Common Stock that were issued and outstanding immediately prior to the Effective Time, upon surrender after the Effective Time of such certificate or certificates, any holder who would otherwise be entitled to a fractional share of Common Stock as a result of the Reverse Stock Split, following the Effective Time, shall be entitled to receive a cash payment (the “Fractional Share Payment”) equal to the fraction of which such holder would otherwise be entitled multiplied by the closing price per share of Common Stock on the date of the Effective Time as reported by The Nasdaq Global Select Market (as adjusted to give effect to the Reverse Stock Split); provided that, whether or not fractional shares would be issuable as a result of the Reverse Stock Split shall be determined on the basis of (i) the total number of shares of Common Stock that were issued and outstanding immediately prior to the Effective Time formerly represented by certificates that the holder is at the time surrendering and (ii) the aggregate number of shares of Common Stock after the Effective Time into which the shares of Common Stock formerly represented by such certificates shall have been reclassified; and (b) with respect to holders of shares of Common Stock in book-entry form in the records of the Corporation’s transfer agent that were issued and outstanding immediately prior to the Effective Time, any holder who would otherwise be entitled to a fractional share of Common Stock as a result of the Reverse Stock Split (after aggregating all fractional shares), following the Effective Time, shall be entitled to receive the Fractional Share Payment automatically and without any action by the holder.”
2. That, at a meeting of stockholders of the Corporation, the aforesaid amendment was duly adopted by the stockholders of the Corporation.
3. That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its President on this [ ] day of [ ] 2023.
PRAXIS PRECISION MEDICINES, INC.
By: __________________________________
Name: Marcio Souza
Title: President
[1] Shall be a whole number between and including 5 and 25, which number is referred to as the “Reverse Split Factor” (it being understood that any Reverse Split Factor within such range shall, together with the remaining provisions of this Certificate of Amendment not appearing in brackets, constitute a separate amendment being approved and adopted by the Board and stockholders in accordance with Section 242 of the Delaware General Corporation Law).
