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SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a party other than the Registrant
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Check the appropriate box:
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| ☒ |
| Preliminary Proxy Statement |
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| | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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| Definitive Proxy Statement |
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| Definitive Additional Materials |
| ☐ | | Soliciting Material under §240.14a-12 |
ROCKET PHARMACEUTICALS, 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 the appropriate box):
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| No fee required.required |
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| Fee paid previously with preliminary materials. |
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| Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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| | (1) | | Title of each class of securities to which transaction applies:
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| | (2) | | Aggregate number of securities to which transaction applies:
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| | (3) | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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| | (4) | | Proposed maximum aggregate value of transaction:
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| | (5) | | Total fee paid:
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☐ | | Fee paid previously with preliminary materials. |
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☐ | | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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| | (1) | | Amount Previously Paid:
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You are cordially invited to attend the 20182024 Annual Meeting of Stockholders (the “Annual Meeting”) of Rocket Pharmaceuticals, Inc. (the “Company”), which will be held virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024on June 25, 2018,13, 2024, at 8:309:00 a.m., Eastern Time, atTime.
We are providing access to our proxy materials over the
officesInternet under the U.S. Securities and Exchange Commission’s “notice and access” rules. As a result, we are mailing to many of
Gibson, Dunn & Crutcher LLP, located at 200 Park Avenue, New York, NY 10166.The attachedour stockholders a Notice of the Annual MeetingInternet Availability of Stockholders andour proxy materials (the “Notice of Internet Availability”) instead of a paper copy of this proxy statement describeand our 2023 Annual Report on Form 10-K. The Notice of Internet Availability contains instructions on how to access those documents over the Internet. The Notice of Internet Availability also contains instructions on how each of those stockholders can receive a paper copy of our proxy materials, including this proxy statement, our 2023 Annual Report on Form 10-K, and a form of proxy card. All stockholders who do not receive the Notice of Internet Availability, including stockholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically. Employing this process will expedite the receipt of materials and will help lower our costs and reduce the environmental impact of distributing our annual meeting materials.
The proxy statement describes the formal business that we will transact at the Annual Meeting. At this year’s Annual Meeting, our stockholders will be asked to consider and act upon the following matters:
1.
| to elect ten directors named in the proxy statement to hold office until the Company’s annual meeting of stockholders in 2025, until their respective successors have been duly elected and qualified or until their earlier death, resignation or removal; |
2.
| to ratify the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024; |
3.
| to consider and act upon a non-binding, advisory vote on the compensation of our named executive officers; |
4.
| to approve an Amendment to our Seventh Amended and Restated Certificate of Incorporation (the “certificate of incorporation”) to increase the authorized number of shares of common stock from 120,000,000 shares to 180,000,000 shares (the “Authorized Shares Increase Proposal”); and |
5.
| to transact any other business that properly comes before the Annual Meeting or any adjournments and postponements thereof. |
to approve an amendment to the Company’s Seventh Amended and Restated Certificate of Incorporation to declassify theThe Board of Directors of the Company (the “Board”);
to approve an amendment to unanimously recommends a vote “FOR” the Company’s Seventh Amended and Restated Certificateelection of Incorporation to eliminateeach of the supermajority voting requirement with respect todirector nominees, “FOR” the removal of directors and replace it with a majority voting standard;
if Proposal 1 to declassify the Board is approved by the stockholders, to elect seven (7) directors named in the proxy statement to hold office until the Company’s annual meeting of stockholders in 2019, or until their respective successors have been duly elected and qualified;
if Proposal 1 to declassify the Board is not approved by the stockholders, to elect two (2) Class I directors named in the proxy statement to the Board for a term of three (3) years, or until their respective successors have been duly elected and qualified;
to ratify the appointmentratification of EisnerAmper LLP as the Company’s independent registered public accounting firm, for“FOR” the fiscal year ending December 31, 2018;
to approve the Company’s Second Amended and Restated 2014 Stock Option and Incentive Plan (the “Proposed 2014 Plan”); and
to transact any other business that properly comes before the Annual Meeting or any adjournments and postponements thereof.
The Board has determined that an affirmativenon-binding, advisory vote on each matter that calls for an affirmative vote is in the best interestcompensation of the Companyour named executive officers and its stockholders and unanimously recommends a vote “FOR” the election of each of the nominees and “FOR” each of the other matters considered at the Annual Meeting.
Authorized Shares Increase Proposal.
Please promptly complete, sign and return the enclosed proxy card by mail or submit your voting instructions by Internet, whether or not you plan to attend the Annual Meeting.
Since several of the items of business for the Annual Meeting have extremely high vote requirements, your
Your vote is important, regardless of the number of shares you own. We urge you to please
votesubmit your proxy on these important matters.
Voting bySubmitting a proxy will not prevent you from voting
in personvirtually via the Internet at the Annual Meeting but will assure that your vote is counted if you cannot attend.
We strongly encourage you to transmit your voting instructions by proxy prior to the Annual Meeting and, if you plan to attend the Annual Meeting, to do so virtually via the Internet.
On behalf of the Board and the employees of the Company, we thank you for your continued support and look forward to seeing you at the Annual Meeting.
Sincerely yours, | | | |
| | | |
/s/ Gaurav Shah | | | |
Gaurav Shah, M.D. | | | |
Chief Executive Officer and Director | | | |
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Sincerely yours,
/s/ Gaurav Shah
Gaurav Shah, MD
President, Chief Executive Officer and Director
ROCKET PHARMACEUTICALS, INC.
430 East 29th Street, Suite 1040
New York, NY 10016
9 Cedarbrook Drive
Cranbury, NJ 08512
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE | | | June 13, 2024 |
DATE
| | June 25, 2018
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TIME | |
TIME
| | 8:30
9:00 a.m. Eastern Time |
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PLACE | | Offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, NY 10166
| Virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024 |
1.
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(1)
| | Approval of an amendment to Rocket Pharmaceuticals, Inc.’s (the “Company”) Seventh Amended and Restated Certificate of Incorporation to declassify the Board of DirectorsElection of the Company (the “Board”); |
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(2)
| | Approval of an amendment to the Company’s Seventh Amended and Restated Certificate of Incorporation to eliminate the supermajority voting requirement with respect to the removal of directors and replace it with a majority voting standard; |
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(3)
| | If Proposal 1 to declassify the Board is approved by the stockholders, election of the seven (7)ten directors named in the proxy statement to hold office until the annual meeting of stockholders in 2019,2025, or until their respective successors have been duly elected and qualified; |
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(4)
| | If Proposal 1 to declassify the Board is not approved by the stockholders, election of two (2) Class I directors named in the proxy statement to the Board for a term of three (3) years,qualified or until their respective successors have been duly elected and qualified;earlier death, resignation or removal; |
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(5)
| 2.
| Ratification of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018;2024; |
3.
| Consider and act upon a non-binding, advisory vote on the compensation of our named executive officers; |
(7)
| 4.
| Approval of an Amendment to our certificate of incorporation to increase the Company’s Second Amended and Restated 2014 Stock Option and Incentive Plan;authorized number of shares of common stock from 120,000,000 shares to 180,000,000 shares; and |
5.
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(6)
| | Consideration ofConsider any other business properly brought before the Annual Meeting or any adjournment or postponement thereof. |
The record date for the Annual Meeting is April
26, 2018.16, 2024. Only stockholders of record at the close of business on that date may vote at the Annual Meeting or any adjournment or postponement thereof.
You
are cordially invited tomay attend
and participate in the Annual Meeting
in person.virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024 where you will be able to vote electronically and submit questions during the meeting. You will be able to vote electronically and submit questions only if you use your control number, which will be included on your Notice of Internet Availability of proxy materials or proxy card (if you received a printed copy of the proxy materials), to log on to the meeting. Whether or not you expect to attend the Annual Meeting, please submit the enclosed proxy or voting instructions by mail, telephone or Internet.
A return envelope (which is postage prepaid if mailed in the United States) is enclosed for your convenience. Submitting a proxy or voting instructions will not prevent you from attending the Annual Meeting and voting
in person.virtually via the Internet. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the Annual Meeting, you must obtain a proxy issued in your name from that record holder.
Each stockholder may appoint only one proxy holder or representative to attend the meeting on his or her behalf.The Notice of Internet Availability and the proxy materials are being made available to our stockholders on or about April 29, 2024.
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By Order of the Board of Directors | | | |
| | | |
/s/ Gaurav Shah | | | |
Gaurav Shah, MDM.D. | | | |
President,
Chief Executive Officer and Director | | | |
Cranbury, New York, New YorkJersey | | | |
April , 201829, 2024 | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on June 13, 2024. The Notice of Annual Meeting of Stockholders, the Proxy Statement and our 2023 Annual Report on Form 10-K are available at www.proxyvote.com and through our website at www.rocketpharma.com.
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FOR THE
20182024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE
25, 2018EXPLANATORY NOTE
On January 4, 2018, Inotek Pharmaceuticals Corporation (“Inotek”) and privately held Rocket Pharmaceuticals, Ltd. (“Private Rocket”) completed a business combination13, 2024
The following information is provided to each stockholder in
accordance with the terms of the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated as of September 12, 2017, by and among Inotek, Rome Merger Sub, a wholly owned subsidiary of Inotek (“Merger Sub”), and Private Rocket, pursuant to which Merger Sub merged with and into Private Rocket, with Private Rocket surviving as a wholly owned subsidiary of Inotek. This transaction is referred to as the “Reverse Merger.” Immediately following the Reverse Merger, Inotek changed its name to “Rocket Pharmaceuticals, Inc.” In connection with the
closingAnnual Meeting of
the Reverse Merger, our common stock began trading on The Nasdaq Global Market under the ticker symbol “RCKT” on January 5, 2018.The former executive officers and a majority of the Board of Directors of InotekStockholders (the “Inotek Board”“Annual Meeting”) resigned concurrent with the closing of the Reverse Merger. In addition, in March 2018, we dismissed Inotek’s independent registered public accounting firm, RSM US LLP, and appointed the independent registered public accounting firm of Private Rocket, EisnerAmper LLP, as auditor of the combined company. Throughout this proxy statement we discuss both the former executive officers and members of the Board or Directors of Inotek and the current executive officers and members of the Board of Directors of Rocket Pharmaceuticals, Inc., (“Rocket” or the combined company.
Immediately prior to the Reverse Merger, Inotek completed a1-for-4 reverse stock split (the “Stock Split”“Company”). All share and per share amounts in this proxy statement reflect the Stock Split unless otherwise noted. As a result of the Reverse Merger, and after giving effect to the Stock Split, each outstanding share of Private Rocket share capital (including shares of Private Rocket share capital to be issued upon exerciseheld virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024 on Thursday, June 13, 2024, at 9:00 a.m., Eastern Time.
The enclosed proxy is for use at the Annual Meeting and any postponement or adjournment thereof. The Company anticipates that the Notice of outstanding share options) automatically converted intoInternet Availability in connection with these proxy solicitation materials will first be mailed on or about April 29, 2024 to all stockholders entitled to vote at the rightAnnual Meeting and we will post our proxy materials on the website referenced in the Notice of Internet Availability. As more fully described in the Notice of Internet Availability, all stockholders may choose to access our proxy materials on the website referred to in the Notice of Internet Availability or may request to receive approximately 76.185 sharesa printed set of our proxy materials.
The Company’s principal executive offices are located at 9 Cedarbrook Drive, Cranbury, New Jersey 08512, and the combined company’s common stock (the “Exchange Ratio”), par value $0.001 per share. Immediately followingCompany’s website is www.rocketpharma.com.
Important Notice Regarding the Reverse Merger,Availability of Proxy Materials for the former holdersAnnual Meeting to be Held on June 13, 2024. This Notice of Private Rocket common stock owned approximately 81.357%Annual Meeting of Stockholders and Proxy Statement and our 2023 Annual Report on Form 10-K are available at www.proxyvote.com and through our website at the fully-diluted common stock of the Company, with the holders of Inotek’s common stock immediately prior to the Reverse Merger owning approximately 18.643% of the fully-diluted common stock of the combined company.address specified above.
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As used in this proxy statement, the “Company,
” “Rocket,” “we,” “us” and “our” refer to Rocket Pharmaceuticals, Inc.
, the combined company.We are an “emerging growth company” under applicable federal securities laws and therefore permitted to take advantage of certain reduced public company reporting requirements. As an emerging growth company, we provide in this proxy statement the scaled disclosure permitted under the Jumpstart Our Business Startups Act of 2012, including the compensation disclosures required of a “smaller reporting company,” as that term is defined inRule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which such votes must be conducted. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) December 31, 2020; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission (the “SEC”).
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
When and where is our Annual Meeting?
We will hold our Annual Meeting on June
25, 201813, 2024 at
8:309:00 a.m.
local time, at the offices of Gibson, Dunn & Crutcher LLP, located at 200 Park Avenue, New York, NY 10166.Eastern Time. The term “Annual Meeting,” as used in this proxy statement, includes any adjournment or postponement of such meeting.
You may attend the Annual Meeting virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024. Stockholders may vote and submit questions while attending the Annual Meeting virtually via the Internet. You will need the 16-digit control number included on your Notice of Internet Availability or proxy card (if you received a paper delivery of proxy materials), to enter the Annual Meeting via the Internet. Instructions on how to attend and participate virtually via the Internet, including how to demonstrate proof of share ownership, are posted at www.virtualshareholdermeeting.com/RCKT2024.
Why are you holding a virtual annual meeting?
We are opting for a virtual annual meeting in order to facilitate attendance, enhance access, lower costs and reduce the environmental impact of the annual meeting. We have designed our virtual format to enhance, rather than constrain, stockholder participation and communication. For example, the virtual format allows stockholders to communicate with us during the Annual Meeting so they can ask questions of the Board of Directors of the Company (the “Board”) or management. During the live Q&A session of the Annual Meeting, we may answer questions as they come in, to the extent relevant to the business of the Annual Meeting, as time permits.
Why am I receiving these materials?
You are receiving these materials because you were one of our stockholders as of the close of business on April 16, 2024, the record date (the “Record Date”) for determining who is entitled to receive notice of and to vote at the Annual Meeting. We have sent youare soliciting your proxy (i.e., your permission) to vote your shares of common stock upon matters to be considered at the Annual Meeting.
When are this proxy statement and the enclosedaccompanying material 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 29, 2024, we will mail a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) containing instructions on how to access our proxy statement and Annual Report on Form 10-K and how to vote.
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 U.S. Securities and Exchange Commission (the “SEC”), we are providing access to our proxy materials over the Internet rather than printing and mailing the proxy materials. We believe electronic delivery will expedite the receipt of materials and will help lower our costs and reduce the environmental impact of distributing our annual meeting materials. Therefore, a Notice of Internet Availability will be mailed to holders of record and beneficial owners of our common stock on or around April 29, 2024. The Notice of Internet Availability will provide instructions as to how stockholders may access and review the proxy materials, including the Notice of Annual Meeting, proxy statement, proxy card becauseand Annual Report on Form 10-K, on the website referred to in the Notice of Internet Availability or, alternatively, how to request that a copy of the proxy materials, including a proxy card, be sent to them by mail. The Notice of Internet Availability will also provide 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 of Internet Availability, and our Notice of Annual Meeting, proxy statement and Annual Report on Form 10-K 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 document.
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Who is soliciting my vote?
The Board is soliciting your
proxy to vote
atfor the
2018 Annual Meeting.
This proxy statement and proxy card is being mailed to stockholders on or about April , 2018. Who can vote at the Annual Meeting?
Only stockholders of record as of the close of business on April
26, 2018,16, 2024, will be entitled to vote at the Annual Meeting. On this date, there were shares of common stock issued and outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If, on April
26, 2018,16, 2024, your shares were registered directly in your name with our transfer agent, Continental Stock Transfer & Trust, then you are a stockholder of record. As a stockholder of record, you may vote
in personvirtually via the Internet at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card by mail or
vote bysubmit your proxy over the telephone or the Internet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If, on April
26, 2018,16, 2024, your shares were held not in your name with our transfer agent, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. Simply complete and mail the proxy card and voting instructions to ensure that your vote is counted. Alternatively, you may
votesubmit your voting instructions by telephone or over the Internet as instructed by your broker or bank, if applicable. To vote
in personvirtually via the Internet at the Annual Meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of our outstanding shares entitled to vote at the Annual Meeting are present at the Annual Meeting
in personvirtually via the Internet or represented by proxy. Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote
in personvirtually via the Internet at the Annual Meeting or vote by proxy over the telephone or the Internet as instructed below. Abstentions and broker
non-votes will be counted towards the quorum requirement. If there is no quorum, the
chairpersonchairman of the Annual Meeting or the holders of a majority of shares present at the Annual Meeting
in personvirtually via the Internet or represented by proxy may adjourn the Annual Meeting to another date.
What am I voting on and how many votes are needed to approve each proposal?
Proposals 1 and 2: Amendment of Seventh Amended and Restated Certificate of Incorporation.The amendments to the Seventh Amended and Restated Certificate of Incorporation will require “FOR” votes from the holders of not less than 75% of the shares entitled to vote on the amendment.
Proposals 3 and 4:
Proposal 1: Election of
Directors.Directors. The directors will be elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present
in personvirtually via the Internet or represented by proxy and entitled to vote on the election of the directors. Plurality means that the individuals who receive the largest number of “FOR” votes cast are elected as directors up to the maximum number of directors to be chosen at the Annual Meeting. Accordingly, the
seventen nominees
if the stockholders approve Proposal 1, and the two nominees, if the stockholders do not approve Proposal 1, receiving the most “FOR” votes will be elected as directors. If you “withhold” your vote with respect to one or more of the nominees, your shares will not be included in determining the number of votes cast
under the plurality-vote standard and, as a result, will have no effect on this proposal.
Proposals 5 Abstentions and 6:broker non-votes will not be counted as votes cast and will have no effect on the vote.
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting
Firm and Approval of Second Amended and Restated 2014 Stock Option and Incentive Plan.Firm. The ratification of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2018 and2024 requires the
approvalaffirmative vote of
the Second Amended and Restated 2014 Stock Option and Incentive Plan will require “FOR” votes from a majority of the votes cast
on the proposal at the Annual Meeting by the holders of shares present
in personvirtually via the Internet or represented by proxy and entitled to vote on this proposal.
Abstentions and brokernon-votes will not be counted as votes cast and will have no effect on the vote. We do not expect any broker non-votes on this proposal because we believe that this proposal is considered a “routine” matter to be considered at the Annual Meeting for which brokerage firms may vote in their discretion on behalf of their clients if no voting instructions are provided.
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Proposal 3: The approval of the compensation of our named executive officers, on a non-binding, advisory basis, requires the affirmative vote of a majority of the votes cast on the proposals referenced above, withproposal by the exceptionholders of Proposals 1shares present virtually via the Internet or represented by proxy and 2, where abstentionsentitled to vote on this proposal. Because your vote is advisory, it will not be binding on the Board or the compensation committee of the Board (the “Compensation Committee”), but the Board and Compensation Committee will review the voting results and take them into consideration when making future decisions about executive compensation. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the vote.
Proposal 4: The approval of an amendment to the Company’s certificate of incorporation to increase the number of authorized shares of common stock requires the affirmative vote of a majority of the votes entitled to vote on this proposal. Abstentions will have the
same effect
as votes against this proposal. We do not expect any broker non-votes on this proposal because we believe that this proposal is considered a “routine” matter to be considered at the Annual Meeting for which brokerage firms may vote in their discretion on behalf of
being counted as a vote “against” these proposals.their clients if no voting instructions are provided.
What are broker
non-votes?Broker
non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote. If the beneficial owner does not provide voting instructions, the broker or nominee may vote the shares with respect to matters that are considered to be
“discretionary,“routine,” but may not vote the shares with respect to
“non-discretionary” matters. “non-routine” matters, such as the election of directors and the proposal for the advisory vote on the compensation of our Named Executive Officers. Where a
proposal is considered “non-routine” and the broker
therefore does not have discretion to vote on
a giventhe proposal, the unvoted shares are considered “broker non-votes.”
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of April
26, 2018.16, 2024.
What does it mean if I receive more than one proxy card?
You may receive more than one proxy card if your shares are registered in more than one name or are registered in different accounts. Please vote in the manner described below under “How do I vote?” for each proxy card to ensure that all of your shares are voted.
How does the Board recommend that I vote my shares?
Unless you give other instructions on your proxy card, the persons named as proxies on the card will vote in accordance with the recommendations of the Board. The Board’s recommendation is set forth together with the description of each item in this proxy statement. The Board recommends a vote:
“FOR” the amendments to the Seventh Amended and Restated Certificate of Incorporation;
“FOR” the election of each of the ten nominees to the Board;Board identified in this proxy statement;
“FOR” the ratification of the appointment of EisnerAmper LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018;2024;
“FOR” the approval, on a non-binding, advisory basis, of the compensation of our named executive officers; and
“FOR” the approval of an amendment to the Second Amended and Restated 2014 Stock Option and Incentive Plan.Company’s certificate of incorporation to increase the number of authorized shares of common stock.
With respect to any other matter that properly comes before the Annual Meeting, the proxies will vote as recommended by the Board or, if no recommendation is given, in their own discretion in the best interest of the Company and its stockholders. As of the date of this proxy statement, the Board had no knowledge of any business other than that described herein that would be presented for consideration at the Annual Meeting.
For the election of directors (Proposals 3 and 4)(Proposal 1), you may either vote “FOR” all or some of the nominees or you may “WITHHOLD” your vote for any nominee you specify. For the other mattersratification of the appointment of EisnerAmper LLP (Proposal 2), you may vote “FOR” or “AGAINST,” or you may “ABSTAIN” from voting.
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For the non-binding, advisory vote on executive compensation (Proposal 3), you may vote “FOR” or “AGAINST,” or you may “ABSTAIN” from voting. For the approval of an amendment to
be voted on,the Company’s certificate of incorporation to increase the number of authorized shares of common stock (Proposal 4), you may vote “FOR” or “AGAINST,” or you may “ABSTAIN” from voting. The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may (a) vote
in personvirtually via the Internet, at the Annual Meeting or (b)
votesubmit your voting instructions by
proxy.proxy either by mail, on the Internet or over the phone. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card by mail or
vote bysubmit your proxy over the telephone or the Internet as instructed below to ensure your vote is counted. You may still attend the Annual Meeting and vote
in personvirtually via the Internet even if you have already
voted by proxy,submitted your voting instructions, as described under “May I change my vote after submitting my proxy card?” below.
| • | | To vote on the Internet, go towww.proxyvote.com to complete an electronic proxy card. Please have the enclosed proxy card available. Your vote must be received by 11:59 P.M., Eastern Time, on June 24, 2018, to be counted. |
To votesubmit your voting instructions on the Internet, go to www.proxyvote.com to complete an electronic proxy card. Please have the enclosed proxy card available. Your proxy must be received by 11:59 P.M., Eastern Time, on June 12, 2023, to be counted.
To submit your voting instructions over the telephone, dial toll-free1-800-690-6903 using a touch-tone phone and follow the recorded instructions. Please have the enclosed proxy card available. Your vote must be received by 11:59 P.M., Eastern Time, on June 24, 2018,12, 2023, to be counted.
To votesubmit your voting instructions by proxy,mail, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, the designated proxy holders will vote your shares as you direct.
| • | To attend the Annual Meeting virtually via the Internet, log in at www.virtualshareholdermeeting.com/RCKT2024. You will need the 16-digit control number included on your Notice of Internet Availability or proxy card (if you received a paper delivery of proxy materials) to enter the Annual Meeting via the Internet. Instructions on how to attend and participate virtually via the Internet, including how to demonstrate proof of share ownership, are posted at www.virtualshareholdermeeting.com/RCKT2024. |
To vote in person, come to the Annual Meeting, and we will give you a ballot when you arrive.
If you sign the proxy card but do not make specific choices, your proxy will vote your shares “FOR”as recommended by our Board (which recommendations are set forth above under the amendments to the Seventh Amended and Restated Certificate of Incorporation, “FOR” all seven nominees toquestion “How does the Board in the case of Proposal 3, or for both nominees to the Board, in the case of Proposal 4, “FOR” the ratification of EisnerAmper LLP as our independent registered public accounting firm and “FOR” the approval of the Second Amended and Restated 2014 Stock Option and Incentive Plan.
recommend that I vote my shares?”).
If any other matter is presented, the proxies will vote as recommended by the Board or, if no recommendation is given, in their own discretion in the best interest of the Company and its stockholders. As of the date of this proxy statement, we know of no other matters that may be presented at the Annual Meeting, other than those listed in the Notice of Annual Meeting of Stockholders.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the proxy card and voting instructions to ensure that your vote is counted.
Alternatively, you may votesubmit your voting instructions by telephone or over the Internet as instructed by your broker, bank or other agent, if applicable. To vote in personvirtually via the Internet at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy form.
How do I submit questions at the virtual annual meeting?
During the Annual Meeting, if you wish to ask a question, you may do so by entering your question in the text box and clicking “submit”. If questions submitted are repetitive as to a particular topic, the Chairman of the meeting may limit discussion on such topic. During the formal portion of the meeting, all questions presented should relate directly to the proposal under discussion. We will also hold a question and answer period at the end of the meeting, as time permits, during which time we welcome questions not relating to specific proposals.
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Please review the Annual Meeting’s Rules of Conduct for further details. The Annual Meeting’s Rules of Conduct will be posted on www.virtualshareholdermeeting.com/RCKT2024 prior to the date of the Annual Meeting.
How do I get Annual Meeting technical assistance?
Beginning 15 minutes prior to the start of and during the virtual Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual 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.
May I change my vote after submitting my proxy card?
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the stockholder of record of your shares, you may revoke your proxy in any one of the following four ways:
send a timely written revocation of the proxy to our Secretary;
submit a signed proxy card bearing a later date;
enter asubmit new votevoting instructions over the Internet or by telephone; or
attend and vote in personvirtually via the Internet at the Annual Meeting.
If your shares are not registered in your own name, you will need the appropriate documentation from the stockholder of record to vote personally at the Annual Meeting. If your shares are held by your broker, bank or another party as a nominee or agent, you should follow the instructions provided by such party. Your personal attendance at the Annual Meeting does not revoke your proxy. Your last vote, prior to or at the Annual Meeting, is the vote that will be counted.
Who will bear the expense of soliciting proxies?
We
The Company will
bearpay the cost
offor the solicitation of proxies
includingby the
preparation, assembly, printing and mailing of this proxy statement, the proxy card and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our common stock beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of our common stock for their costs of forwarding solicitation materials to such beneficial owners. OriginalBoard. The solicitation of proxies
will be made primarily by mail
and through Internet access to materials. Proxies may
also be
supplemented by solicitationsolicited personally, by telephone,
viafax or e-mail by employees of Rocket without any remuneration to such individuals other than their regular compensation. Rocket will also reimburse brokers, banks, custodians, other nominees and fiduciaries for forwarding these materials to their principals to obtain the
Internet or in person by our directors, officers or other regular employees. No additional compensation will be paid to directors, officers or other regular employeesauthorization for
such services. In addition, we have engaged The Proxy Advisory Group, LLC to assist in the
solicitationexecution of
proxies and provide related advice and informational support, for a services fee and the reimbursement of customary disbursements, which are not expected to exceed $15,000 in total.proxies.
How can I find the voting results from the Annual Meeting?
Preliminary voting results will be announced at our Annual Meeting. Final voting results will be published in a Current Report on Form8-K that we expect to file no later than four business days after the Annual Meeting. If final voting results are not available by the time we file theForm 8-K, we will disclose the preliminary results in theForm 8-K and, within four business days after the final voting results are known to us, file an amendedForm 8-K to disclose the final voting results.
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PROPOSAL 1
DECLASSIFICATION AMENDMENT TO THE CERTIFICATE OF INCORPORATION
Background | of the Proposal |
The Company’s Seventh Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) currently provides for a classified Board divided into three classes, with each class being elected for a three-year term. On March 29, 2018, the Board approved, and recommended that the stockholders approve, an amendment (the “Declassification Amendment”) to the Certificate of Incorporation to declassify the Board and provide for the annual election of each of the Company’s directors, effective at the 2018 Annual Meeting.
Proposed | Amendment to Article VI of the Certificate of Incorporation |
After careful consideration, the Board has determined that it is advisable and in the best interests of the Company and its stockholders to declassify the Board to allow the Company’s stockholders to vote on the election of directors generally on an annual basis, rather than on a staggered basis.
The Board carefully considered the advantages and disadvantages of the current classified structure. In reaching its determination to propose the declassification of the Board, it concluded that the benefits of a classified structure, including maintaining continuity of experience and encouraging a person seeking control of the Company to initiate arm’s length discussions with management and the Board, were outweighed by the following considerations:
the Board’s belief that providing the Company’s stockholders with the opportunity to annually register their views on the collective performance of the Board and on each director individually will further the Company’s goal of ensuring that its corporate governance policies conform to best practices and maximize accountability to the stockholders;
discussions with certain of the Company’s stockholders who prefer the annual election of directors; and
the growing sentiment among the investment community in favor of the annual election of directors.
If the Declassification Amendment is adopted by the Company’s stockholders, beginning at the 2018 Annual Meeting and at each annual meeting of stockholders thereafter, all directors scheduled to stand for election will be eligible to serve aone-year term expiring at the subsequent annual meeting of stockholders.
If the Declassification Amendment is not adopted by the Company’s stockholders, the Board will remain classified and the current Class I directors standing for election at the 2018 Annual Meeting will be eligible to serve a three-year term expiring at the Company’s 2021 annual meeting of stockholders.
Removal | of Directors Without Cause |
Delaware corporate law provides that, unless a company’s certificate of incorporation provides otherwise, members of a classified board of directors may be removed only for cause. At present, because the Board is classified, our Certificate of Incorporation provides that directors are removable only for cause. If this proposal is approved by our stockholders, our Certificate of Incorporation will be amended to remove this provision such that directors may be removed with or without cause after the Board is no longer classified. If the Declassification Amendment is not adopted by the Company’s stockholders, the Board will remain classified and our stockholders will be able to remove directors only for cause.
Text | of the Proposed Amendment |
The text of the proposed Declassification Amendment is as follows:
Article VI, Sections 3, 4 and 5.
3.Number of Directors; Term of Office. The number of Directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors.The Directors, other than those who may be elected by the holders of any series of Undesignated Preferred Stock, shall be classified, with respect to the term for which they severally hold office, into three classes. The initial Class I Directors of the Corporation shall be Devang Kantesaria and David P. Southwell; the initial Class II Directors of the Corporation shall be Martin Vogelbaum, Isai Peimer and Ittai Harel; and the initial Class III Directors of the Corporation shall be Paul Howes and A.N. “Jerry” Karabelas. The initial Class I Directors shall serve for a term expiring at the annual meeting of stockholders to be held in 2015, the initial Class II Directors shall serve for a term expiring at the annual meeting of stockholders to be held in 2016, and the initial Class III Directors shall serve for a term expiring at the annual meeting of stockholders to be held in 2017. At each annual meeting of stockholders, Directors elected to succeed those Directors whose terms expire shall be elected for a term of office to expire at thethird succeedingnextannual meeting of stockholders after their election. Notwithstanding the foregoing, the Directors elected to each class shall hold office until their successors are duly elected and qualified or until their earlier resignation, death or removal.
Notwithstanding the foregoing, whenever, pursuant to the provisions of Article IV of this Certificate, the holders of any one or more series of Undesignated Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect Directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate and any certificate of designations applicable to such series.
4.Vacancies. Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock to elect Directors and to fill vacancies in the Board of Directors relating thereto, any and all vacancies in the Board of Directors, however occurring, including, without limitation, by reason of an increase in the size of the Board of Directors, or the death, resignation, disqualification or removal of a Director, shall be filled solely and exclusively by the affirmative vote of a majority of the remaining Directors then in office, even if less than a quorum of the Board of Directors, and not by the stockholders. Any Director appointed in accordance with the preceding sentence shallhold office for the remainder of the full term of the class of Directors in which the new directorship was created or the vacancy occurred andserve for a term expiring at the next annual meeting of stockholders after his or her appointment and shall hold office until such Director’s successor shall have been duly elected and qualified or until his or her earlier resignation, death or removal.Subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock to elect Directors, when the number of Directors is increased or decreased, the Board of Directors shall, subject to Article VI.3 hereof, determine the class or classes to which the increased or decreased number of Directors shall be apportioned; provided, however, that noNo decrease in the number of Directors shall shorten the term of any incumbent Director. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, shall exercise the powers of the full Board of Directors until the vacancy is filled.
5.Removal. Subject to the rights, if any, of any series of Undesignated Preferred Stock to elect Directors and to remove any Director whom the holders of any such series have the right to elect, any Director (including persons elected by Directors to fill vacancies in the Board of Directors) may be removed from office(i) only with cause and (ii) with or without cause, only by the affirmative vote of the holders of 75% or more of the outstanding shares of capital stock then entitled to voteat an election of Directorsthereon, voting together as a single class. At least forty-five (45) days prior to any annual or
special meeting of stockholders at which it is proposed that any Director be removed from office, written notice of such proposed removal and the alleged grounds thereof shall be sent to the Director whose removal will be considered at the meeting.
Effective Date of Amendment. This amendment shall become effective on the date that the Declassification Amendment is approved by the vote of the holders of not less than 75% of the shares entitled to vote on the amendment.
Vote Required
The proposal to amend the Certificate of Incorporation requires an affirmative vote of the holders of not less than 75% of the shares entitled to vote on the amendment.
Our Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE DECLASSIFICATION AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL 2
DIRECTOR REMOVAL AMENDMENT TO THE CERTIFICATE OF INCORPORATION
Background of the Proposal
The Company’s Certificate of Incorporation currently provides for a supermajority voting requirement with respect to the removal of directors. On March 29, 2018, the Board approved, and recommended that the stockholders approve, an amendment (the “Director Removal Amendment”) to the Certificate of Incorporation to eliminate the supermajority voting requirement with respect to removal of directors and replace it with a majority voting standard.
Proposed Amendment to Article VI of the Certificate of Incorporation
After careful consideration, the Board has determined that it is advisable and in the best interests of the Company and its stockholders to eliminate the supermajority voting requirement with respect to the removal of directors and replace it with a majority voting standard. The Certificate of Incorporation currently provides that our directors may only be removed for cause by the vote of 75% of the shares then entitled to vote at a meeting of stockholders for the election of directors. This proposal eliminates the 75% requirement and replaces it with a majority voting standard. If the Director Removal Amendment is adopted by the Company’s stockholders, directors will be able to be removed with or without cause.
This change will make it easier for stockholders to remove directors of the Company. This change further coincides with the declassification of our Board to ensure the accountability of directors to stockholders. Moreover, by eliminating the supermajority vote, we ensure that the will of a majority of our stockholders is controlling with respect to director retention. The Board carefully considered the advantages and disadvantages of the current supermajority voting requirement.
Text of the Proposed Amendment
The text of the proposed Director Removal Amendment is as follows:
Article VI, Section 5.
5.Removal. Subject to the rights, if any, of any series of Undesignated Preferred Stock to elect Directors and to remove any Director whom the holders of any such series have the right to elect, any Director (including persons elected by Directors to fill vacancies in the Board of Directors) may be removed from office (i) only with cause and (ii) only by the affirmative vote of the holders of75% or morea majority of the outstanding shares of capital stock then entitled to vote at an election of Directors, voting together as a single class. At least forty-five (45) days prior to any annual or special meeting of stockholders at which it is proposed that any Director be removed from office, written notice of such proposed removal and the alleged grounds thereof shall be sent to the Director whose removal will be considered at the meeting.
Effective Date of Amendment. This amendment shall become effective on the date that the Director Removal Amendment is approved by the vote of the holders of not less than 75% of shares entitled to vote on the amendment.
Vote Required
The proposal to amend the Certificate of Incorporation requires an affirmative vote of the holders of not less than 75% of the shares entitled to vote on the amendment.
Our Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE DIRECTOR REMOVAL AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL 3
ELECTION OF DIRECTORS
As described in Proposal 1, on March 29, 2018, the Board approved, and recommended that the stockholders approve, an amendment to the Certificate of Incorporation to declassify the Board, effective at the 2018 Annual Meeting. If the Company’s stockholders approve Proposal 1 at the Annual Meeting, the Company’s stockholders will elect seven (7) directors to hold office until the annual meeting of stockholders in 2019, or until their respective successors have been duly elected and qualified. If the Company’s stockholders do not approve Proposal 1, this Proposal 3 will not be submitted to a vote of the stockholders at the Annual Meeting, and instead, Proposal 4 (Election of Class I Directors) will be submitted in its place.
Upon the recommendation of the nominating and corporate governance committee of the Board (the “Nominating and
Corporate Governance Committee”), the Board has nominated
Messrs.Dr. Roderick Wong,
Dr. Elisabeth Björk, Mr. Carsten Boess,
Mr. Pedro Granadillo,
Dr. Gotham Makker,
Dr. Fady Malik, Dr. Gaurav Shah,
Mr. David P. Southwell,
Mr. R. Keith Woods and
Dr. Naveen Yalamanchi to serve as
directors.directors and to hold office until the Company’s annual meeting of stockholders in 2025, until their respective successors have been duly elected and qualified or until their earlier death, resignation or removal. Each of the foregoing persons currently serves as a director, and each has indicated a willingness to continue to serve as a director.
Directors are elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present
in personvirtually via the Internet or represented by proxy and entitled to vote on the election of the directors. The
seventen nominees receiving the highest number of
“For”“FOR” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the
seventen nominees named above. If any of the nominees become unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES SET FORTH ABOVE.
PROPOSAL 4ELECTIONTABLE OF CLASS I DIRECTORSCONTENTS
Stockholders will be asked to vote on this Proposal 4 solely in the event that, at the Annual Meeting, the Company’s stockholders do not approve the adoption of the amendment to the Certificate of Incorporation to declassify the Board, effective at the 2018 Annual Meeting, as described in Proposal 1. If the Company’s stockholders approve Proposal 1, then the Company will amend its Certificate of Incorporation to eliminate the classified Board and the stockholders will proceed to vote on Proposal 3, and not this Proposal 4. If, however, the stockholders do not approve Proposal 1, a vote will be taken on this Proposal 4.
If the stockholders do not approve Proposal 1, the stockholders will elect two Class I directors to hold office until the annual meeting of stockholders in 2021, or until their respective successors have been duly elected and qualified. If the stockholders do not approve Proposal 1, the Board will continue to be divided into three classes serving staggered three-year terms, the term of one class of directors to expire each year. The current term of the Class I directors expires at the Annual Meeting.
Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Pedro Granadillo and David P. Southwell to serve as Class I directors. Pedro Granadillo and David P. Southwell serve presently as Class I directors, and each has indicated a willingness to continue to serve as a director.
Vote Required
Directors are elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote on the election of the directors. The two nominees receiving the highest number of “For” votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the two nominees named above. If any of the nominees become unavailable for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by our Board.
Our Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES SET FORTH ABOVE.
The members of the Board as of the date of this proxy statement, together with certain information about them, are set forth below.
As described in the biographical information below, a number of the members of our Board were associated with Private Rocket prior to the Reverse Merger.There are no arrangements or understanding between any director, or nominee for
directorship,director, pursuant to which such director or nominee was selected as a director or nominee. Additionally, there are no family relationships among our directors, officers, or
director-nominees.nominees for director. We know of no reason why any of the nominees may be unable to serve as a director. If any of the nominees are unable to serve, your proxy may vote for another nominee proposed by the Board. If for any reason any of the nominees prove unable or unwilling to stand for election, the Board will nominate alternate(s) or reduce the size of the Board to eliminate the vacancy.
On January 4, 2018, Rocket Pharmaceuticals, Inc. (f/k/a Inotek Pharmaceuticals Corporation) completed a reverse merger (the “Reverse Merger”) of a wholly-owned subsidiary with and into Rocket Pharmaceuticals, Ltd. (“Private Rocket”). Following the completion of the Reverse Merger, the surviving company, Private Rocket, became a wholly owned subsidiary of the Company and the Company changed its corporate name from Inotek Pharmaceuticals Corporation to Rocket Pharmaceuticals, Inc.
Nominees for Election as Directors
Set forth below are the names, ages as of April 26, 2018,22, 2024, principal occupations, and business experience, as well as their prior service on the Board, of the directors. Unless otherwise indicated, principal occupations shown for each director have extended for five or more years. If the stockholders approve Proposal 1, then stockholdersStockholders will be voting on the election as directors of all of the individuals below. If
Roderick Wong, M.D. | | | 47 | | | Chairman of the Board | | | 2018 |
Elisabeth Björk, M.D., Ph.D. | | | 62 | | | Director | | | 2020 |
Carsten Boess | | | 57 | | | Director | | | 2016 |
Pedro Granadillo | | | 77 | | | Director | | | 2018 |
Gotham Makker, M.D. | | | 60 | | | Director | | | 2018 |
Fady Malik, M.D., Ph.D. | | | 60 | | | Director | | | 2022 |
Gaurav Shah, M.D. | | | 49 | | | Chief Executive Officer and Director | | | 2018 |
David P. Southwell | | | 63 | | | Director | | | 2014 |
R. Keith Woods | | | 56 | | | Director | | | 2023 |
Naveen Yalamanchi, M.D. | | | 47 | | | Director | | | 2018 |
Roderick Wong, M.D. has served as Chairman of our Board since January 2018. Dr. Wong served as the stockholders do not approve Proposal 1, thenChairman of the stockholders will be votingBoard for Private Rocket from July 2015 until January 2018. Dr. Wong has over 20 years of healthcare investment experience. Since 2010, he has served as Managing Partner and Chief Investment Officer of RTW Investments, LP (“RTW”), a healthcare-centered investment firm. He also serves on the election asboard of Avidity Biosciences, Inc. and Landos Biopharma, Inc. Prior to RTW, Dr. Wong was a Managing Director and the Portfolio Manager for the Davidson Kempner Healthcare Funds. Prior to joining Davidson Kempner, Dr. Wong held various healthcare investment and healthcare research roles at SAC Capital Company and Cowen & Company. Dr. Wong previously served on the board of directors of Messrs. GranadilloPenwest Pharmaceuticals, Health Sciences Acquisitions Corporation and SouthwellHealth Sciences Acquisitions Corporation 2. He received an M.D. from the University of Pennsylvania Medical School, received an M.B.A. from Harvard Business School, and graduated with a B.S. in Economics from Duke University. We believe that Dr. Wong is qualified to serve on our Board due to his service prior to the closing of the Reverse Merger as Class I directors.Chairman of the Board of Directors of Private Rocket and his years of experience in, and extensive knowledge of, the biopharmaceutical industry.
Elisabeth Björk, M.D., Ph.D. has served as one of our directors since April 2020. She is currently the Senior Vice President, Head of Late-Stage Development, Cardiovascular, Renal and Metabolism (CVRM), Biopharmaceuticals R&D at AstraZeneca, a publicly-traded multinational pharmaceutical and biotechnology company, leading the global development of medicines in this area. Prior to taking on this role in June 2012, Dr. Björk had several roles of increasing seniority within AstraZeneca, with responsibility for clinical phases I-IV. She is an endocrinologist by training and an associate professor of medicine at Uppsala University, and was Head of the Diabetes and Endocrinology Unit at the University Hospital, Uppsala, where she spent 15 years in
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| | | | | | | | | | |
Name | | Age | | Class | | Term Expires | | Position(s) Held | | Director
Since |
Carsten Boess | | 51 | | II | | 2019 | | Director | | 2016 |
Pedro Granadillo | | 70 | | I | | 2018 | | Director | | 2018 |
Gotham Makker, M.D. | | 44 | | III | | 2020 | | Director | | 2018 |
Gaurav Shah, M.D. | | 43 | | II | | 2019 | | President, Chief Executive
Officer and Director | | 2018 |
David P. Southwell | | 57 | | I | | 2018 | | Director | | 2014 |
Roderick Wong, M.D. | | 41 | | II | | 2019 | | Chairman of the Board | | 2018 |
Naveen Yalamanchi, M.D. | | 41 | | III | | 2020 | | Director | | 2018 |
clinical practice and diabetes research, before joining AstraZeneca in 2002. She is also a board member of Pharvaris N.V., Calliditas Therapeutics AB, Chalmers University of Technology, Chalmers Ventures AB, Björks Matematik o Mera AB and rfidcompare europe AB. We believe that Dr. Björk’s qualifications to serve on our Board include her depth of knowledge of the pharmaceutical industry and her many years of experience in drug development.
Carsten Boess
has served as one of our directors since January 2016. He is currently thepreviously served as Executive Vice President of Corporate Affairs at Kiniksa Pharmaceuticals, a privately heldpublicly-traded biotechnology company. He previously servedcompany, and as Senior Vice President and Chief Financial Officer at Synageva Biopharma Corporation from 2011 until the company’s acquisition by Alexion Pharmaceuticals in 2015. Prior to his role at Synageva, Mr. Boess served in multiple roles with increasing responsibility for Insulet Corporation, including Chief Financial Officer from 2006 to 2009 and Vice President of International Operations from 2009 to 2011. Prior to that, Mr. Boess served as Executive Vice President of Finance for Serono Inc. from 2005 to 2006. In addition, he was a member of the Geneva basedGeneva-based World Wide Executive Finance Management Team while at Serono. Mr. Boess was also Chief Financial Officer at Alexion Pharmaceuticals and was a finance executive at Novozymes of North America and Novo Nordisk in France, Switzerland and China. He is also a board member of Avidity Biosciences, Inc. and Achilles Therapeutics plc, a privately held biopharmaceuticals company, and previously served on the board of directors of Health Sciences Acquisitions Corporation 2. Mr. Boess received a Bachelor’s degree and Master’s degree in Economics and Finance, specializing in Accounting and Finance from the University of Odense, Denmark. We believe that Mr. Boess’ qualifications to sitserve on our Board include his business and financial experience working at pharmaceutical companies.
Pedro Granadillo
has served as one of our directors since January 2018, when he joined the Board in connection with the Reverse Merger.2018. He has over 40 years of biopharmaceutical industry experience with expertise in human resources, manufacturing, quality and corporate governance. From 1970 until his retirement in 2004, Mr. Granadillo held multiple leadership roles at Eli Lilly and Company, a publicly-traded pharmaceutical company, including Senior Vice President of Global Manufacturing and Human Resources and a member of the Executive Committee. He currently serveson the Board of Directors of Haemonetics Corporation, a position he has held since 2004. Mr. Granadillo has previously served on the Boardsboards of Directorsdirectors at Haemonetics Corporation, Dendreon Corporation, Health Sciences Acquisitions Corporation, Health Sciences Acquisitions Corporation 2 and Noven Pharmaceuticals, as well as NPS Pharmaceuticals, which sold to Shire for $5.2 billion in 2015. He graduated from Purdue University with a Bachelor of Science in Industrial Engineering. We believe that Mr. Granadillo’s qualifications to sitserve on our Board include his depth of knowledge of the pharmaceutical industry and his many years of experience serving on the boards of directors of healthcare companies.
Gotham Makker, MDM.D. has served as one of our directors since January 2018, when he joined the Board in connection with the Reverse Merger.2018. Dr. Makker has over 1720 years of healthcare industry experience. Since 2005,Dr. Makker currently serves as head of Strategic Investments for RTW, a position he has held since 2019. From 2005 to 2019, he served as CEOChief Executive Officer of Simran Investment Group, LLC, a closely held equity investment fund. Prior to Simran, Dr. Makker was a healthcare portfolio manager and principal at Citadel Investment Group LLC, a position he held from 2002 to 2005. Prior to joining Citadel, Dr. Makker served as an analyst at Oracle Partners LP covering biotechnology and medical device sectors from 2000 to 2001. From 1999 to 2000, Dr. Makker was a senior analyst on the life sciences investment banking team at Hambrecht & Quist. Dr. Makker has previously served on the board of directors of Health Sciences Acquisitions Corporation. Dr. Makker received an MDM.D. from the University of Nebraska Medical School, and he completed the Sarnoff cardiovascular research fellowship at Columbia University, College of Physicians & Surgeons and at Harvard Medical School, Brigham & Women’s Hospital. We believe that Dr. Makker’s qualifications to sitserve on our Board include his years of experience in, and extensive knowledge of, the healthcare industry.
Fady Malik, M.D., Ph.D. has served as one of our directors since March 2022. Dr. Malik has served as the Executive Vice President of Research and Development at Cytokinetics, Inc., a publicly-traded biopharmaceutical company focused on discovering, developing, and commercializing muscle activators and inhibitors, since November 2015, and he has been with Cytokinetics since its inception in 1998. Prior to taking on his current role in 2015, Dr. Malik had several other roles of increasing seniority within Cytokinetics, including serving as the Senior Vice President of Research and Development from August 2014 to November 2015, as the Senior Vice President of Research and Early Development from June 2012 to August 2014 and as Vice President, Biology from March 2008 to June 2012, all of which roles were focused towards building Cytokinetics’ cardiovascular and skeletal muscle programs from their conception. In addition, since 2000, Dr. Malik has held
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an appointment in the Cardiology Division of the University of California, San Francisco, where he is currently a Clinical Professor. Dr. Malik is a cardiologist by training, and he was a practicing Interventional Cardiologist at the San Francisco Veterans Administration Medical Center for over 18 years. Dr. Malik received a B.S. from the University of California at Berkeley, a Ph.D. from the University of California at San Francisco and his M.D. from the University of California at San Francisco. We believe that Dr. Malik’s qualifications to serve on our Board include his depth of knowledge of the pharmaceutical industry and his many years of experience in clinical research and drug development.
Gaurav Shah,
MDM.D. has served as our President and Chief Executive Officer and as one of our directors since January 2018, when he joined the Board in connection with the Reverse Merger.2018. Dr. Shah was appointed Chief Executive Officer of Private Rocket in September 2015. Prior to joining Private Rocket, from 2011-2015, Dr. Shah held various leadership positions at Novartis including Global Program Head forCART-19, Global Clinical Program Head forCTL-019 and Biosimilars, and Global Clinical Leader for Afinitor. Prior to Novartis, he spent three years at Eli Lilly and Company as Medical Director overseeing clinical development of numerous programs including olaratumab. During his industry tenure, he has participated in several drug development programs resulting in successful regulatory approvals, such asCTL-019 in pediatric ALL, the first cell and gene therapy approved in the U.S., and successful commercial launches. He also serves on the boards of Talaris Therapeutics, Inc. and privately-held Altheia Science. Prior to joining industry, Dr. Shah was Assistant Professor of Medicine/Oncology at Columbia University. He holds a B.A. in Behavioral Neuroscience from Harvard University and an MDM.D. from Columbia University. Dr. Shah completed his internal medicine residency at Brigham and& Women’s Hospital/Harvard Medical School and completed his hematology/oncology fellowship training at the Memorial-Sloan Kettering Cancer Center. We believe Dr. Shah is qualified to sitserve on our Board due to his role as Chief Executive Officer of the Company and his significant leadership and management experience in the biopharmaceutical industry.
David P.
Southwell has served as one of our directors since August 2014. He served as ourPresident, Chief Executive Officer and board member of TScan Therapeutics, a publicly-traded, clinical-stage biopharmaceutical company from October 2018 through March 2023. Mr. Southwell previously served as the President and Chief Executive Officer of Inotek from July 2014 to January 2018. From March 2010 to October 2012, Mr. Southwell served as Executive Vice President, Chief Financial Officer of Human Genome Sciences, Inc., or Human Genome Sciences, which is owned by GlaxoSmithKline plc. Prior to his time at Human Genome Sciences, Mr. Southwell served as Executive Vice President and Chief Financial Officer of Sepracor Inc. from July 1994 to July 2008. Mr. Southwell has also served on the Boardboard of Directorsdirectors of PTC Therapeutics Inc. since December 2005 and Spero Therapeutics, Inc. sincefrom February 2018.2018 to April 2019. Mr. Southwell received a B.A. from Rice University and an M.B.A. from Dartmouth College.College, where he served on the Board of Overseers from 2011 to 2020. We believe that Mr. Southwell’s qualifications to sitserve on our Board include his broad experience serving on the boards of directors of public companies, his specific experience with public therapeutics companies and his executive leadership, managerial and business experience.Roderick Wong, MD
R. Keith Woods has served as Chairmanone of our Boarddirectors since JanuaryDecember 2023. Mr. Woods is an experienced biopharmaceutical executive with a career spanning over 30 years in the sector, most recently serving as the Chief Operating Officer for argenx SE from April 2018 when he joined the Boardthrough June 2023. Mr. Woods led argenx through its important transition from an R&D organization to a global commercial organization, implementing and overseeing core commercial and medical teams in connection with the Reverse Merger.Dr. Wongpreparation for its first product launch, including sales, marketing, market access and reimbursement, business operations, patient services and medical affairs. Prior to argenx, Mr. Woods served as Senior Vice President of North American operations for Alexion Pharmaceuticals Inc., where he managed a team of several hundred people in the Chairman of the BoardU.S. and Canada and was responsible for Private Rocket from July 2015 until January 2018. Dr. Wong has over 15 years of healthcare investment experience. Since 2010,more than $1 billion in annual sales. Within Alexion, he haspreviously served as Managing Partnervice president and Chief Investment Officermanaging director of RTW Investments, LP (“RTW”), a healthcare-centered investment firm. Prior to RTW, Dr. Wong was a Managing DirectorAlexion UK, overseeing all aspects of Alexion’s UK business, vice president of U.S. operations and executive director of sales, leading the Portfolio Manager for theDavidson Kempner Healthcare Funds.launch of Soliris in atypical hemolytic uremic syndrome. Prior to joining Davidson Kempner, Dr. WongAlexion, he held various healthcare investmentpositions of increasing responsibility within Roche, Amgen and healthcare research roles at SAC Capital Company and Cowen & Company. Dr. Wong servedEisai over a span of 20 years. Mr. Woods currently serves on the Boardboard of Directorsdirectors of PenwestX4 Pharmaceuticals, TScan Therapeutics and Neurogene Inc. Mr. Woods holds a B.S. in 2010. He received an MDmarketing from the University of Pennsylvania Medical School, received an MBA from Harvard Business School, and graduated with a BS in Economics from DukeFlorida State University. We believe that Dr. Wong is qualified to sit on our Board due to his service prior to the closing of the Reverse Merger as Chairman of the Board of Directors of Private Rocket and his years of experience in, and extensive knowledge of, the biopharmaceutical industry.
Naveen Yalamanchi, MDM.D. has served as one of our directors since January 2018, when he joined the Board in connection with the Reverse Merger.2018. Dr. Yalamanchi joined Private Rocket as a Directordirector in July 2015. Dr. Yalamanchi has over 15 years of healthcare investment and research experience. Since 2015, Dr. Yalamanchi has served as Partner and Portfolio Manager at RTW Investments, LP, a healthcare-centered investment firm.RTW. Prior to RTW, Dr. Yalamanchi was Vice-President andco-portfolio manager at Calamos Arista Partners, a subsidiary of Calamos
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Investments, a position he held from 2012 to 2015. Prior to joining Calamos Arista Partners, Dr. Yalamanchi held various healthcare investment roles at Millennium Management and Davidson Kempner Capital Management. Dr. Yalamanchi holds a BSB.S. in Biology from MIT and an MDM.D. from Stanford University. He completed his surgery internship at UCLA Medical Center. Dr. Yalamanchi currently serves as an observerhas previously served on the board of the Boarddirectors of Directors of Dermtech, Inc., a privately held diagnostic company.Health Sciences Acquisitions Corporation and Health Sciences Acquisitions Corporation 2. We believe that Dr. Yalamanchi is qualified to sitserve on our Board due to his service prior to the closing of the Reverse Merger as a member of the Board of Directors of Private Rocket and his years of experience in, and extensive knowledge of, the healthcare industry.
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BOARD DIVERSITY DISCLOSURE
Board Diversity Matrix
We believe it is important that our Board is composed of individuals reflecting the diversity of our employees, stockholders and the communities we serve. In recent years, our Corporate Governance and Nominating Committee has made diversity an organizational priority. We provide the below enhanced disclosure regarding the diversity of our Board, utilizing the template in accordance with the board diversity listing standards of the Nasdaq Global Market (“Nasdaq”).
| | Board Diversity Matrix (As of April 29, 2024) | |
| | Total Number of Directors | | | 10 | |
| | | | | Female | | | Male | | | Non-Binary | | | Did Not
Disclose
Gender | |
| | Part I: Gender Identity | |
| | Directors | | | 1 | | | 9 | | | | | | | |
| | Part II: Demographic Background | |
| | African American or Black | | | | | | | | | | | | | |
| | Alaskan Native or Native American | | | | | | | | | | | | | |
| | Asian | | | | | | 4 | | | | | | | |
| | Hispanic or Latinx | | | | | | 1 | | | | | | | |
| | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | |
| | White | | | 1 | | | 4 | | | | | | | |
| | Two or More Races or Ethnicities | | | | | | | | | | | | | |
| | LGBTQ+ | | | | |
| | Did Not Disclose Demographic Background | | | | |
Information about Our Executive Officers
The following table identifies our executive officers and sets forth their current position(s) and their ages as of April
26, 2018.29, 2024.Name
| | Age | | Position(s) Held
|
Gaurav Shah, M.D. | | 43 | 49 | President, | | Chief Executive Officer and Director |
Kinnari Patel, Pharm.D., M.B.A. | | | 46 | | | President, Head of R&D and Chief Operating Officer |
Aaron Ondrey | | | 48 | | | Chief Financial Officer |
Raj Prabhakar, M.B.A. | | | 50 | | | Chief Business Officer, Senior Vice President |
Jonathan Schwartz, M.D. | | 54 | 60 | | | Chief Medical & Gene Therapy Officer |
John Militello
Mayo Pujols | | 44 | 55 | Controller | | Chief Technical Officer, Executive Vice President |
Kinnari Patel, PharmD
Mark White, MB.ChB | | 39 | 57 | | | General Manager, Commercial Affairs |
John Militello, CPA | | | 50 | | | Vice President of Finance, Treasurer, Principal Accounting Officer |
Martin Wilson, J.D. | | | 47 | | | General Counsel and Chief OperatingCorporate Officer, and Head of DevelopmentSenior Vice President |
You should refer to
“Directors Continuing in Office”“Nominees for Election as Directors” above for information about our
President and Chief Executive Officer, Gaurav Shah, M.D. Biographical information for our other executive officers, as of April
26, 2018,29, 2024, is set forth below.
Jonathan Schwartz, MD
Kinnari Patel, Pharm.D., M.B.A. joined us as Chief Medical Officer in January 2018 in connection with the Reverse Merger. Dr. Schwartz joined Private Rocket in January 2016Merger, and served as Chief Medical Officer andcurrently holds the position of President, Head of Clinical Development. Dr. Schwartz is responsible for leading our medical and program development. Dr. Schwartz has over 20 years of combined clinical practice and drug development experience. Prior to Private Rocket, Dr. Schwartz was Vice-President of Clinical Development at Stemline Therapeutics, where he oversaw development efforts for anticancer, vaccine and small-molecule platforms, a position he held since 2014. Prior to Stemline, he spent seven years at Eli Lilly and Company in several leadership positions, including Vice-President of Clinical Science, where he led development teams for numerous drug programs including ramucirumab. Previously, Dr. Schwartz was Associate Professor of Medicine at the Mount Sinai Medical Center in New York, specializing in the treatment and translational research of hepatobiliary malignancies and also served as Director for the Hematology-Oncology Fellowship training program. He has a BA in American Civilization from Brown University and an MD from Washington University (St. Louis). He completed post-graduate Internal Medicine and Hematology-Oncology training at the Mount Sinai and New York Presbyterian Hospitals.John Militello joined us as Controller in January 2018. From April 2015 to November 2017, Mr. Militello worked at Immune Pharmaceuticals, Inc., a publicly traded biotechnology company, where he most
recently served as Vice President of Finance (principal financial officer), ControllerR&D and Chief AccountingOperating Officer. Prior to that, Mr. Militello was an Assistant Controller with Retrophin, Inc., a San Diego based biotech company, and the Manager, External Reporting & Compliance at Volt Information Sciences, Inc., a publicly traded staffing company. Prior to Volt Information Sciences, Inc., Mr. Militello was a Senior Manager with BDO USA, LLP serving multi-national SEC registrants. Mr. Militello is a Certified Public Accountant and earned his Bachelor of Science degree in Accounting from St. Joseph’s College.
Kinnari Patel, PharmDjoined us as Chief Operating Officer and Head of Development in January 2018 in connection with the Reverse Merger. Dr. Patel joined Private Rocket in April 2016, serving as Vice President –- Head of Regulatory, Pharmacoviligence and Quality from April 2016 to July 2017, and as Senior Vice President, Global Program Head and Head of Regulatory and Quality from August 2017 to December 2017.2017, and Chief Operating Officer and Head of Development from
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January 2018 to February 2021. Prior to joining Private Rocket, Dr. Patel was the Global Regulatory Lead at AstraZeneca from January 2015 to April 2016. Prior to that, Dr. Patel was Head of U.S. Risk Management at Bristol-Meyers Squibb from May 2014 through January 2015 and the U.S. Liaison for Global Regulatory Sciences at Bristol-Meyers Squibb from November 2010 to April 2014. Dr. Patel received the dual degrees of B.S. in Biology and Doctorate of Pharmacy from the USciences in Philadelphia, PA. She also completed atwo-year Post-Doctoral Regulatory Affairs Fellowship through Rutgers University. Most recently, sheShe received her Executive MBAM.B.A. from NYU Stern School of Business with specialization in Corporate Finance, Leadership and Strategy. Most recently, she graduated from the C-Suite Harvard Business School Advanced Management Program.
Aaron Ondrey joined Rocket in March 2024 and is currently our Chief Financial Officer. Mr. Ondrey most recently served as the Chief Financial Officer and principal and financial accounting officer of Mirati Therapeutics, Inc. (“Mirati”), a publicly traded commercial-stage oncology company (acquired by Bristol-Myers Squibb Company in January 2024), a position he held from November 2023 through January 2024, after previously serving as Interim Chief Financial Officer from August 2023 through November 2023. Mr. Ondrey had previously served as the Senior Vice President, Financial Planning and Analysis for Mirati since July 2022. Prior to his time at Mirati, Mr. Ondrey served as Vice President, Finance of Arena Pharmaceuticals, Inc., a publicly traded biotechnology company (acquired by Pfizer Inc. in March 2022) from January 2020 until July 2022. From December 2018 to January 2020, Mr. Ondrey served as Head of Global Commercial Finance at Alexion Pharmaceuticals, Inc., a publicly traded biotechnology company (acquired by AstraZeneca in July 2021). From March 2010 to November 2018, Mr. Ondrey served in various finance roles of increasing responsibility, most recently as Executive Director, Commercial Finance and Business Planning, at Regeneron Pharmaceuticals, Inc., a publicly traded biotechnology company. Mr. Ondrey received his Bachelor of Science in Business Administration and Finance from Case Western Reserve University.
Raj Prabhakar, M.B.A., joined Rocket in October 2017 and is currently the Chief Business Officer and Senior Vice President. Raj has over twenty years of broad experience, including the last 19 years at clinical development-stage biotechnology companies. Raj comes to Rocket from Caladrius Biosciences, which through the subsidiary PCT as well as proprietary Regulatory T-cell and CD34 cell therapy programs, had direct hand-on business, manufacturing and operating experience in clinical-stage autologous ex-vivo cell and cell-based gene therapy programs. Prior to Caladrius Raj spent nearly ten years at Celsion Corporation leading multiple oncology candidates from Phase I through Phase III pivotal programs, spanning platforms including small and large molecules, including oligonucleotides and in-vivo non-viral gene therapy approaches to cancer. Prior to holding strategic planning and business development roles, Raj also worked in clinical program management, manufacturing and operations. Raj has also worked at non-profit organizations such as PATH Vaccine Development Program, and private-staged companies such as Osiris Therapeutics and Protiveris. Raj holds dual bachelor of sciences degrees in Biology and Mechanical Engineering from MIT and an MBA from the Harvard Business School.
Jonathan Schwartz, M.D. joined Rocket as Chief Medical Officer in January 2018 in connection with the Reverse Merger. Dr. Schwartz served as Chief Medical Officer from January 2018 until he transitioned to Chief Gene Therapy Officer in April 2023. In March 2024, Dr. Schwartz became Rocket’s Chief Medical & Gene Therapy Officer. Dr. Schwartz joined Private Rocket in January 2016 and served as Chief Medical Officer and Head of Clinical Development until the Reverse Merger. Dr. Schwartz has over 20 years of combined clinical practice and drug development experience. Prior to Private Rocket, Dr. Schwartz was Vice-President of Clinical Development at Stemline Therapeutics, where he oversaw development efforts for anticancer, vaccine and small-molecule platforms, a position he held since 2014. Prior to Stemline, he spent seven years at Eli Lilly and Company in several leadership positions, including Vice-President of Clinical Science, where he led development teams for numerous drug programs including ramucirumab.
Previously, Dr. Schwartz was Associate Professor of Medicine at the Mount Sinai Medical Center in New York, specializing in the treatment and translational research of hepatobiliary malignancies and also served as Director for the Hematology-Oncology Fellowship training program. He has a B.A. in American Civilization from Brown University and an M.D. from Washington University (St. Louis). He completed post-graduate Internal Medicine and Hematology-Oncology training at the Mount Sinai and New York Presbyterian Hospitals.
Mayo Pujols joined Rocket in July 2022 as Executive Vice President and Chief Technical Officer. As Chief Technical Officer, Mr. Pujols leads Rocket’s state-of-the-art in-house Good Manufacturing Practice (cGMP) facility and Technical Operations function that includes Manufacturing, Validation Engineering, MS&T, Process
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Development, Analytical Development, Cell Therapy Development, Supply Chain, Project Management, Facilities Engineering and Environmental Health and Safety. Mr. Pujols has nearly three decades of experience working in leadership roles across technical operations, quality operations, validation, process development and cGMP. Prior to joining Rocket in July 2022, Mr. Pujols was Chief Executive Officer of Andelyn Biosciences Inc. (“Adelyn”), a biopharmaceutical contract development and manufacturing organization (“CDMO”), from June 2020 through July 2022, where he led their expansion to a full-service gene therapy CDMO. Prior to his time at Adelyn, Mr. Pujols served as Vice President, Head of Global Cell and Gene Technical Development and Manufacturing at Novartis, a multinational pharmaceutical corporation, from July 2018 through June 2020. Prior to Novartis, Mr. Pujols was the Vice President of Global CAR-T Operations and Technology at Celgene, a pharmaceutical company, from August 2017 through July 2018. Earlier in his career, he also held key roles at Merck, Advaxis, MedImmune and Schering-Plough. Mr. Pujols earned his bachelor’s degree in Chemical Engineering from Stevens Institute of Technology and his master’s in Chemical Engineering and Applied Chemistry from Columbia University’s The Fu Foundation School of Engineering and Applied Science.
Mark White, MB.ChB joined as the Company’s Chief Medical Officer in April 2023 and became General Manager, Commercial Affairs in March 2024. Mr. White had been employed at AstraZeneca since March 2013, serving as the Global Franchise Head for Fasenra (benralizumab) since March 2020. Prior to his role as Global Franchise Head, Mr. White served as the program lead for Saphnelo (anifrolumab) in systemic lupus erythematosus (SLE) and as a Global Product Vice President. From October 2008 through March 2013, Mr. White served as program lead for the influenza vaccines at MedImmune, LLC (“MedImmune”), a global biologics research and development company. Mr. White also worked for AstraZeneca prior to his time at MedImmune, spending time in global marketing, portfolio strategy and in clinical development in the design and delivery of clinical pharmacology trials for products including Faslodex, Iressa and Casodex, and in late-stage development as clinical lead for Accolate and Diprivan. Mr. White obtained his MB.ChB at the University of Manchester School of Medicine and is a member of the Royal College of Physicians in the UK, a Fellow of the Royal College of Anaesthetists in the UK and a Member of the Faculty of Pharmaceutical Medicine of the Royal College of Physicians.
John Militello, CPA joined as the Company’s Controller in January 2018 and is currently the Vice President of Finance, Treasurer, Principal Accounting Officer. Mr. Militello served as the Company’s Interim Principal Financial Officer from March 2022 to March 2024. Before joining the Company, Mr. Militello served as the Vice President of Finance and Principal Financial and Accounting Officer with Immune Pharmaceuticals Inc. from April 2015 to November 2017. Prior to that Mr. Militello was an Assistant Controller with Travere Therapeutics, formerly Retrophin, Inc. (NASDAQ GM: TVTX), a San Diego based biotech company, and the Manager, External Reporting & Compliance at Volt Information Sciences, Inc. (NYSE MKT: VOLT), a publicly traded staffing company. Prior to Volt Information Sciences, Inc., Mr. Militello was a Senior Manager in the biotech practice of BDO USA, LLP serving multi-national SEC registrants. Mr. Militello is a Certified Public Accountant and earned his Bachelor of Science degree in Accounting from St. Joseph’s College.
Martin Wilson, J.D. joined Rocket as General Counsel and Chief Compliance Officer in November 2021 and became Chief Corporate Officer in March 2024. Mr. Wilson has nearly 20 years of legal, compliance and executive experience and accomplishment within the life sciences industry. Before Rocket, Mr. Wilson was General Counsel and Chief Corporate Officer at Ichnos Sciences Inc. (“Ichnos”), a research and development company focused on oncology, autoimmune disease and pain management, from January 2020 through November 2021. Prior to his time at Ichnos, Mr. Wilson served as General Counsel at Teligent Inc., a generic pharmaceutical company, from April 2017 through December 2019. Mr. Wilson earned his Juris Doctorate from Villanova University Charles Widger School of Law.
Information about the Board and Corporate Governance
The Board oversees our business and monitors the performance of our management.
In accordance with our corporate governance procedures, the Board does not involve itself in theday-to-day operations of the Company. Our executive officers and management oversee the
day-to-day operations.
Our directors fulfill their duties and responsibilities by attending meetings of the Board, which are held from time to time.The Board held sevenfive meetings during the year ended December 31, 2017.2023. During the year ended December 31, 2017,2023, each director then in office attended at least 75% of the total of (i) the meetings of the Board held during
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the period for which he or she has been a director and (ii) the meetings of the committee(s) on which that director served during such period. Each of our directors then in office attended our
20172023 annual meeting of stockholders. It is our policy to encourage our directors to attend the Annual Meeting.
The Board is also focused on overboarding concerns and strongly believes that all directors have sufficient time and attention to devote to Board duties and to otherwise fulfill the responsibilities required of directors. Prior to recommending a candidate as a nominee for director, the Nominating and Corporate Governance Committee reviews the candidate’s professional commitments, including the number of boards on which the candidate serves and considers whether those commitments may limit the ability of the candidate to devote sufficient time and attention to Board duties.
Board of Directors Independence
Under the listing requirements and rules of
the Nasdaq,
Global Market (“Nasdaq”), independent directors must compose a majority of a listed company’s board of directors. In addition, applicable Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating committees must be independent within the meaning of applicable Nasdaq rules. Audit committee members must also satisfy the independence criteria set forth in Rule
10A-3 under the
Securities Exchange
Act.Act of 1934, as amended (the “Exchange Act”). Our Board has undertaken a review of the independence of each director and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. In making this determination, our Board considered the current and prior relationships that each
non-employee director has with our
companyCompany and all other facts and circumstances our Board deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each
non-employee director. As a result of this review, our Board determined that each of
Dr. Björk, Mr. Boess, Mr. Granadillo, Dr.
MakkerMalik, Dr. Southwell, Mr. Woods and Dr. Yalamanchi qualify as “independent” directors within the meaning of the Nasdaq rules.
Our Board also determined that our former directors, Mr. Barberich, Mr. Howes, Mr. Machado, Dr. Phillips and Dr. Spivey, satisfied the independence requirements, as determined in accordance with the rules of Nasdaq. As required under applicable Nasdaq rules, our independent directors meet in regularly scheduled executive sessions at which only independent directors are present. Dr. Wong is the current
chairpersonChairman of our Board and is not considered an
independent director.director due to his role as chairman of an affiliate, RTW, and his continued role as an employee of the Company. Consistent with Nasdaq listing requirements, the independent directors regularly have the opportunity to meet in executive sessions without Dr. Wong, Dr. ShahMakker and Mr. SouthwellDr. Shah in attendance. The purpose of these executive sessions is to promote open and candid discussion among the independent directors. We do not have a lead independent director.
The Board has three committees: an audit committee (the “Audit Committee”),
a compensation committee (the “Compensation Committee”),the Compensation Committee, and the Nominating and Corporate Governance Committee. During the year ended December 31,
2017,2023, the Audit Committee held
sixfour meetings, the Compensation Committee held
twofour meetings, and the Nominating and Corporate Governance Committee held
one meeting.two meetings. Continuing directors and our nominees for election as director are
requiredstrongly encouraged to attend the annual meeting of stockholders
barring significant commitments or special circumstances, and
are also required to participate in our committee meetings. The following table provides membership information for each committee:
Name
| | Audit | | | Nominating and Corporate
Governance | | | Compensation | |
Elisabeth Björk | | | X | | | | | | |
Carsten Boess** | | | XX* | * | | | | | | | X | |
Pedro Granadillo | | | X | | | X | X | | | | X | * X* |
Gotham Makker
Naveen Yalamanchi | | | X | | | | X | | | | | |
Naveen Yalamanchi
R. Keith Woods | | | | | | X* | X | * | | | X | |
*
| Committee ChairpersonChairman |
The members of the Audit Committee are Dr. Elisabeth Björk, Mr. Carsten Boess, Mr. Pedro Granadillo and Dr. Gotham Makker.Mr. R. Keith Woods. Mr. Boess serves as chair of the Audit Committee. The Audit Committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq and which is available on our
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website at
www.rocketpharma.com/www.ir.rocketpharma.com/corporate-governance/governance-highlights. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.
Our Board has determined that
Dr. Björk, Mr. Boess, Mr. Granadillo and
Dr. MakkerMr. Woods are independent as independence is currently defined in Rule 5605 of the Nasdaq listing standards and Rule
10A-3 under the Exchange Act. In addition, our Board has determined that each member of the Audit Committee is financially literate, and that Mr. Boess qualifies as an “audit committee financial expert” as defined in applicable SEC rules. In making this determination, our Board has considered the formal education and nature and scope of their previous experience, coupled with past and present service on various audit committees. The responsibilities of our Audit Committee include, among other things:
appointing, determining the compensation of, and assessing the independence of our independent registered public accounting firm;
pre-approving auditing and permissiblenon-audit services, and the terms of such services, to be provided by our independent registered public accounting firm;
reviewing the overall audit plan with our independent registered public accounting firm and members of management responsible for preparing our financial statements;
reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures as well as critical accounting policies and practices used by us;
reviewing major issues as to the adequacy of our internal control over financial reporting;
establishing procedures for the receipt, retention and treatment of complaints received regarding ethics-related issues or potential violations of our code of business conduct and ethics and accounting and auditing-related complaints and concerns;
recommending, based upon the Audit Committee’s review and discussions with management and the independent registered public accounting firm, whether our audited financial statements shall be included in our Annual Report on Form10-K;
regularly reportreporting to, and reviewreviewing with the Board, any issues that arise with respect to the integrity of our financial statements and our compliance with legal and regulatory requirements;
preparing the audit committee report required by SEC rules to be included in our annual proxy statement;
reviewing all related party transactions for potential conflict of interest situations and approving all such transactions; and
discussing quarterly earnings releases.
AUDIT COMMITTEE REPORTTABLE OF CONTENTS
Audit Committee Report(1)* The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31,
2017,2023 with management and our
former independent registered public accounting firm,
RSM USEisnerAmper LLP. The Audit Committee has discussed with
RSM USEisnerAmper LLP the matters required by the applicable standards of the Public Company Accounting Oversight Board (“PCAOB”)
. and the Securities and Exchange Commission. The Audit Committee has also received the written disclosures and the letter from
RSM USEisnerAmper LLP required by applicable requirements of the PCAOB regarding
RSM USEisnerAmper LLP’s communication with the Audit Committee concerning independence, and has discussed with
RSM USEisnerAmper LLP the firm’s independence. Based on the foregoing, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form
10-K for the fiscal year ended December 31,
2017,2023, for filing with the SEC.
|
Rocket Pharmaceuticals, Inc.
|
Audit Committee
|
Carsten Boess, Chairperson
|
Pedro Granadillo
|
Gotham Makker
|
Rocket Pharmaceuticals, Inc.
(1) | The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing we make under either the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
Audit Committee
Carsten Boess, Chairman
Elisabeth Björk
Pedro Granadillo
R. Keith Woods
Nominating and Corporate Governance Committee
The members of our Nominating and Corporate Governance Committee are Mr. Pedro Granadillo
Dr. Gotham Makker and
Dr. Naveen Yalamanchi. Dr. YalamanchiMr. R. Keith Woods. Mr. Woods serves as
chairpersonchairman of the Nominating and Corporate Governance Committee. Our Board has determined that all members of our Nominating and Corporate Governance Committee are independent as independence is currently defined in Section 5605 of the Nasdaq listing standards. The Nominating and Corporate Governance Committee operates under a written charter that satisfies the applicable standards of Nasdaq and which is available on our website at
www.rocketpharma.com/www.ir.rocketpharma.com/corporate-governance/governance-highlights. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.
The responsibilities of our Nominating and Corporate Governance Committee include, among other things:
recommending to the Board criteria for Board and committee membership;
establishing a policy and procedures for identifying and evaluating Board candidates, including nominees recommended by stockholders;
identifying individuals qualified to become members of the Board;
recommending to the Board the persons to be nominated for election as directors and to each of the Board’s committees;
developing and recommending to the Board a set of corporate governance guidelines; and
overseeing the evaluation of the Board and management.
The Nominating and Corporate Governance Committee periodically determines the qualifications, qualities, skills and other expertise required to be a director and develops, subject to approval by the full Board, criteria to be considered in selecting nominees for director. Among other things, the Nominating and Corporate Governance Committee considers whether the Board reflects the balance of knowledge, experience, skills, expertise, integrity, ability to make analytical inquiries, and diversity as a whole that the Nominating and Corporate Governance Committee deems appropriate.appropriate and assess the effectiveness of this policy/goal during the Board’s annual evaluation. The Nominating and Corporate Governance Committee has not adopted a policy regarding the consideration of diversity in identifying director nominees. The process followed by the Nominating and Corporate Governance Committee to identify and evaluate director candidates includes requests to current directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the Nominating and Corporate Governance Committee and the Board. The Nominating and
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Corporate Governance Committee may use outside consultants to assist in identifying or evaluating candidates. Final approval of director candidates is determined by the full Board.
The Nominating and Corporate Governance Committee will consider qualified nominations for directors recommended by stockholders. In general, stockholder recommendations are evaluated on the same basis as any recommendation from members of the Board or management of the Company. Recommendations should be sent to our Secretary, c/o Rocket Pharmaceuticals, Inc.,
430 East 29th Street, Suite 1040,9 Cedarbrook Drive, Cranbury, New
York, NY 10016.Jersey 08512. For additional information about our director nomination requirements, please see “Stockholder Proposals and Nominations” and our
amendedAmended and
restated bylaws.Restated Bylaws (“bylaws”).
The members of our Compensation Committee are Mr. Carsten Boess, Mr. Pedro Granadillo and
Dr. Naveen Yalamanchi.Mr. R. Keith Woods. Mr. Granadillo serves as
chairpersonchairman of the Compensation Committee. All members of the Compensation Committee are independent as independence is currently defined in Section 5605 of the Nasdaq listing standards. The Compensation Committee operates under a written charter that satisfies the applicable standards of Nasdaq and which is available on our website at
www.rocketpharma.com/ www.ir.rocketpharma.com/corporate-governance/governance-highlights. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.
The responsibilities of the Compensation Committee include, among other things:
reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer;
evaluating the performance of our Chief Executive Officer in light of such corporate goals and objectives and determining and approving the compensation of our Chief Executive Officer;
determining the compensation of our other executive officers;
overseeing and administering our compensation and similar plans;
appointing, compensating, and overseeing potential current compensation advisors in accordance with the independence standards identified in the applicable rules of Nasdaq;
reviewing our policies and procedures for the grant of equity-based awards;
reviewing and making recommendations to the Board with respect to director compensation;
preparing the Compensation Committee Report required by SEC rules to be included in our annual proxy statement or Annual Report on Form10-K; 10-K, if applicable;
reviewing and discussing with management the compensation discussion and analysis to be included in our annual proxy statement or Annual Report on Form10-K; 10-K, if applicable; and
reviewing and discussing with the Board corporate succession plans for the Chief Executive Officer and other key officers.
As part of its process for approving or recommending to the Board the compensation for our senior executives other than our Chief Executive Officer, the Compensation Committee reviews and considers the recommendations made by our Chief Executive Officer. In fulfilling its responsibilities, the Compensation Committee may delegate any or all of its responsibilities to a subcommittee of the Compensation Committee, but only to the extent consistent with our
amended and restated certificate of incorporation,
amended and restated bylaws, Nasdaq rules, and other applicable law. In addition, pursuant to its charter, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation.
Beginning inSince October 2016, the Compensation Committee
has directly engaged
Pearl Meyer & Partners (“Pearl Meyer”) as itsa compensation consultant to assist with matters relating to senior executive and director compensation.
In January 2018, the Compensation Committee transitioned this work to F.W. Cook & Co. (“F.W. Cook”). The Compensation Committee requested that
Pearl Meyer and F.W. Cook:its compensation consultant:develop a peer group of public companies to be used to benchmark pay levels of the senior leadership team and the board of directors;Board;
benchmark the total direct compensation of the senior leadership team;
review the pay mix of the senior leadership team and compare it to the pay mix of the named executive officers of theour peer group executive;group;
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review the amount of equity used to support the executive and Board pay programs and evaluate how this equity usage compared to peer practices and proxy advisory policies; and
conduct a detailed analysis of the design and amount of board of director pay at the peer companies and contrastcompare this againstto the Company’s current practices.
Pearl Meyer and F.W. Cook
The Compensation Committee’s compensation consultant ultimately developed recommendations that were presented to the Compensation Committee for its consideration. These recommendations covered the executive and Board pay programs.
Semler Brossy Consulting Group LLC (“Semler Brossy”) has served as the Compensation Committee’s compensation consultant since June 2019. Pursuant to the factors set forth in Item 407 of Regulation S-K of the Exchange Act, the Compensation Committee reviewed the independence of Semler Brossy, and conducted a conflicts of interest assessment (taking into consideration factors specified in the Nasdaq listing standards) on Semler Brossy. The Compensation Committee concluded that Semler Brossy is independent and their work for the Compensation Committee has not raised any conflicts of interest. No other fees were paid to Semler Brossy except fees related to their services to the Compensation Committee.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31,
2017,2023, the Compensation Committee consisted of Mr.
Timothy Barberich,Carsten Boess, Mr. Pedro Granadillo and Dr.
Gary M. Phillips and Richard N. Spivey, PharmD, PhD.Naveen Yalamanchi. No member of our Compensation Committee then in
office service had ever been an officer or employee of the Company.Company or had any other relationship requiring disclosure herein. None of our executive officers then in office served as a member of the board of directors or compensation committee of any other entity that had one or more of its officers serving on our Board or Compensation Committee.
Dr. Roderick Wong currently serves as
chairpersonchairman of our Board. Our Board has determined that its current structure, with separate Chairman and
CEOChief Executive Officer roles, is in the best interests of the Company and its stockholders at this time. The Board believes that this governance structure promotes balance between the Board’s independent authority to oversee our business and the
CEOChief Executive Officer and his management team who manage the business on a
day-to-day basis. Our Board believes that this leadership structure is appropriate for us, given Dr. Wong’s extensive knowledge and understanding of the biopharmaceutical industry and his ability to effectively identify strategic priorities for the Company. Furthermore, our Board believes that Dr. Wong’s qualifications to be our
chairpersonChairman include his significant experience as a healthcare investor in all stages of the lifecycle of biopharmaceutical companies.
Risk assessment and oversight are an integral part of our governance and management processes. Our Board encourages management to promote a culture that incorporates risk management into the Company’s corporate strategy and
day-to-day business operations. Management discusses strategic and operational risks at regular management meetings and conducts specific strategic planning and review sessions during the year that include a focused discussion and analysis of the risks facing the Company. Throughout the year, senior management reviews these risks with the Board at regular Board meetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken by management to mitigate or eliminate such risks.
Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, and our Audit Committee is responsible for overseeing our significant financial and operational risk exposures and the steps our management has taken to monitor and control these exposures.
The Audit Committee also monitors compliance with legal and regulatory requirements, including managing violations of our code of business conduct and ethics, and considers and approves or disapproves any related-person transactions. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines. Our Compensation Committee assesses and monitors whether any of our compensation policies andor programs has the potential to encourage excessive risk-taking.
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Code of Business Conduct and Ethics
We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics is available on our website at
www.rocketpharma.com/www.ir.rocketpharma.com/corporate-governance/governance-highlights, under the corporate governance tab on our website. We intend to satisfy applicable disclosure requirements regarding an amendment to, or a waiver from, a provision of our code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, by posting such information on our website at the
internetInternet address set forth
above.above within four business days following the date of amendment or waiver. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.
Commitment to ESG and Corporate Responsibility
Rocket’s unique set of core values— “Trust,” “Curiosity,” “Generosity” and “Elevate”—is a true beacon of hope within and outside the company. Trust is the bedrock, the ground upon which everything is built. Generosity and curiosity, derived from the same root words as “gene” and “cure,” describe a spirit of giving, aspiring for something greater than oneself, and humility in the search for excellence. Ultimately, the company’s associates and partners seek to elevate themselves, one another, and the lives of patients and families around the world through gene therapy.
In 2022, Rocket formalized its first-ever, management-level ESG Steering Committee. This cross-functional working group consists of individuals from investor relations, legal, EHS, facilities, human resources and other functions, allowing us to gather data and insights for focus areas that affect patients, science, employees, communities, and the environment. Organized in environmental, social and governance verticals, these dedicated team members oversee, develop a strategy for, and review reporting and key performance indicators surrounding our ESG practices.
Stockholder Communications with Our Board
Stockholders wishing to communicate directly with our Board may send correspondence to our Secretary, c/o Rocket Pharmaceuticals, Inc., 430 East 29th Street, Suite 1040,9 Cedarbrook Drive, Cranbury, New York, NY 10016.Jersey 08512. Our Secretary will relay the information received to the Board. Stockholders may also visit our website atwww.rocketpharma.com and select “Contact Us” to communicate online with us.
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RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s stockholders are being asked by the Audit Committee to ratify the appointment of EisnerAmper LLP to serve as the Company’s independent registered public accounting firm. EisnerAmper LLP has served as the independent registered public accounting firm for Private Rocket since
August 20172016 and was appointed to be the independent registered public accounting firm for the Company on March 16, 2018. The Audit Committee is solely responsible for selecting the Company’s independent registered public accounting firm, and stockholder approval is not required to appoint EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2018.2024. However, the Board believes that submitting the appointment of EisnerAmper LLP to the stockholders for ratification is good corporate governance. If the stockholders do not ratify this appointment, the Audit Committee will reconsider whether to retain EisnerAmper LLP. If the selection of EisnerAmper LLP is ratified, the Audit Committee, in 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 the Company and its stockholders. Representatives of EisnerAmper LLP are expected to be present at the Annual Meeting. These representatives will be provided an opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions from stockholders.
The proposal to ratify the appointment of EisnerAmper LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2018,2024, requires an affirmative vote of a majority of the votes cast for or against the proposal at the Annual Meeting by holders of shares present
in personvirtually via the Internet or represented by proxy and entitled to vote on the proposal.
THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF EISNERAMPER LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Dismissal of RSM US LLPAs previously disclosed in the Company’s Current Report on Form8-K filed on March 21, 2018, RSM US LLP, an independent registered public accounting firm, served as our independent auditors until March 16, 2018, when thePre-Approval Policies and Procedures
The Audit Committee
dismissed RSM US LLP in connection with the appointment of EisnerAmper LLP.The reports of RSM US LLP on the financial statements of Rocket Pharmaceuticals, Inc. (formerly known as Inotek Pharmaceuticals Corporation) for each of fiscal years ended December 31, 2017 and December 31, 2016 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principle.
During the fiscal years ended December 31, 2017 and December 31, 2016, and the subsequent interim period, there were no disagreements (as that term is defined in Item 304(a)(1)(iv) of RegulationS-K and related instructions) between the Company and RSM US LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures which disagreements, if not resolved to the satisfaction of RSM US LLP would have caused RSM US LLP to make reference thereto in its reports on the financial statements for such years.
As disclosed in the Company’s Current Report on Form8-K filed on March 21, 2018, the Company provided RSM US LLP with a copy of the disclosures it made on its Current Report on Form8-K filed on March 21, 2018
(which are repeated above) and requested that RSM US LLP furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements contained herein. A copy of RSM US LLP’s letter, dated March 21, 2018, is filed as Exhibit 16.1 to the Company’s Current Report on Form8-K filed on March 21, 2018.
During the fiscal years ended December 31, 2017 and December 31, 2016, and the subsequent interim period through March 16, 2018, neither the Company, nor anyone acting on its behalf, consulted with EisnerAmper LLP regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that may be rendered on the Company’s financial statements, and EisnerAmper LLP did not provide either a written report or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of RegulationS-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of RegulationS-K).
Pre-Approval Policies and Procedures
The Audit Committeepre-approves all audit and permissiblenon-audit services provided by its independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.Pre-approval may be given as part of the Audit Committee’s approval of the scope of the engagement of the independent registered public accounting firm or on an individualcase-by-case basis. All of the services described below were approved by our Audit Committee.
Audit Fees and Services
In 2014, we retained RSM US LLP to provide audit services
The following table presents aggregate fees billed for the fiscal years ended December 31, 2014, 2013, and 2012, and for services in connection with our initial public offering which took place in February 2015 (the “IPO”). In the table below, Audit Fees reflects fees for audit services foreach of the years ended December 31, 20172023 and December 31, 2016. Audit-Related Fees2022 for 2017 primarily reflect fees forprofessional services related torendered by EisnerAmper LLP in the Reverse Merger. Audit-Related Fees for 2016 primarily reflect fees for services related to our registration statement on FormS-3.categories listed below.
The Audit Committee
pre-approved all services provided by our independent registered public accounting firm for the fiscal
yearsyear ended December 31,
2017 and 2016. | | | | | | | | |
| | | 2017 | | | 2016 | |
Audit Fees (1) | | $ | 139,550 | | | $ | 162,950 | |
Audit-Related Fees (2) | | | 50,740 | | | | 67,300 | |
Tax Fees (3) | | | — | | | | 36,000 | |
All Other Fees (4) | | | — | | | | — | |
| | | | | | | | |
Total | | $ | 190,290 | | | $ | 266,250 | |
| | | | | | | | |
Audit Fees(1) | | | $531,430 | | | $588,516 |
Audit-Related Fees(2) | | | — | | | — |
Tax Fees(3) | | | $125,670 | | | 199,257 |
All Other Fees(4) | | | — | | | — |
Total | | | $657,100 | | | $774,273 |
(1)
| “Audit Fees” include the aggregate fees billed for audit of annual financial statements, audit of internal controls under Sarbanes-Oxley, review of financial statements included in the Form10-Qs, and services normally provided by the accountant for statutory and regulatory filings or engagements for those fiscal years. The 2022 audit fees included $124,635 related to quarterly bringdowns of the |
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at-the-market offering program and consents for the October 2022 Public Offering and the Form S-4 filed in conjunction with the Renovacor acquisition in October and December 2022. The 2023 audit fees included $70,125 related to quarterly bringdowns of the at-the-market offering program and consents for the September 2023 Public Offering.
(2)
| “Audit-Related Fees” include the aggregate fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the Company’s financial statements. |
(3)
| “Tax Fees” include the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. |
(4)
| “All Other Fees” include the aggregate fees billed for any other products and services provided by the principal accountant. |
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NON-BINDING, ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION Our Board is providing our stockholders with an opportunity to cast a non-binding, advisory vote to approve the compensation of our named executive officers.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) enables our stockholders to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. As described below in the “Compensation Discussion and Analysis” section, we have developed a compensation program that is designed to motivate employees to achieve short-term and long-term results that are in the best interests of our stockholders. We believe our compensation policy strikes an appropriate balance between the implementation of responsible, measured compensation practices and the effective provision of incentives for our named executive officers to exert their best efforts for our success.
We are asking for stockholder approval, on a non-binding, advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement, which includes the disclosures under the “Compensation Discussion and Analysis” section below, including the compensation tables and the narrative discussion following the compensation tables in this proxy statement. This vote, commonly referred to as the “Say on Pay” vote, is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the policies and practices described in this proxy statement. We currently hold our Say on Pay vote every year. Stockholders will have an opportunity to cast an advisory vote on the frequency of our Say on Pay votes at least every six years. The next advisory vote on the frequency of our Say on Pay vote will occur no later than the 2027 Annual Meeting of Stockholders.
The following resolution will be submitted for a stockholder vote at the Annual Meeting:
“BE IT RESOLVED THAT the Company’s stockholders hereby approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers, as disclosed in the proxy statement for the 2024 Annual Meeting of Stockholders pursuant to Section 14A of the Exchange Act, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the narrative disclosures that accompany the compensation tables.”
As this vote is advisory, it will not be binding upon the Board or the Compensation Committee, and neither the Board nor the Compensation Committee will be required to take any action as a result of the outcome of this vote. However, the Compensation Committee will carefully consider the outcome of this vote when considering future executive compensation policies and decisions.
For approval, this proposal must receive the affirmative vote of the majority of shares properly cast on the proposal. Abstentions and broker non-votes will have no effect on Proposal No. 3.
THE BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 3 TO APPROVE, ON A NON-BINDING, ADVISORY BASIS, THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.
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APPROVAL OF
THE COMPANY’S SECOND AMENDED AND RESTATED 2014INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
OPTION AND INCENTIVE PLANBackground
On April 15, 2024, our Board approved, subject to stockholder approval, an amendment (the “Amendment”) to our certificate of incorporation, in order to increase the number of authorized shares of our Common Stock from 120,000,000 to 180,000,000. We are not increasing the authorized number of shares of preferred stock.
Our Board determined that the Amendment is advisable and in the best interest of the
ProposalIn August 2014,Company and our stockholders and necessary for general corporate purposes as more fully described below. The Board directed that the Board adoptedproposed Amendment be submitted for adoption and approval by our stockholders at the 2014 Stock OptionAnnual Meeting and Incentive Planrecommends that our stockholders adopt and approve the Amendment at the Annual Meeting.
Form of the Amendment
The proposed Amendment would amend the first paragraph of Article IV of our certificate of incorporation to read in its entirety as follows:
The total number of shares of capital stock which the Corporation shall have authority to issue is 185,000,000 Million ), of which (i) 180,000,000 shares shall be a class designated as common stock, par value $0.01 per share (the “Original Plan”“Common Stock”), and (ii) Five Million (5,000,000) shares shall be a class designated as undesignated preferred stock, par value $0.001 per share (the “Undesignated Preferred Stock”).
The full text of the Amendment is also set forth in the Certificate of Amendment set forth in Annex A hereto, which was subsequentlywe intend to file with the Secretary of State of the State of Delaware if the Amendment is adopted and approved by the requisite vote of our stockholders.
Description of Common Stock
The certificate of incorporation currently authorizes the issuance of 120,000,000 shares of Common Stock at a par value of $0.01 per share. As of the record date, there were [•] shares of Common Stock issued and outstanding. The Amendment would not affect the number of authorized shares of our preferred stock.
Purpose of the Amendment
Our Board believes that the current number of authorized shares of Common Stock is not adequate to enable us, as the need may arise, to take advantage of market conditions and favorable opportunities involving the issuance of our Common Stock without the delay and expense associated with the holding of a special meeting of our stockholders. The availability of additional authorized Common Stock will provide us with the flexibility in the future to issue shares of our Common Stock for general corporate purposes, such as raising additional capital, acquisitions and other strategic transactions, effecting stock splits, sales of stock or securities convertible into or exercisable for Common Stock, and providing equity incentives to employees, officers and directors. We believe that the Amendment will provide us with additional flexibility to meet business and financing needs as and when they may arise.
As of the date of this Proxy Statement, we have no specific plans, agreements or commitments to issue any shares of Common Stock for which approval of the proposed Amendment is required, except as described herein, although we intend to continue to consider transactions consistent with our business plan from time to time that could result in such issuances. Our Board will determine whether, when and on what terms the issuance of shares of our Common Stock may be warranted in connection with any future actions. No further action or authorization by our stockholders will be necessary before issuance of the additional shares of our Common Stock authorized under the Amendment, except as may be required for a particular transaction by applicable law or regulatory agencies or by the rules of the Nasdaq Stock Market.
Rights of Additional Authorized Shares of Common Stock
Any newly authorized shares of Common Stock will be identical to the shares of Common Stock now authorized and outstanding. The Amendment will not alter the voting powers or relative rights of the Common Stock.
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Potential Adverse Effects of the Amendment
Any future issuance of additional authorized shares of our Common Stock may, among other things, dilute the earnings per share of Common Stock and the equity and voting rights of those holding Common Stock at the time the additional shares are issued. Additionally, this potential dilutive effect may cause a reduction in the market price of our Common Stock. Further, the Amendment could adversely affect the ability of third parties to take us over or change our control by, for example, permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our Board or contemplating a tender offer or other transaction for the combination of us with another company that our Board determines is not in our best interests or in the best interests of our stockholders. Our Board, however, does not intend or view the Amendment as an anti-takeover measure, nor does it contemplate its use in this manner at any time in the foreseeable future.
Neither the Delaware General Corporation Law, the certificate of incorporation, nor our bylaws provides for appraisal or other similar rights for dissenting stockholders in connection with this proposal. Accordingly, our stockholders will have no right to dissent and obtain payment for their Common Stock.
Effectiveness of Amendment
If the Amendment is adopted and approved by the stockholders at the Annual Meeting, the increase to our authorized shares of Common Stock would become effective on the date we file the Amendment to our certificate of incorporation with the Secretary of State of the State of Delaware.
For approval, this proposal must receive the affirmative vote of the majority of the shareholder votes entitled to be cast. Abstentions and broker non-votes, if any, will have the effect of a vote “Against” this proposal. We do not expect any broker non-votes on this proposal because we believe that this proposal is considered a “routine” matter to be considered at the Annual Meeting for which brokerage firms may vote in their discretion on behalf of their clients if no voting instructions are provided.
THE BOARD RECOMMENDS A VOTE “FOR” PROPOSAL NO. 4, TO APPROVE THE INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK, AS DISCLOSED IN THIS PROXY STATEMENT.
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TRANSACTION OF OTHER BUSINESS
Our Board does not know of any other matters to be raised at the Annual Meeting. If any other matters not mentioned in this proxy statement are properly brought before the meeting, the appropriate executive officers and directors named in this proxy statement intend to use their discretionary voting authority under the proxy to vote the proxy in accordance with their best judgment on those matters.
COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis provides an overview of the material elements of our executive compensation program during the fiscal year ended December 31, 2023 (“fiscal 2023”) for the following “named executive officers,” whose compensation is set forth in the Summary Compensation Table and other compensation tables contained in this proxy statement:
Gaurav D. Shah, M.D., Chief Executive Officer (“CEO”) and Director;
John Militello, CPA, Vice President of Finance, Treasurer, Principal Accounting Officer;
Kinnari Patel, Pharm.D., MBA, President and Chief Operating Officer;
Mayo Pujols, Chief Technical Officer and Executive Vice President; and
Jonathan Schwartz, M.D., Chief Medical and Gene Therapy Officer
This section also discusses our executive compensation philosophy, objectives and design; how and why the Compensation Committee arrived at the specific compensation policies and decisions during fiscal 2023; the role of Semler Brossy, the Compensation Committee’s independent compensation consultant; and the peer group used in evaluating executive compensation.
Executive Summary
We are a fully integrated, late-stage biotechnology company focused on the development of first, only and best in class gene therapies, with direct on-target mechanism of action and clear clinical endpoints, for rare and devastating diseases. We have three clinical-stage ex vivo lentiviral vector (“LV”) programs, which include programs for:
Fanconi Anemia (“FA”), a genetic defect in the bone marrow that reduces production of blood cells or promotes the production of faulty blood cells;
Leukocyte Adhesion Deficiency-I (“LAD-I”), a genetic disorder that causes the immune system to malfunction; and
Pyruvate Kinase Deficiency (“PKD”), a red blood cell autosomal recessive disorder that results in chronic non-spherocytic hemolytic anemia.
In September 2014.2023, the FDA accepted the Biologics License Application (“BLA”) and granted priority review for RP-L201 for the treatment of severe LAD-I. Treatments in the FA Phase 2 studies were completed in 2023 with regulatory filings in the United States (“U.S.”) and Europe (“EU”) for FA anticipated in 2024. Additional work on a gene therapy program for the less common FA subtypes C and G is ongoing.
In the U.S., we also have two clinical stage and one pre-clinical stage in vivo adeno-associated virus (“AAV”) programs, which include programs for:
Danon disease (“DD”), a multi-organ lysosomal-associated disorder leading to early death due to heart failure. The DD program is currently in an ongoing Phase 2 trial.
Plakophilin-2 Arrhythmogenic Cardiomyopathy (“PKP2-ACM”), an inheritable cardiac disorder that is characterized by a progressive loss of cardiac muscle mass, severe right ventricular dilation, dysplasia, fibrofatty replacement of the myocardium and a high propensity to arrhythmias and sudden death. This program received FDA clearance of an Investigational New Drug (“IND”) application and we have initiated a Phase 1 study.
BAG3 Dilated Cardiomyopathy (“DCM”), which is the most common form of cardiomyopathy and is characterized by progressive thinning of the walls of the heart resulting in enlarged heart chambers that are unable to pump blood. Our program utilizes recombinant AAV9-based gene therapy designed to slow or halt progression of BAG3-DCM.
We have global commercialization and development rights to all of these product candidates under royalty-bearing license agreements.
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Fiscal 2023 Financial and Business Highlights
In fiscal 2023, we achieved significant financial and business results, including:
Announced expansion of cardiac gene therapy portfolio with addition of RP-A601 for PK2-ACM;
Announced positive clinical data from completed Phase 1 trial of RP-A501 for DD;
Received Regenerative Medicine Advanced Therapy designation and Prime Medicines designation for RP-A501 gene therapy for the treatment of DD;
Announced FDA clearance of IND for clinical trial of RP-A601 for PKP2-ACM;
Announced FDA Fast Track and Orphan Drug designations for RP-A601 for PKP2-ACM;
Received Regenerative Medicine Advanced Therapy designation for RP-L301 gene therapy for the treatment of PKD;
Announced alignment with the FDA on the design of the Phase 2 pivotal trial of RP-A501 for DD;
Announced that the FDA accepted the BLA and granted Priority Review for RP-L201 for LAD-I;
Continued buildout of our research and development and manufacturing facility in Cranbury, New Jersey; and
Completed the sale of 9,453,418 shares of our common stock and 3,126,955 pre-funded warrants to purchase shares of our common stock for net proceeds of approximately $188.9 million, after deducting offering costs, commissions, legal and other expenses.
Fiscal 2023 Executive Compensation Highlights
In fiscal 2023, the key highlights of our executive officer compensation program included:
| • | Base Salary and Annual Target Cash Incentives. We maintained competitive base salary and annual target cash incentive levels for our executive officers to ensure competitive positioning relative to market pay levels and to ensure pay-and-performance alignment through our annual incentive program. |
| • | Annual Target Cash Incentives Paid Based on Corporate Performance. We achieved 100% of our target corporate objectives and paid annual cash incentive awards to our executive officers based on this performance. |
| • | Equity Awards. We granted restricted stock unit (“RSU”) and stock option awards to each of our executive officers with a three-year vesting schedule. We consider market-competitive pay levels for similarly-situated executives and our prior year performance when calibrating the target level of our equity awards. We believe that RSUs offer predictable value delivery and promote retention of our executive officers while aligning their interests with the long-term interests of our stockholders in a manner consistent with competitive market practices, and that stock options provide further alignment between the interests of our stockholders and executive officers given that our stock price must increase above the option exercise price to provide any value to our executive officers. |
Stockholder Advisory Vote on Executive Compensation
Our stockholders have the opportunity annually to cast a non-binding, advisory vote to approve the compensation of our named executive officers. Consistent with the recommendation of our Board and the preference of our stockholders subsequentlyas reflected in the non-binding, advisory vote on the frequency of future “Say On Pay” votes conducted at our 2021 annual meeting of stockholders, we intend to provide for annual non-binding, advisory votes on the compensation of our named executive officers. The next non-binding, advisory vote on the frequency of our Say on Pay vote will occur no later than our 2027 annual meeting of stockholders.
At our 2023 annual meeting of stockholders, our Say On Pay proposal was approved amendmentsby approximately 83.6% of the votes cast. While we view the strong support expressed in the Say On Pay proposal as a general endorsement of our named executive officer compensation program, we believe that it is constructive to have an ongoing dialogue with our stockholders and intend to take the views of our stockholders into consideration when making future decisions about named executive officer compensation.
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Compensation Philosophy and Objectives
We have designed our executive compensation program to achieve the following objectives:
attract, motivate and retain executive officers of outstanding ability and potential;
motivate and reward behavior consistent with our corporate performance objectives; and
ensure that compensation is meaningfully tied to the Original Plancreation of stockholder value through the development of best-in-class gene therapies.
We believe that our executive compensation program should include short-term and long-term elements and should reward consistent performance in November 2014achieving the corporate and strategic objectives that support long-term value creation. We evaluate both performance and compensation to ensure that the compensation provided to our executive officers remains competitive relative to compensation paid by similar companies operating in the biotechnology and pharmaceuticals industry, in particular our peer companies, taking into account the role and performance of the individual executive and the performance and strategic objectives of Rocket Pharmaceuticals.
Compensation Policies and Practices
Our executive compensation and corporate governance programs are designed to link pay with operational performance and increase long-term stockholder value while striking a responsible balance between risk and reward. To accomplish these objectives, we have adopted the following policies and practices over time:
☑ Establish pay-for-performance philosophy and culture
☑ Set goals for target direct compensation, over two-thirds of which are performance-based and/or at risk
☑ Maintain independent compensation committee
☑ Hire and retain independent compensation consultant
☑ Use shares under our long-term incentive program responsibly
☑ Conduct annual risk assessment of our compensation program
☑ Limit perquisites and personal benefits
☑ Maintain a clawback policy covering incentive-based cash and equity compensation
☑ Require our directors and executive officers to maintain specified levels of stock ownership | | | ☒ Allow for pledging without prior Board approval or hedging of Company stock by executive officers or directors
☒ Provide tax gross-up payments
☒ Provide for single trigger vesting of equity awards
☒ Provide for excessive severance in the event of a change in control
☒ Allow for repricing, cash-out or exchange of “underwater” stock options without stockholder approval
☒ Provide executive pension plans or supplemental retirement plans |
The compensation arrangements for our executive officers consist of base salary, performance-based cash incentives, equity awards, and broad-based welfare and health benefit programs. While we offer cash compensation in the form of base salaries and annual cash incentives, we intend equity compensation to be the central component of our executive compensation program.
We emphasize the use of equity to provide incentives for our executive officers to focus on the growth of our overall enterprise value and, correspondingly, to create value for our stockholders. The longer-term nature of equity mirrors the long-term investment in bringing new therapies to market and incentivizes continuity of leadership over the long term. Historically, we have provided equity compensation primarily in the form of stock options because we believe that stock options serve as an effective performance incentive for our executive officers because the executive officer derives value only if our stock price increases. In 2022, the Compensation Committee approved the addition of RSUs to the named executive officer equity compensation mix at a 33% weighting (based on the grant date fair value under generally accepted accounting principles). We believe
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that RSUs are complementary to stock options in that they are highly aligned with our stock price between the grant date and vesting dates. However, their shorter duration (i.e., lack of an exercise period) allow for value delivery to our named executive officers that is more consistent with the programs at other, larger pharma companies with which we compete for talent. The Compensation Committee also believes that the equity compensation mix at 67% weighting (based on the grant date fair value under generally accepted accounting principles) on stock options continues to align our named executive officers’ compensation opportunities with sustainable long-term increases in our stock and fosters a “start-up” entrepreneurial culture that is critical to our company’s identity.
The Compensation Committee intends to review our executive compensation program, including our equity compensation program, at least annually and with input from its independent compensation consultant. As part of this review process, the Compensation Committee considers whether our programs support our ability to attract, retain and motivate talented executive officers in a manner that drives the success of our business. This evaluation is conducted with input from the management team, as well as the Compensation Committee’s consideration of competitive market data and input provided by the Compensation Committee’s independent compensation consultant. The Compensation Committee also evaluates whether we are meeting our retention objectives and the potential cost of replacing key executive officers.
Compensation-Setting Process
The Compensation Committee is responsible for reviewing, evaluating, and approving the compensation arrangements of our executive officers and for establishing and maintaining our executive compensation policies and practices. The Compensation Committee seeks input and receives recommendations from our Chief Executive Officer when discussing the performance and compensation of other executive officers, and in determining the financial and accounting implications of our compensation programs and hiring decisions. The Compensation Committee is authorized to engage its own independent advisors to provide advice on matters related to executive compensation and general compensation programs. For additional information on our Compensation Committee, see “Board of Directors and Corporate Governance-Board Committees” elsewhere in this proxy statement.
Role of our Chief Executive Officer
In fiscal 2023, our CEO and human resources team assisted the Compensation Committee in evaluating the performance of our other executive officers and making recommendations to the Compensation Committee with respect to base salary adjustments, target annual cash incentive opportunities, actual cash incentive award payments, and equity awards for each executive officer. While the Compensation Committee takes these recommendations into consideration, it exercises its own independent judgment in approving the compensation of our executive officers. In setting compensation for the CEO, the Compensation Committee consults with the full Board, excluding the CEO.
Role of Compensation Consultant
In fiscal 2023, the Compensation Committee retained Semler Brossy to provide advice regarding our executive compensation program. Pursuant to this engagement, Semler Brossy performed the following projects for the Compensation Committee:
assisted in the development of the compensation peer group that we use to understand market competitive compensation practices;
provided compensation data and analysis of our executive compensation program, comparing our program to those of companies in our compensation peer group;
provided perspective on pay recommendations and adjustments for the executive officers; and
advised on trends and developments relating to executive compensation.
Semler Brossy does not provide any other services to us. Semler Brossy maintains a conflict of interest policy that is specifically designed to prevent any conflicts of interest. In addition, the Compensation Committee has assessed the independence of Semler Brossy considering, among other things, the factors set forth in Exchange Act rules and the Nasdaq listing standards and concluded that no conflict of interest exists with respect to Semler Brossy’s engagement by the Compensation Committee.
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Compensation Peer Group
In September 2021, the Compensation Committee identified a compensation peer group designed to reflect companies that are in the biotechnology and pharmaceutical sectors, with similar company stage, pipeline, headcount and mid-level market capitalization. At the time of the group’s approval, we had a market capitalization in the range of the median and a headcount below the median for the compensation peer group. Our compensation peer group for fiscal 2023 consisted of the following companies:
Agios
Allogene
Amicus
Beam
Bluebird bio
BridgeBio
CRISPR AG
Editas
Intellia
Krystal
Mirati
Regenxbio
Replimune
Rhythm
Tenaya
Ultragenyx
uniQure, N.V.
The Compensation Committee considers the compensation levels of the executives at the companies in our compensation peer group to provide general guidance and a benchmark for market practices, without rigidly setting compensation based on specific percentiles relative to the peer group.
Elements of Our Executive Compensation Program
Our executive compensation program consists of three principal components:
base salary;
cash incentives; and
equity compensation.
In fiscal 2023, approximately 92% of our CEO’s and an average of approximately 82% of our other named executive officers’ total target compensation consisted of “at-risk” and/or performance-based compensation (with equity awards valued using their grant date fair value under generally accepted accounting principles).
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Base Salary
We offer base salaries that are intended to provide a stable level of fixed compensation to our executive officers for performance of their day-to-day responsibilities. Each executive officer’s base salary was originally established as the result of arm’s-length negotiation with the individual at the time of his or her initial hiring. Base salaries for our executive officers are reviewed annually to determine whether an adjustment is warranted to reflect changes in market conditions or other factors, including changing responsibilities as our executive officers’ positions evolve. In February 2023, the Compensation Committee reviewed the base salaries of our named executive officers and, after considering analysis performed by Semler Brossy, determined to increase base salaries, effective as of March 1, 2023, for certain of our named executive officers in recognition of strong performance by the named executive officer and to better align base salaries with the median of base salaries for similarly situated executives in our peer group. The base salaries for our named executive officers during fiscal 2022 and fiscal 2023 are set forth below.
Gaurav D. Shah | | | $600,000 | | | $625,000 |
John Militello | | | $305,036 | | | $317,506 |
Kinnari Patel | | | $522,750 | | | $537,125 |
Mayo Pujols | | | $480,000 | | | $492,500 |
Jonathan Schwartz | | | $434,600 | | | $447,433 |
Annual Cash Incentives
We provide our executive officers with the opportunity to receive annual cash incentives. The annual cash incentives are intended to promote our corporate objectives. When determining performance after the annual performance period, the Compensation Committee considers the Company’s performance across various corporate objectives that it considers to be the primary drivers of our business and that will promote long-term durable growth. For our named executive officers other than our CEO, the Compensation Committee also considers individual performance objectives. In February 2024, the Compensation Committee reviewed the target cash incentive amounts of our named executive officers and maintained the targets, as a percentage of base salary, the same as fiscal 2023. The fiscal 2023 target cash incentive amounts for our named executive officers, both in dollars and as a percentage of base salary, are set forth below.
Gaurav D. Shah | | | $375,000 | | | 60% |
John Militello | | | $95,252 | | | 30% |
Kinnari Patel | | | $268,563 | | | 50% |
Mayo Pujols | | | $221,625 | | | 45% |
Jonathan Schwartz | | | $178,973 | | | 40% |
In January 2023, the Compensation Committee set the following corporate objectives for fiscal 2023:
Advance clinical development pipeline
Bring promising clinical-stage products to market.
Expand early-stage pre-clinical pipeline.
Maintain our strong reputation and increase visibility.
Build and maintain a culture of quality and compliance.
In February 2024, the Compensation Committee evaluated the Company’s performance across these corporate objectives and determined that the corporate objectives were achieved at 100% of target.
In addition, the Compensation Committee assessed the individual performance of each non-CEO named executive officer, whose annual bonus for 2023 was also based on such assessment. The Compensation Committee determined that, for individual performance, Mr. Militello achieved 105% of target, Dr. Patel achieved 110% of target, Mr. Pujols 100% of target and Mr. Schwartz achieved 110% of target. In making its
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determinations regarding individual performance, the Compensation Committee considered the following achievements in 2023 for each of the non-CEO named executive officers:
Mr. Militello: Created a dynamic planning process, continued to build upon our internal controls infrastructure and maintained Sarbanes-Oxley Act compliance.
Dr. Patel: Led late-stage development of LV programs, aligned for FDA and EMA approval, and advanced RP-A501 for Danon disease to pivotal stage.
Mr. Pujols: Completed the GMP manufacturing capabilities at the Company’s Cranbury manufacturing facility.
Mr. Schwartz: Advanced the Company pipeline and made contributions to the field of gene therapy.
In light of such achievement, the Compensation Committee determined to award annual cash incentive awards to the named executive officers as set forth in the following table.
Gaurav D. Shah | | | $375,000 | | | 60% | | | $375,000 | | | 100% |
John Militello | | | $95,252 | | | 30% | | | $100,014 | | | 105% |
Kinnari Patel | | | $268,563 | | | 50% | | | $295,419 | | | 110% |
Mayo Pujols | | | $221,625 | | | 45% | | | $221,625 | | | 100% |
Jonathan Schwartz | | | $178,973 | | | 40% | | | $196,871 | | | 110% |
Equity Compensation
We believe that strong long-term corporate performance is achieved with a compensation program that encourages a long-term focus by our executive officers through the use of equity compensation, the value of which depends on the performance of our common stock. For this reason, our long-term incentive compensation to date has been provided largely in the form of equity awards. Historically, we have used stock options to help align the interests of our executive officers with the interests of our stockholders and to enable them to participate in the appreciation of our common stock. Over the course of 2021, the Compensation Committee undertook a holistic evaluation of the Company’s long-term incentive compensation strategy. In particular, the Committee felt it was an appropriate time to evaluate the extent to which the quickly evolving talent landscape in the biopharma and biotechnology spaces necessitated changes to the grant approach at the Company.
As described above, the Compensation Committee determined at the conclusion of this evaluation that the incorporation of RSUs into the long-term incentive program would be competitive with grant practices at its peer companies and create further ratifiedlong-term alignment between executive officers and stockholders. Additionally, RSUs are a typical component of long-term incentive program mixes at larger pharma companies with which we compete for critical talent. However, the Original PlanCompensation Committee also felt it appropriate to maintain the majority of the long-term incentive program in June 2015.the form of stock options given their inherent performance-based nature (through the exercise price). To that end, the equity grant mix to our executive officers for 2023 was 67% in the form of stock options and 33% in the form of RSUs (based on the grant date fair value under generally accepted accounting principles). The Compensation Committee believes that this mix best balances Rocket’s size, scale, and complexity as a later-stage pre-commercial pharma company with its entrepreneurial, “start-up” identity.
The size and form of the equity awards for our executive officers are determined in the discretion of the Compensation Committee at a level that it believes is competitive with current market conditions (as reflected by our compensation peer group), and after taking into consideration each individual executive officer’s role and the scope of his or her responsibilities, his or her experience, his or her past performance and expected future contributions, his or her current equity holdings and the potential equity awards of our other executive officers.
When determining the size of equity awards, the Compensation Committee considers the number of underlying shares granted, with a reference to the executive’s total percentage ownership in the Company, and it also considers prior year performance as an input into decision-making.
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The Company has historically reviewed executive officer market benchmarks prepared by Semler Brossy utilizing the peer group during the December Compensation Committee meeting and during the February Compensation Committee meeting when executive pay levels are discussed and approved. The Company has historically awarded executive officers, other than new hires, annual equity awards during the first fiscal quarter, in either January/February. From time to time, the Company will make off-cycle awards for executive officer retention or promotion or other corporate purposes.
For fiscal 2023, the Compensation Committee determined to grant each of our executive officers RSUs and stock options. Our annual RSUs and annual grants of stock options vest over three years, with one-third vesting on the first anniversary of the date of grant and the remainder vesting in equal quarterly installments over the following two years. The table below provides information regarding the number of shares underlying RSUs and stock options granted to each named executive officer during the annual grant process in fiscal 2023 and the aggregate grant date fair value of such equity awards.
Gaurav D. Shah | | | 348,590 | | | $20.04 | | | 116,317 | | | $6,999,987 |
John Militello | | | 49,798 | | | $20.04 | | | 16,616 | | | $999,976 |
Kinnari Patel | | | 199,194 | | | $20.04 | | | 66,467 | | | $3,999,991 |
Mayo Pujols | | | 167,103 | | | $20.04 | | | 78,009 | | | $3,499,974 |
Jonathan Schwartz | | | 124,496 | | | $20.04 | | | 41,541 | | | $2,499,974 |
As part of its annual review of long-term incentive compensation, the Compensation Committee reviewed the long-term incentive compensation level for the CEO in February 2024. Based upon the Company’s performance in 2023, the Compensation Committee determined that the aggregate target value of Mr. Shah’s 2024 equity awards would be $6.0 million, a decrease of approximately 14% year-over-year. The aggregate grant date fair value for Mr. Militello’s 2024 equity awards would be $750,000, a decrease of approximately 25% year-over-year. The aggregate grant date fair value for Mrs. Patel’s 2024 equity awards would be $3.0 million, a decrease of approximately 25% year-over-year. The aggregate grant date fair value for Mr. Pujols 2024 equity awards would be $1.5 million, a decrease of approximately 25% year-over-year. The aggregate grant date fair value for Dr. Schwartz 2024 equity awards would be $1.75 million, a decrease of approximately 30% year-over-year.
Fiscal 2024 CFO Transition
On March 25, 2024, Aaron Ondrey was appointed as the Company’s Chief Financial Officer and Principal Financial Officer. In April 2018,connection with such appointment, the Company and Mr. Ondrey entered into an executive employment agreement, which provides for an annual base salary of $485,000 and a target annual bonus of 45% of such salary. In connection with the appointment, the Company will grant Mr. Ondrey new hire equity compensation with a grant date fair value of $2,500,000 (based on generally accepted accounting principles), split evenly between options and RSUs. One-third of the RSUs and Options will vest on the first anniversary of the grant, and the remaining two-thirds will vest in eight quarterly increments over the following two years, subject to Mr. Ondrey’s continued employment with the Company. The agreement provides for a severance payment of nine months of annual base salary and nine months of Company-paid COBRA benefits upon certain qualifying terminations of employment and Mr. Ondrey’s execution of an irrevocable release of claims in favor of the Company. In connection with a qualifying termination within 12 months following a Company change in control, Mr. Ondrey would be entitled to a lump sum payment equal to twelve months of annual base salary, a lump sum amount equal to any annual bonus to which Mr. Ondrey would have been entitled for the year in which termination occurs, and, if timely elected, 12 months of Company-paid COBRA benefits.
Benefits Programs
Our employee benefit programs, including our 401(k) plan and health and welfare programs, are designed to provide a competitive level of benefits to our employees generally, including our named executive officers and their families. We adjust our employee benefit programs as needed based upon regular monitoring of applicable laws and practices and the competitive market. Our named executive officers are eligible to participate in the same employee benefit plans, and on the same terms and conditions, as all other U.S. full-time employees.
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Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not generally provide perquisites to our executive team. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive in the performance of his or her duties, to make our executive team more efficient and effective and for recruitment, motivation or retention purposes. All future practices with respect to perquisites or other personal benefits will be subject to review and approval by our Compensation Committee.
Post-Employment Compensation
We have entered into post-employment compensation arrangements with certain of our named executive officers as described in more detail in “Severance and Change in Control Agreements” below.
In determining payment and benefit levels under the various circumstances covered by such post-employment compensation arrangements, the Compensation Committee has drawn a distinction between voluntary terminations of employment, terminations of employment for cause, and involuntary terminations of employment both in connection with or not involving a change in control of the Company. Payment in the latter circumstances has been deemed appropriate in light of the benefits to us described above, as well as the likelihood that the executive officer’s departure is due, at least in part, to circumstances not within his or her control. In contrast, we believe that payments are generally not appropriate in the event of a voluntary resignation or a termination of employment for cause because such events often reflect either an affirmative decision by the executive officer to end his or her relationship with us or inadequate performance.
The post-employment compensation arrangements with certain of our named executive officers also contain certain specified payments and benefits in the event of an involuntary termination of employment in connection with a change in control of the Company. We believe that these arrangements are designed to align the interests of management and stockholders when considering the long-term future for the Company. The primary purpose of these arrangements is to keep our most senior executive officers focused on pursuing all corporate transaction activity that is in the best interests of stockholders regardless of whether those transactions may result in their own job loss. Reasonable post-acquisition payments and benefits should serve the interests of both the executive officer and our stockholders.
We do not provide any executive officer, including any named executive officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer may owe as a result of the application of Sections 280G or 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).
Other Compensation Policies
Clawback Policies
In March 2022, our Board
approvedadopted a clawback policy that covers incentive compensation paid to our employees. The policy provides that our Board or Compensation Committee may require an employee to repay to us compensation in the following circumstances: (i) as required by Section 304 of the Sarbanes-Oxley Act; (ii) as required by Section 954 of the Dodd-Frank Act as supplemented by the Nasdaq Clawback Policy (as defined below))] (iii) as required by any other applicable law, regulation or regulatory requirement; (iv) if we suffer significant financial loss, reputational damage or similar adverse impact as a result of actions taken or decisions made by the employee in circumstances constituting illegal or intentionally wrongful conduct, or gross negligence; or (v) if the employee is awarded or is paid out under the Second Amended and Restated 2014 Stock Option and Incentive Plan (the
“Proposed 2014“2014 Plan”)
which contains the following material features and
changes from the Original Plan: | • | | Shares Authorized for Issuance. As of April 2, 2018, [ ] shares were authorized for issuance under the Original Plan, of which [ ] shares remained available for issuance, subject to automatic increase on each January 1 for the term of the Original Plan by 4% of the number of shares of our common stock issued and outstanding on the immediately preceding December 31. On January 4, 2018, in connection with the Reverse Merger, the Company implemented the Stock Split, which adjusted the number of shares reserved and available for issuance under the Original Plan. Subsequently, the Company issued 26,272,107 shares of common stock on January 4, 2018 in connection with the Reverse Merger. The Proposed 2014 Plan nevertheless continues to provide for an aggregate maximum number of shares of common stock initially authorized for issuance of [ ] shares (the “Initial Limit”). On January 1, 2019, and each January 1 thereafter for the term of the Proposed 2014 Plan, the number of shares reserved and available under the Proposed 2014 Plan will automatically increase by 4% of the number of shares of our common stock issued and outstanding on the immediately preceding December 31 (the “Annual Increase”); |
| • | | Increased Award Limits. An increase in the number shares of stock underlying stock options or stock appreciation rights that may be granted to any one individual in any single calendar year of 750,000 shares, for a maximum of 1,000,000 shares of common stock, and an increase in the number of shares of stock that may be issued in the form of incentive stock options. The Stock Split adjusted the foregoing limits in the Original Plan. These increases will bring these limits back to thepre-Stock Split amounts; |
| • | | Section 162(m) Revisions. In light of recent changes in the tax code, the Proposed 2014 Plan eliminates certain provisions relating to awards of “performance-based compensation;” and |
| • | | Term.The term of the Proposed 2014 Plan will expire on June 25, 2028. |
The Board is submitting the Proposed 2014 Plan to the stockholders for their approval at the Annual Meeting. The Board unanimously recommends that the Company’s stockholders approve the Proposed 2014 Plan. The Company’s ability to grant an appropriate number of equity-based awards continues to be crucial in allowing the Company to effectively compete for talent and appropriately reward employees. It is in the long-term interestany successor plan, or any other incentive compensation plan of the Company on the basis of significantly incorrect financial calculations or information or if events coming to light after the award or payout would have significantly reduced the amount of the award or payout if known at the time of the award or payout.
In September 2023, we adopted the Nasdaq Rule 5608 Compensation Clawback Policy (the “Nasdaq Clawback Policy”), effective as of December 1, 2023, for purposes of compliance with Section 10D of the Exchange Act and its stockholdersthe Nasdaq listing standards. The Nasdaq Clawback Policy provides for the mandatory recovery of certain cash- and equity-based compensation paid to strengthenexecutive officers, including our named executive officers, on the ability to attract, motivate and retain employees, officers, directors and consultants, and to provide additional incentive for those persons throughbasis of the achievement of financial performance measures in the event of an accounting restatement.
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Stock Ownership Guidelines
In March 2022, we adopted stock ownership
and other incentives to improve operations, increase profits and strengthen the mutuality of interest between those persons and the Company’s stockholders.As the Reverse Merger was not completed until January 2018, the Company currently does not have an established grant practice and therefore it is difficult to predict how long the share reserve under the Original Plan is expected to last. Expectations regarding future share usage could be impacted by a number of factors, including award type mix, hiring and promotion activity at the executive level, the future performance of our stock price, the consequences of acquiring other companies and other factors.
As a result of the Stock Split, the number of shares authorized for issuance, and the limit on the number of incentive stock options that may be issued under the Original Plan and the limit on the maximum number of shares of stock
that could be granted to a single individual in a single calendar year pursuant to the award of stock options or stock appreciation rights were adjusted. Because the Company issued 26,272,107 shares of common stock on January 4, 2018 in connection with the Reverse Merger, theas-adjusted incentive stock option and per person stock option and stock appreciation right limits are not adequate to accomplish the purposes of the Original Plan.
If the Proposed 2014 Plan is not approved, the Original Plan as currently in effect will continue and we may not be able to provide persons eligible for awards with compensation packagesguidelines that are necessaryapplicable to properly attract, retain and motivate these individuals.
Summary of the Proposed 2014 Plan
The following description of certain features of the Second Amended and Restated 2014 Stock Option and Incentive Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the Proposed 2014 Plan, which is attached hereto asAppendix A.
Purpose. The Proposed 2014 Plan provides the Company with the flexibility to use various equity-based incentive and other awards as compensation tools to motivateexecutive officers, including our workforce. These tools include stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards, cash-based awards and dividend equivalent rights. These tools provide meaningful performance incentives to our directors,named executive officers, employees and other service providers, which, in turn, are expected to improve the Company’s long-term performance.
Plan Administration. The Proposed 2014 Plan is currently administered by the Compensation Committee (the “Administrator”). The Administrator has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the Proposed 2014 Plan. The Administrator may delegate to our Chief Executive Officer the authority to grant awards to employees who are not subject to the reporting and other provisionsrequirements of Section 16 of the Exchange Act, subject to certain limitations and guidelines.
Eligibility. Persons eligible to participateAct. The stock ownership policy requires that the Chief Executive Officer own equity in the Proposed 2014 Plancompany equal to at least three times his annual base salary and that all other covered executive officers own equity in the company equal to at least his or her annual base salary. The stock ownership policy provides for a phase-in period, which is generally five years. The stock ownership policy also includes certain share retention obligations that apply to officers who have not met the minimum equity ownership requirements by the end of their phase-in period or who cease to hold the minimum equity ownership at any time following such date. Additionally, each Director is required to own Common Shares having a value equal to or greater one times the annual cash retainer payable to the Directors for Board membership.
Equity Awards Grant Policy
Equity awards granted to our executive officers are
those fullgenerally granted early in the fiscal year and equity awards for our directors are generally granted in the second quarter in connection with the Company’s Annual Meeting. The equity awards for our executive officers and directors must be approved either by the Board or
part-time officers,the Compensation Committee at a meeting or by unanimous written consent, per the policy adopted by the Compensation Committee governing equity to our executive employees. The timing of equity grant approvals may be changed in the event of extraordinary circumstances, including in connection with mid-year promotions and new hires. The policy further provides that the CEO may make awards to non-executive employees
non-employee directors and other key persons (including consultants) within prescribed limits. Generally, equity awards will be effective on the first Monday of the
Company and its subsidiaries as selected from timemonth following the employee’s start date, or for grants to
time byexisting employees, the
Administrator in its discretion. Asdate of
April 2, 2018, individuals who are currently eligibleapproval. The Compensation Committee does not grant equity awards to
participate in the Proposed 2014 Plan include 4 officers, 14 employees who are not officers and 6non-employee directors.Plan Limits. Subject to stockholder approval, [•] shares will initially be reserved under the Proposed 2014 Plan. On January 1, 2019, and each January 1 thereafter, the number of shares reserved and available under the Proposed 2014 Plan will automatically increase by 4%take advantage of the numberrelease of sharesmaterial nonpublic information. Similarly, the Compensation Committee does not time the release of our common stock issued and outstanding onmaterial nonpublic information to affect the immediately preceding December 31.value of equity award grant dates. The maximum awardexercise price of all stock options orand stock appreciation rights grantedmust be equal to any one individual will not exceed 1,000,000 shares of common stock (subject to adjustment for stock splits and similar events) for any calendar year period. The maximum aggregate number of shares of stock that may be issued under the Proposed 2014 Plan in the form of incentive stock options may not exceed the Initial Limit as cumulatively increased on each January 1 by the lesser of the Annual Increase for such year or 8,000,000 shares of common stock. The shares of common stock underlying any awards that are forfeited, canceled, held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of common stock or otherwise terminated (othergreater than by exercise) shall be added back to the shares of common stock available for issuance under the Proposed 2014 Plan. In the event the Company repurchases shares of common stock on the open market, such shares shall not be added to the shares of common stock available for issuance under the Proposed 2014 Plan. Stock may be issued under the Proposed 2014 Plan in connection with a merger or acquisition as permitted by Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares of stock available for issuance under the Proposed 2014 Plan.
Stock Options. The Proposed 2014 Plan permits the granting of (1) options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and (2) options that do not so qualify. Options granted under the Proposed 2014 Plan will benon-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries.Non-qualified options may be granted to any persons eligible to receive incentive options and tonon-employee directors and key persons. The option exercise price of each option will be determined by the Administrator but, subject to certain limited exceptions for awards assumed or substituted by the Company in connection with certain transactions, may not be less than 100% of the fair market value of theour common stock on the date of grant. Fair market value for this purpose will be the last reported sale price
Policy on Hedging, Pledging and Other Short-Term or Speculative Transactions
Our insider trading policy applies to all employees, including our named executive officers, and members of
the shares of common stock on The Nasdaq Global Select Market on the date of grant. The exercise price of an option may not be reduced after the date of the option grant, other thanour Board and prohibits any hedging and monetization transactions that transfer, with respect to
appropriately reflect changes in our capital structure.The term of each option will be fixed by the Administrator and may not exceed ten years from the date of grant, subject to certain limited exceptions as provided in the Proposed 2014 Plan. The Administrator will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the Administrator . In general, unless otherwise permitted by the Administrator, no option granted under the Proposed 2014 Plan is transferable by the optionee other than by will or by the laws of descent and distribution, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to the Administrator or by delivery (or attestation to the ownership) of shares of common stock that are not then subject to any restrictions under any Company plan. Subject to applicable law, the exercise price may also be delivered to us by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, the Administrator may permitnon-qualified options to be exercised using a net exercise feature, which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.
To qualify as incentive stock options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive stock options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The Administrator may award stock appreciation rights subject to such conditions and restrictions as the Administrator may determine. Stock appreciation rights entitle the recipient to shares of common stock equal to the value of the appreciation in the stock price over the exercise price. The exercise price may not be less than the fair market value of the common stock on the date of grant, subject to certain limited exceptions for awards assumed or substituted by the Company in connection with certain transactions. The maximum term of a stock appreciation right is ten years, subject to certain limited exceptions as provided in the Proposed 2014 Plan.
Restricted Stock Awards. The Administrator may award shares of common stock to participants subject to such conditions and restrictions as the Administrator may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified restricted period.
Restricted Stock Units. The Administrator may award restricted stock units to any participants. Restricted stock units are ultimately payable in the form of shares of common stock or, if determined by the Administrator, the cash equivalent, and may be subject to such conditions and restrictions as the Administrator may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified vesting period or for board fees in lieu of cash compensation. In the Administrator’s sole discretion, it may permit a participant to make an advance election to receive a portion of his or her future cashequity compensation otherwise due in the form of restricted stock units, subject to the
participant’s compliance with the procedures established by the Administrator and requirements of Section 409A. During the deferral period, the restricted stock units may be credited with dividend equivalent rights.
Unrestricted Stock Awards. The Administrator may also grant shares of common stock that are free from any restrictions under the Proposed 2014 Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.
Cash-Based Awards. The Administrator may grant cash bonuses under the Proposed 2014 Plan to participants. The cash bonuses may be subject to the achievement of certain performance goals.
Performance Share Awards. The Administrator may grant performance share awards to any participant that entitle the recipient to receive shares of common stock upon the achievement of certain performance goals and such other conditions as the Administrator shall determine.
Dividend Equivalent Rights. The Administrator may grant dividend equivalent rights to participants, which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of common stock. Dividend equivalent rights may be granted as a component of another award (other than a stock option or stock appreciation right) or as a freestanding award. Dividend equivalent rights may be settled in cash, shares of common stock or a combination thereof, in a single installment or installments, as specified in the award. Restrictions on dividend equivalent rights granted as part of a restricted stock unit award or performance share award will only lapse when the restrictions on the corresponding award lapse.
Sale Event Provisions. The Proposed 2014 Plan provides that, upon the effectiveness of a “sale event,” as defined in the Proposed 2014 Plan, the Proposed 2014 Plan and all awards thereunder will terminate, unless the parties to the sale event agree that such awards will be assumed or continued by the successor entity. Notwithstanding the foregoing and except as may be provided in the relevant award agreement, the Administrator may, in its discretion, accelerate the vesting of all outstanding awards with time-based and/or performance-based vesting conditions or restrictions immediately prior to their termination and/or make or provide for a payment, in cash or in kind, to the grantees holding awards in an amount equal to value of the awards as determined in the sole discretion of the Administrator.
Adjustments for Stock Dividends, Stock Splits, etc. The Proposed 2014 Plan requires the Administrator to make appropriate adjustments to the number of shares of common stock that are subject to the Proposed 2014 Plan, to certain limits in the Proposed 2014 Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.
Tax Withholding. Participants in the Proposed 2014 Plan are responsible for the payment of any federal, state or local taxes that we are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. Subject to approval by the Administrator, participants may elect to have the tax withholding obligations satisfied by authorizing the Company to withhold shares of common stock to be issued pursuant to exercise or vesting.
Amendments and Termination. The Board may at any time amend or discontinue the Proposed 2014 Plan and the Administrator may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may materially adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under Nasdaq rules, any amendments that materially change the terms of the Proposed 2014 Plan will be subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by the Administrator to be required by the Code to preserve the qualified status of incentive options.
Effective Date of Proposed 2014 Plan. The Board adopted the Proposed 2014 Plan on March 29, 2018. It will become effective subject to stockholder approval at the Annual Meeting. No awards may be granted under the Proposed 2014 Plan after the date that is ten years from the date of stockholder approval.
Plan Benefits
Because the grant of awards under the Proposed 2014 Plan is within the discretion of the Administrator, we cannot determine the dollar value or number of shares of common stock that will in the future be received by or allocated to any participant in the Proposed 2014 Plan. As of April 11, 2018, the closing price of a share of the Company’s common stock was $16.58. Following the adoption of the Proposed 2014 Plan in March 2018, the Company made certain grants from the Proposed 2014 Plan which were contingent upon receipt of stockholder approval at the Annual Meeting. The grants made subject to stockholder approval are summarized in the table below. If the Proposed 2014 Plan is not approved by the stockholders at the Annual Meeting, such grants will be forfeited.
| | | | | | | | |
Name and Position | | Options
Exercise Price ($) | | | | | Number (#) |
Gaurav Shah | | | 18.75 | | | | | 145,000 |
Tax Aspects under the Code
The following is a summary of the principal federal income tax consequences of certain transactions under the Proposed 2014 Plan as of the date hereof. It does not describe all federal tax consequences under the Proposed 2014 Plan, nor does it describe state or local tax consequences ornon-U.S. tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If shares of common stock issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If shares of common stock acquired upon the exercise of an incentive option are disposed of prior to the expiration of thetwo-year andone-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount realized on a sale of such shares of common stock) over the exercise price thereof and (ii) the Company will be entitled to deduct such amount. Special rules apply where all or a portion of the exerciserisk of a decline in the market price of the incentive option is paid by tendering shares of Company common stock.
If Instruments that would be considered to be a “hedge” include prepaid variable forward contracts, equity swaps, collars, and exchange funds. In addition, employees and members of our Board may not engage in short sales or transactions in publicly traded options on Company securities, such as puts, calls, and other derivative securities, on an incentive option is exercised atexchange or in any other organized market. Further, such persons are prohibited from entering into loans or other arrangements where Company securities are pledged as collateral, except as may be approved by our full Board. Standing orders may only be used only for a time when it no longer qualifiesvery brief period of time.
Policy regarding 10b5-1 Plans for Directors and Executive Officers
Our insider trading policy generally requires that our executive officers and members of our Board may not trade in our equity securities during “blackout” periods and that such individuals must pre-clear trades or adopt plans in accordance with Exchange Act Rule 10b5-1 for sales of securities which they beneficially own.
Compensation Policies and Practices as they Relate to Risk Management
The Compensation Committee has reviewed our executive and employee compensation programs and does not believe that our compensation policies and practices encourage undue or inappropriate risk taking or create risks that are reasonably likely to have a material adverse effect on us. The reasons for the tax treatment described above,Compensation Committee’s determination include the optionfollowing:
We structure our compensation program to consist of both fixed and variable components. The fixed (base salary) component of our compensation programs is
treated as anon-qualified option. Generally, an incentive optiondesigned to provide income independent of our stock price performance so that employees will not
be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.Non-Qualified Options. No income is realized by the optionee at the time the option is granted. Generally, (i) at exercise, ordinary income is realized by the optionee in an amount equalfocus exclusively on stock price performance to the difference betweendetriment of other important business metrics.
TABLE OF CONTENTS
We maintain internal controls over the option pricemeasurement and calculation of financial information, which are designed to prevent this information from being manipulated by any employee, including our executive officers.
Employees of Rocket Pharmaceuticals are required to comply with our code of conduct, which covers, among other things, accuracy in keeping financial and business records.
The Compensation Committee approves the overall annual equity pool and the fair market value of the shares of common stock on the date of exercise, and the Company receives a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of common stock have been held. Special rules apply where all or aemployee equity award guidelines.
A significant portion of the exercisecompensation paid to our executive officers is in the form of equity to align their interests with the interests of stockholders.
As part of our insider trading policy, we prohibit hedging transactions involving our securities so that our executive officers and other employees cannot insulate themselves from the effects of poor stock price ofperformance.
Accounting Considerations
We account for stock compensation in accordance with the
non-qualified option is paid by tendering shares of common stock. Upon exercise, authoritative guidance set forth in FASB ASC Topic 718, which generally requires companies to measure and recognize the
optionee will also be subjectcompensation expense for all share-based awards made to
Social Security taxes on the excess of the fair market valueemployees and directors, including stock options and RSU awards, over the
exercise price of the option.Other Awards. The Company generally will be entitled to a tax deduction in connection with an award under the Proposed 2014 Plan in an amount equal to the ordinary income realized by the participant at the time the
participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomesnon-forfeitable, unlessperiod during which the award providesrecipient is required to perform services in exchange for a further deferral.
Parachute Payments. The vestingthe award.
Deductibility of
any portion of an option or other award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments,” as defined in the Code. Any such parachute payments may benon-deductible to the Company, in whole or in part, and may subject the recipient to anon-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).Limitation on Deductions.Executive Compensation
Generally, Section 162(m) of the Code,
limitsdisallows a
publicly traded company’s federal income tax deduction
to certain publicly held corporations for
compensationany remuneration in excess of $1 million paid
in any taxable year to
its Chief Executive Officer, Chief Financial Officertheir chief executive officer, chief financial officer, and
certain other current and former highly compensated officers that qualify as covered employees within the
next three highest-paidmeaning of Section 162(m) of the Code. The Compensation Committee considers tax deductibility when structuring our executive compensation arrangements for our current and former executive officers.
PriorHowever, the Compensation Committee may, in its judgment, pay compensation that is not fully tax deductible to the
Tax Cutsextent it determines that doing so is appropriate to attract and
Jobs Act that was signed into law on December 22, 2017, compensation that satisfied conditions set forth under Section 162(m)retain executive talent or to
qualify as “performance-based compensation” was not subject to the limitation, and the limitation did not apply to compensation paid to the Chief Financial Officer. The Tax Cuts and Jobs Act eliminates the performance-based compensation exception beginning January 1, 2018, but provides a transition rule with respect to remuneration which is provided pursuant to a written binding contract which was in effect on November 2, 2017 and which was not materially modified after that date.meet other business needs. The Compensation Committee intends to
administer any awards granted under the Original Plan priorcontinue to
November 2, 2017 which qualify as “performance-based compensation” under Section 162(m), as amended by the Tax Cutscompensate our current and
Jobs Act, including equity awards and other forms of compensation granted under the Original Plan that qualify as performance-based compensation, in accordance with the transition rules applicable to binding contracts in effect on November 2, 2017. With the elimination of the exemption for performance-based compensation, we expect that we will be unable to deduct all compensation in excess of $1 million paid to our Chief Executive Officer, Chief Financial Officer and the next three highest-paidformer executive officers,
other than previously granted awards that are subject toincluding the
transition rules.The foregoing is only a summary of the effects of the U.S. federal income taxation upon participants and the Company with respect to awards under the Proposed 2014 Plan. It does not purport to be complete, and does not discuss the impact of employment or other tax requirements, the tax consequences of a participant’s death or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside.
Vote Required
The affirmative vote of the majority of the votes cast for or against the proposal at the Annual Meeting by holders of shares present in person or represented by proxy and entitled to vote on the proposal is required for the approval of the Second Amended and Restated 2014 Stock Option and Incentive Plan.
Our Recommendation
THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE SECOND AMENDED AND RESTATED 2014 STOCK OPTION AND INCENTIVE PLAN.
EXECUTIVE COMPENSATION
Merger with Rocket Pharmaceuticals, Ltd.
As the Reverse Merger was not completed until January 4, 2018, the following discussion of executive compensation relates to ourpre-Reverse Merger named executive officers, during the fiscal year ended December 31, 2017—David P. Southwell, Dr. Rudolf Baumgartner and Dale Ritter—in a manner consistent with our best interests and the decisionsbest interests of our shareholders.
Compensation Committee Report The Compensation Committee has reviewed and
considerations ofdiscussed the
Inotek Compensation
Committee. Unless the context otherwise requires, all referencesDiscussion and Analysis included in this
“Executive Compensation” section toproxy statement with management and based on such review and discussions, the Compensation Committee
referrecommended to the
Inotek Compensation Committee. Our current Board
includingthat the Compensation
Committee thereof, is currently considering what changes, if any, willDiscussion and Analysis be
made to the Company’s executive compensation policiesincorporated by reference in Rocket Pharmaceutical’s Annual Report on Form 10-K for
the year ending December 31, 2018.fiscal 2023 and included in this proxy statement.
The Compensation Committee
Pedro Granadillo (Chair)
Carsten Boess
R. Keith Woods
TABLE OF CONTENTS
2023 Summary Compensation Table
The following table sets forth the
total compensation
paidawarded to
the named executive officers (“NEOs”) that is attributable to services performedor earned by our NEOs during the fiscal years
ended December 31, 2017 and 2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and principal position | | Fiscal
Year | | | Salary
$ | | | Bonus
$ | | | Option
Awards
$ (3) | | | Stock
Awards
$ (4) | | | All Other
Compensation
$ (6) | | | Total
$ | |
David P. Southwell | | | 2017 | | | | 479,454 | | | | 239,862 | (1) | | | — | | | | 533,750 | (5) | | | 14,016 | | | | 1,267,082 | |
Former President and Chief Executive Officer | | | 2016 | | | | 465,508 | | | | 221,231 | (2) | | | 1,093,470 | | | | 2,275,000 | | | | 5,273 | | | | 4,060,482 | |
Rudolf Baumgartner, M.D. | | | 2017 | | | | 404,872 | | | | 141,785 | (1) | | | — | | | | 266,875 | (5) | | | 14,016 | | | | 827,548 | |
Former Executive Vice President and
Chief Medical Officer | | | 2016 | | | | 393,095 | | | | 144,538 | (2) | | | 839,175 | | | | 780,000 | | | | 9,761 | | | | 2,166,569 | |
Dale Ritter | | | 2017 | | | | 282,304 | | | | 84,739 | (1) | | | — | | | | 85,000 | (5) | | | 15,175 | | | | 467,218 | |
Former Vice President- Finance | | | 2016 | | | | 274,093 | | | | 86,384 | (2) | | | 203,436 | | | | — | | | | 11,367 | | | | 575,280 | |
Gaurav D. Shah, M.D.
Chief Executive Officer
| | | 2023 | | | 625,000 | | | — | | | 2,330,993 | | | 4,668,994 | | | 375,000 | | | 13,566 | | | 8,013,553 |
| | 2022 | | | 598,333 | | | — | | | 1,814,989 | | | 3,684,991 | | | 434,390 | | | 20,500 | | | 6,553,203 |
| | 2021 | | | 590,000 | | | — | | | — | | | 6,998,550 | | | 318,600 | | | 11,600 | | | 7,918,750 |
John Militello, CPA
Principal Accounting Officer and Interim Principal Financial Officer, Vice President(6)
| | | 2023 | | | 409,014 | | | 5,000 | | | 332,985 | | | 666,991 | | | 100,014 | | | 13,566 | | | 1,527,570 |
| | 2022 | | | 376,788 | | | — | | | 664,976 | | | 584,988 | | | 104,133 | | | 20,500 | | | 1,751,386 |
Kinnari Patel, Pharm.D., MBA
President and Chief Operating Officer
| | | 2023 | | | 537,125 | | | — | | | 1,331,999 | | | 2,667,993 | | | 295,419 | | | 13,566 | | | 4,846,102 |
| | 2022 | | | 522,750 | | | — | | | 1,824,468 | | | 1,842,489 | | | 314,978 | | | 12,200 | | | 4,516,885 |
| | 2021 | | | 510,000 | | | — | | | — | | | 4,539,600 | | | 196,222 | | | 11,600 | | | 5,257,422 |
Mayo Pujols
Chief Technical Officer, Executive Vice President(7)
| | | 2023 | | | 492,500 | | | 150,000 | | | 1,415,987 | | | 2,083,987 | | | 221,625 | | | 13,566 | | | 4,377,665 |
| | 2022 | | | 229,090 | | | 150,000 | | | 1,249,997 | | | 1,249,994 | | | 119,070 | | | 151,551 | | | 3,149,702 |
Jonathan Schwartz, M.D.
Chief Medical and Gene Therapy Officer
| | | 2023 | | | 447,433 | | | — | | | 832,482 | | | 1,667,492 | | | 196,871 | | | 13,566 | | | 3,157,844 |
| | 2022 | | | 434,600 | | | — | | | 894,988 | | | 1,004,996 | | | 189,420 | | | 8,453 | | | 2,532,457 |
| | 2021 | | | 410,000 | | | — | | | — | | | 1,324,050 | | | 136,530 | | | 11,265 | | | 1,881,845 |
(1)
| Represents bonus amounts accrued at December 31, 2017 as annual bonuses, butcash incentives earned with respect to individual and Company performance in the years indicated, which were paid in 2018 as retentionthe following year. For a discussion of bonuses upon consummation of the Reverse Merger.for fiscal 2023, see above under “Compensation Discussion and Analysis - Annual Cash Incentives.” |
(2)
| Represents bonusReflects the aggregate grant date fair value of RSU awards granted to our named executive officers in the year indicated, calculated in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements for the year ended December 31, 2023. The amounts earnedreported in 2016this column reflect the accounting cost for these RSU awards and paid in 2017.do not correspond to the actual economic value that may be received by the named executive officers upon the vesting of the RSUs or any sale of the corresponding shares of common stock. |
(3)
| Reflects the aggregate grant date fair value of option awards granted to our named executive officers in the years indicated, calculated in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements for the year ended December 31, 2023. The amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be received by the named executive officers upon the exercise of the stock options or any sale of the underlying shares of common stock. |
(4)
| ReflectsThe amounts in this column for 2021 and 2022 were previously included in the grant date fair value“Bonus” columns of stock awards calculatedthe Summary Compensation Table in accordance with ASC Topic 718.the proxy statements for our annual meeting of shareholders in 2022 and 2023 and are now being reflected in the “Non-Equity Incentive Compensation” column. |
(5)
| Represents restricted stock units (“RSUs”) granted in December 2016 and subsequently modified in January 2017. Amounts reflect the fair value of the modified RSUsExcept as of the date of modification. |
(6) | The following table includes details regarding the values reported in the All Other Compensation column for 2017. |
All Other Compensation Table
| | | | | | | | | | | | | | | | |
Name | | Insurance
Premiums
$(1) | | | Retirement Plan
Contributions
$(2) | | | Disability
$(3) | | | Total
$ | |
David P. Southwell | | | 1,290 | | | | 10,800 | | | | 1,926 | | | | 14,016 | |
Rudolf Baumgartner, M.D. | | | 1,290 | | | | 10,800 | | | | 1,926 | | | | 14,016 | |
Dale Ritter | | | 3,010 | | | | 10,330 | | | | 1,835 | | | | 15,175 | |
(1) | Represents premiums paid on behalf of our NEOs under our group term life insurance policy. |
(2) | Representsotherwise noted, represents Company matching contributions to the accounts of our NEOsnamed executive officers in the Company’s 401(k) plan.plan and the cost of $50,000 company paid life insurance for all employees, including NEOs. |
(3)(6)
| Represents premiums paidMr. Militello was appointed as the Interim Principal Financial Officer of the Company effective March 16, 2022 until March 28, 2024, upon the hiring of Aaron Ondrey as Rocket’s CFO and Principal Financial Officer. For consideration for his duties as Interim Principal Financial Officer, Mr. Militello received a monthly stipend of $7,626 until the Company hires a Chief Financial Officer. Mr. Militello’s monthly stipend ended on behalf of our NEOs under our disability insurance policy.March 28, 2024. This stipend is included in Mr. Militello’s salary. Mr. Militello’s actual salary for 2023 was $317,506 and stipend for duties as Interim Principal Financial Officer was $91,508. Mr. Militello received a one-time $5,000 bonus for his work on the Renovacor acquisition. Mr. Militello’s actual salary for 2022 was $300,529 and stipend for duties as Interim Principal Financial Officer was $76,259. |
(7)
| Mr. Pujols start date with the Company was July 11, 2022. The amount included in the Salary column represents base salary earned in fiscal 2022. His annualized base salary for fiscal 2023 was $492,500. His annualized base salary for fiscal 2022 was $480,000. In connection with Mr. Pujols offer letter, Mr. Pujols received a sign-on bonus of $300,000, of which $150,000 has been earned and included in the 2023 Bonus column and $150,000 earned in 2022. In addition, in 2022, Mr. Pujols received a relocation bonus of $137,509 and a housing allowance of $14,042 which have been included in the All Other Compensation column. |
Executive Agreements; Termination and ChangeTABLE OF CONTENTS
Grants of
Control BenefitsAt the timePlan-Based Awards
The following table shows information regarding grants of
their employment, Mr. Southwell, Dr. Baumgartner and Mr. Ritter were each a party to an employment agreement with the Company. Upon consummation of the Reverse Merger, the employment of Mr. Southwell and Dr. Baumgartner terminated. On March 16, 2018, the employment of Mr. Ritter terminated. These employment agreements provided for “at will” employment and contained the additional terms summarized below:David P.Southwell.On August 11, 2014, we entered into an employment agreement with Mr. Southwell, as amended on September 1, 2017, pursuant to which he served as our President and Chief Executive Officer. In 2017, Mr. Southwell received a base salary of $479,454. In 2017, Mr. Southwell was eligible for an annual performance bonus with a target amount of 50% of his base salary. For 2017, the Compensation Committee awarded Mr. Southwell a retention bonus of $239,862, representing 50% of his 2017 base salary, in exchange for his continued active employment in a full-time capacity through the effective time of the Reverse Merger. While employed, Mr. Southwell was eligible to participate in our employee benefit plans in effect from time to time, subject to the terms of those plans. Subject to the execution and effectiveness of a separation agreement, including, among other things, a general release of claims, Mr. Southwell would have been eligible to receive the following payments and benefits in the event that his employment had been terminated by us without cause or by him for good reason as of the last day of the fiscal year, in either case not in connection with a change in control: base salary continuation for 12 months; if Mr. Southwell was participating in our group health plan immediately prior to the date of termination and elected COBRA health continuation, a monthly cash payment equal to the monthly employer contribution we would have made to provide him health insurance if he had remained employed by us until twelve months following the date of termination; and the portion of the stock options and other time-based equityplan-based awards held by Mr. Southwell as of the date of termination that would have vested in the 12 months following termination of his employment had he remained employed by us through such date would have immediately accelerated and become fully vested as of the date of termination. Subject to the execution and effectiveness of a separation agreement, including, among other things, a general release of claims, Mr. Southwell would have been eligible to receive the following payments and benefits in the event that his employment had terminated by us without cause or by him for good reason as of the last day of the fiscal year, in either case in connection with a change in control: a severance payment equal to 18 months of base salary and, if Mr. Southwell was participating in our group health plan immediately prior to the date of termination and elected COBRA health continuation, a monthly cash payment equal to the monthly employer contribution we would have made to provide him health insurance if he had remained employed by us until 18 months following the date of termination. In connection with the consummation of the Reverse Merger and his termination of employment, Mr. Southwell became entitled to the foregoing change in control severance benefits and all of his outstanding equity awards were accelerated.
Rudolf Baumgartner, M.D. On May 2, 2007, we entered into an employment agreement with Dr. Baumgartner, our Executive Vice President and Chief Medical Officer, which we amended on December 23, 2008, October 9, 2009 and September 12, 2017. In 2017, Dr. Baumgartner received a base salary of $404,872. In 2017, Dr. Baumgartner was eligible for an annual performance bonus with a target amount of 35% of his base salary. For 2017, the Compensation Committee awarded Dr. Baumgartner a retention bonus of $141,785, representing 35% of his 2017 base salary, in exchange for his continued active employment in a full-time capacity through the effective time of the Reverse Merger. Dr. Baumgartner was eligible to participate in our employee benefit plans in effect from time to time, subject to the terms of those plans. Subject to the execution and effectiveness of a separation agreement, including, among other things, a general release of claims, Dr. Baumgartner would have been eligible to receive the following payments and benefits in the event that his employment had been terminated by us without cause or by him for good reason as of the last day of the fiscal year: base salary continuation for twelve months; a monthly cash payment equal to the monthly employer contribution to provide him health and dental insurance coverage if he had remained employed by us until 12 months following the date of termination; and accelerated vesting of all outstanding equity awards. In connection with the consummation of the Reverse Merger and his termination of employment, Dr. Baumgartner became
entitled to the foregoing severance benefits and all of his outstanding equity awards were accelerated. The receipt of the severance payments and benefits set forth above are conditioned upon Dr. Baumgartner not violating the terms of a restrictive covenant agreement between Dr. Baumgartner and Inotek.
Dale Ritter.On August 28, 2014, we entered into an employment agreement with Mr. Ritter, our Vice President-Finance, as amended on September 1, 2017. In 2017, Mr. Ritter received an annual base salary of $282,304. Mr. Ritter was eligible for an annual performance bonus with a target amount of 30% of his annualized base salary. In 2017, the Compensation Committee awarded Mr. Ritter a retention bonus of $84,739, representing 30% of his 2017 base salary, in exchange for his continued active employment in a full-time capacity through the effective time of the Reverse Merger. Mr. Ritter was eligible to participate in our employee benefit plans in effect from time to time, subject to the terms of those plans. Subject to the execution and effectiveness of a separation agreement, including, among other things, a general release of claims, Mr. Ritter would have been eligible to receive base salary continuation for six months, payment of the employer contribution for group health coverage for up to six months and accelerated vesting of all outstanding equity awards in the event that his employment had been terminated by us without cause or by him for good reason as of the last day of the fiscal year. In connection with the consummation of the Reverse Merger and his subsequent termination of employment, Mr. Ritter became entitled to the foregoing severance benefits and all of his outstanding equity awards were accelerated. The receipt of the severance payments and benefits set forth above is conditioned upon Mr. Ritter not violating the terms of a restrictive covenant agreement between Mr. Ritter and Inotek.
Effective as of January 4, 2018, Gaurav Shah is the principal executive officer of the Company. We expect that the proxy statement forduring the fiscal year ended December 31, 2018 will include2023 to the Company’s named executive compensation disclosure regarding Dr. Shah andofficers. The awards were granted on the same day that they were approved by our next two most highly compensated executive officers as of fiscal year end, as well as executive compensation disclosure for David P. Southwell, our former principal executive officer, since he served as Chief Executive Officer until January 4, 2018.
Equity Incentive Awards
Compensation Committee.
Gaurav Shah, M.D. | | | 02/14/2023 | | | 375,000 | | | 116,317 | | | 348,590 | | | 20.04 | | | 6,999,987 |
John Militello, CPA | | | 02/14/2023 | | | 95,252 | | | 16,616 | | | 49,798 | | | 20.04 | | | 999,976 |
Kinnari Patel, Pharm.D., MBA | | | 02/14/2023 | | | 268,563 | | | 66,467 | | | 199,194 | | | 20.04 | | | 3,999,991 |
Mayo Pujols | | | 02/14/2023 | | | 221,625 | | | 78,009 | | | 167,103 | | | 20.04 | | | 3,499,974 |
Jonathan Schwartz | | | 02/14/2023 | | | 178,973 | | | 41,541 | | | 124,496 | | | 20.04 | | | 2,499,974 |
(1)
| Reflects the aggregate grant date fair value of option awards and RSUs granted to our named executive officers in 2023, calculated in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements for the year ended December 31, 2023. The awards were granted under the 2014 Plan. Please see the Compensation Discussion and Analysis section of this proxy statement for more information regarding these equity awards. |
(2)
| The Company’s Non-Equity Incentive Plan Awards have an annual target amount, but do not have threshold or maximum amounts. |
2023 Outstanding Equity Awards at Fiscal
Year-End The following table provides information concerning outstanding equity awards forheld by each of our named executive officers as of December 31, 2017. All share numbers and prices have been adjusted to reflect the Stock Split. All of the below unvested equity awards became fully vested upon consummation of the Reverse Merger.2023.
Gaurav D. Shah, M.D. | | | 76,490 | | | — | | | 1.69 | | | 4/12/27 | | | — | | | — |
| | | 395,000 | | | — | | | 18.75 | | | 3/29/28 | | | — | | | — |
| | | 315,700 | | | — | | | 14.56 | | | 1/28/29 | | | — | | | — |
| | | 383,306 | | | — | | | 22.72 | | | 2/6/30 | | | — | | | — |
| | | 107,993 | | | 77,077 | | | 62.32 | | | 2/4/31 | | | — | | | — |
| | | 172,652 | | | 124,385 | | | 19.05 | | | 2/14/32 | | | — | | | — |
| | | 116,429 | | | 232,161 | | | 20.04 | | | 2/14/33 | | | — | | | — |
| | | — | | | — | | | — | | | — | | | 156,215(3) | | | 4,681,764 |
John Militello, CPA | | | 10,000 | | | — | | | 12.55 | | | 1/8/28 | | | — | | | — |
| | | 10,000 | | | — | | | 18.75 | | | 3/29/28 | | | — | | | — |
| | | 10,000 | | | — | | | 20.61 | | | 6/25/28 | | | — | | | — |
| | | 20,000 | | | — | | | 14.56 | | | 1/28/29 | | | — | | | — |
| | | 10,000 | | | — | | | 10.85 | | | 9/2/29 | | | — | | | — |
| | | 20,000 | | | — | | | 22.72 | | | 2/6/30 | | | — | | | — |
| | | 2,000 | | | — | | | 23.89 | | | 2/10/30 | | | | | | |
| | | 18,000 | | | — | | | 24.82 | | | 8/3/30 | | | | | | |
| | | 16,501 | | | 1,499 | | | 62.32 | | | 2/4/31 | | | | | | |
| | | 15,693 | | | 11,310 | | | 19.05 | | | 2/14/32 | | | — | | | — |
| | | 14,468 | | | 14,442 | | | 13.12 | | | 4/18/32 | | | — | | | — |
| | | — | | | 49,798 | | | 20.04 | | | 2/14/33 | | | | | | |
| | | — | | | — | | | — | | | — | | | 44,072(4) | | | 1,320,838 |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
Name | | Number of
securities
underlying
unexercised
options
exercisable | | | Number of
securities
underlying
unexercised
options
unexercisable | | | Per share
option
exercise price
($) | | | Option
expiration
date | | | Number of
securities
that have
not vested | | | Market value
of securities
that have
not vested
($) (5) | |
David P. Southwell | | | 83,020 | (1) | | | 16,604 | (1) | | | 17.368 | | | | 08/28/24 | | | | — | | | | — | |
| | | 26,562 | (2) | | | 10,937 | (2) | | | 20.12 | | | | 06/23/25 | | | | — | | | | — | |
| | | 25,754 | (3) | | | 27,995 | (3) | | | 30.24 | | | | 03/21/26 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | | | | | 65,625 | (5) | | | 685,125 | (6) |
| | | — | | | | — | | | | — | | | | | | | | 87,500 | (7) | | | 913,500 | (6) |
Rudolf Baumgartner, M.D. | | | 49 | (4) | | | — | | | | 162.312 | | | | 03/20/18 | | | | — | | | | — | |
| | | 41,510 | (1) | | | 8,302 | (1) | | | 17.368 | | | | 08/28/24 | | | | — | | | | — | |
| | | 13,278 | (2) | | | 5,471 | (2) | | | 20.12 | | | | 06/23/25 | | | | — | | | | — | |
| | | 19,764 | (3) | | | 21,485 | (3) | | | 30.24 | | | | 03/21/26 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | | | | | 22,500 | (5) | | | 234,900 | (6) |
| | | — | | | | — | | | | — | | | | | | | | 43,750 | (7) | | | 456,750 | (6) |
Dale Ritter | | | 9,160 | (1) | | | 1,834 | (1) | | | 17.368 | | | | 08/28/24 | | | | — | | | | — | |
| | | 4,422 | (2) | | | 1,827 | (2) | | | 20.12 | | | | 06/23/25 | | | | — | | | | — | |
| | | 4,790 | (3) | | | 5,209 | (3) | | | 30.24 | | | | 03/21/26 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 9,375 | (8) | | | 97,875 | (6) |
Kinnari Patel, Pharm.D., M.B.A. | | | 175,000 | | | — | | | 18.75 | | | 3/29/28 | | | — | | | — |
| | | 180,000 | | | — | | | 14.56 | | | 1/28/29 | | | — | | | — |
| | | 50,000 | | | — | | | 10.85 | | | 9/2/29 | | | — | | | — |
| | | 150,000 | | | — | | | 22.72 | | | 2/6/30 | | | — | | | — |
| | | 15,000 | | | — | | | 23.89 | | | 2/10/30 | | | — | | | — |
| | | 50,000 | | | — | | | 23.05 | | | 9/8/30 | | | — | | | — |
| | | 110,010 | | | 9,990 | | | 62.32 | | | 2/4/31 | | | — | | | — |
| | | 86,324 | | | 62,194 | | | 19.05 | | | 2/14/32 | | | — | | | — |
| | | — | | | 199,194 | | | 20.04 | | | 2/14/33 | | | — | | | — |
| | | — | | | — | | | — | | | — | | | 138,906(5) | | | 4,163,013 |
Jonathan Schwartz, M.D. | | | 38,310 | | | — | | | 1.21 | | | 2/8/26 | | | — | | | — |
| | | 60,000 | | | — | | | 18.75 | | | 3/29/28 | | | — | | | — |
| | | 75,000 | | | — | | | 14.56 | | | 1/28/29 | | | — | | | — |
| | | 30,000 | | | — | | | 10.85 | | | 9/2/29 | | | — | | | — |
| | | 75,000 | | | — | | | 22.72 | | | 2/6/30 | | | — | | | — |
| | | 7,000 | | | — | | | 23.89 | | | 2/10/30 | | | — | | | — |
| | | 32,086 | | | 2,914 | | | 62.32 | | | 2/4/31 | | | — | | | — |
| | | 47,265 | | | 33,745 | | | 19.05 | | | 2/14/32 | | | — | | | — |
| | | — | | | 124,496 | | | 20.04 | | | 2/14/33 | | | — | | | — |
| | | — | | | — | | | — | | | — | | | 75,319(5) | | | 2,257,310 |
Mayo Pujols | | | 59,372 | | | 82,922 | | | 13.74 | | | 08/01/32 | | | — | | | — |
| | | — | | | 99,597 | | | 20.04 | | | 02/13/33 | | | — | | | — |
| | | — | | | 67,506 | | | 16.75 | | | 08/07/33 | | | — | | | — |
| | | — | | | — | | | — | | | — | | | 131,026(6) | | | 3,926,849 |
(1)
| These stock options werehave a grant date that is ten years prior to the expiration date. Such awards vest 33% on the first anniversary of the date of grant with the remaining portion subject to equal quarterly vesting over the following two years. |
(2)
| Reflects the market value of the RSUs that have not vested computed by multiplying $29.97, which was the closing market price of the Company’s stock on December 31, 2023, by the number of RSUs that had not vested as of December 31, 2023. |
(3)
| Reflects RSUs granted pursuant to our 2014 Stock Optionon February 14, 2022 and Incentive Plan (the “2014 Plan”)February 14, 2023, one-third of which vest on August 28, 2014, have aten-year term and vested 25% on theone-year first anniversary of the grant date and the remaining 75% were subject totwo-thirds of which vest in equal monthly vestingquarterly installments over the following 36 monthly anniversaries.two years. |
(4)
| Reflects RSUs granted on February 14, 2022, April 18, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025. |
(5)
| Reflects RSUs granted on February 14, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025.
|
(6)
| Reflects RSUs granted on August 1, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025. |
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2023 Option Exercises and Stock Vested
The following table provides information concerning the vesting of RSUs and exercise of options held by each of our named executive officers during the year ended December 31, 2023.
Gaurav D. Shah, M.D. | | | — | | | — | | | 55,377 | | | 1,098,983 |
John Militello, CPA | | | — | | | — | | | 14,569 | | | 277,800 |
Kinnari Patel, Pharm.D., M.B.A. | | | — | | | — | | | 27,687 | | | 549,462 |
Jonathan Schwartz, M.D. | | | 38,310 | | | 627,822 | | | 15,102 | | | 299,706 |
Mayo Pujols | | | — | | | — | | | 686,867 | | | 37,958 |
(1)
| The value realized on vesting is calculated by multiplying the number of shares of stock by the difference between (i) the market value of the shares of common stock at exercise and (ii) the exercise price of the options. |
(2)
| TheseThe value realized on vesting is calculated by multiplying the number of shares of stock options were granted pursuant to our 2014 Plan on June 24, 2015, have aten-year term, and vested 25% onby theone-year anniversary of our IPO and the remaining 75% were subject to equal monthly vesting over the following 36 monthly anniversaries. |
(3) | These stock options were granted pursuant to our 2014 Plan on March 22, 2016, have aten-year term, and vested 25% on January 1, 2017 and the remaining 75% were subject to equal monthly vesting over the following 36 monthly anniversaries. |
(4) | These stock options were granted pursuant to our 2004 Stock Option and Incentive Plan (the “2004 Plan”) and are fully vested. |
(5) | These restricted stock units were granted pursuant to our 2014 Plan on December 13, 2016, and were amended on January 23, 2017 to modify their vesting schedule. In early January 2017, after Inotek’s failure to meet the primary endpoint in its first pivotal Phase 3 trial oftrabodenoson monotherapy, the Inotek Board had determined that Inotek’s new corporate strategy should be to identify and pursue a strategic merger that would likely result in a change of control. As a result of this determination, the Inotek Board concluded that it would be in the best interest of Inotek to modify the vesting schedule of these restricted stock units to a time-based metric, in order to enable Inotek to retain Mr. Southwell and Mr. Baumgartner during the execution of this new corporate strategy. The restricted stock units were modified such that, instead of vesting subject to the achievement of certain performance criteria, the awards were subject to vesting in equal annual installments over four years from the date of grant, subject to the named executive officer’s continued service through such each date. For Mr. Southwell and Dr. Baumgartner, the awards that vested remained unsettled at December 31, 2017, per the terms market value of the Restricted Stock Unit Agreements. The vested awards settledunderlying shares on March 15, 2018, per the terms of the Restricted Stock Unit Agreements.each vesting date. |
Executive Agreements; Termination and Change in Control Benefits Severance and Change in Control Agreements
In October 2018, the Company entered into Severance and Change in Control Agreements (the “Severance Agreements”) with Gaurav D. Shah, M.D., Kinnari Patel, Pharm.D., M.B.A. and Jonathan Schwartz, M.D.
The Severance Agreements provide the executives with certain severance benefits upon certain qualifying terminations of employment.
In connection with a termination of the executive’s employment by the Company for Cause or by the executive without Good Reason (each as defined below), the executive is not entitled to any severance payments or benefits and is only entitled to receive (i) any accrued but unpaid base salary and accrued but unused vacation, (ii) any unpaid annual bonus with respect to any completed fiscal year immediately preceding the date of termination (provided, however, that if the executive is terminated for Cause, such bonus shall be forfeited), (iii) reimbursement for unreimbursed business expenses, and (iv) employee benefits, if any, to which the executive may be entitled as of the date of termination ((i) through (iv) collectively, the “Accrued Amounts”).
In connection with a termination of the executive’s employment with the Company without Cause or by the executive for Good Reason, the executive is entitled to receive the Accrued Amounts and, upon execution of an irrevocable release of claims in favor of the Company, (i) a lump sum payment equal to, in the case of Dr. Patel and Dr. Schwartz, nine months, and, in the case of Dr. Shah, 12 months, of the executive’s annual base salary for the year in which termination occurs and (ii) if timely elected, in the case of Dr. Patel and Dr. Schwartz, nine months, and, in the case of Dr. Shah, 12 months, of Company-paid COBRA benefits.
In connection with a termination of the executive’s employment with the Company without Cause (other than on account of the executive’s death or Disability) or by the executive for Good Reason within 12 months following a Change in Control (as defined below), the executive is entitled to receive, upon execution of an irrevocable release of claims in favor of the Company, (i) the Accrued Amounts, (ii) a lump sum payment equal to, in the case of Dr. Patel and Dr. Schwartz, 12 months, and, in the case of Dr. Shah, 18 months, of the executive’s annual base salary for the year in which termination occurs, (iii) a lump sum amount equal to any annual bonus to which the executive would have been entitled for the year in which termination occurs, and (iv) if timely elected, in the case of Dr. Patel and Dr. Schwartz, 12 months, and, in the case of Dr. Shah, 18 months, of Company-paid COBRA benefits.
In connection with a termination of the executive’s employment upon death or Disability (as defined in the Severance Agreements) of the executive, the executive (or the executive’s estate or beneficiaries) is entitled to receive the Accrued Amounts and a pro-rata portion of the annual bonus, if any, the executive would have earned for the year in which termination occurs.
Under certain circumstances, the payments and benefits provided under the Severance Agreements in connection with a Change in Control may not be eligible for a federal income tax deduction by us pursuant to Section 280G
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of the Code. Under certain circumstances, these payments and benefits may also subject the executive to an excise tax under Section 4999 of the Code. If the payments or benefits payable to an executive in connection with a Change in Control would be subject to the excise tax imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a greater net after-tax benefit to the executive.
For purposes of the Severance Agreements, “Cause” means (as determined by the Board in their discretion exercised in good faith):
any material breach by the executive of any agreement between the executive and the Company;
the conviction of, indictment for or plea of nolo contendere by the executive to a felony or a crime involving moral turpitude; or
any material misconduct or willful and deliberate nonperformance (other than by reason of the executive’s Disability) by the executive of the executive’s duties to the Company.
For purposes of the Severance Agreements, “Good Reason” means the occurrence of any of the following in each case during the term of employment without the executive’s written consent, which circumstances are not remedied by the Company within 30 days of its receipt of a written notice from the executive describing the applicable circumstances (which notice must be provided by the executive within 90 days of the executive’s knowledge of the applicable circumstances):
a material, adverse change in the executive’s duties, responsibilities, authority, title or reporting structure;
a material reduction in the executive’s base salary or bonus opportunity; or
a geographical relocation of the executive’s principal office location by more than 50 miles.
For purposes of the Severance Agreements, a “Change in Control” shall be deemed to have occurred upon the occurrence of any one of the following events:
the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity;
a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction;
the sale of all of the stock of the Company to an unrelated person, entity or group thereof acting in concert; or
any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
In addition, the stock option agreements and restricted stock unit agreements with the named executive officers provide for accelerated vesting of 100% of the unvested portion of the shares underlying the stock option upon a termination of the executive’s employment with the Company without Cause or by the executive for Good Reason (each as defined in the applicable stock option agreement) within 12 months following a Sale Event (as defined in the 2014 Plan), as well as in the event of termination due to death or permanent and total Disability (as defined in the stock option agreements). In the event of an accelerated vesting of an executive officer’s options due to death or permanent and total Disability, such options are exercisable for a period of 12 months from the earlier of such date and the initial termination date.
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The following table describes the potential payments and benefits upon employment termination for Dr. Shah, as if his employment terminated as of December 31, 2023.
Compensation:
| | | | | | | | | |
Cash Severance | | | 1,005,000 | | | 375,000 | | | 1,320,000 |
Acceleration of Equity Awards(1) | | | — | | | 8,345,405 | | | 8,345,405 |
Health care continuation | | | 29,961 | | | — | | | 44,942 |
Total | | | 1,034,961 | | | 8,720,405 | | | 9,710,347 |
(6)(1)
| The value of the restrictedaccelerated vesting of stock units reflected in the tableoptions is based on a price per share of $10.44, which wasthe difference between (x) $29.97, the closing market price of our common stock on December 31, 2023, and (y) the per share exercise price of the stock option. The value of accelerated RSUs is based on $29.97, the closing market price of our common stock on December 31, 2023, and the unvested RSUs. Cash severance represents $630,000 annual base salary and $375,000 annual bonus payable upon death. |
The following table describes the potential payments and benefits upon employment termination for Dr. Patel, as if her employment terminated as of December 31, 2023.
Compensation:
| | | | | | | | | |
Cash Severance | | | 673,563 | | | 268,563 | | | 808,563 |
Acceleration of Equity Awards(1) | | | — | | | 6,820,168 | | | 6,820,168 |
Health care continuation | | | 17,894 | | | — | | | 23,858 |
Total | | | 691,457 | | | 7,088,731 | | | 7,652,589 |
(1)
| The value of accelerated vesting of stock options is based on the difference between (x) $29.97, the closing market price of our common stock on December 31, 2023, and (y) the per share exercise price of the stock option. The value of accelerated RSUs is based on $29.97, the closing market price of our common stock on December 31, 2023 and the unvested RSUs. Cash severance represents prorated nine months annual salary of $405,000 and annual bonus payable on death of $268,563. |
The following table describes the potential payments and benefits upon employment termination for Dr. Schwartz, as if his employment terminated as of December 31, 2023.
Compensation:
| | | | | | | | | |
Cash Severance | | | 516,473 | | | 178,973 | | | 516,473 |
Acceleration of Equity Awards(1) | | | — | | | | | | 3,713,878 |
Health care continuation | | | 25,361 | | | — | | | 25,361 |
Total | | | 541,834 | | | 178,973 | | | 4,255,711 |
(1)
| The value of accelerated vesting of stock options is based on the difference between (x) $29.97, the closing market price of our |
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common stock on December 31, 2023, and (y) the per share exercise price of the stock option. The value of accelerated RSUs is based on $29.97, the closing market price of our common stock on December 31, 2023 and the unvested RSUs. Cash severance represents prorated nine months annual salary of $351,000 and annual bonus payable on death of $178,973.
The following table describes the potential payments and benefits upon employment termination for Mr. Militello, as if his employment terminated as of December 31, 2023.
Compensation:
| | | | | | | | | |
Cash Severance | | | 164,500 | | | — | | | 415,252 |
Acceleration of Equity Awards(1) | | | — | | | — | | | 2,182,185 |
Health care continuation | | | 21,176 | | | — | | | 21,176 |
Total | | | 185,676 | | | — | | | 2,618,613 |
(1)
| The value of accelerated vesting of stock options is based on the difference between (x) $29.97, the closing market price of our common stock on December 31, 2023, and (y) the per share exercise price of the stock option. The value of accelerated RSUs is based on $29.97, the closing market price of our common stock on December 31, 2023 and the unvested RSUs. |
The following table describes the potential payments and benefits upon employment termination for Mr. Pujols, as if his employment terminated as of December 31, 2023.
Compensation:
| | | | | | | | | |
Cash Severance | | | 369,375 | | | — | | | 716,625 |
Acceleration of Equity Awards(1) | | | — | | | — | | | 6,961,840 |
Health care continuation | | | 17,799 | | | — | | | 17,799 |
Total | | | 387,174 | | | — | | | 7,696,264 |
(1)
| The value of accelerated vesting of stock options is based on the difference between (x) $29.97, the closing market price of our common stock on December 31, 2023, and (y) the per share exercise price of the stock option. The value of accelerated RSUs is based on $29.97, the closing market price of our common stock on December 31, 2023 and the unvested RSUs. |
Our compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. We strive to ensure the pay of each of our employees reflects the level of their job impact and responsibilities and is competitive within our peer group. Compensation rates are benchmarked and are generally set to be market competitive. Our ongoing commitment to pay equity is critical to our success in supporting a diverse workforce with opportunities for all employees to grow, develop and contribute.
Under rules adopted pursuant to the Dodd-Frank Act, we are required to calculate and disclose median of the annual total compensation of all employees, the annual total compensation of our Chief Executive Officer, as well as the ratio of the annual total compensation paid to the median employee as compared to the annual total compensation paid to our Chief Executive Officer (the “CEO Pay Ratio”). The paragraphs that follow describe our methodology and the resulting CEO Pay Ratio.
We identified the median employee using our employee population on December 31, 2023 (including all employees, whether employed on a full-time, part-time, seasonal or temporary basis).
We identified the median employee by looking at annual base pay and annual target cash incentive opportunity as of December 31, 2023 for all active employees as of that date. We did not perform adjustments to the compensation paid
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to part-time employees to calculate what they would have been paid on a full-time basis. In identifying the median employee, we did not exclude workers in non-U.S. countries and did not make any cost-of-living adjustments. Once the median employee was identified, we calculated the median employee’s annual total compensation in accordance with the same requirements used to calculate the amounts reported in the Summary Compensation Table. During the year ended December 31, 2023, there were no changes to the Company’s employee population or employee compensation arrangements that it reasonably believes would result in a significant change to its pay ratio disclosure; therefore, the Company used the same employee for purposes of calculating the 2023 CEO Pay Ratio.
Our median employee compensation as calculated using these requirements was $106,462. Our Chief Executive Officer’s compensation as reported in the Summary Compensation Table was $8,013,553. Therefore, our CEO Pay Ratio is approximately 75:1.
This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Neither the Compensation Committee nor management of the Company used the CEO Pay Ratio measure in making compensation decisions.
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Pay Versus Performance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing certain information, including the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning our pay-for-performance philosophy and how we align executive compensation with our performance, refer to the “Executive Compensation” section in this Proxy Statement.
The Pay Versus Performance Table below discloses the relationship between the compensation actually paid to the executive officers and the Company’s financial performance during the years ended December 31, 2021, 2022, and 2023. The compensation information presented in this table is different from compensation information presented in the Summary Compensation Table above. The differences can largely be attributed to variation in the treatment of equity awards in each of these tables.
In accordance with SEC rules, the Stock Awards and Options Awards columns in the Summary Compensation Table include the aggregate grant date fair values of the RSUs and options granted during 2023.
The Pay Versus Performance Table below differs from both the information presented in the CD&A and in the Summary Compensation Table, because it calculates “compensation actually paid” based on different methodologies, including the value of 2023 equity awards as of December 31, 2023, and the change in value during 2023 for prior years’ equity awards.
The Company does not use any financial performance measures to link compensation actually paid to our named executive officers to the Company’s performance. Accordingly, pursuant to SEC rules, we have not included a “Company-Selected Measure” or a tabular list of performance measures.
2023 | | | $8,013,553 | | | $12,366,504 | | | $3,477,295 | | | $5,584,040 | | | $131.68 | | | $115.42 | | | ($245,595) |
2022 | | | $6,553,203 | | | $5,185,698 | | | $2,714,046 | | | $2,414,745 | | | $85.98 | | | $111.27 | | | ($221,863) |
2021 | | | $7,918,750 | | | ($4,329,821) | | | $3,598,514 | | | ($380,245) | | | $95.91 | | | $124.89 | | | ($169,069) |
2020 | | | $6,859,135 | | | $21,732,137 | | | $1,897,164 | | | $4,591,740 | | | $240.95 | | | $125.69 | | | ($139,700) |
(1)
| This column represents the amount of total compensation reported for Mr. Shah (our CEO) for each corresponding fiscal year in the “Total” column of the Summary Compensation Table (“total compensation”). Please refer to the Summary Compensation Table in this Proxy Statement. |
(2)
| This column represents the amount of “compensation actually paid” to Mr. Shah, as computed in accordance with Item 402(v) of Regulation S-K. The “compensation actually paid” for 2022 has been updated from the amounts reported in the Company’s 2023 Proxy Statement to reflect vesting treatment of restricted stock unit agreements. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Shah during the applicable fiscal year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Shah’s total compensation for each fiscal year to determine the “compensation actually paid”: |
2023 | | | $8,013,553 | | | $6,999,987 | | | $11,352,938 | | | $12,366,504 |
2022 | | | $6,553,203 | | | $5,499,980 | | | $4,132,475 | | | $5,185,698 |
(a)
| This column represents the amount of total compensation reported for Mr. Shah for 2022 and 2023 in the “Total” column of the Summary Compensation Table. Please refer to the Executive Compensation Tables section of this Proxy Statement. |
(b)
| This column represents the aggregate grant date fair value of equity awards reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each year. Please refer to the Executive Compensation Tables section of the Company’s Proxy Statement. The amount in this column is replaced with the amount reported in the Adjusted Value of Equity Awards column in order to arrive at compensation actually paid. |
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(c)
| This column represents an adjustment to the amounts in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each year. For each year presented, the adjusted amount replaces the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for Mr. Shah to arrive at “compensation actually paid” to Mr. Shah for the year presented. The adjusted amount is determined by adding (or subtracting, as applicable) the following for each year: (i) the year-end fair value of any equity awards granted in each year that are outstanding and unvested as of December 30, 2017.the end of such year; (ii) the amount of change as of the end of each year (from the end of the prior fiscal year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of such year; (iii) for awards that are granted and vest in each year presented, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the years presented, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the years presented, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in each year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for each year. The amounts added or subtracted to determine the adjusted amount are as follows: |
2023 | | | $10,224,335 | | | $1,182,622 | | | $— | | | ($54,019) | | | $— | | | $— | | | $11,352,938 |
2022 | | | $5,493,244 | | | ($193,446) | | | $— | | | ($1,167,323) | | | $— | | | $— | | | $4,132,475 |
(3)
| This column represents the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Shah) in the “Total” column of the Summary Compensation Table in each applicable fiscal year. Please refer to the Summary Compensation Table in the Company’s Proxy Statement for the applicable fiscal year. The names of each of the NEOs (excluding Mr. Shah) included for purposes of calculating the average amounts in each applicable fiscal year are as follows: (i) for 2023, Kinnari Patel, John Militello, Raj Prabhakar, Mayo Pujols; (ii) for 2022, Kinnari Patel, John Militello, Carlos Garcia-Parada, Raj Prabhakar, Mayo Pujols; and (iii) for 2021, Kinnari Patel, Carlos Garcia-Parada, Jonathan Schwartz and Martin Wilson, (iv) for 2020, Kinnari Patel, Jonathan Schwartz, Kamran Alam and John Militello. |
(4)
| This column represents the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Shah), as computed in accordance with Item 402(v) of Regulation S-K. The “compensation actually paid” for 2022 has been updated from the amounts reported in the Company’s 2023 Proxy Statement to reflect vesting treatment of restricted stock unit agreements. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Shah) during 2023. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Shah) for 2023 to determine the “compensation actually paid”, using the same adjustment methodology described above in Note 2(c): |
2023 | | | $3,477,295 | | | $2,749,979 | | | $4,856,724 | | | $5,584,040 |
2022 | | | $2,714,046 | | | $2,123,381 | | | $1,824,080 | | | $2,414,745 |
(a)
| This column represents the average of the amounts reported for the Company’s named executive officers (NEOs) as a group (excluding Mr. Shah) in the “Total” column of the Summary Compensation Table in each year. |
(b)
| This column represents the average of the total amounts reported for the NEOs as a group (excluding Mr. Shah) in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table in each year. The amount in this column is replaced with the amount reported in the Average Non-PEO NEO Adjusted Value of Equity Awards column in order to arrive at compensation actually paid. |
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(c)
| This column represents an adjustment to the average of the amounts reported for the NEOs as a group (excluding Mr. Shah) in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each year determined using the same methodology described above in Note 2(c). For each year, the adjusted amount replaces the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for each NEO (excluding Mr. Shah) to arrive at “compensation actually paid” to each NEO (excluding Mr. Shah) for each year, which is then averaged to determine the average “compensation actually paid” to the NEOs (excluding Mr. Shah) for that year. The amounts added or subtracted to determine the adjusted average amount are as follows: |
2023 | | | $4,140,112 | | | $792,922 | | | $— | | | ($76,309) | | | $— | | | $— | | | $4,856,724 |
2022 | | | $2,258,641 | | | ($48,605) | | | $— | | | ($248,187) | | | ($137,769) | | | $— | | | $1,824,080 |
For purposes of the above adjustments, the fair value of equity awards on the applicable date were determined in accordance with FASB’s ASC Topic 718, using valuation methodologies that are generally consistent with those used to determine the grant-date fair value for accounting purposes. The assumptions used in calculating the fair value of the equity awards for 2023 did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that the option valuations used an estimated term between 4.2 years and 8.0 years, an estimated volatility between 68% and 78%, and a risk-free rate between 3.2% and 4.9%.
(5)
| Total Shareholder Return (“TSR”) represents the cumulative return on a fixed investment of $100 in the Company’s common stock, for the period beginning on the last trading day of fiscal year 2019 through the end of the applicable fiscal year, assuming reinvestment of dividends. |
(6)
| This column represents cumulative peer group TSR computed in accordance with Note 5. The peer group used for this purpose is Nasdaq Biotechnology Index. |
(7)
| These restricted stock units were granted pursuant to our 2014 Plan on January 23, 2017. The awards were subject to vesting 25% per year over four years, onThis column represents the anniversaryamount of net income reflected in the grant date.Company’s audited financial statements for the applicable fiscal year. |
(8) | These restricted stock units were granted pursuant to our 2014 Plan on January 17, 2017. The awards were subject to vesting 25% every six months over two years, on thesix-month anniversary of the grant date. |
Description of the Relationship Between Pay and Performance
The following chart illustrates the relationship between CAP for our PEO and the average CAP for our Non-PEO NEOs against the Company’s TSR, as well as the relationship between our TSR and the TSR of our peer group:
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The following chart illustrates the relationship between CAP for our PEO and the average CAP for our Non-PEO NEOs against the Company’s net income:
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Non-Employee Director Compensation
TableThe following table presents the total compensation for each person who served as a member of our Board during 2017. Other than as set forth in the table, we did not pay any compensation, make any equity awards ornon-equity awards to, or pay any other compensation to any of thenon-employee members of our Board in 2017. David P. Southwell, our former President and Chief Executive Officer, received no compensation for his service as a director during 2017, and, consequently, is not included in this table.
All share numbers and prices have been adjusted to reflect the Stock Split.
Non-Employee Director Compensation
The Company adopted anon-employee director compensation policy that became effective upon the Company’s IPO in February 2015. Policy
The purpose of thisthe Company’s non-employee director compensation policy is to provide a total compensation package that enables the Company to attract and retain, on a long-term basis, high-caliber directors who are not employees or officers of the Company. During 2017, for serviceThe Company’s compensation philosophy has been to target director cash compensation at or below the median and director equity grants in a range of the median to 75th percentile as compared to the Company’s peer group.
Semler Brossy, the Company’s independent compensation consultant advises on the board of directors, annual cash retainers were paid as follows: for board members, $50,000,director pay and annually prepares a director compensation study for the chairperson, $92,850. This policy was amended in March 2018 such that in 2018,June Compensation Committee meeting, which includes a director compensation review against the Company’s peer group and an update on compensation trends and developments. In addition, Semler Brossy prepares an annual market and governance trend update for the September Compensation Committee meeting, and pertinent other updates are provided throughout the year as needed. The Company’s Compensation Committee annually recommends approval of a non-employee director pay package to the full Board for approval at the Company’s June Board meeting.
The fees paid to non-employee directors, other than our Chairman, for service on the Board annual cash retainersand for service on each committee of $35,000 will be paidthe Board on which the director is a member are as follows:
Board of Directors:
| | | |
All non-employee members, except chairman | | | 40,000 |
Audit Committee:
| | | |
Members | | | 10,000 |
Chairman | | | 20,000 |
Compensation Committee:
| | | |
Members | | | 7,500 |
Chairman | | | 15,000 |
Nominating and Corporate Governance Committee:
| | | |
Members | | | 5,000 |
Chairman | | | 10,000 |
We also reimburse our non-employee directors for
reasonable travel and out-of-pocket expenses incurred in connection with attending our Board
members, excludingand committee meetings. The Chairman of the
chairperson. The chairperson willBoard does not receive
an annualany cash
retainer for his service. In addition to cash retainerscompensation and instead is compensated for service on the Board
entirely in the form of equity. Our directors may elect to receive their annual retainer in options with aggregate grant date fair value equal to the cash
retainers are paid for service on committeesamount of the
board of directors. For serviceretainer that they would have otherwise been entitled to receive on such date. Such options vest in full on the
Audit Committee in 2017 and 2018, annual cash retainers are paid as follows: for committee members, $7,500, forfirst anniversary of the
chairperson, $15,000. For service on the Compensation Committee in 2017 and 2018, annual cash retainers are paid as follows: for committee members, $5,000, for the chairperson, $10,000. For service on the Nominating and Corporate Governance Committee in 2017, annual cash retainers were paid as follows: for committee members, $3,000, for the chairperson, $7,500. For service on the Nominating and Corporate Governance Committee in 2018, annual cash retainers will be paid as follows: for committee members, $4,000, for the chairperson, $8,000.grant date.
In addition, each newnon-employee director upon his/her election to the Board will receivereceives aone-time option grant to purchase shares of the Company’s common stock in such amount and on such terms as authorized by the Board, or by a committee appointed by the Board, subject to periodic review. Following completion ofThe Company’s Compensation Committee has reviewed market practice related to non-employee director awards and discussed the Reverse Merger, based on a competitive market review of peer companies performed by F.W. Cook and our compensation philosophy,approach for the Board authorized, toCompany eachnon-employee director excluding the chairperson, aone-time option grant to purchase 40,000 shares of the Company’s common stock, and, to the chairperson, aone-time option grant to purchase 47,000 shares of the Company’s common stock. year since 2020. Beginning in 2019, on the date of2020, each annual meeting of stockholders of the Company, an annual option will be granted to eachnon-employee director serving on the Board immediately following the Company’s annual meeting of stockholders to purchase sharesreceives an annual option grant on the date of common stockeach annual meeting of stockholders in such amount and on such terms as authorized by the Board, or by a committee appointed by the Board, subject to periodic review. FollowingIn 2021, the completionCompany holistically assessed its approach to new director equity (and has reviewed annually thereafter) using market data prepared by Semler Brossy.
The annual option grants awarded to our directors vest in full on the first anniversary of the
Reverse Merger, based on the competitive market review performed by F.W. Cook and our compensation philosophy,grant date. The one-time option grants awarded upon a new director’s appointment to the Board
authorized, to eachnon-employee director excludingvest in equal monthly installments over the
chairperson, an annual option grant to purchase 20,000 sharescourse of the
Company’s common stock, and, tothree years following the
chairperson, an annual option grant
to purchase 27,000 shares of the Company’s common stock.date.
All of the foregoing option grants have or will have an exercise price equal to the fair market value of a share of common stock on the date of grant.
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20172023 Director Compensation Table
| | | | | | | | | | | | | | | | | | | | |
Director name | | Fees
earned
$(1) | | | Option awards
$ | | | | | | All other
compensation
$ | | | Total
$ | |
Timothy Barberich | | | 60,000 | | | | 64,304 | | | | (2 | ) | | | — | | | | 124,304 | |
Carsten Boess | | | 68,000 | | | | 64,304 | | | | (2 | ) | | | — | | | | 132,304 | |
J. Martin Carroll | | | 92,850 | | | | 64,304 | | | | (2 | ) | | | — | | | | 157,154 | |
Paul G. Howes | | | 57,500 | | | | 64,304 | | | | (2 | ) | | | — | | | | 121,804 | |
Patrick Machado | | | 57,500 | | | | 64,304 | | | | (2 | ) | | | — | | | | 121,804 | |
Gary Phillips, M.D. | | | 55,000 | | | | 64,304 | | | | (2 | ) | | | — | | | | 119,304 | |
Richard N. Spivey, PharmD, PhD | | | 62,500 | | | | 64,304 | | | | (2 | ) | | | — | | | | 126,804 | |
The following table presents the total compensation for each person who served as a member of our Board during 2023. Other than as set forth in the table, 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 in 2023. Gaurav D. Shah, M.D., our Chief Executive Officer, received no compensation for his service as a director during 2023, and, consequently, is not included in this table. The compensation received by Dr. Shah as an employee during 2023 is presented in the “2023 Summary Compensation Table” earlier in this proxy statement and other related named executive officer compensation disclosures in this proxy statement.
Elisabeth Björk, M.D., Ph.D. | | | — | | | 409,987 | | | — | | | 409,987 |
Carsten Boess | | | 67,500 | | | 359,992 | | | — | | | 427,492 |
Pedro Granadillo | | | — | | | 429,984 | | | — | | | 429,984 |
Gotham Makker, M.D. | | | — | | | 399,988 | | | — | | | 399,988 |
Fady Malik, M.D., Ph.D. | | | 40,000 | | | 359,992 | | | — | | | 399,992 |
David Southwell | | | 40,000 | | | 359,992 | | | — | | | 399,992 |
Naveen Yalamanchi, M.D. | | | 57,500 | | | 359,992 | | | — | | | 417,492 |
Keith Woods(2) | | | 2,717 | | | 565,987 | | | — | | | 568,704 |
Roderick Wong, M.D.(3) | | | — | | | 409,987 | | | — | | | 409,987 |
(1)
| Represents fees earnedAmounts represent the aggregate grant-date fair value of option awards granted to our directors in 2017, a portion2023, computed in accordance with FASB ASC Topic 718 excluding any estimates of which were paid in 2018.forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 9 to our consolidated financial statements for the year ended December 31, 2023. These amounts do not correspond to the actual value that may be recognized by the directors upon vesting of the applicable awards. As of December 31, 2023, Rocket Board members held unexercised options to purchase the following number of shares: 212,856 shares for Mr. Wong, 227,044 shares for Mr. Makker, 193,519 shares for Mr. Granadillo, 196,081 shares for Mr. Boess, 175,831 shares for Mr. Yalamanchi, 366,705 shares for Mr. Southwell, 158,465 shares for Dr. Björk and 32,482 for Mr. Woods. |
(2)
| RepresentsMr. Woods was appointed to our Board effective December 7, 2023, and his cash Board fees were prorated based on the number of days he served as a director in fiscal 2023. Mr. Woods received a new director grant with a grant date fair value of an option$359,988 and a prorated annual grant with a grant date fair value of $205,988. |
(3)
| As Chairman of the Board, Dr. Wong is not entitled to purchase 11,250 shares of our common stock granted to each then-currentnon-employee director on June 20, 2017, with an exercise price of $7.20 per share.receive any cash fees for his service. |
As
Director Stock Ownership Guidelines
We maintain stock ownership guidelines to further align the interests of December 31, 2017, Board members held optionsour directors and officers with our shareholders. Directors and officers are expected to purchaseachieve ownership in the following numberamounts set forth in the table below within five years of shares: 17,250 shares for Mr. Barberichbeing appointed to the relevant role. Each non-employee director and Mr. Machado; 20,250 shares for Mr. Boess, Dr. Phillips and Dr. Spivey; 33,000 shares for Mr. Carroll; and 19,714 shares for Mr. Howes.NEO was in compliance with these requirements (subject to the five-year phase-in period) as of the record date, April 16, 2024.
Non-Employee Director | | | 1x Annual Retainer |
Chief Executive Officer | | | 3x Annual Base Salary |
Chief Financial Officer | | | 1x Annual Base Salary |
Other Executive Officer | | | 1x Annual Base Salary |
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TRANSACTIONS WITH RELATED PERSONS
Policies and Procedures for Related Person Transactions
Other than compensation arrangements, we describe below the transactions, and series of similar transactions, since January 1, 2023, to which we were a party or will be a party, in which:
the amounts involved exceeded or exceeds $120,000; and
any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
We have adopted a written Related Person Transaction Policy, which requires that all related person transactions are reviewed and approved by our Audit Committee. This review covers any material transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we were or are to be a participant, and a related person had or will have a direct or indirect material interest, including, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. A “related person” is any person who is or was one of our executive officers, directors or director nominees or is a holder of more than 5% of our common stock, or their immediate family members or any entity owned or controlled by any of the foregoing persons.
Certain Related-Person Transactions
Other than compensation arrangements
In October 2020, the Company entered into a consulting agreement with directors andAdaptive Technologies, LLC (“Adaptive Technologies”), which is owned by the spouse of Kinnari Patel, one of the Company’s executive officers, for information technology advisory services. In exchange for the services provided under the agreement, the Company granted 10,000 restricted stock units which are described where requiredvest over a three-year period.
In June 2023, the Company entered into a new consulting agreement with Adaptive Technologies for information technology advisory services. In exchange for the services provided under “Executive Compensation—Executive Agreements” and “Director Compensation,”the agreement, the Company will pay $450 per hour worked for performing the services.
On September 15, 2023, we have no other related-party transactions that are subjectcompleted a public offering, which included the sale of pre-funded warrants to disclosure in accordancepurchase approximately 3.1 million shares of common stock at a price of $15.99 per warrant to funds affiliated with RTW Investments LP, our policies and procedureslargest shareholder, for related party transactions.aggregate net proceeds of approximately $50 million.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to us regarding beneficial ownership of our capital stock as of April
2, 201816, 2024 for:
each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our capital stock;
our named executive officers;
each of our other directors; and
all executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. A person is deemed to be a beneficial holder of our common stock if that person has or shares voting power, which includes the power to vote or direct the voting of our common stock, or investment power, which includes the power to dispose of or to direct the disposition of such capital stock. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all common stock shown as beneficially owned by them.
The table lists applicable percentage ownership based on
39,435,148 shares of common stock outstanding as of April
2, 2018.16, 2024. Shares of common stock that may be acquired by an individual or group within 60 days of April
2, 2018,16, 2024, pursuant to the exercise of options, warrants or other rights, are deemed to be beneficially owned by the persons holding these options for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person’s ownership percentage.
Unless otherwise noted below, the address of each person listed on the table is c/o Rocket Pharmaceuticals, Inc.,
430 East 29th Street, Suite 1040, New York, NY, 10016. | | | | | | | | |
Name and address of beneficial owner | | Number of
Shares
Beneficially
Owned | | | Percent
of Class | |
5% Stockholders | | | | | | | | |
RTW Investments, LP (1) 250 West 55th Street, 16th Floor, Suite A New York, NY 10019 | | | 15,439,577 | | | | 39.15 | % |
Tang Capital Partners, LP (2) 4747 Executive Drive, Suite 510 San Diego, CA 92121 | | | 2,665,485 | | | | 6.76 | % |
Named executive officers and directors | | | | | | | | |
David P. Southwell (3) | | | 382,534 | | | | * | |
Rudolf Baumgartner, M.D. (4) | | | 217,609 | | | | * | |
Dale Ritter (5) | | | 41,554 | | | | * | |
Carsten Boess (6) | | | 20,250 | | | | * | |
Pedro Granadillo | | | - | | | | * | |
Gotham Makker, M.D. (7) | | | 1,331,406 | | | | 3.38 | % |
Gaurav Shah, M.D.(8) | | | 1,098,892 | | | | 2.79 | % |
Roderick Wong, M.D. (1) | | | 15,439,577 | | | | 39.15 | % |
Naveen Yalamanchi, M.D. (9) | | | 114,278 | | | | * | |
All directors and executive officers as a group (10 persons) (10) | | | 18,799,477 | | | | 47.67 | % |
5% Stockholders
| | | | | | |
RTW Investments, LP(1)
40 10th Avenue, Floor 7
New York, NY 10014 | | | 18,188,457 | | | % |
Wellington Management Group LLP(2)
280 Congress Street
Boston, MA 02210 | | | 9,156,099 | | | % |
Blackrock, Inc.(3)
55 East 52nd Street
New York, NY 10055 | | | 5,930,178 | | | % |
The Vanguard Group(4)
100 Vanguard Blvd
Malvern, PA 19355 | | | 5,447,565 | | | % |
Named executive officers and directors
| | | | | | |
Gaurav Shah, M.D.(5) | | | 2,819,758 | | | % |
John Militello, CPA(6) | | | 193,508 | | | *% |
Kinnari Patel, Pharm.D., M.B.A.(7) | | | 1,514,305 | | | % |
Mayo Pujols(8) | | | 144,757 | | | % |
Jonathan Schwartz, M.D(9) | | | 548,323 | | | % |
Roderick Wong, M.D.(1) | | | 18,371,873 | | | % |
Elisabeth Björk, M.D., Ph.D.(10) | | | 129,025 | | | % |
Carsten Boess(11) | | | 170,231 | | | % |
Pedro Granadillo(12) | | | 162,643 | | | % |
Gotham Makker, M.D.(13) | | | 1,018,144 | | | % |
Fady Malik, M.D., Ph.D.(14) | | | 78,519 | | | *% |
David P. Southwell(15) | | | 436,015 | | | *% |
R. Keith Woods | | | — | | | — |
Naveen Yalamanchi, M.D.(16) | | | 263,622 | | | *% |
All directors and executive officers as a group (14 persons)(17) | | | 25,580,723 | | | % |
*
| Represents beneficial ownership of less than one percent. |
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(1)
| Based on Amendment No. 10 to Schedule 13D, jointly filed by RTW Investments, LP (“RTW”) and Roderick Wong with the SEC on January 16, 2018.September 19, 2023. According to Amendment No. 10 to Schedule 13D, the reporting persons had shared voting power and shared dispositive power with respect to 18,188,457 shares, which includes 30,852 shares of common stock issuable upon the exercise of warrants and did not have sole voting power or dispositive power as to any shares. The number shares of shares beneficially owned does not include 3,126,955 pre-funded warrants to purchase shares of Rocket’s common stock (the “Pre-Funded Warrants”) purchased by funds affiliated with RTW in September 2023. The Pre-Funded Warrants contain an exercise limitation prohibiting the holder from exercising the Pre-Funded Warrants until such time as the holder, together with certain other related parties, would not beneficially own after any such exercise more than 9.99% of the then issued and outstanding common stock (the “Blocker”). Due to the Blocker, the Pre-Funded Warrants beneficially owned by certain of the RTW Funds are not presently exercisable. According to Schedule 13D/A, the shares of common stock beneficially owned by the reporting persons are held by one or more funds (together the “RTW Funds”) managed by RTW Investments, LP (the “RTW Adviser”). The RTW Adviser, in its capacity as the investment manager of the RTW Funds, has the power to vote and the power to direct the disposition of all such shares of common stock held by the RTW Funds. Roderick Wong is the Managing Partner and Chief Investment Officer of the RTW Adviser. Roderick Wong is a control person of RTW and Chairman of the Board. Mr. Wong’s holdings also include 129,795 shares of common stock issuable upon the exercise of options exercisable within 60 days of April 16, 2024. |
(2)
| Based on Schedule 13G, jointly filed by Tang Capital Partners, LP, Tang CapitalWellington Management LLCGroup LLP with the SEC on February 8, 2024. According to the Schedule 13G, the reporting persons had shared voting power with respect to 7,363,699 shares, shared dispositive power as to 8,197,546 shares and Kevin C. Tangdid not have sole voting power or sole dispositive power as to any shares. |
(3)
| Based on Amendment No. 2 to Schedule 13G, filed by Blackrock, Inc. with the SEC on January 16, 2018. Tang Capital Partners, LP29, 2024. According to Amendment No. 1 to Schedule 13G, the reporting persons had sole voting power with respect to 5,847,675 shares, voting andsole dispositive power over suchwith respect to 5,930,178 shares, with Tang Capital Management, LLC and Kevin Tang. Mr. Tang disclaims beneficial ownership of all shares reported therein exceptdid not have shared voting or dispositive power as to the extent of his pecuniary interest therein.any shares. |
(3)(4)
| Based on Amendment No. 1 to Schedule 13G, filed by The Vanguard Group with the SEC on February 13, 2024. According to the Schedule 13G, the reporting persons had shared voting power with respect to 108,058 shares, shared dispositive power with respect to 183,551 shares, sole dispositive power as to 5,264,014 shares and did not have sole voting power as to any shares. |
(5)
| Consists of (i) 16,660561,895 shares of common stock, (ii) 190,874207,897 shares of common stock owned by Dr. Shah’s wife, (iii) 198,341 shares of common stock held by Gaurav D. Shah Irrevocable Trust, (iv) 1,677,146 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 2, 201816, 2024 and (iii) 175,000 restricted(v) 91,725 shares of common stock units that are fully vested. Mr. Southwell ceased being an executive officer on January 4, 2018.issuable upon the vesting of RSUs within 60 days after April 16, 2024. |
(4)(6)
| Consists of (i) 34,04710,705 shares of common stock, (ii) 109,812179,109 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 2, 201816, 2024 and (iii) 73,750 restricted3,694 shares of common stock units that are fully vested. Dr. Baumgartner ceased being an executive officer on January 4, 2018.issuable upon the vesting of RSUs within 60 days after April 16, 2024. |
(5)(7)
| Consists of (i) 4,956259,013 shares of common stock, (ii) 27,22398,261 shares owned by Adaptive Technologies, LLC, a limited liability company that is owned and managed by Dr. Patel’s husband, (iii) 5,675 shares owned by Dr. Patel’s husband, (iv) 1,141,833 shares of common stock issuable upon the exercise of stock options within 60 days after April 16, 2024 and (v) 9,523 shares of common stock issuable upon the vesting of RSUs within 60 days after April 16, 2024. |
(8)
| Consists of (i) 56,630 shares of common stock, (ii) 124,620 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 2, 201816, 2024 and (iii) 9,375 restricted20,137 shares of common stock units that are fully vested. Mr. Ritter ceased being an executive officer on January 4, 2018.issuable upon the vesting of RSUs within 60 days after April 16, 2024. |
(6)(9)
| Consists of (i) 20,25095,726 shares of common stock, (ii) 147,586 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 2, 2018.16, 2024 and (iii) 19,508 shares of common stock issuable upon the vesting of RSUs within 60 days after April 16, 2024. |
(7)(10)
| Consists of 129,025 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 16, 2024. |
(11)
| Consists of 170,231 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 16, 2024. |
(12)
| Consists of (i) 86,009 shares of common stock issuable upon the exercise of options held by Ann Granadillo Lowe 2020 Revocable Trust dated 12/28/2020 (“Ann Granadillo Lowe Trust”) exercisable within 60 days after April 16, 2024, (ii) 48,245 shares of common stock issuable upon the exercise of options held by Paul Andrew Granadillo 2020 Revocable Trust dated 12/28/2020 (“Paul Andrew Granadillo Trust” (iii) 16,009 shares of common stock issuable upon the exercise of options by the Pedro P. Granadillo Irrevocable Trust of 2020, dated December 28, 2020, and together with the Ann Granadillo Lowe Trust, the “Trusts”) exercisable within 60 days after April 16, 2024, and (iii) 162,643 shares of common stock issuable upon the exercise of options held by Mr. Granadillo exercisable within 60 days after April 16, 2024. [Mr. Granadillo is the trustee of the Trusts.]2 |
(13)
| Consists of (i) 1,331,406621,500 shares of common stock held by Simran Investment Group.Group and (ii) 198,322 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 16, 2024. Dr. Makker serves as the Chief Executive Officer and Chief Investment Officer of Simran Investment Group and exercises voting and dispositive control over the securities held by Simran Investment Group and is therefore deemed be the beneficial owner of securities owned or controlled by Simran Investment Group. Notwithstanding the foregoing, Dr. Makker disclaims personal beneficial ownership of the reported securities held by Simran Investment Group, except to the extent of his pecuniary interest therein. Dr. Makker has a pecuniary interest in RTW, but the beneficial ownership of Dr. Makker in the table above does not reflect such ownership. Dr. Makker has no voting or dispositive power over the shares held by RTW. |
(8)(14)
| Consists of (i) 761,850 shares of common stock and (ii) 337,04278,519 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 2, 2018.16, 2024. |
(9)(15)
| Consists of (i) 114,27895,160 shares of common stock and (ii) 340,855 shares of common stock issuable upon the exercise of options exercisable within 60 days after April 16, 2024. |
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(16)
| Consists of (i) 82,391 shares owned by the Naveen Yalamanchi Revocable Living Trust, February 9, 2016, of which Dr. Yalamanchi is the trustee.trustee and (ii) 148,981 shares of common stock issuable upon the exercise of options within 60 days of April 16, 2024. Dr. Yalamanchi has a pecuniary interest in RTW, but the beneficial ownership of Dr. Yalamanchi in the table above does not reflect such ownership. Dr. Yalamanchi has no voting or dispositive power over the shares held by RTW. |
(10)(17)
| Includes only current directors and executive officers serving in such capacity on the date of the table. Consists of the shares and stock options held by Dr. Björk, Mr. Southwell, Mr. Boess, Mr. Granadillo, Dr. Malik, Dr. Makker, Mr. Woods, Dr. Shah, Dr. Wong, and Dr. Yalamanchi and shares and stock options held by current executive officers of the Company not referenced in the table.Company. |
SECTIONDelinquent Section 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCEReports
Section 16(a) of the Securities Exchange Act of 1934 requires our directorsexecutive officers and executive officers,directors and persons who own more than 10% of our common stock to report to the SEC their initialfile reports of ownership of our common stock and any subsequent changes in that ownership. Specific due dates for these reports have been established byownership with the SEC,Securities and weExchange Commission. Officers, directors and greater than 10% shareholders are required by regulation to disclose in this proxy statement any late filings or failures tofurnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such reportsforms furnished to us, andor written representations from our officers and directors, we believe that noduring, and with respect to, 2023, all of our officers and directors and greater than 10% shareholders complied in all respects with the reporting requirements promulgated under Section 16(a), other than (i) Form 4 reports filed by Gaurav Shah, John Militello and Kinnari Patel in connection with February 14, 2023 RSU vestings which were required during the fiscal year endedfiled February 22, 2023, (ii) a Form 4 report filed by John Militello in connection with an October 20, 2023 sale to cover withholding taxes in connection with RSU vesting that was inadvertently filed on October 25, 2023 and (iii) a Form 4 report filed by Mark White for RSUs granted in connection with his hiring on April 4, 2023 that was inadvertently filed on April 12, 2023.
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EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of December 31,
2017, all Section 16(a) filing requirements for2023 with respect to shares of our
most recent fiscal year were satisfied.SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following sets forth the aggregate information ofcommon stock that may be issued under the Company’s equity compensation plans in effect as of December 31, 2017. The Company’s equity plans consist of the 2014 Plan, the 2004 Stock Option and Incentive Plan (the “2004 Plan”), and the 2014 Amended and Restated Employee Stock Purchase Plan.
| | | | | | | | | | | | |
Plan Category | | Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights | | | Weighted-
average exercise
price of
outstanding
options, warrants
and rights | | | Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column
(a)) | |
| | | (a) | | | (b) | | | (c) | |
Equity compensation plans approved by security
holders (1) (2) | | | 795,239 | | | $ | 21.40 | | | | 269,073 | |
Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | |
| |
Total | | | 795,239 | | | $ | 21.40 | | | | 269,073 | |
| |
Equity compensation plans approved by security holders(2) | | | 16,354,353(3) | | | $15.07 | | | 1,561,404(4) |
Equity compensation plans not approved by security holders | | | — | | | — | | | — |
Total | | | 16,354,353 | | | $15.07 | | | 1,561,404 |
(1)
| No additional awards will be made under the 2004 Plan.Does not include shares issuable upon vesting of outstanding RSUs, which have no exercise price and are included in column (a). |
(2)
| Includes 271,719Consists of the 2014 Plan and the 2014 Amended and Restated Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 Plan provides that an additional number of shares will automatically be added to the shares authorized for issuance under the 2014 Plan on January 1 of each year. The number of shares added each year will be equal to 4% of the outstanding shares on the immediately preceding December 31. The 2014 ESPP provides on January 1, 2016 and each January 1 thereafter, the number of shares of common stock approved, reserved and available for issuance under the 2014 ESPP will be cumulatively increased by the lesser of (i) 600,000 shares of common stock or (ii) such number of shares as is necessary to set the number of unissued shares under the plan at 1% of the Company’s outstanding common stock as of January 1 of the applicable year; provided that the Board may act prior to the first day of any fiscal year to provide that there will be no January 1 increase in the share reserve for such fiscal year or that the increase in the share reserve for such fiscal year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding clause. |
(3)
| Consists of shares underlying outstanding options and restricted stock units issuedunder the 2014 Plan.
|
(4)
| Consists of shares available under the 2014 Plan and outstanding pursuantthe 2014 ESPP. No shares were added to the 2014 Plan. There is no exercise price associated with these RSUs and therefore the weighted average price of outstanding options, warrants and rights reflect only the weighted average exercise price of the 523,520 options outstanding at December 31, 2017, issued pursuant to the 2004 Plan and 2014 Plan.on January 1, 2022. |
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STOCKHOLDER PROPOSALS AND NOMINATIONS
Stockholder proposals and nominations should be addressed to our Secretary, c/o Rocket Pharmaceuticals, Inc.,
430 East 29th Street, Suite 1040, New York, NY 10016.9 Cedarbrook Drive, Cranbury, NJ 08512.
The required notice must be in writing and received by our corporate secretary at our principal executive offices not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the
one-year anniversary of the preceding year’s annual meeting. However, in the event the annual meeting is first convened more than thirty (30) days before or more than sixty (60) days after such anniversary date, or if no annual meeting were held in the preceding year, a stockholder’s notice must be received by our corporate secretary not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made. Accordingly, for stockholder proposals or nominations to be brought before the
20192025 annual meeting of stockholders, the required notice must be received by our corporate secretary at the address set forth above no earlier than February
25, 2019,13, 2025, and no later than March
27, 2019.15, 2025. Proposals and nominations not received within this time frame will be considered untimely.
Any stockholder proposal submitted pursuant to Rule
14a-8 of the Exchange Act to be included in the proxy statement for the
next2025 annual meeting of our stockholders must satisfy the SEC’s regulations under Rule
14a-8 of the Exchange Act and be received no later than December
26, 2018.30, 2024. Under Rule
14a-8, we are not required to include such stockholder proposals in our proxy materials unless this condition is satisfied. Accordingly, any notice of such stockholder proposals received after this date will be considered untimely. If the date of the annual meeting is moved by more than thirty (30) days from the date contemplated at the time of the previous year’s proxy statement, then notice must be received within a reasonable time before we begin to print and send proxy materials. In the event of such a change to the annual meeting date, we will publicly announce the deadline for submitting a proposal in a press release or in a document filed with the SEC. Nothing in this paragraph shall be deemed to require us to include in our proxy statement and proxy card for such meeting any such stockholder proposal which does not meet the requirements of the SEC in effect at the time. Any such proposal will be subject to Rule
14a-8 of the Exchange Act.
As of the time of preparation of this proxy statement, neither the Board nor management intends to bring before the Annual Meeting any business other than the matters referred to in the Notice of Annual Meeting and this proxy statement. If any other business should properly come before the Annual Meeting, or any adjournment thereof, the persons named in the proxy will vote on such matters according to their best judgment.
AVAILABILITY OF CERTAIN DOCUMENTS
Accompanying this proxy statement and posted on the investor relations portion of our website at
www.rocketpharma.com with this proxy statement, is our Annual Report on Form
10-K for the fiscal year ended December 31,
2017.2023. The inclusion of our website address here and elsewhere in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement.
We will also mail without charge, upon written request, a copy of that Annual Report excluding exhibits.exhibits. Requests can be made by email by emailing info@rocketpharma.com, or by a written request addressed to our Secretary, c/o Rocket Pharmaceuticals, Inc.,
430 East 29th Street, Suite 1040,9 Cedarbrook Drive, Cranbury, New
York, NY 10016.Jersey 08512.
Stockholders residing in the same household who hold their stock through a bank or broker may receive only one set of proxy materials in accordance with a notice sent earlier by their bank or broker unless we have received contrary instructions from one or more of the stockholders. This practice will continue unless instructions to the contrary are received by your bank or broker from one or more of the stockholders within the household. We will promptly deliver a separate copy of the
Notice of Internet Availability or the proxy materials,
as applicable, to such stockholders if you make a written or oral request to our corporate secretary at the address above, or by calling (646)
440-9100.If you hold your shares in “street name” and reside in a household that received only one copy of the proxy materials, you can request to receive a separate copy in the future by following the instructions sent by your bank or broker. If your household is receiving multiple copies of the
Notice of Internet Availability or the proxy materials, you may request that only a single set of materials be sent by following the instructions sent by your bank or broker.
AppendixTABLE OF CONTENTS
ANNEX A
ROCKET PHARMACEUTICALS, INC.
SECOND
CERTIFICATE OF AMENDMENT OF
SEVENTH AMENDED AND RESTATED
2014 STOCK OPTION AND INCENTIVE PLANCERTIFICATE OF INCORPORATION OF
ROCKET PHARMACEUTICALS, INC.
PURSUANT TO SECTION
1.GENERAL PURPOSE242 OF THE PLAN; DEFINITIONSThe name of the plan is the
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
Rocket Pharmaceuticals, Inc.
2014 Second Amended and Restated Stock Option and Incentive Plan, a Delaware corporation (the
“Plan”“Corporation”)
. The purpose of the Plan is to encourage and enable the officers, employees,Non-Employee Directors and Consultants of Rocket Pharmaceuticals, Inc. (the “Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. It is anticipated that providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain with the Company.The following terms shall be defined, hereby certifies as set forth below:
“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Administrator” means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation committee and which is comprised of not less thantwo Non-Employee Directors who are independent.
“Award” or “Awards,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options,Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Units, Restricted Stock Awards, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights.
“Award Certificate” means a written or electronic document setting forth the terms and provisions applicable to an Award granted under the Plan. Each Award Certificate is subject to the terms and conditions of the Plan.
“Board” means thefollows:
The Board of Directors of the
Company.“Cash-Based Award” means an Award entitling the recipient to receive a cash-denominated payment.
“Code” means the Internal Revenue CodeCorporation (the “Board of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
“Consultant” means any natural person that provides bona fide services to the Company, and such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities.
“Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other award to which it relates) if such shares had been issued to and held by the grantee.
“Effective Date” means the date on which the Plan is approved by stockholders as set forth in Section 20.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair Market Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator; provided, however, that if the Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”Directors”), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to market quotations. If there are no market quotations for such date, the determination shall be made by reference to the last date preceding such date for which there are market quotations.
“Incentive Stock Option” means any Stock Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.
“Non-Employee Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.
“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.
“Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to Section 5.
“Performance Criteria” means242 of the criteria thatDelaware General Corporations Law (“DGCL”), has duly adopted a resolution setting forth the Administrator selects for purposes of establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle. The Performance Criteria (which may be applicablefollowing proposed amendment (the “Amendment”) to the organizational level specified byCorporation’s seventh amended and restated certificate of incorporation as currently in effect (the “Certificate of Incorporation”) and declared such amendment advisable, and the Administrator, including, but not limited to, the Company or a unit, division, group, or Subsidiarystockholders of the Company) that may be used to establish Performance Goals shall includeCorporation have duly approved and adopted the following: total shareholder return, earnings before interest, taxes, depreciationAmendment at the annual meeting of stockholders called and amortization, net income (loss) (either before or after interest, taxes, depreciation and/or amortization), changesheld upon notice in the market priceaccordance with Section 222 and Section 242 of the Stock, economic value-added, funds from operations or similar measure, sales or revenue, developmental, clinical or regulatory milestones, acquisitions or strategic transactions, including licenses, collaborations, joint ventures, or promotion arrangements, operating income (loss), cash flow (including, but not limitedDGCL. Accordingly, the Amendment has been duly adopted in accordance with Section 242 of the DGCL.
In order to
operating cash floweffect such proposed amendment, ARTICLE IV of the Certificate of Incorporation is hereby amended by deleting the first paragraph of Article IV in its entirety and
free cash flow), return on capital, assets, equity, or investment, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss) per share of Stock,sales or market shares,inserting the following paragraph in lieu thereof:
“The total number of
customers and any other objective or subjective measure or metricshares of capital stock which the
Administrator deems appropriate, anyCorporation shall have authority to issue is One Hundred Eighty Five Million (185,000,000), of which
may(i) One Hundred Eighty Million (180,000,000) shares shall be
measured either in absolute terms ora class designated as
compared to any incremental increase or as compared to results of a peer group or on an individual basis. The Administrator may appropriately adjust any evaluation performance under a Performance Criterion to include or exclude any of the following events that occurs during a Performance Cycle: (i) asset write-downs or impairments, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reporting results, (iv) accruals for reorganizations and restructuring programs, (v) any unusual, infrequently occurring ornon-recurring items, including those described in the Financial Accounting Standards Board’s authoritative guidance and/or in management’s discussion and analysis of financial condition of operations appearing the Company’s annual report to stockholders for the applicable year, and (vi) any other inclusions or exclusions as the Administrator may determine with respect to an Award.“Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of an Award, the vesting and/or payment of which is subject to the attainment of one or more Performance Goals.
“Performance Goals” means, for a Performance Cycle, the specific goals established in writing by the Administrator for a Performance Cycle based upon the Performance Criteria.
“Performance Share Award” means an Award entitling the recipient to acquire shares of Stock upon the attainment of specified Performance Goals.
“Restricted Shares” means the shares of Stock underlying a Restricted Stock Award that remain subject to a risk of forfeiture or the Company’s right of repurchase.
“Restricted Stock Award” means an Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Restricted Stock Units” means an Award of stock units subject to such restrictions and conditions as the Administrator may determine at the time of grant.
“Sale Event” shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, (iii) the sale of all of the Stock of the Company to an unrelated person, entity or group thereof acting in concert, or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity
immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company.
“Sale Price” means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.
“Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Stock” means the common stock, par value $0.01 per share of the Company, subject to adjustments pursuant to Section 3.
“Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
“Subsidiary” means any corporation or other entity (other than the Company) in which the Company has at least a 50 percent interest, either directly or indirectly.
“Substitute Awards” shall mean Awards granted or Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.
“Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.
“Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.
SECTION 2.ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS
(a)Administration of Plan. The Plan shall be administered by the Administrator.
(b)Powers of Administrator. The Administrator shall have the power(the “Common Stock”), and authority to grant Awards consistent with the terms of the Plan, including the power and authority:
(i) to select the individuals to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock Options,Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Unrestricted Stock Awards, Cash-Based Awards, Performance Share Awards and Dividend Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;
(iii) to determine the number of shares of Stock to be covered by any Award;
(iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ among individual Awards and grantees, and to approve the forms of Award Certificates;
(v) to accelerate at any time the exercisability or vesting of all or any portion of any Award.
(vi) subject to the provisions of Section 5(c), to extend at any time the period in which Stock Options may be exercised; and
(vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Award (including related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes arising in connection with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.
(c)Delegation of Authority to Grant Awards. Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. Any such delegation by the Administrator shall include a limitation as to the amount of Stock underlying Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price and the vesting criteria. The Administrator may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.
(d)Award Certificate. Awards under the Plan shall be evidenced by Award Certificates that set forth the terms, conditions and limitations for each Award which may include, without limitation, the term of an Award and the provisions applicable in the event employment or service terminates.
(e)Indemnification. Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between such individual and the Company.
(f)Foreign Award Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Award is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act or any other applicable United States securities law, the Code, or any other applicable United States governing statute or law.
SECTION 3.STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a)Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be [•] shares (the “Initial Limit”), subject to adjustment as provided in Section 3(b), plus on January 1, 2019 and each January 1 thereafter, the number of shares of Stock reserved and available for issuance under the Plan shall be cumulatively increased by 4 percent of the number of shares of Stock issued and outstanding on the immediately preceding December 31 (the “Annual Increase”). Subject to such overall limitation, the maximum aggregate number of shares of Stock that may be issued in the form of Incentive Stock Options shall not exceed the Initial Limit cumulatively increased on January 1, 2019 and on each January 1 thereafter by the lesser of the Annual Increase for such year or 8,000,000 shares of Stock, subject in all cases to adjustment as provided in Section 3(b). The shares of Stock underlying any Awards that are forfeited, canceled, held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back to the shares of Stock available for issuance under the Plan. In the event the Company repurchases shares of Stock on the open market, such shares shall not be added to the shares of Stock available for issuance under the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum number pursuant to any type or types of Award; provided, however, that Stock Options or Stock Appreciation Rights with respect to no more than 1,000,000 shares of
Stock may be granted to any one individual grantee during any one calendar year period. The shares available for issuance under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
(b)Changes in Stock. Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, extraordinary cash dividend, stock dividend, spinoff, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or othernon-cash assets are distributed with respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, including the maximum number of shares that may be issued in the form of Incentive Stock Options, (ii) the maximum number of Stock Options or Stock Appreciation Rights that can be granted to any one individual grantee in a single calendar year, (iii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted Stock Award, (v) the exercise price for each share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation Rights remain exercisable, and (vi) any Performance Goals applicable to outstanding Awards. The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration any other extraordinary corporate event. The adjustment by the Administrator shall be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment, but the Administrator in its discretion may make a cash payment in lieu of fractional shares.
(c)Mergers and Other Transactions. In the case of and subject to the consummation of a Sale Event, the parties thereto may cause the assumption or continuation of Awards theretofore granted by the successor entity, or the substitution of such Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree. To the extent the parties to such Sale Event do not provide for the assumption, continuation or substitution of Awards or except as may be otherwise provided in the relevant Award Certificate, upon the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall terminate. Notwithstanding the foregoing and except as may be otherwise provided in the relevant Award Certificate, the Administrator, in its discretion, may (i) determine to accelerate the vesting of all outstanding Awards with time-based vesting, conditions or restrictions immediately prior to their termination as of the effective time of the
Sale Event; (ii) determine to accelerate the vesting of all Awards with conditions and restrictions relating to the attainment of performance goals immediately prior to their termination upon the effective time of the Sale Event or to the extent specified in the relevant Award Certificate; and/or (iii) make or provide for a payment, in cash or in kind, to the grantees holding Awards in an amount equal to value of the Awards (as determined in the sole discretion of the Administrator).
(d)Acquisitions by the Company. Stock may be issued under the terms of the Plan in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares of Stock available for issuance under the Plan.
SECTION 4.ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other employees,Non-Employee Directors and Consultants of the Company and its Subsidiaries as are selected from time to time by the Administrator in its sole discretion.
SECTION 5.STOCK OPTIONS
(a)Award of Stock Options. The Administrator may grant Stock Options under the Plan. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options orNon-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall be deemed aNon-Qualified Stock Option.
Stock Options granted pursuant to this Section 5 shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election, subject to such terms and conditions as the Administrator may establish.
(b)Exercise Price. Other than in connection with Substitute Awards, the exercise price per share for the Stock covered by a Stock Option granted pursuant to this Section 5 shall be determined by the Administrator at the time of grant but shall not be less than 100 percent of the Fair Market Value on the date of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the option price of such Incentive Stock Option shall be not less than 110 percent of the Fair Market Value on the grant date.
(c)Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than ten years after the date the Stock Option is
granted; provided, however, that, an Award Certificate may provide that, in the event that on the last business day of the term of a Stock Option (other than an Incentive Stock Option) (i) the exercise of the Stock Option is prohibited by applicable law or (ii) shares of Stock may not be purchased or sold by certain employees or directors of the Company due to the“black-out period” of a Company policy or a“lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Stock Option shall be extended for a period of thirty (30) days following the end of the legal prohibition,black-out period orlock-up agreement, as applicable. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the term of such Stock Option shall be no more than five years from the date of grant.
(d)Exercisability; Rights of a Stockholder. Stock Options shall become exercisable at such time or times, whether or not in installments and/or subject to the achievement of Performance Goals, as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability of all or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.
(e)Method of Exercise. Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the following methods except to the extent otherwise provided in the Option Award Certificate:
(i) in cash, by certified or bank check or other instrument acceptable to the Administrator;
(ii) through the delivery (or attestation to the ownership following such procedures as the Company may prescribe) of shares of Stock that are not then subject to restrictions under any Company plan. Such surrenderedFive Million (5,000,000) shares shall be valued at Fair Market Value on the exercise date;
(iii) by the optionee delivering to the Company a properlyclass designated as undesignated preferred stock, par value $0.001 per share (the “Undesignated Preferred Stock”).”
IN WITNESS WHEREOF, this Certificate of Amendment has been executed
exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in the event the optionee chooses to pay the purchase price as so provided, the optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Company shall prescribe as a condition of such payment procedure; or(iv) with respect to Stock Options that are not Incentive Stock Options, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.
Payment instruments will be received subject to collection. The transfer to the optionee on the recordsduly authorized officer of the Company or of the transfer agent of the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with the provisions of the Stock Option) by the Company of the full purchase price for such shares and the fulfillment of any other requirements contained in the Option Award Certificate or applicable provisions of laws (including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the optionee). In the event an optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the exercise of Stock Options, such as a system using an internet website or interactive voice response, then the paperless exercise of Stock Options may be permitted through the use of such an automated system.
(f)Annual LimitCorporation on Incentive Stock Options. To the extent required for “incentive stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options granted under the Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any Stock Option exceeds this limit, it shall constitute aNon-Qualified Stock Option.
SECTION 6.STOCK APPRECIATION RIGHTS
(a)Award of Stock Appreciation Rights. The Administrator may grant Stock Appreciation Rights under the Plan. A Stock Appreciation Right is an Award entitling the recipient to receive shares of Stock having a value equal to the excess of the Fair Market Value of a share of Stock on the date of exercise over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised.
(b)Exercise Price of Stock Appreciation Rights. Other than in connection with Substitute Awards, the exercise price of a Stock Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant.
(c)Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be granted by the Administrator independently of any Stock Option granted pursuant to Section 5.
(d)Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights shall be subject to such terms and conditions as shall be determined from time to time by the Administrator. The term of a Stock Appreciation Right may not exceed ten years; provided, however, that, an Award Certificate may provide that, in the event that on the last businessth day of the term of a Stock Appreciation Right (i) the exercise of the Stock Appreciation Right is prohibited by applicable law or (ii) shares of Stock may not be purchased or sold by certain employees or directors of the Company due to the“black-out period” of a Company policy or
June, 2024. | | | Rocket Pharmaceuticals, Inc. |
| | | | | | |
| | | By: | | | |
| | | Gaurav Shah
President and Chief Executive Officer |
a“lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term shall be extended for a period of thirty (30) days following the end of the legal prohibition,black-out period orlock-up agreement, as applicable.
SECTION 7.RESTRICTED STOCK AWARDS
(a)Nature of Restricted Stock Awards. The Administrator may grant Restricted Stock Awards under the Plan. A Restricted Stock Award is any Award of Restricted Shares subject to such restrictions and conditions as the Administrator may determine at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement ofpre-established Performance Goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.
(b)Rights as a Stockholder. Upon the grant of the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to the voting of the Restricted Shares and receipt of dividends; provided that, if the lapse of restrictions with respect to the Restricted Stock Award is tied to the attainment of Performance Goals, any dividends paid by the Company during the performance period shall accrue and shall not be paid to the grantee until and to the extent the Performance Goals are met with respect to the Restricted Stock Award. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares shall be accompanied by a notation on the records of the Company or the transfer agent to the effect that they are subject to forfeiture until such Restricted Shares are vested as provided in Section 7(d) below, and (ii) certificated Restricted Shares shall remain in the possession of the Company until such Restricted Shares are vested as provided in Section 7(d) below, and the grantee shall be required, as a condition of the grant, to deliver to the Company such instruments of transfer as the Administrator may prescribe.
(c)Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of except as specifically provided herein or in the Restricted Stock Award Certificate. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 17 below, in writing after the Award is issued, if a grantee’s employment (or other service relationship) with the Company and its Subsidiaries terminates for any reason, any Restricted Shares that have not vested at the time of termination shall automatically and without any requirement of notice to such grantee from or other action by or on behalf of, the Company be deemed to have been reacquired by the Company at its original purchase price (if any) from such grantee or such grantee’s legal representative simultaneously with such termination of employment (or other service relationship), and thereafter shall cease to represent any ownership of the Company by the grantee or rights of the grantee as a stockholder. Following such deemed reacquisition of Restricted Shares that are represented by physical certificates, a grantee shall surrender such certificates to the Company upon request without consideration.
(d)Vesting of Restricted Shares. The Administrator at the time of grant shall specify the date or dates and/or the attainment ofpre-established Performance Goals, objectives and other conditions on which thenon-transferability of the Restricted Shares and the Company’s right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the attainment of suchpre-established Performance Goals, objectives and other conditions, the shares on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed “vested.”
SECTION 8.RESTRICTED STOCK UNITS
(a)Nature of Restricted Stock Units. The Administrator may grant Restricted Stock Units under the Plan. A Restricted Stock Unit is an Award of stock units that may be settled in shares of Stock (or, if determined by the Administrator, the cash equivalent based on the Fair Market Value of such Stock) upon the satisfaction of such restrictions and conditions at the time of grant. Conditions may be based on continuing employment (or other service relationship) and/or achievement ofpre-established Performance Goals and objectives. The terms and conditions of each such Award Certificate shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. Except in the case of Restricted Stock Units with a deferred settlement date that complies with Section 409A, at the end of the vesting period, the Restricted Stock Units, to the extent vested, shall be settled in the form of shares of Stock (or, if determined by the Administrator, the cash equivalent based on the Fair Market Value of such Stock). Restricted Stock Units with deferred settlement dates are subject to Section 409A and shall contain such additional terms and conditions as the Administrator shall determine in its sole discretion in order to comply with the requirements of Section 409A.
(b)Election to Receive Restricted Stock Units in Lieu of Compensation. The Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future cash compensation otherwise due to such grantee in the form of an award of Restricted Stock Units. Any such election shall be made in writing and shall be delivered to the Company no later than the date specified by the Administrator and in accordance with Section 409A and such other rules and procedures established by the Administrator. Any such future cash compensation that the grantee elects to defer shall be converted to a fixed number of Restricted Stock Units based on the Fair Market Value of Stock on the date the compensation would otherwise have been paid to the grantee if such payment had not been deferred as provided herein. The Administrator shall have the sole right to determine whether and under what circumstances to permit such elections and to impose such limitations and other terms and conditions thereon as the Administrator deems appropriate. Any Restricted Stock Units that are elected to be received in lieu of cash compensation shall be fully vested, unless otherwise provided in the Award Certificate.
(c)Rights as a Stockholder. A grantee shall have the rights as a stockholder only as to shares of Stock acquired by the grantee upon settlement of Restricted Stock Units; provided, however, that the grantee may be credited with Dividend Equivalent Rights with respect to the stock units underlying his Restricted Stock Units, subject to the provisions of Section 12 and such terms and conditions as the Administrator may determine.
(d)Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 17 below, in writing after the Award is issued, a grantee’s right in all Restricted Stock Units that have not vested shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
SECTION 9. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Administrator may grant (or sell at par value or such higher purchase price determined by the Administrator) an Unrestricted Stock Award under the Plan. An Unrestricted Stock Award is an Award pursuant to which the grantee may receive shares of Stock free of any restrictions under the Plan. Unrestricted Stock Awards may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to such grantee.
SECTION 10.CASH-BASED AWARDS
Grant of Cash-Based Awards. The Administrator may grant Cash-Based Awards under the Plan. A Cash-Based Award is an Award that entitles the grantee to a payment in cash upon the attainment of specified Performance Goals. The Administrator shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Administrator shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Administrator. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and may be made in cash.
SECTION 11.PERFORMANCE SHARE AWARDS
(a)Nature of Performance Share Awards. The Administrator may grant Performance Share Awards under the Plan. A Performance Share Award is an Award entitling the grantee to receive shares of Stock upon the attainment of Performance Goals. The Administrator shall determine whether and to whom Performance Share Awards shall be granted, the Performance Goals, the periods during which performance is to be measured, which may not be less than one year except in the case of a Sale Event, and such other limitations and conditions as the Administrator shall determine.
(b)Rights as a Stockholder. A grantee receiving a Performance Share Award shall have the rights of a stockholder only as to shares of Stock actually received by the grantee under the Plan and not with respect to shares subject to the Award but not actually received by the grantee. A grantee shall be entitled to receive shares of Stock under a Performance Share Award only upon satisfaction of all conditions specified in the Performance Share Award Certificate (or in a performance plan adopted by the Administrator).
(c)Termination. Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 17 below, in writing after the Award is issued, a grantee’s rights in all Performance Share Awards shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
SECTION 12.DIVIDEND EQUIVALENT RIGHTS
(a)Dividend Equivalent Rights. The Administrator may grant Dividend Equivalent Rights under the Plan. A Dividend Equivalent Right is an Award entitling the grantee to receive credits based on cash dividends that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which it relates) if such shares had been issued to the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee as a component of an award of Restricted Stock Units, Restricted Stock Award or Performance Share Award or as a freestanding award. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Certificate. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or installments. A Dividend Equivalent Right granted as a component of an Award of Restricted Stock Units or Performance Share Award shall provide that such Dividend Equivalent Right shall be settled only upon settlement or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award.
(b)Termination. Except as may otherwise be provided by the Administrator either in the Award Certificate or, subject to Section 17 below, in writing after the Award is issued, a grantee’s rights in all Dividend Equivalent Rights shall automatically terminate upon the grantee’s termination of employment (or cessation of service relationship) with the Company and its Subsidiaries for any reason.
SECTION 13.TRANSFERABILITYTABLE OF AWARDSCONTENTS
(a)Transferability. Except as provided in Section 13(b) below, during a grantee’s lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity. No Awards shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Awards shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be null and void.
(b)Administrator Action. Notwithstanding Section 13(a), the Administrator, in its discretion, may provide either in the Award Certificate regarding a given Award or by
subsequent written approval that the grantee (who is an employee or director) may transfer his or herNon-Qualified Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of the terms and conditions of the Plan and the applicable Award. In no event may an Award be transferred by a grantee for value.
(c)Family Member. For purposes of Section 13(b), “family member” shall mean a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,mother-in-law,father-in-law,son-in-law,daughter-in-law,brother-in-law, orsister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons (or the grantee) own more than 50 percent of the voting interests.
(d)Designation of Beneficiary. To the extent permitted by the Company, each grantee to whom an Award has been made under the Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any Award payable on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries have predeceased the grantee, or if the beneficiary designation is deemed ambiguous, incomplete or invalid by the Administrator, the beneficiary shall be the grantee’s estate.
SECTION 14.TAX WITHHOLDING
(a)Payment by Grantee. Each grantee shall, no later than the date as of which the value of an Award or of any Stock or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned on tax withholding obligations being satisfied by the grantee.
(b)Payment in Stock. Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding obligation satisfied (or, if and when the Company adopts any applicable accounting standard allowing for greater share withholding, up to such withholding rate that will not cause an adverse accounting consequence or cost and is permitted under applicable tax rules), in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a number of shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due. The Administrator may also require Awards to be subject to mandatory share withholding up to the required withholding amount. For purposes of share withholding, the Fair Market Value of withheld shares shall be determined in the same manner as the value of Stock includible in income of the grantees.
SECTION 15.SECTION 409A AWARDS
To the extent that any Award is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A (a “409A Award”), the Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A) to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any such Award may not be accelerated except to the extent permitted by Section 409A. For the avoidance of doubt, the Company is not required to indemnify or reimburse a grantee for any taxes or penalties that may be imposed on an Award due tonon-compliance with the requirements of Section 409A.
SECTION 16.TERMINATIONTABLE OF EMPLOYMENT, TRANSFER, LEAVE OF ABSENCE, ETC.CONTENTS
(a)Termination of Employment. If the grantee’s employer ceases to be a Subsidiary, the grantee shall be deemed to have terminated employment for purposes of the Plan.
(b) For purposes of the Plan, the following events shall not be deemed a termination of employment:
(i) a transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another; or
(ii) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s right tore-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise so provides in writing.
SECTION 17.AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall materially adversely affect rights under any outstanding Award without the holder’s consent. Except as provided in
Section 3(b) or 3(c), without prior stockholder approval, in no event may the Administrator (a) lower the exercise price of a Stock Option or Stock Appreciation Right, (b) cancel a Stock Option or Stock Appreciation Right when the exercise price exceeds the Fair Market Value in exchange for cash or another Award, or (c) take any other action with respect to a Stock Option or Stock Appreciation Right that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the shares of Stock are listed. To the extent required under the rules of any securities exchange or market system on which the Stock is listed or to the extent determined by the Administrator to be required by the Code to ensure that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code, any amendments to the Plan shall be subject to approval by the Company stockholders entitled to vote at a meeting of stockholders. Nothing in this Section 17 shall limit the Administrator’s authority to take any action permitted pursuant to Section 3(b) or 3(c).
SECTION 18.STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and any payments in cash, Stock or other consideration not received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator shall otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts or other arrangements is consistent with the foregoing sentence.
SECTION 19.GENERAL PROVISIONS
(a)No Distribution. The Administrator may require each person acquiring Stock pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.
(b)Delivery of Stock Certificates. Stock certificates to grantees under the Plan shall be deemed delivered for all purposes when the Company or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel (to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange
on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws, regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a window-period limitation, as may be imposed in the discretion of the Administrator.
(c)Stockholder Rights. Until Stock is deemed delivered in accordance with Section 19(b), no right to vote or receive dividends or any other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise of a Stock Option or any other action by the grantee with respect to an Award.
(d)Other Compensation Arrangements; No Employment Rights. Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable only in specific cases. The adoption of the Plan and the grant of Awards do not confer upon any employee any right to continued employment with the Company or any Subsidiary.
(e)Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to the Company’s insider trading policies and procedures, as in effect from time to time.
(f)Clawback Policy. Awards under the Plan shall be subject to the Company’s clawback policy, as in effect from time to time.
SECTION 20.EFFECTIVE DATE OF PLAN
The Plan shall become effective upon stockholder approval in accordance with applicable state law, the Company’s bylaws and articles of incorporation, and applicable stock exchange rules or pursuant to written consent. No grants of Stock Options and other Awards may be made hereunder after the tenth anniversary of the Effective Date and no grants of Incentive Stock Options may be made hereunder after the tenth anniversary of the date the Plan is approved by the Board. For the avoidance of doubt, this second amendment and restatement is not intended, and shall not be interpreted to, modify any Awards granted prior to June [25], 2018 to the extent such modification would result in a loss of deductibility under Section 162(m) of the Code.
SECTION 21.GOVERNING LAW
The Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware applied without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: March 29, 2018
DATE APPROVED BY STOCKHOLDERS: June [25], 2018
ROCKET PHARMACEUTICALS, INC. 430 EAST 29TH STREET, SUITE 1040 NEW YORK, NY 10016 VOTE BY INTERNET—www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E45393-P08686 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ROCKET PHARMACEUTICALS, INC. The Board of Directors recommends a vote FOR all the nominees for Directors listed in proposal 3 or 4, as applicable, For Against Abstain and FOR proposals 1, 2, 5 and 6. 1. Approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation to declassify the Board. 4. If Proposal 1 is not approved by the stockholders of the 2. Approval of the amendment to the Company’s Amended Company, election of each of Messrs.: For Withhold and Restated Certificate of Incorporation to eliminate Nominees: the supermajority voting requirement with respect to the removal of directors and replace it with a majority 4a. Pedro Granadillo* voting standard. 3. If Proposal 1 is approved by the stockholders of the 4b. David P. Southwell* Company, election of each of Messrs.: *as Class I Directors for a term of three years. For Withhold Nominees: 3a. Roderick Wong For Against Abstain 5. Ratification of the appointment of EisnerAmper LLP as 3b. Carsten Boess the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. 3c. Pedro Granadillo 3d. Gotham Makker 6. Approval of the Second Amended and Restated 2014 Stock Option and Incentive Plan. 3e. Gaurav Shah NOTE: To transact such other business as may properly come 3f. David P. Southwell before the meeting or any adjournment thereof. 3g. Naveen Yalamanchi For address changes and/or comments, please check this box and write them on the back where indicated. Please indicate if you plan to attend this meeting. Yes No NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form10-K are available at www.proxyvote.com. ROCKET PHARMACEUTICALS, INC. Annual Meeting of Stockholders June 25, 2018 8:30 a.m., Eastern Time This proxy is solicited by the Board of Directors The undersigned appoints Gaurav Shah and John Militello, or either of them, as Proxy holders, with full power of substitution, to represent the undersigned at the Annual Meeting of Stockholders of Rocket Pharmaceuticals, Inc. (the “Company”), to be held on June 25, 2018, at 8:30 a.m., Eastern Time, at the offices of Gibson, Dunn & Crutcher LLP, located at 200 Park Avenue, New York, NY 10166, and at any adjournments or postponements of the Annual Meeting, and to vote on behalf of the undersigned as specified in this Proxy all the shares of common stock of the Company that the undersigned would be entitled to vote if personally present, upon the matters referred to on the reverse side hereof, and, in their sole discretion, upon any other business as may properly come before the Annual Meeting. The undersigned acknowledges receipt of the Notice of the Annual Meeting of Stockholders and of the accompanying Proxy Statement and revokes any proxy heretofore given with respect to such Annual Meeting. This Proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this Proxy will be voted in accordance with the Board of Directors’ recommendations, which are set forth on the reverse side hereof. The votes entitled to be cast by the undersigned will be cast in the discretion of the Proxy holders on any other matter that may properly come before the Annual Meeting and any adjournment or postponement thereof. Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side
0001281895 rckt:ValueOfDividendsOrOtherEarningsPaidOnStockOrOptionAwardsNotOtherwiseReflectedInFairValueOrTotalCompensationMember ecd:NonPeoNeoMember 2022-01-01 2022-12-31
