☒ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
☐ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
☒ | No fee |
☐ | Fee paid previously with preliminary materials. |
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29, 2024
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.
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. |
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.
Since several of the items of business for the Annual Meeting have extremely high vote requirements, your
Sincerely yours, | | | |
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/s/ Gaurav Shah | | | |
Gaurav Shah, M.D. | | | |
Chief Executive Officer and Director | | |
Sincerely yours,
/s/ Gaurav Shah
Gaurav Shah, MD
President, Chief Executive Officer and Director
430 East 29th Street, Suite 1040
New York, NY 10016
DATE | | | June 13, 2024 |
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| Virtually via the Internet at www.virtualshareholdermeeting.com/RCKT2024 |
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| 2. | Ratification of the appointment of EisnerAmper LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, |
3. | Consider and act upon a non-binding, advisory vote on the compensation of our named executive officers; |
| 4. | Approval of an Amendment to our certificate of incorporation to increase the |
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By Order of the Board of Directors | | | |
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/s/ Gaurav Shah | | | |
Gaurav Shah, | | | |
Chief Executive Officer and Director | | | |
Cranbury, New | | | |
April | | |
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On January 4, 2018, Inotek Pharmaceuticals Corporation (“Inotek”) and privately held Rocket Pharmaceuticals, Ltd. (“Private Rocket”) completed a business combination13, 2024
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.
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”).
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.
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:
Proposals 5 Abstentions and 6:broker non-votes will not be counted as votes cast and will have no effect on the vote.
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.
their clients if no voting instructions are provided.
16, 2024.
• | 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. |
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?”).
We
proxies.
ELECTION OF DIRECTORSDECLASSIFICATION AMENDMENT TO THE CERTIFICATE OF INCORPORATIONBackgroundof the ProposalThe 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.ProposedAmendment to Article VI of the Certificate of IncorporationAfter 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; andthe 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.Removalof Directors Without CauseDelaware 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.Textof the Proposed AmendmentThe 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 orspecial 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.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.THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE DECLASSIFICATION AMENDMENT TO THE CERTIFICATE OF INCORPORATION.DIRECTOR REMOVAL AMENDMENT TO THE CERTIFICATE OF INCORPORATIONThe 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 IncorporationAfter 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 AmendmentThe 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.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.THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE DIRECTOR REMOVAL AMENDMENT TO THE CERTIFICATE OF INCORPORATION.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.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.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.
ELECTIONTABLE 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.
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.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES SET FORTH ABOVE.
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.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.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 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.
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 |
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.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.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.
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.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, MDChairmanone 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.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
26, 2018.29, 2024. Name Age Position(s) Held 43President, 54 John Militello 44Controller Kinnari Patel, PharmD 39 OperatingCorporate Officer, and Head of DevelopmentSenior Vice President“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 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 mostrecently 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
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 theday-to-day operations. Our directors fulfill their duties and responsibilities by attending meetings of the Board, which are held from time to time.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
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.
Name | | | Audit | | | |||||||
| Nominating and Corporate Governance | | | Compensation | ||||||||
Elisabeth Björk | | | X | | | | | |||||
Carsten Boess** | | | X* | | | | X | |||||
Pedro Granadillo | | | X | | | X | | X* | ||||
Naveen Yalamanchi | | | X | | | | ||||||
R. Keith Woods | | | | | X* | X |
* | Committee |
** | Financial Expert |
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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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 atwww.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 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. |
Restated Bylaws (“bylaws”).
Pearl Meyer and F.W. Cook
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.
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.
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.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.
Audit Fees (1) Audit-Related Fees (2) Tax Fees (3) All Other Fees (4) Total 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.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.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 Proceduresdismissed 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 ProceduresThe 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.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.yearsyear ended December 31, 2017 and 2016.2023. 2017 2016 $ 139,550 $ 162,950 50,740 67,300 — 36,000 — — $ 190,290 $ 266,250 (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
(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. |
In 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.
• | 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. |
What We Do | | | What We Don’t Do |
☑ 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 |
Named Executive Officer | | | Fiscal 2022 Base Salary | | | Fiscal 2023 Base Salary |
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 | | | $447,433 |
Named Executive Officer | | | Fiscal 2023 Total Target Cash Incentive ($) | | | Fiscal 2023 Total Target Cash Incentive (as a % of Base Salary) |
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% |
Named Executive Officer | | | 2023 Target Cash Incentive Award Opportunity | | | 2023 Target Cash Incentive Award (% of 2023 Salary) | | | 2023 Cash Incentive Award Payment | | | Payout Percentage |
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% |
Named Executive Officer | | | Number of Shares Subject to Options (#) | | | Weighted Average Exercise Price | | | Number of Shares Subject to RSUs (#) | | | Aggregate Grant Date Fair Value |
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 |
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.
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.
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
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.
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 |
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.
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.
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.
Limitation on Deductions.Executive Compensation
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.
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.
THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE SECOND AMENDED AND RESTATED 2014 STOCK OPTION AND INCENTIVE PLAN.
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.
fiscal 2023 and included in this proxy statement.
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 | 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 |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Option Awards ($)(3) | | | Non-Equity Incentive Compensation ($)(4) | | | All Other Compensation ($)(5) | | | Total ($) |
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 |
(2) |
(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) |
(5) |
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 |
(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.
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.
Compensation Committee.
| | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/share) | | | Grant Date Fair Value of Stock and Option Awards ($)(1) | ||||
| | Grant Date | | | Target ($)(2) | | ||||||||||||
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. |
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) |
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 |
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) |
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) |
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 |
(2) | Reflects the market value of the RSUs that have not vested computed by multiplying $29.97, which was the closing market price of the Company’s stock on December 31, 2023, by the number of RSUs that had not vested as of December 31, 2023. |
(3) | Reflects RSUs granted |
(4) | Reflects RSUs granted on February 14, 2022, April 18, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025. |
(5) | Reflects RSUs granted on February 14, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025. |
(6) | Reflects RSUs granted on August 1, 2022 and February 14, 2023, one-third of which vest on the first anniversary of the grant date and two-thirds of which vest in equal quarterly installments over the following two years and RSUs granted on August 12, 2022 which vest in full on August 12, 2025. |
Name | | | Number of Shares Acquired Upon Exercise (#) | | | Value Realized on Exercise ($)(1) | | | Number of Shares Acquired Upon Vesting (#) | | | Value Realized on Vesting ($)(2) |
Gaurav D. Shah, M.D. | | | — | | | — | | | 55,377 | | | 1,098,983 |
John Militello, CPA | | | — | | | — | | | 14,569 | | | 277,800 |
Kinnari Patel, Pharm.D., M.B.A. | | | — | | | — | | | 27,687 | | | 549,462 |
Jonathan Schwartz, M.D. | | | 38,310 | | | 627,822 | | | 15,102 | | | 299,706 |
Mayo Pujols | | | — | | | — | | | 686,867 | | | 37,958 |
(1) | The value realized on vesting is calculated by multiplying the number of shares of stock by the difference between (i) the market value of the shares of common stock at exercise and (ii) the exercise price of the options. |
(2) |
Executive Benefits and Payment upon Termination | | | Termination by Company without Cause or Resignation For Good Reason Not in Connection with a Change in Control ($) | | | Termination due to Death or Disability ($) | | | Termination by Company without Cause or Voluntary Resignation for Good Reason within 12 Months Following a Change in Control ($) |
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 |
The value of |
Executive Benefits and Payment upon Termination | | | Termination by Company without Cause or Resignation For Good Reason Not in Connection with a Change in Control ($) | | | Termination due to Death or Disability ($) | | | Termination by Company without Cause or Voluntary Resignation for Good Reason within 24 Months Following a Change in Control ($) |
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 $268,563. |
Executive Benefits and Payment upon Termination | | | Termination by Company without Cause or Resignation For Good Reason Not in Connection with a Change in Control ($) | | | Termination due to Death or Disability ($) | | | Termination by Company without Cause or Voluntary Resignation for Good Reason within 24 Months Following a Change in Control ($) |
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) $29.97, the closing market price of our |
Executive Benefits and Payment upon Termination | | | Termination by Company without Cause or Resignation For Good Reason Not in Connection with a Change in Control ($) | | | Termination due to Death or Disability ($) | | | Termination by Company without Cause or Voluntary Resignation for Good Reason within 12 Months Following a Change in Control ($) |
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 $29.97, the closing market price of our common stock on December 31, 2023 and the unvested RSUs. |
Executive Benefits and Payment upon Termination | | | Termination by Company without Cause or Resignation For Good Reason Not in Connection with a Change in Control ($) | | | Termination due to Death or Disability ($) | | | Termination by Company without Cause or Voluntary Resignation for Good Reason within 12 Months Following a Change in Control ($) |
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. |
Year | | | Summary Compensation Table Total for PEO(1) | | | Compensation Actually Paid to PEO(2) | | | Average Summary Compensation Table Total for Non-PEO NEOS(3) | | | Average Compensation Actually Paid to Non-PEO NEOS(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net income (in thousands)(7) | |||
| Total Shareholder Return(5) | | | Peer Group Total Shareholder Return(6) | | ||||||||||||||||
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”: |
Year | | | Reported Summary Compensation Table Total for PEO(a) | | | Reported Summary Compensation Table Value of PEO Equity Awards(b) | | | Adjusted Value of Equity Awards(c) | | | Compensation Actually Paid to PEO |
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. |
(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 |
Year | | | Year End Fair Value of Equity Awards Granted in the Year | | | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Total Equity Award Adjustments |
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): |
Year | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs(a) | | | Average Reported Summary Compensation Table Value of Non-PEO NEO Equity Awards(b) | | | Average Non-PEO NEO Adjusted Value of Equity Awards(c) | | | Average Compensation Actually Paid to Non-PEO NEOs |
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. |
(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: |
Year | | | Year End Fair Value of Equity Awards Granted in the Year | | | Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | | | Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year | | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Total Equity Award Adjustments |
2023 | | | $4,140,112 | | | $792,922 | | | $— | | | ($76,309) | | | $— | | | $— | | | $4,856,724 |
2022 | | | $2,258,641 | | | ($48,605) | | | $— | | | ($248,187) | | | ($137,769) | | | $— | | | $1,824,080 |
(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) |
The 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
| | Annual Retainer | |
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 |
grant date.
date.
Director name Timothy Barberich Carsten Boess J. Martin Carroll Paul G. Howes Patrick Machado Gary Phillips, M.D. Richard N. Spivey, PharmD, PhD2017 Fees
earned
$(1) Option awards
$ All other
compensation
$ Total
$ 60,000 64,304 (2 ) — 124,304 68,000 64,304 (2 ) — 132,304 92,850 64,304 (2 ) — 157,154 57,500 64,304 (2 ) — 121,804 57,500 64,304 (2 ) — 121,804 55,000 64,304 (2 ) — 119,304 62,500 64,304 (2 ) — 126,804 (1) Represents fees earned2017, 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.AsDecember 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.
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.“Executive Compensation—Executive Agreements” and “Director Compensation,”the agreement, the Company will pay $450 per hour worked for performing the services.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.
Name and address of beneficial owner 5% Stockholders RTW Investments, LP (1) 250 West 55th Street, 16th Floor, Suite A New York, NY 10019 Tang Capital Partners, LP (2) 4747 Executive Drive, Suite 510 San Diego, CA 92121 Named executive officers and directors David P. Southwell (3) Rudolf Baumgartner, M.D. (4) Dale Ritter (5) Carsten Boess (6) Pedro Granadillo Gotham Makker, M.D. (7) Gaurav Shah, M.D.(8) Roderick Wong, M.D. (1) Naveen Yalamanchi, M.D. (9) All directors and executive officers as a group (10 persons) (10)2, 201816, 2024 for: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.430 East 29th Street, Suite 1040, New York, NY, 10016.9 Cedarbrook Drive, Cranbury, NJ 08512. Number of
Shares
Beneficially
Owned Percent
of Class 15,439,577 39.15 % 2,665,485 6.76 % 382,534 * 217,609 * 41,554 * 20,250 * - * 1,331,406 3.38 % 1,098,892 2.79 % 15,439,577 39.15 % 114,278 * 18,799,477 47.67 % * Represents beneficial ownership of less than one percent.
(1) | Based on Amendment No. 10 to Schedule 13D, jointly filed by RTW Investments, LP (“RTW”) and Roderick Wong with the SEC on |
(2) | Based on Schedule 13G, |
(3) | Based on Amendment No. 2 to Schedule 13G, filed by Blackrock, Inc. with the SEC on January |
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) |
Consists of (i) |
Consists of (i) |
(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 |
Consists of (i) |
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) |
Consists of |
Consists of (i) |
2 | NTD: To be confirmed upon review of D&O Questionnaire. |
(16) | Consists of (i) 82,391 shares owned by the Naveen Yalamanchi Revocable Living Trust, February 9, 2016, of which Dr. Yalamanchi is the |
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 |
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.
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 | 795,239 | $ | 21.40 | 269,073 | ||||||||
Equity compensation plans not approved by security holders
|
| —
|
|
| —
|
|
| —
|
| |||
| ||||||||||||
Total
|
| 795,239
|
| $
| 21.40
|
|
| 269,073
|
| |||
|
Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted- average exercise price of outstanding options, warrants and rights(1) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| | (a) | | | (b) | | | (c) | |
Equity compensation plans approved by security holders(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) |
(2) |
(3) | Consists of shares underlying outstanding options and restricted stock units |
(4) | Consists of shares available under the 2014 Plan and |
9 Cedarbrook Drive, Cranbury, NJ 08512. Jersey 08512.430 East 29th Street, Suite 1040, New York, NY 10016.20192025 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.next2025 annual meeting of our stockholders must satisfy the SEC’s regulations under Rule14a-8 of the Exchange Act and be received no later than December 26, 2018.30, 2024. Under Rule14a-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 Rule14a-8 of the Exchange Act.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.
ROCKET PHARMACEUTICALS, INC.
SECOND
CERTIFICATE OF INCORPORATION OF
The name of the plan is the
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:
“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.
sales or market shares,inserting the following paragraph in lieu thereof:
“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”).”
(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
| | Rocket Pharmaceuticals, Inc. | ||||
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| | 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