UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒
Filed by a party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material under §240.14a-12 |
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Oncorus, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than Theother than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No fee required
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☐ Fee paid previously with preliminary materials
☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
ONCORUS, INC.
4 Corporate Drive
Andover, Massachusetts 01810
May 13, 2022June 23, 2023
To our stockholders:Our Stockholders:
You are cordially invited to attend the 2022 Annuala Special Meeting of Stockholders (the “"AnnualSpecial Meeting”") of Oncorus, Inc. (the "Company") to be held at 9:00 a.m., a Delaware corporation (“Oncorus”).Eastern time, on July 28, 2023. The meetingSpecial Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/ONCR2022ONCR2023SM, which you can access using your 16-digit control number located on Wednesday, June 22, 2022 at 1:00 p.m. Eastern Time.your proxy card.
Details regarding admissionThe purpose of the Special Meeting is to approve the liquidation and dissolution of the Company (the "Dissolution") and the Plan of Liquidation and Dissolution (the "Plan of Dissolution"), which, if approved, will authorize the Company and the Company’s Board of Directors (the "Board") to liquidate and dissolve the Company in accordance with the Plan of Dissolution. The Notice of Special Meeting of Stockholders and the accompanying proxy statement on the following pages describe the matters to be presented at the Special Meeting.
The Board carefully reviewed and considered the Plan of Dissolution in light of the financial position of the Company, including its available cash, resources and operational needs. The Board unanimously adopted resolutions determining that the Dissolution is advisable and in the best interests of the Company and its stockholders, approving the Dissolution and the Plan of Dissolution and directing that the Plan of Dissolution and the Dissolution be submitted to the Annual MeetingCompany’s stockholders for approval, and this Notice constitutes notice of the businessadoption of such resolutions. The Board unanimously recommends that you vote “FOR” the Dissolution Proposal and “FOR” the other proposal to be conducted atadjourn the Annual Meeting areSpecial meeting if necessary described in the accompanying Noticeproxy statement.
More information about the Dissolution, the Plan of 2022 AnnualDissolution and the Special Meeting is contained in the accompanying proxy statement. In particular, you should carefully read the section entitled “Risk Factors” beginning on page 9 of Stockholders and Proxy Statement.
The Annual Meeting will be held for the purpose of considering and voting on the following company-sponsored proposals:
Proposal No. 1: To elect Luke Evnin, Ph.D., Spencer Nam and Eric Rubin, M.D. as Class II directors, eachaccompanying proxy statement for a three-year term; and
Proposal No. 2: To ratifydiscussion of risks you should consider in evaluating the selection of Ernst & Young LLP as Oncorus' independent registered public accounting firm for the fiscal year ending December 31, 2022.
We will also consider and act upon any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof.
Our board of directors recommends that you vote “for” each nominee for Class II director (Proposal No. 1) and “for” ratification of the independent registered public accounting firm (Proposal No. 2).Dissolution.
Your voteIt is important.important that your shares be represented at this meeting to assure the presence of a quorum. Whether or not you plan to attend the Annual Meeting online,meeting, we hope that you will have your stock represented by submitting a proxy to vote your shares over the Internet or by telephone as provided in the instructions set forth on the enclosed proxy card, or by completing, signing, dating and returning your proxy in the enclosed envelope, as soon as possible. You may vote over the Internet, by telephone or by completing and returning the proxy card or voting instruction form that has been mailed to you. Please carefully reviewYour stock will be voted in accordance with the instructions on each ofyou have given in your voting options described in this Proxy Statement.proxy.
On behalf of the board of directors and the employees of Oncorus, we thankThank you for your continued support.
Sincerely,
Brian J. Shea
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Interim Chief Executive Officer
President, General Counsel and Secretary
Oncorus, Inc.ONCORUS, INC.
50 Hampshire Street, Suite 4014 Corporate Drive
Cambridge,Andover, Massachusetts 02139
(857) 320-640001810
NOTICE OF 2022 ANNUALSPECIAL MEETING OF STOCKHOLDERS
To Be Held on July 28, 2023
To Our Stockholders: NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the "Special Meeting") of Oncorus, Inc. (the "Company") will be held at 9:00 a.m., Eastern time, on July 28, 2023. The Special Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/ONCR2023SM, which you can access using your 16-digit control number located on your proxy card. At the Special Meeting, stockholders will consider and vote on the following matters: 1. the approval of the liquidation and dissolution of the Company (the "Dissolution") and the Plan of Liquidation and Dissolution (the "Plan of Dissolution"), which, if approved, will authorize the Company and the Board to liquidate and dissolve the Company in accordance with the Plan of Dissolution (the "Dissolution Proposal"); and 2. the approval of an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Dissolution Proposal (the "Adjournment Proposal"). Stockholders of record at the close of business on June 8, 2023 (the "Record Date"), are entitled to notice of, and to vote at, the Special Meeting or any postponement, continuation or adjournment thereof. Your vote is important regardless of the number of shares you own. You are cordially invited to attend the Special Meeting, which will be held virtually via live webcast. Whether or not you expect to attend the Special Meeting, please submit a proxy to vote by telephone or through the Internet, or by completing and returning the proxy card mailed to you, as promptly as possible in order to ensure your representation at the Special Meeting. Voting instructions are provided on your proxy card and included in the accompanying Proxy Statement. Even if you have submitted a proxy to vote your shares, you may still vote online if you attend the Special Meeting. Please note, however, that if your shares are held of record by a brokerage firm, bank or other agent and you wish to vote at the Special Meeting, you must obtain a proxy issued in your name from that agent in order to vote your shares that are held in such agent’s name and account at the Special Meeting. |
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By Order of the Board of Directors,
Brian J. Shea
Corporate SecretaryChairman
June 23, 2023
Cambridge, Massachusetts
May 13, 2022
ONCORUS, Inc.
50 Hampshire Street, Suite 401
Cambridge, Massachusetts 02139
PROXY STATEMENT
FOR THE 2022 ANNUAL MEETING OF STOCKHOLDERS
To be held on June 22, 2022
Table of Contents
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QUESTIONS AND ANSWERS ABOUT THESE
PROXY MATERIALS AND VOTINGSTATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 28, 2023
Why am I receiving these materials?
WeThis proxy statement and the enclosed proxy card are providing youbeing furnished in connection with these Proxy Materials (as defined below) becausethe solicitation of proxies by the Board of Directors (the “Board”) of Oncorus, Inc., also referred to in this proxy statement as the "Company," "Oncorus," "we" or "us," for use at the Special Meeting of Stockholders to be held at 9:00 a.m., Eastern time, on July 28, 2023. The Special Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/ONCR2023SM.
This proxy statement and accompanying proxy materials are being mailed to stockholders on or about June 23, 2023.
Important Notice Regarding the Availability of Proxy Materials for the
Special Meeting of Stockholders to be Held on July 28, 2023:
This proxy statement is available for viewing, printing and downloading by following the instructions at
www.proxyvote.com.
GENERAL INFORMATION
Who is soliciting my vote?
The board of directors of the Company (the "CompanyBoard") is soliciting your proxy to vote at the Company's 2022 Annual Meeting of Stockholders (the “Annual Meeting”), including at any adjournments or postponements thereof, on Wednesday, June 22, 2022 at 1:00 p.m., Eastern Time in a virtual meeting format only, live via webcast at www.virtualshareholdermeeting.com/ONCR2022.
You are invited to attend the Annual Meeting online to vote on the proposals described in this proxy statement (the "Proxy Statement"). However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or through the Internet.
We intend to mail the Notice of the 2022 Annual Meeting of Stockholders ("Notice of Annual Meeting"), the Proxy Statement, the proxy card and our Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report", and together with the Notice of Annual Meeting, the Proxy Statement and the proxy card, the “Proxy Materials”) on or about May 13, 2022 to all stockholders of record entitled to vote at the Annual Meeting. In addition, the Proxy Materials are also being made available on the Internet on or about May 13, 2022 at http://www.proxyvote.com.
As used in this Proxy Statement, references to “we,” “us,” “our” and the “Company” refer to Oncorus, Inc. and our consolidated subsidiary.
When and where is the Annual Meeting?
In light of the ongoing COVID-19 pandemic, for the safety of all our stockholders and to facilitate stockholder participation in the Annual Meeting, the Annual Meeting is again being held in a virtual-only format this year by live webcast at www.virtualshareholdermeeting.com/ONCR2022 on Wednesday, June 22, 2022 at 1:00 p.m., Eastern Time. You will not be able to attend the Annual Meeting in person.
If you attend the Annual Meeting virtually as described above, you will be deemed to be attending in person, as provided by Delaware law.
The Annual Meeting webcast will begin promptly at 1:00 p.m., Eastern Time. We encourage you to access the meeting webcast prior to the start time. Online check-in will begin, and stockholders may begin submitting written questions, at 12:45 p.m., Eastern Time, and you should allow sufficient time for the check-in procedures.
How do I attend the Annual Meeting?
You are entitled to attend the annual meeting at www.virtualshareholdermeeting.com/ONCR2022 if you were a stockholder as of the close of business on May 10, 2022, the record date, or hold a valid proxy for the meeting. You will need the 16-digit control number included on your proxy card or voting instruction form, or in the email sending you the Proxy Statement. Beneficial owners who do not have a control number may gain access to the meeting by logging into their broker, brokerage firm, bank, or other nominee’s website and selecting the shareholder communications mailbox to link through to the Annual Meeting; instructions should also be provided on the voting instruction card provided by your broker, bank, or other nominee. Instructions on how to connect to the Annual Meeting and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com. If you do not have your 16-digit control number, you will be able to login as a guest and access and listen to the Annual Meeting but you will not be able to vote your shares or submit questions during the AnnualSpecial Meeting.
Any stockholder can listen to and participate in the Annual Meeting live via the Internet at the link above. Our stockholders will be afforded the same rights and opportunities to participate at the Annual Meeting as they would at an in-person meeting of stockholders, including the ability to vote shares electronically during the Annual Meeting and ask questions in accordance with the rules of conduct for the Annual Meeting. At the end of the Annual Meeting, we will spend up to 15 minutes answering stockholder questions that comply with the meeting rules of conduct, which will be posted on the virtual meeting web portal. If you are a stockholder, questions may be submitted during the meeting through at www.virtualshareholdermeeting.com/ONCR2022. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.
We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting or submitting questions. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting web portal.
Whether or not you participate in the annual meeting, it is important that you vote your shares.
WhatWhen is the record date for the AnnualSpecial Meeting? Who can
The Record Date for determination of stockholders entitled to vote at the Annual Meeting?
Only stockholders of record atSpecial Meeting or any postponement, continuation or adjournment thereof is the close of business on May 10, 2022 willJune 8, 2023.
How many votes can be cast by all stockholders?
There were 26,094,847 shares of our common stock, par value $0.001 per share, outstanding on the Record Date, all of which are entitled to vote with respect to all matters to be acted upon at the Special Meeting. Each stockholder of record is entitled to one vote for each share of our common stock held by such stockholder on the Record Date. No shares of our undesignated preferred stock were outstanding as of the Record Date.
How is a quorum reached?
Our Amended and Restated Bylaws provide that the holders of a majority of the outstanding shares entitled to vote at the AnnualSpecial Meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business at the Special Meeting. On this record date, there wereUnder the General Corporation Law of 25,884,023the State of Delaware (the "DGCL"), shares of common stock outstandingthat "abstain" on any matter to be considered at the Special Meeting, and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on May 10, 2022, your shares were registered directly in your name with our transfer agent, Computershare Trust Company, N.A., then youfor which broker "non-votes" (shares held by a broker or nominee that are a stockholder of record. As a stockholder of record, you may vote onlinerepresented at the meeting, votebut with respect to which the broker or nominee is not instructed by proxy over the telephone or through the internet, or vote by proxy using a proxy card. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Similar Organization
If on May 10, 2022, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of such shares held in “street name” andto vote on the Proxy Materialsparticular non-discretionary proposal)
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occur, are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of recordcounted as present for purposes of votingdetermining whether a quorum is present at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting.
Will a list of stockholders of record as of the record date be available?
A complete list of such stockholders will be available for examination by any stockholder for any purpose germane to the Annual Meeting beginning ten days prior to the Annual Meeting at our headquarters at 50 Hampshire Street, Suite 401, Cambridge, Massachusetts 02139. If you would like to view the list, please contact our Secretary to schedule an appointment by calling (857) 320-6400 or writing to him at the address above. In addition, the list will be available for inspection by stockholders during the Annual Meeting at www.virtualshareholdermeeting.com/ONCR2022.
What am I voting on?
At the Annual Meeting, there are two matters scheduled for a vote:
In addition, you will also be asked to transact such other business, if any, as may properly come before the Annual Meeting or any adjournment or postponement thereof.
What if another matter is properly brought before the Annual Meeting?
The Board knows of no other matters that will be presented for consideration at the AnnualSpecial Meeting. If any other matters are properly brought beforea quorum is not present, the meeting the proxies will vote as recommended by the Board or, if no recommendationmay be adjourned until a quorum is given, will vote on those matters in accordance with their best judgment.obtained.
How do I vote?
For the election of directors (Proposal 1), you may either vote “For” all nominees to the Board or you may “Withhold” your vote for any nominee you specify. For the ratification of the selection of our independent registered public accounting firm (Proposal 2), you may vote “For” or “Against” or abstain from voting.
Stockholders of Record: Shares Registered in Your Name
If you are a stockholderthe record holder of record and your shares, are registered directly in your name, you may vote:cause your shares to be voted in one of four ways. You may submit a proxy to vote over the Internet, by telephone, or by mail or you may vote in person at the Special Meeting. A 16 digit control number that is provided on the enclosed proxy card is needed for voting over the telephone or Internet.
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Before If you have Internet access, you may submit a proxy to vote your shares from any location in the Annual Meeting. To vote throughworld by following the internet before"Submit a Proxy to Vote by Internet" instructions set forth on the Annual Meeting, go to www.proxyvote.comto complete an electronicenclosed proxy card.
You will be askedmay submit a proxy to providevote by telephone: You may submit a proxy to vote your shares by following the company number and control number from your"Submit a Proxy to Vote by Phone" instructions set forth on the enclosed proxy card. Your
You may submit a proxy to vote must be received by 11:59 p.m., Eastern Time, on June 21, 2022 to be counted.
During the Annual Meeting. Attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/ONCR2022mail: You may submit a proxy to vote by completing, dating and follow the instructions posted there. Please have your control number from the proxy card to join the Annual Meeting.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Similar OrganizationUnited States.
If your shares of common stock are held in street name (i.e., held for your account by a broker, bank or other nominee), you should have received a notice, voting instructions or e-mail containing voting instructions from that organization rather than from us. You should followmay vote at the instructions in these documents to ensure your vote is counted. Virtual Special Meeting. To vote at the AnnualSpecial Meeting, attend the AnnualSpecial Meeting by visiting www.virtualshareholdermeeting.com/ONCR2022 ONCR2023SM and follow the instructions posted there. Please have your 16-digit control number to join the AnnualSpecial Meeting.
Internet proxy votingThe shares represented by all valid proxies will be provided to allowvoted as specified in those proxies. If the shares you to voteown are held in your name and you return a duly executed proxy without specifying how your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your internet access, such as usage charges from Internet access providers and telephone companies.
How many votes do I have?
On each matterare to be voted, upon, you have one vote for each sharethey will be voted as follows in accordance with the recommendations of common stock you own as of May 10, 2022.
What are the Board’s recommendations on how to vote my shares?
The Board recommends a vote:our Board:
Who pays the cost for soliciting proxies?
We will pay the entire cost of soliciting proxies. In additionSpecial Meeting, if necessary, to these Proxy Materials, our directors and employees may also solicit additional proxies in person, by telephone, or by other means of communication. Directors and employees willif there are not be paid any additional compensation for soliciting proxies. We will also reimburse brokers, banks, custodians, other nominees and fiduciaries for forwarding these materials to their principals to obtain the authorization for the execution of proxies.
If I am a stockholder of record and I do not vote, or if I return a proxy card or otherwise vote without giving specific voting instructions, what happens?
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the Internet or by attending the Annual Meeting online, your shares will not be voted. If you return a signed and dated proxy card or otherwise vote without marking voting selections, your shares will be voted, as applicable, “For” the election of each of the three nominees for director and “For” the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
If I am a beneficial owner of shares held in street name and I do not provide my broker or bank with voting instructions, what happens?
If your shares are held in street name, your bank, broker or other nominee may under certain circumstances vote your shares if you do not timely instruct your broker, bank or other nominee how to vote your shares. Banks, brokers and other nominees can vote your unvoted shares on routine matters, but cannot vote such shares on non-routine matters. If you do not timely provide voting instructions to your bank, broker or other nominee to vote your shares, your bank, broker or other nominee may, on routine matters, either vote your shares or leave your shares unvoted. The election of directors (Proposal 1) is a non-routine matter. The ratification of the selection of our independent registered puCblic accounting firm (Proposal 2) is a routine matter. We encourage you to provide voting instructions to your bank, broker or other nominee. This ensures that your shares will be voted at the Annual Meeting according to your instructions. You should receive directions from your bank, broker or other nominee about how to submit your proxy to themsufficient votes at the time you receive this proxy statement.of the Special Meeting to approve the Dissolution Proposal.
If you are a beneficial owner of shares held in street name, in order to ensure your shares are voted in the way you would prefer, you must provide voting instructions to"street name" by your broker, bank or other agentnominee: If you are a beneficial owner of shares held in "street name" by the deadline provided in theyour broker, bank or other nominee, you should have received a voting instruction form with these proxy materials you receive from your broker, bank or other nominee.nominee rather than from us. The voting deadlines and availability to submit a proxy by telephone or the Internet for beneficial owners of shares will depend on the voting processes of the broker, bank or other nominee that holds your shares. Therefore, we urge you to carefully review and follow the voting instruction form and any other materials that you receive from that organization. If you hold your shares in multiple accounts, you should submit a proxy to vote your shares as described in each set of proxy materials you receive.
What doesIf the shares you own are held in street name, the bank or brokerage firm, as the record holder of your shares, is required to vote your shares in accordance with your instructions. You should direct your broker how to vote the shares held in your account. Under the rules that govern brokers who are voting with respect to shares held by them as nominee, brokers have the discretion to vote such shares only on routine matters.
The approval of the Dissolution pursuant to the Plan of Dissolution is considered a non-routine matter. A broker “non-vote” occurs when a broker submits a proxy form but declines to vote on a particular matter because the broker has not received voting instructions from the beneficial owner. For the Dissolution Proposal, broker non-votes will have the effect of voting against that proposal. If you want to approve the Dissolution, you must vote FOR the Dissolution Proposal. If you do not instruct your broker on how to vote your shares with respect to the Dissolution Proposal, your broker will not be able to vote your shares with respect to the Dissolution Proposal, and it mean ifwill have the effect of a vote against that proposal.
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The Adjournment Proposal is considered a routine matter. If you do not instruct your broker on how to vote your shares, your broker will have the discretion to vote your shares with respect to the Adjournment Proposal.
If you need assistance with voting or have questions regarding the Special Meeting, please contact our solicitation agent at:
Alliance Advisors, LLC
Tel: 855-601-2246
E-mail: ONCR@allianceadvisors.com
How do I receive more than one set of Proxy Materials?revoke my proxy or change my vote?
If you receive more than one set of Proxy Materials, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on the proxy cards and in the Proxy Materials to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. If you are thea stockholder of record on the Record Date for your shares,the Special Meeting, you mayhave the power to revoke your proxy at any time before the final voteyour proxy is voted at the Annual MeetingSpecial Meeting. You can revoke your proxy in one of the followingfour ways:
Your last vote, whetherAny written notice of revocation or subsequent proxy card must be received by our Corporate Secretary prior to orthe taking of the vote at the Annual Meeting, is the vote that we will count.
Beneficial Owner: Shares Registered in the NameSpecial Meeting. Such written notice of a Broker, Bankrevocation or Similar Organizationsubsequent proxy card should be delivered to Brian Shea, our Corporate Secretary, or sent to Oncorus, Inc., 4 Corporate Drive, Andover, Massachusetts 01810, Attention: Brian Shea, Corporate Secretary
If a broker, bank or other nominee holds your shares, are held in street name, you must contact yoursuch broker, bank or nominee for instructions asin order to find out how to change your vote.
How is a quorum reached?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote are present virtually at the Annual Meeting or represented by proxy. On the record date, there were 25,884,023 shares outstanding and entitled to vote. Thus, the holders of 12,942,012 shares must be present virtually or represented by proxy at the Annual Meeting to have a quorum. As described above, stockholders attending the Annual Meeting virtually will be deemed to be attending in person, as provided by Delaware law, and their shares will be counted towards the quorum requirement.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the Annual Meeting. Abstentions and broker non-votes, if any, will be counted towards the quorum requirement. If there is no quorum, the chairperson of the meeting or the holders of a majority of shares entitled to vote at the meeting and present virtually or represented by proxy may adjourn the meeting to another date.
What are “broker non-votes”?
As discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed to be “non-routine,” the broker or nominee cannot vote the shares. These not voted shares are counted as “broker non-votes.” Proposal 1 is considered to be “non-routine” and we, therefore, expect broker non-votes to exist in connection with Proposal 1.
What vote is required to approveadopt each proposal?
The Dissolution Proposal 1: Electionrequires the affirmative vote of Directors. Directors will be elected bythe holders of a pluralitymajority of votes castthe outstanding shares of common stock of the Company entitled to vote at the Annual Meeting bySpecial Meeting. With respect to the Dissolution Proposal, abstentions, failures to vote and broker non-votes will have the same effect as votes against the proposal.
The Adjournment Proposal requires the approval of the holders of a majority in voting power of the shares present virtually or represented by proxy at the Special Meeting and entitled to vote on the election of directors. The three nominees receivingproposal. With respect to the most “For” votes will be elected as directors. You may not vote your shares cumulatively for the election of directors.Abstentions and broker non-votes will not affect the outcome of the election of directors.
Adjournment Proposal, 2: Ratification of the Selection of the Independent Registered Public Accounting Firm. To be approved, the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year ending December 31, 2022 must receive “For” votes from the holders of a majority of shares present virtually or represented by proxy and entitled to vote on the matter. Abstentionsabstentions will have the same effect as an “Against” vote.votes against the proposal.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting selections, your sharesThe votes will be voted “For”counted, tabulated and certified by Terrance Hassett, who shall serve as the electioninspector of the three nominees for director and “For” the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firmelections for the year ending December 31, 2022.Special Meeting.
How can I find out the results ofknow the voting results?
We plan to announce preliminary voting results at the Annual Meeting?
Preliminary votingSpecial Meeting and will publish final results will be announced at the Annual Meeting. In addition, final voting results will be published in a current reportCurrent Report on Form 8-K that we expect to filebe filed with the SEC within four business days afterfollowing the AnnualSpecial Meeting.
When are stockholder proposalsWhy is the Board recommending approval of the Plan of Dissolution?
The Board carefully reviewed and considered the Plan of Dissolution in light of the financial position of the Company, including its available cash, resources and operational needs. After due consideration of the options available to the Company, our Board has determined that the Dissolution is advisable and in the best interests of the Company and its stockholders. See "Proposal 1: Approval of the Dissolution Pursuant to the Plan of Dissolution - Reasons for the 2023 Annual MeetingProposed Dissolution."
What does the Plan of Stockholders?Dissolution entail?
The Plan of Dissolution provides an outline of the steps for the Dissolution of the Company under Delaware law. The Plan of Dissolution provides that we will file a Certificate of Dissolution following the required
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stockholder approval; however, the Board has the discretion to determine whether or not to proceed with the Dissolution and the decision of when to file the Certificate of Dissolution will be made by the Company in its sole discretion.
What will happen if the Dissolution is approved?
If you wishthe Dissolution is approved by our stockholders, our Board will have the sole discretion to submit proposalsdetermine whether or not to proceed with the Dissolution, and the Company will have sole discretion to determine when (at such time as it deems appropriate following stockholder approval of the Dissolution) to proceed with the Dissolution. If the Company proceeds with the Dissolution, we will liquidate any remaining assets, satisfy or make reasonable provisions for inclusionour remaining obligations, and make distributions to the stockholders of available proceeds, if any. The Board intends to seek to distribute funds to our stockholders as quickly as possible, as permitted by the DGCL and the Plan of Dissolution, and intends to take all reasonable actions to optimize the distributable value to our stockholders.
If our Board determines that the Dissolution is not in our best interests or not in the best interests of our stockholders, our Board may direct that the Dissolution be abandoned, or may amend or modify the Plan of Dissolution to the extent permitted by Delaware law without the necessity of further stockholder approval. After the Certificate of Dissolution has been filed, revocation of the Dissolution would require stockholder approval under Delaware law.
Can the Company estimate the distributions, if any, that the stockholders would receive in the Dissolution?
The Company cannot predict with certainty the amount of distributions, if any, to our stockholders. However, based on the information currently available to us and, assuming our stockholders approve the Dissolution on the date of the Special Meeting, we estimate that the aggregate amount of cash that will be available for distribution to our stockholders in the Dissolution will be in the range between approximately $0.1 million and $1.4 million and the total amount distributed to stockholders will be in the range between approximately $0.00 and $0.05 per share of common stock. These estimates do not include cash that may be available for distribution from the proceeds from any sales or our remaining assets, including our intellectual property. These amounts may be paid in one or more distributions. You may receive substantially less than the amount that we currently estimate that you may receive, or you may receive no distribution at all. Such distributions, if any, will not occur until after the Certificate of Dissolution is filed, and we cannot predict the timing or amount of any such distributions, as uncertainties as to the ultimate amount of our liabilities, the operating costs and amounts to be reserved for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount, if any, that will ultimately be available for distribution to stockholders or the timing of any such distributions. Accordingly you will not know the exact amount of any distribution you may receive as a result of the Plan of Dissolution when you vote on the proposal to approve the Dissolution and the Plan of Dissolution.
Although we cannot predict the timing or amount of any such distributions, to the extent funds are available for distribution to stockholders, the Board intends to seek to distribute such funds to our stockholders as quickly as possible, as permitted by the DGCL and the Plan of Dissolution, and will take all reasonable actions deemed advisable by the Board to optimize the distributable value to our stockholders. See the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Estimated Distributions to Stockholders" beginning on page 14 of this proxy statement for a description of the assumptions underlying and sensitivities of our estimate of the total cash distributions to our stockholders in the Dissolution.
What is the reporting and listing status of the Company?
Our common stock is currently listed on The Nasdaq Capital Market and, prior to May 3, 2023, Annual Meetingwas previously listed on The Nasdaq Global Market. To maintain the listing of Stockholders (the “our common stock on The Nasdaq Global Market, we were required to satisfy minimum financial and other continued listing requirements and standards, including those related to the price of our common stock. On November 1, 2022, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market ("2023 Annual MeetingNasdaq”") notifying us that, based on the closing bid price of our common stock being below $1.00 per share for 30 consecutive business days, we no longer complied with Nasdaq’s minimum bid price requirement in Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we must receive themwere provided an initial compliance period of 180 calendar days from receipt of the Notice, or until May 1, 2023, to regain compliance with the minimum bid price
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requirement. To regain compliance, the bid price for our Secretarycommon stock would need to close at $1.00 per share or more for a minimum of 10 consecutive business days during this 180-day grace period, among other requirements.
On April 26, 2023, we submitted to the Listing Qualifications Department of Nasdaq an application to transfer the listing of our common stock from The Nasdaq Global Market to The Nasdaq Capital Market. On May 2, 2023, we received a notice (the "Extension Notice") from the Listing Qualifications Department informing us that Nasdaq granted us an additional 180 calendar days, or until October 30, 2023, to regain compliance with the minimum closing bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2). In connection with the Extension Notice, the listing of our common stock was transferred from the Nasdaq Global Market to the Nasdaq Capital Market, effective as of May 3, 2023.
On June 8, 2023, the we received written notice from Nasdaq that, in light of the Plan of Dissolution, the Workforce Reduction Plan and based upon Nasdaq’s review of the Company and pursuant to Nasdaq Listing Rule 5101, Nasdaq believes that the Company is a “public shell,” and that the continued listing of its securities is no longer warranted. The trading of the Company's common stock was suspended as of the opening of business on June 21, 2023, and, based on the notice, we expect that Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission, which will remove the Company's common stock from listing and registration on Nasdaq.
Notwithstanding the foregoing, there is no assurance as to when our common stock will be delisted from Nasdaq. If and when our common stock is delisted from Nasdaq and is not eligible for quotation or before January 13, 2023. Nothinglisting on another market or exchange, trading of our common stock could be conducted only in this paragraph shall require usthe over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to includedispose of, or obtain accurate price quotations for, our common stock, which could cause the price of our common stock to decline further.
Regardless of the foregoing, if the Dissolution is approved by our stockholders and if the Company proceeds with the Dissolution, we will close our transfer books at the effective time of the Certificate of Dissolution (the "Effective Time"). After the Effective Time, we will not record any further transfers of our common stock, except in our proxy statementsole discretion pursuant to the provisions of a deceased stockholder’s will, intestate succession, or proxy card foroperation of law and we will not issue any new stock certificates, other than replacement certificates. In addition, after the Annual MeetingEffective Time, we will not issue any stockholder proposal that does not meet the requirementsshares of our common stock upon exercise of outstanding options, warrants, or restricted stock units. As a result of the SECclosing of our transfer books, it is anticipated that distributions, if any, made in effect atconnection with the time. Any such proposalDissolution will likely be subjectmade pro rata to Rule 14a-8the same stockholders of record as the stockholders of record as of the Effective Time, and it is anticipated that no further transfers of record ownership of our common stock will occur after the Effective Time.
Additionally, whether or not the Dissolution is approved, we will have an obligation to continue to comply with the applicable reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”"Exchange Act"). until we have exited such reporting requirements. The Company plans to initiate steps to exit from certain reporting requirements under the Exchange Act.
However, such process may be protracted and we may be required to continue to file Current Reports on Form 8-K to disclose material events, including those related to the Dissolution. Accordingly, we will continue to incur expenses that will reduce the amount available for distribution to stockholders, including expenses of complying with public company reporting requirements and paying its service providers, among others.
Do I have appraisal rights in connection with the Dissolution?
None of Delaware law, our Amended and Restated Certificate of Incorporation, or our Amended and Restated Bylaws provides for appraisal or other similar rights for dissenting stockholders or beneficial owners in connection with the Dissolution, and we do not intend to independently provide stockholders or beneficial owners with any such right.
Are there any risks related to the Dissolution?
Yes. You should carefully review the section entitled "Risk Factors" beginning on page 9 of this proxy statement for a description of risks related to the Dissolution.
Who is paying the costs of soliciting these proxies?
We will pay all of the costs of soliciting these proxies. Our directors, officers and other employees may solicit proxies in person or by mail, telephone, fax or email. We will not pay our directors, officers and other employees
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any additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to execute proxies. We have hired Broadridge Financial Solutions, Inc. to assist us in the distribution of proxy materials and the solicitation of votes described above. Proxy solicitation expenses that we will pay include those for preparation, mailing, returning, and tabulating the proxies.
We have also engaged Alliance Advisors as the proxy solicitor for the Special Meeting for a base fee of $8,000 plus fees for additional services. We have also agreed to reimburse Alliance for its reasonable out of pocket expenses. Some of our officers and other employees also may, but without compensation other than their regular compensation, solicit proxies by further mailing or personal conversations, or by telephone, facsimile or other electronic means.
Will I owe any U.S. federal income taxes as a result of the Dissolution?
If you wishthe Dissolution is approved and implemented, a stockholder that is a U.S. person generally will recognize gain or loss on a share-by-share basis equal to nominate a directorthe difference between (1) the sum of the amount of cash and the fair market value of property, if any, distributed to the stockholder with respect to each share, less any known liabilities assumed by the stockholder or submit a proposal for presentation atto which the 2023 Annual Meeting, without including such proposaldistributed property (if any) is subject, and (2) the stockholder’s adjusted tax basis in next year’seach share of our common stock. You are urged to read the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Certain Material U.S. Federal Income Tax Consequences of the Proposed Dissolution" beginning on page 23 of this proxy statement for a summary of certain material U.S. federal income tax consequences of the Dissolution, including the ownership of an interest in a liquidating trust, if any.
What will happen to my common stock if the Certificate of Dissolution is filed with the Secretary of State of Delaware?
If the Certificate of Dissolution is filed with the Secretary of State, the common stock (if not previously delisted and deregistered) will be delisted from the Nasdaq and deregistered under the Exchange Act. From and after the Effective Time, and subject to applicable law, each holder of shares of our common stock shall cease to have any rights in respect of that stock, except the right to receive distributions, if any, pursuant to and in accordance with the Plan of Dissolution and the DGCL. After the Effective Time, our stock transfer records shall be closed, and we will not record or recognize any transfer of common stock occurring after the Effective Time, except, in our sole discretion, such transfers occurring by will, intestate succession or operation of law as to which we have received adequate written notice. Under the DGCL, no stockholder or beneficial owner shall have any appraisal rights in connection with the Dissolution.
We expect to file the Certificate of Dissolution and for the Dissolution to become effective as soon as reasonably practicable after the Dissolution is approved by our stockholders; however, the Board has discretion not to proceed with the Dissolution its sole discretion.
Who can help answer my other questions?
If you musthave more questions about the proposals or voting, you should contact Alliance Advisors, LLC who is assisting us with the proxy solicitation.
The solicitation agent for the Special Meeting is:
Alliance Advisors, LLC
Tel: 855-601-2246
E-mail: ONCR@allianceadvisors.com
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend that such forward-looking statements be a stockholder of record and provide timely notice in writing to our Secretary at c/o Oncorus, Inc., 50 Hampshire Street, Suite 401, Cambridge, Massachusetts 02139. To be timely, we must receive the notice not less than 90 days nor more than 120 days priorsubject to the first anniversarysafe harbors created by Section 27A of the Annual Meeting, that is, between February 22, 2023Securities Act of 1933, as amended (the "Securities Act"), and March 24, 2023; provided, however, that in the event that the dateSection 21E of the 2023 Annual Meeting is more than 30 days beforeExchange Act. These statements include statements regarding the intent, belief or more than 30 days aftercurrent expectations of members of our management team, as well as the assumptions on which such anniversary date,statements are based, and are generally identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “predicts,” “intends,” “should,” “could,” “continues,” or the negative version of these words or other comparable words. Forward-looking statements in this proxy statement include, but are not limited to:
You are cautioned not to place undue reliance on the 10th day following the day onthese forward-looking statements, which we first make a public announcementspeak only as of the date they are made. Such statements are subject to known and unknown risks and uncertainties and other unpredictable factors, many of which are beyond our control. We make no representation or warranty (express or implied) about the accuracy of any of the 2023 Annual Meeting. Your written notice must contain specific information requiredforward-looking statements. These statements are based on a number of assumptions involving the judgment of management. Many relevant risks are described under the caption "Risk Factors" on page 9 of this proxy statement, as well as throughout this proxy statement and the incorporated documents, and you should consider these important cautionary factors as you read this document.
The forward-looking statements in Section 5this proxy statement involve certain uncertainties and risks, including but not limited to:
PROPOSAL 1
ELECTION OF DIRECTORS
General
Our amended and restated certificate the impact of incorporation provides for a classified Board consistingbusiness uncertainties in connection with the Dissolution;
Our Board presently has eight directors. Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated the following individuals whoAny forward-looking statements are the three Class II directors standing for re-election, which is the class of directors whose term of office expires in 2022: Luke Evnin, Ph.D., Spencer Nam and Eric Rubin, M.D. Each of the nominees listed below is a current director, and Dr. Evnin and Mr. Nam were previously elected by our stockholders. Dr. Rubin was appointed by the Board in December 2021 to fill a vacancy on the Board and was identified by our Chief Executive Officer for evaluation by the Nominating and Corporate Governance Committee of the Board. If the nominees listed below are elected, each director will hold office until the annual meeting of stockholders in 2025 and until his successor has been duly elected and qualified or, if sooner, until such director’s death, resignation, or removal. It is our policy to encourage our directors and nominees for director to attend the Annual Meeting.
It is our policy to encourage our directors to attend the Annual Meeting. Seven of our eight directors then serving attended our 2021 annual meeting of stockholders.
Director Nominees and Continuing Directors
The brief biography for each nominee below includes information,made as of the date of this proxy statement regardingonly. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the specificrisk factors or risks and particular experience, qualifications, attributesuncertainties referred to in this proxy statement or skills that ledincluded in the Nominatingdocuments incorporated by reference herein or other periodic reports or other documents or filings filed with or furnished to the SEC from time to time could materially and Corporate Governance Committeeadversely affect our business, prospects, financial
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condition and results of operations. Except as required by law, we do not undertake or plan to believeupdate or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this proxy statement.
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RISK FACTORS
The following risk factors, together with the other information in this proxy statement and in the "Risk Factors" sections included in the documents incorporated by reference into this proxy statement (see the section entitled "Where You Can Find More Information; Incorporation by Reference" beginning on page 33 of this proxy statement), should be carefully considered before deciding whether to vote to approve the Dissolution Proposal as described in this proxy statement. In addition, stockholders should keep in mind that the respective nomineerisks described below are not the only risks that are relevant to your voting decision. The risks described below are the risks that we currently believe are the material risks of which our stockholders should continuebe aware. Nonetheless, additional risks that are not presently known to serve onus, or that we currently believe are not material, may also prove to be important. Notably, the Board. There areCompany cautions that trading in the Company’s securities is highly speculative and poses substantial risks.
Trading prices for the Company’s securities may bear little or no family relationships amongrelationship to the actual value realized, if any, by holders of the Company’s securities. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.
RISKS RELATED TO THE DISSOLUTION
We cannot predict the timing of the distributions, if any, to stockholders.
Our current intention is that, if the Dissolution Proposal is approved by our stockholders, the Certificate of Dissolution would be filed promptly after such approval; however, the Board would retain the discretion to determine not to proceed with the Dissolution and the filing of the Certificate of Dissolution in its sole discretion and the Company would have discretion as to the timing of the filing of the Certificate of Dissolution. No further stockholder approval would be required to effect the Dissolution. However, if the Board determines that the Dissolution is not in our best interest or in the best interest of our executive officersstockholders, the Board may, in its sole discretion, abandon the Dissolution or directors.may amend or modify the Plan of Dissolution to the extent permitted by Delaware law without the necessity of further stockholder approval. After the Certificate of Dissolution has been filed, revocation of the Dissolution would require stockholder approval under Delaware law.
Nominees for Election as a Class II Director for a Three-Year Term Expiring atUnder Delaware law, utilizing the 2025 Annual Meetingprocedures of Stockholders
Nominee
| Age(1)
| Term
| Position(s) Held
| Director
|
Luke Evnin, Ph.D. | 58 | 2022 | Director | 2016 |
Spencer Nam | 52 | 2022 | Director | 2019 |
Eric Rubin, M.D. | 63 | 2022 | Director | 2021 |
Luke Evnin, Ph.D. has served on our Board since March 2016. Dr. Evnin co-founded MPM Capital, an early-stage life sciences venture investing firm, in 1997, where he currently serves as Managing Director. Priorthe DGCL (which is contemplated by the Plan of Dissolution unless otherwise determined by the Board) may make any distribution to co-founding MPM Capital, Dr. Evnin spent seven years as a venture capitalist at Accel Partners, a venture capital firm, including four years as general partner, where he focused on investments in emerging healthcare companies. Dr. Evnin currently serves as Chief Executive Officer of Turmeric Acquisition Corp., a publicly traded special purpose acquisition company formed by MPM Capital. In 2015 Dr. Evnin co-founded Harpoon Therapeutics Inc., a publicly held immunotherapy company, and until July 2020 served as chairmanits stockholders, it must: (i) pay or make reasonable provision to pay all of its boardclaims and obligations, including all contingent, conditional or unmatured contractual claims known to the corporation, (ii) make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against it which is the subject of a pending action, suit or proceeding to which it is a party, and (iii) make such provision as will be reasonably likely to be sufficient to provide compensation for any claims that are either unknown to the corporation or have not arisen, but based on facts known to the corporation, are likely to arise or to become known to the corporation within 10 years after the date it dissolves. Among other things, our potential liabilities that may require provision could include those relating to indemnification obligations, if any, to third parties or to our current and former officers and directors. From October 2017It might take significant time to June 2019, Dr. Evnin served as the interim Chief Executive Officer of Werewolf Therapeutics, Inc., where he continues to serves as chairman of its board of directors. Dr. Evnin has also served on the board of directors of many public and private companies over his 28-year venture capital career, including serving as a director of Syndax Pharmaceuticals, Inc., EnteroMedics Inc. (now known as ReShape Lifesciences Inc.), Epix Medical, Inc., Intercell AG, Metabasis Therapeutics, Inc. (acquired by Ligand Pharmaceuticals, Inc.), Oscient Pharmaceuticals Corp., Pacira Pharmaceuticals Inc., Restore Medical, Inc. (acquired by Medtronic, Inc.), Sonic Innovations, Inc. and Signal Pharmaceuticals, Inc. (acquired by Celgene Corporation). He currently serves, on behalf of MPM Capital, as a director for eight private companies in addition to his role as member of our Board. Dr. Evnin also serves as chairman of the board of directors of the Scleroderma Research Foundation, a not-for-profit entity. Dr. Evnin holds an A.B. in Molecular Biology from Princeton University and a Ph.D. in Biochemistry from the University of California, San Francisco. We believe that Dr. Evnin’s depth and expertise in the life sciences and venture capital industries including significant experience serving on boards of directors and his educational background provide him with the qualifications and skills to serve on our Board.
Spencer Nam has served on our Board since August 2019. Since January 2019, he has served as a Managing Partner at Kensington-SV Global Innovations LP, a healthcare venture capital fund. Mr. Nam was instrumental in the formation of Kensington-SV Global in 2018 and Mr. Nam has served as a managing director of SV Investment Corp., a Korean healthcare investment firm, since 2017. Prior to joining SV Investment Corp., Mr. Nam was a senior research fellow at the Clayton Christensen Institute for Disruptive Innovation from 2014 through 2017 where he researched disruptive innovation models in the healthcare industry. Previously, he worked as a licensed securities analyst for several Wall Street investment banks where he had research coverage on publicly traded companies in medical devices, diagnostics and life science tools. Prior to his tenure as a securities analyst, Mr. Nam was an associate at TDI Capital, a venture capital firm, where he conducted investment analysis on companies in the life sciences and technology sectors. Prior to TDI Capital, he was a management consultant at Bain & Company. Mr. Nam holds an M.B.A. from Harvard Business School and a B.A. in Mathematics from Harvard College. We believe Mr. Nam is qualified to serve on our Board due to his experience in the healthcare venture capital sector, extensive background in the financial and healthcare industries and his educational background.
Eric H. Rubin, M.D. has served on our Board since June 2021. Dr. Rubin has served as a Senior Vice President of Oncology of Merck & Co., Inc., a publicly traded biopharmaceutical company, since January 2018, where he oversees development of Merck’s early oncology pipeline and translational oncology research activities. Prior to that position, Dr. Rubin was Vice President of Oncology at Merck, overseeing clinical oncology development from 2008 until January 2018. Additionally, Dr. Rubin served as Director of the Investigational Therapeutics Division at the Cancer Institute of New Jersey from 1998 to 2008resolve these matters, and as a faculty member at several institutions, includingresult we are unable to predict the Dana-Farber Cancer Institute, from 1992timing of distributions, if any are made, to 1995,our stockholders.
We cannot assure you as to the amount of distributions, if any, to be made to our stockholders.
We cannot predict with certainty the amount of distributions, if any, to our stockholders. However, based on the information currently available to us and currently as an adjunct professorif our stockholders approve the Dissolution, we estimate that the aggregate amount of cash, if any, that will be available for distribution to our stockholders in the DepartmentsDissolution will be in the range between approximately $0.1 million and $1.4 million and the total amount distributed to stockholders, if any, will be in the range between approximately $0.00 and $0.05 per share of Medicinecommon stock. These estimates do not include cash that may be available for distribution from the proceeds from any sales or our remaining assets, including our intellectual property. Any such amounts may be paid in one or more distributions. Any such distributions will not occur until after the Certificate of Dissolution is filed, and Pharmacology, Robert Wood Johnson Medical School, Universitywe cannot predict the timing or amount of Medicineany such distributions, or whether any such distributions will occur, as uncertainties as to the ultimate amount of our liabilities, the operating costs and Dentistryamounts to be set aside for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount, if any, that will ultimately be available for distribution to stockholders or the timing of New Jersey, a position he has held since 2008. any such distributions. Examples of uncertainties that could reduce the value of distributions to our stockholders include: the receipt of no, or lower than expected, proceeds in the course of
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our efforts to monetize our remaining assets; uncertainty as to whether we will be able to negotiate an exit from our lease for our facility located in Andover, Massachusetts; unanticipated costs relating to the defense, satisfaction or settlement of lawsuits or other claims threatened against us or our directors or officers; amounts necessary to resolve claims of any creditors or other third parties; and delays in the liquidation and dissolution or other winding up process.
In addition, Dr. Rubin is currently the Co-Chair of the Cancer Steering Committee of the Biomarkers Consortium, a public-private research partnership managed by the Foundation for the National Institutes of Health, a position he has held since 2015,as we wind down, we will continue to incur expenses from operations, including directors’ and a member of the Science Policy and Governmental Affairs Committee for the American Association for Cancer Research, a position he has held since 2014. Dr. Rubin was also previously a member of the National Cancer Moonshot Initiative Blue Ribbon Panel Working Group on Expanding Clinical Trials in 2016. He has an M.D. from the University of South Florida and a B.S. in Mathematics from Tulane University. We believe that Dr. Rubin is qualifiedofficers’ insurance; payments to serve on our Board due to his clinical development experience in the field of oncology and leadership experience in the biopharmaceutical industry and in academia.
Vote Required
Directors are elected by a plurality of the votes of the holders of shares present virtually or represented by proxy and entitled to vote at the Annual Meeting on the election of directors. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. You may not vote your shares cumulatively for the election of directors. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. If any nominee becomes 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. Each person nominated for election has agreed to serve if elected. The Board and management have no reason to believe that any nominee will be unable to serve. There are no arrangements or understandings between usservice providers and any director,continuing employees or nominee for directorship, pursuantconsultants; taxes; legal, accounting and consulting fees and expenses related to which such person was selected as a director or nominee.
THE BOARD RECOMMENDS A VOTE “FOR” EACH NAMED DIRECTOR NOMINEE.
Information About Our Continuing Directors
Director | Age(1) | Term | Position(s) Held | Director |
Mitchell Finer, Ph.D. | 62 | 2023 | Chairman | 2016 |
Theodore (Ted) Ashburn, M.D., Ph.D. | 55 | 2024 | Director | 2018 |
Scott Canute | 62 | 2024 | Director | 2020 |
Mary Kay Fenton | 58 | 2023 | Director | 2019 |
Barbara Yanni | 68 | 2024 | Director | 2021 |
Class III Directors Continuing in Office until the 2023 Annual Meeting of Stockholders
Mary Kay Fenton has served on our Board since December 2019. Since March 2021, she has served as Chief Financial Officer of Talaris Therapeutics, Inc., a cell therapy company. From October 2019 to March 2021, she served as the Vice President of Strategic Operations, Vertex Cell & Genetic Therapies of Vertex Pharmaceuticals, Inc. Ms. Fenton joined Vertex upon completion of the acquisition of Semma Therapeutics, Inc. by Vertex in October 2019. From May 2019 until October 2019, Ms. Fenton served as the
Chief Financial Officer and Chief Operating Officer of Semma. From 2006 until December 2018, Ms. Fenton served as Executive Vice President and Chief Financial Officer of Achillion Pharmaceuticals, Inc. and from 2000 until 2006, Ms. Fenton held the position of Executive Vice President at Achillion. Prior to joining Achillion, Ms. Fenton held various positions within the Technology Industry Group at PricewaterhouseCoopers LLP, from 1991 until 2000, including as Senior Manager responsible for the life sciences practice in Connecticut. Ms. Fenton holds an M.B.A. in Finance from the Graduate School of Business at the University of Connecticut and an A.B. in Economics from the College of the Holy Cross. We believe that Ms. Fenton’s extensive executive leadership experience and her background in finance and operations provide herfiling obligations with the qualifications and skillsSEC, which will reduce any amounts available for distribution to serve on our Board.
Mitchell Finer, Ph.D., a co-founder of our company, has served as Chairman of our Board since January 2022 and previously as Executive Chairman of our Board since July 2018, after serving as a member of our Board since January 2016. From January 2016 until June 2018, he served as our Chief Executive Officer. Dr. Finer has served as an Executive Partner of MPM Capital, Inc., since 2015, and currently serves as President of Research and Development of Elevate LLC as of November 2021. Formerly he was the Chief Scientific Officer of ElevateBio LLC and President of ElevateBio BaseCamp, Inc, positions he held from July 2018 until November 2021. Dr Finer also serves as Chief Executive Officer of LifeEDIT Technologies, Incorporated, an Elevate Bio portfolio company, since November 2020. Prior to joining MPM Capital, Dr. Finer was the Chief Scientific Officer of bluebird bio, Inc. from 2010 until 2015. Dr. Finer co-founded and served on the board of directors of Adverum Biotechnologies, Inc. (formerly Avalanche Biotechnologies) and CODA Biotherapeutics, Inc., where he also served as Chief Executive Officer from April 2017 to July 2018. He currently serves on the board of directors of Turmeric Acquisition Corp., a publicly traded special purpose acquisition company formed by MPM Capital, He also serves on the board of directors of the following privately-held biotechnology companies: ElevateBio, LLC, CODA Biotherapeutics, Inc., LifeEDIT Technologies Incorporated, Abata Therapeutics, Inc and Tabby Therapeutics Ltd. Previously he served on the board of directors of TCR2 Therapeutics, Inc and Adverum Biotechnologies. Dr. Finer received a Ph.D. in Biochemistry and Molecular Biology from Harvard University and a B.A. in Biochemistry and Bacteriology from the University of California, Berkeley. He completed a postdoctoral fellowship at the Whitehead Institute for Biomedical Research. We believe Dr. Finer is qualified to serve as a member of our Board because of his operational, strategic and corporate leadership experience and his experience as a founder of numerous biopharmaceutical companies, including as our co-founder.
Class I Directors Continuing in Office until the 2024 Annual Meeting of Stockholders
Theodore (Ted) Ashburn, M.D., Ph.D. has served as our President and Chief Executive Officer and as a member of our Board since July 2018. Prior to joining us, he served as Head of Oncology Development at Moderna, Inc. from September 2017 until July 2018, where he was responsible for overall design, integration and execution of its clinical-stage oncology programs. From February 2016 until July 2017, Dr. Ashburn served as the Head of Operations of Caperna, a Moderna venture focused on personalized cancer vaccines. From December 2014 until February 2016, he served as Senior Vice President, Product Strategy and Operations at Dicerna Pharmaceuticals, Inc. From 2006 to 2014, Dr. Ashburn held various positions of increasing responsibility at Genzyme/Sanofi Oncology, including holding the position of global product leader for Leukine® and Elitek® in addition to various business development roles of increasing seniority. Dr. Ashburn has an M.D. from Harvard Medical School, a Ph.D. in Organic Chemistry from Massachusetts Institute of Technology and a B.S. from Ball State University where he majored in Chemistry and obtained a minor degree in Computer Science. We believe Dr. Ashburn provides invaluable insight and guidance to our Board and our Company due to his extensive technical skills and executive-level leadership experience in the field of oncological biotherapeutics, as well as his operating and historical experience gained from serving as our President and Chief Executive Officer.
Scott Canute has served on our Board since December 2020. Previously, he served as the President of Global Manufacturing and Corporate Operations at Genzyme Corporation from 2010 to 2011, and before that, in various positions with Eli Lilly and Company over the span of 25 years, including as President, Global Manufacturing Operations from 2004 to 2007. Mr. Canute served as a director of Flexion Therapeutics, Inc., a publicly traded biopharmaceuticals company, from 2015 to November 2021. Mr. Canute joined the board of directors of Immunomedics, Inc., a publicly traded biopharmaceutical company, in March 2017, serving in that capacity until its acquisition by Gilead Sciences in October 2020, during which time he served as that company’s Executive Director from March 2019 until April 2020. Within the past five years, Mr. Canute also served as a member of the boards of directors of the publicly traded biopharmaceuticals companies Akebia Therapeutics, Inc., Proteon Therapeutics, Inc. (prior to its merger with ArTara Therapeutics, Inc.) and Outlook Therapeutics, Inc. (previously Oncobiologics, Inc.). Mr. Canute also previously served as a member of the board of directors of AlloCure, Inc. and Inspiration Biopharmaceuticals, Inc. In addition, Mr. Canute previously served on the board of directors of the National Association of Manufacturers and the Indiana Manufacturers Association. He holds a Master of Business Administration from Harvard Business School and a Bachelor of Science in Chemical Engineering from the University of Michigan. We believe that Mr. Canute’s manufacturing and operational experience in the biopharmaceutical industry and his experience of serving on the boards of directors for a variety biopharmaceuticals companies qualifies Mr. Canute to serve on our Board.
Barbara Yanni has served on our Board since July 2021. She previously served as Vice President and Chief Licensing Officer at Merck & Co. from 2001 until her retirement in 2014. Prior to this role, Ms. Yanni held various roles at Merck including in corporate
development, financial evaluation, and tax. Ms. Yanni currently serves as an independent director on the boards of three public biotechnology companies: Trevena, Inc., since 2014, Vaccinex, Inc., since 2015, and Pharming Group N.V. since December 2020. She is also currently an independent director of Mesentech, a private biotechnology company. Ms. Yanni previously served on the board of directors of Akcea Therapeutics, Inc. from December 2019 until the company’s sale in October 2020 and Abionyx Pharma SA from July 2018 to January 2020, both of which were public biotechnology companies, and Symic Holdings, LLC, a private biotechnology company from 2015 to 2019. Ms. Yanni earned a J.D. from Stanford Law School and an A.B. from Wellesley College. She also holds a Masters of Law in Taxation from New York University Law School. We believe that Ms. Yanni is qualified to serve on our Board based on her extensive experience in biotechnology and pharmaceutical business evaluation and transaction execution, as well as her financial and general business knowledge.
INFORMATION REGARDING THE BOARD AND CORPORATE GOVERNANCE
Director Independence
As required under The Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s Board must qualify as “independent,” as affirmatively determined by the Board. The Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant identified transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, our Board affirmatively determined that six of our eight directors—Scott Canute, Luke Evnin, Ph.D., Mary Kay Fenton, Spencer Nam, Eric Rubin, M.D., and Barbara Yanni— are independent directors within the meaning of the applicable Nasdaq listing standards. In making these determinations, our Board has determined, upon the recommendation of our Nominating and Corporate Governance Committee, that none of these directors had a material or other disqualifying relationship with the Company. Dr. Ashburn is not independent by virtue of his position as President and Chief Executive Officer and Dr. Finer is not independent by virtue of his former employment as an executive officer of the Company within the last three years. The Board also determined that each member of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee satisfies the independence standards for such committees established by the SEC and the Nasdaq listing standards, as applicable.
Board Leadership Structure
The Board has a non-executive Chairman, Dr. Finer, who has authority, among other things, to call and preside over Board meetings, including meetings of the independent directors, to set meeting agendas and to determine materials to be distributed to the Board. Accordingly, our Chairman has substantial ability to shape the work of the Board. We believe that separation of the positions of Chairman and Chief Executive Officer reinforces the independence of the Board in its oversight of the business and affairs of the Company. In addition, the Company believes that having a Chairman who is separate from our Chief Executive Officer creates an environment that is more conducive to objective evaluation and oversight of management’s performance, increasing management accountability and improving the ability of the Board to monitor whether management’s actions are in our best interests and the best interests of our stockholders. As a result, we believe that having a non-executive Chairman can enhance the effectiveness ofcannot assure you as to any amounts, if any, to be distributed to our stockholders if the Board as a whole.
Role of the Board in Risk Oversight
One of the Board’s key functions is informed oversight of our risk management process. The Board does not have a standing risk management committee, but rather administers this oversight function directly through the Board as a whole, as well as through various Board standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for our size and our industry. Our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. Audit Committee responsibilities also include oversight of risks relating to data privacy, technology and information security, including cyber security risk, and, to that end, the committee typically meets annually with personnel responsible for these areas of risk management. Our Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible.
Board Diversity
The table below provides information relating to certain voluntary self-identified characteristics of our directors. Each of the categories listed in the table below has the meaning set forth in the Nasdaq listing rules.
Board Diversity Matrix (As of May 13, 2022)
Total Number of Directors |
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| 8 |
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| Female |
| Male |
| Non-Binary |
| Did Not Disclose Gender |
Part I: Gender Identity |
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Directors |
| 2 |
| 4 |
| — |
| 2 |
Part II: Demographic Background |
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African American or Black |
| — |
| — |
| — |
| — |
Alaskan Native or Native American |
| — |
| — |
| — |
| — |
Asian |
| — |
| 1 |
| — |
| — |
Hispanic or Latinx |
| — |
| — |
| — |
| — |
Native Hawaiian or Pacific Islander |
| — |
| — |
| — |
| — |
White |
| 2 |
| 3 |
| — |
| — |
Two or More Races or Ethnicities |
| — |
| — |
| — |
| — |
LGBTQ+ |
| — |
| — |
| — |
| — |
Did Not Disclose Demographic Background |
| — |
| — |
| — |
| 2 |
Board Meetings and Attendance
Our Board held seven meetings during the fiscal year ended December 31, 2021. Each of the incumbent directors attended at least 75% of the aggregate number of meetings of the Board and of the committees of the Board on which he or she served during the fiscal year ended December 31, 2021 (in each case, which were held during the period for which he or she was a director and/or a member of the applicable committee).
Board Committees
Our Board has established three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. The following table provides current membership information as of the date of this Proxy Statement and the total number of meetings held during the year ended December 31, 2021 for each committee.
Name
| Audit
| Compensation
| Nominating and
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Mitchell Finer, Ph.D. |
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Scott Canute |
| X* | X |
Luke Evnin, Ph.D.(1) |
| X | X |
Mary Kay Fenton† | X* | X |
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Spencer Nam | X |
| X* |
Eric Rubin, M.D. |
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| X |
Barbara Yanni(1) | X |
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Total meetings held in 2021 | 5 | 5 | 4 |
† Audit Committee Financial Expert
* Committee Chair
Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities. The Board has determined that each member of each committee meets the applicable Nasdaq rules and regulations regarding “independence” and each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company. Each of the committees operates pursuant to a written charter and each committee reviews and assesses the adequacy of its charter and submits its charter to the Board for approval. The charters are all available in the “Investors & Media/Corporate Governance/Governance Documents” section of our website, www.oncorus.com. 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.
Audit Committee
The Audit Committee of the Board was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee our corporate accounting and financial reporting processes and audits of its financial statements. For this purpose, the Audit Committee performs several functions, including, among other things:
Ms. Fenton, Mr. Nam and Ms. Yanni serve as the current members of the Audit Committee, with Ms. Fenton serving as Chair of the Audit Committee. The Board also determined that Ms. Fenton is an “audit committee financial expert” within the meaning of the SEC regulations and applicable listing standards of Nasdaq. The Board made a qualitative assessment of Ms. Fenton’s level of knowledge and experience based on a number of factors, including her formal education and experience as a chief financial officer for
a public reporting company. Our Board has determined that each of the members of our Audit Committee satisfies the independence requirements under the listing standards of Nasdaq and Rule 10A-3(b)(1) of the Exchange Act.
The Audit Committee operates under a written charter, which satisfies the applicable rules and regulations of the SEC and Nasdaq listing standards, that is available to stockholders on the Company’s website at https://investors.oncorus.com/corporate-governance/governance-overview.
Report of the Audit Committee of the Board
The material in this report isdo not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2021 with management of the Company. The Audit Committee has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with the audit committee concerning independence, and has discussed with the independent registered public accounting firm the accounting firm’s independence. Based on the foregoing, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
Respectfully submitted,
Mary Kay Fenton, Chair
Luke Evnin, Ph.D.
Spencer Nam
Compensation Committee
The principal duties and responsibilities of the Compensation Committee include, among other things:
Mr. Canute, Ms. Fenton, and Dr. Evnin serve as the current members of the Compensation Committee, with Mr. Canute serving as the Chair of the Compensation Committee.
Each member of the Compensation Committee is a non-employee member of our board of directors as defined in Rule 16b-3 under the Exchange Act. The composition of our Compensation Committee meets the requirements for independence under current rules and regulations of the SEC and Nasdaq listing standards.
The Compensation Committee operates under a written charter, which satisfies the applicable rules and regulations of the SEC and Nasdaq listing standards, that is available to stockholders on the Company’s website at https://investors.oncorus.com/corporate-governance/governance-overview.
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets quarterlyand with greater frequency if necessary. The agenda for each meeting is usually developed by the Chair of the Compensation Committee, in consultation with our Chief Executive Officer and our Chief Operating Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultantsmay be invited by the Compensation Committee to makepresentations, to provide financial or otherbackground information or advice or to otherwise participate in Compensation Committee meetings. The Chief Executive Officer mayDissolution Proposal, we will not participate in, or be present during, any deliberations or determinations of the Compensation Committee regarding his compensation or individual performance objectives. The charter of the Compensation Committee grants the Compensation Committee full access to all books, records, facilities and personnel of the Company. In addition, under the charter, the Compensation Committee has the authority to obtain, at the expense of the Company, advice and assistance from compensation consultants and internal and external legal, accounting or other advisors and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. The Compensation Committee has direct responsibility for the oversight of the work of any consultants or advisers engaged for the purpose of advising the Committee. In particular, the Compensation Committee has the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation ofexecutiveand director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms. Under the charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the compensation committee, other than in-house legal counsel and certain other types of advisers, only after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent.
During the past fiscal year, after taking into consideration the six factors prescribed by the SEC and Nasdaq, the Compensation Committee engaged Pearl Meyer (the “Consultant”), a compensation consulting firm, as a compensation consultant. The Compensation Committee assessed the Consultant’s independence and determined that the Consultant had no conflicts of interest in connection with its provisions of services to the Compensation Committee. Specifically, the Compensation Committee engaged the Consultant to provide market data, peer group analysis and conduct an executive compensation assessment analyzing the current cash and equity compensation of our executive officers and directors against compensation for similarly situated executives at our peer group. Our management did not have the ability to direct the Consultant’s work.
Historically, the Compensation Committee has made most of the significant adjustments to annual compensation, determined bonus and equity awards and established new performance objectives at one or more meetings held during the first quarter of the year. However, the Compensation Committee also considers matters related to individual compensation, such as compensation for new executive hires, as well as high-level strategic issues, such as the efficacy of the Company’s compensation strategy, potential modifications to that strategy and new trends, plans or approaches to compensation, at various meetings throughout the year. Generally, the Compensation Committee’s process comprises two related elements:the determination of compensation levels and the establishment of performance objectives for the current year. For executives other than the Chief Executive Officer, the Compensation Committee solicits and considers evaluations and recommendations submitted to the Compensation Committeeby the Chief Executive Officer.Any adjustments to the compensation of the Chief Executive Officer as well as any equity awards to be granted to the Chief Executive Officer is approved by the Board and based on an assessment of his performance and recommendation by the Compensation Committee, including a review by the Compensation Committee of compensation arrangements of chief executive officers in our peer group. For all executives and directors as part of its deliberations, the Compensation Committee may review and consider, as appropriate,materials such as annual performance reviews, executive and director stock ownership information, analyses of historical executive compensation levels and current Company-wide compensation levels and recommendations of the Consultant, including analyses of executive and director compensation paid at other companies identified by the Consultant.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for identifying, reviewing and evaluating candidates to serve as directors of the Company, reviewing and evaluating incumbent directors, recommending to the Board for selecting candidates for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board, and developing and making recommendations regarding corporate governance matters.
Specific responsibilities of our Nominating and Corporate Governance Committee include:
Drs. Evnin and Rubin and Messrs. Canute and Nam serve as the current members of the Nominating and Corporate Governance Committee, with Mr. Nam serving as Chair of the Nominating and Corporate Governance Committee. Our Board has determined that each member of our Nominating and Corporate Governance committee is independent under the applicable listing standards of Nasdaq.
The Nominating and Corporate Governance Committee operates under a written charter, which satisfies the applicable rules and regulations of the SEC and Nasdaq listing standards, that is available to stockholders on the Company’s website at https://investors.oncorus.com/corporate-governance/governance-overview.
The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, understand the Company’s industry, being over the age of 21 and having the highest personal integrity and ethics. The Nominating and Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer adviceproceed with the Dissolution and guidance to management, having sufficient time to devoteno liquidating distributions will be made in connection therewith. See the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the affairsPlan of the Company, demonstrated excellence in his or her field, having the abilityDissolution - Estimated Distributions to exercise sound business judgment and having the commitment to rigorously represent the long-term interestsStockholders" beginning on page 14 of the Company’s shareholders. However, the Nominating and Corporate Governance Committee retains the right to modify these qualifications from time to time.
Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of shareholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity (including gender, racial and ethnic diversity), age, skills and such other factors as it deems appropriate, given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. In the case of incumbent directors whose terms of office are set to expire, the Nominating and Corporate Governance Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance and any other relationships and transactions that might impair the directors’ independence. The Committee will take into account the results of the Board’s self-evaluation, conducted annually on a group and individual basis. In the case of new director candidates, the Nominating and Corporate Governance Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary.
Generally, our Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with management, using search firms or other advisors, through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. In 2021, the Nominating and Corporate Governance Committee paid a fee to Russell Reynolds to assist in the process of identifying or evaluating director candidates. The Nominating and Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Nominating and Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote. The Nominating and Corporate Governance Committee may gather information about the candidates through interviews, questionnaires, background checks or any other means that the Nominating and Corporate Governance Committee deems to be appropriate in the evaluation process.
We have no formal policy regarding board diversity. Our Nominating and Corporate Governance Committee’s priority in selecting board members is identification of persons who will further the interests of our company through his or her established record of professional accomplishment, the ability to contribute positively to the collaborative culture among board members, and professional and personal experiences and expertise relevant to our growth strategy.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board may do so by providing timely notice in writing to our Secretary at c/o Oncorus, Inc., 50 Hampshire Street, Suite 401, Cambridge, Massachusetts 02139. To be timely, we must receive the notice not less than 90 days nor more than 120 days prior to the anniversary of the prior year’s annual meeting of stockholders; provided, however, that in the event that no annual meeting was held during the preceding year or the date of the annual meeting is more than 30 days before or more than 30 days after such anniversary date, we must receive the stockholder’s notice (i) no earlier than the close of business on the 120th day prior to the
proposed date of the annual meeting and (ii) no later than the close of business on the later of the 90th day prior to the annual meeting or the 10th day following the day on which we first make a public announcement of the date of the annual meeting. Submissions must include the specific information required in Section 5 of our Bylaws. For additional information about our director nomination requirements, please see our Bylaws.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all employees, officers and directors, including our principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. The Code of Business Conduct and Ethics is available in the “Investors & Media/Corporate Governance/Governance Documents” section of our website, www.oncorus.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. The reference to our website does not constitute incorporation by reference of the information contained at or available through our website.
Corporate Governance Guidelines
Our Board has adopted Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to, among other things, board composition and selection including diversity, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines are available in the “Investors & Media/Corporate Governance/Governance Documents” section of our website, www.oncorus.com.
Stockholder Communications with Our Board
The Board has adopted a formal process by which stockholders may communicate with the Board or any of the directors. This information is available in the Corporate Governance Guidelines located in the “Investors & Media/Corporate Governance/Governance Documents” section of our website, www.oncorus.com. All communications will be compiled by our Secretary and submitted to our Board or individual directors, as applicable, on a periodic basis. 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.
Prohibition on Hedging, Pledging, and Short Sales
Pursuant to our Insider Trading Policy, our officers, directors, employees and consultants are prohibited from engaging in short sales, transactions in publicly traded options, such as puts or calls, hedging transactions, margin accounts, pledges or other inherently speculative transactions with respect to our common stock at any time.
PROPOSAL 2
RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022 and has further directed that management submit the selection of its independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Ernst & Young LLP has audited our financial statements since 2017. Representatives ofErnst & Young LLPare expected to be present at the Annual Meeting with the opportunity to make a statement if they desire and to respond to appropriate questions.
Our organizational documents do not require that the stockholders ratify the selection of Ernst & Young LLP as our independent registered public accounting firm. However, the Audit Committee of the Board is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its discretion may direct the appointment of different independent auditors at any time during the year if they determine that such a change would be in the best interests of the Company and its stockholders.
Vote Required
The affirmative vote of the holders of a majority of the shares present virtually or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify the selection of Ernst & Young LLP.
Independent Registered Public Accounting Firm Fees
The following is a summary and description of fees for the fiscal years ended December 31, 2021 and 2020 billed to us by Ernst & Young LLP. All fees described below were pre-approved by the Audit Committee.
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| Fiscal Year Ended | |||
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| 2021 |
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| 2020 |
Audit fees(1) |
| $ | 680,000 |
| $ | 930,208 |
All other fees(2) |
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| 4,385 |
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| 5,000 |
Total Fees |
| $ | 684,385 |
| $ | 935,208 |
Pre-Approval Policies and Procedures
Consistent with requirements of the SEC and the Public Company Accounting Oversight Board regarding auditor independence, our Audit Committee is responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.
The Audit Committee elected to delegate pre-approval authority to the chair of the Audit Committee to approve any one or more individual permitted non-audit services for which estimated fees do not exceed $75,000 as well as adjustments to any estimated pre-approval fee thresholds up to $50,000 for any individual service. Any services that would exceed such limits should be pre-approved by the full Audit Committee. The chair shall report any pre-approval granted at the next scheduled meeting of the Audit Committee.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” PROPOSAL 2.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following table sets forth information regarding our current executive officers, including their ages, as of May 13, 2022:
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Theodore (Ted) Ashburn, M.D., Ph.D. has served as our President and Chief Executive Officer and as a member of our Board since July 2018. Prior to joining us, he served as Head of Oncology Development at Moderna, Inc. from September 2017 until July 2018, where he was responsible for overall design, integration and execution of its clinical-stage oncology programs. From February 2016 until July 2017, Dr. Ashburn served as the Head of Operations of Caperna, a Moderna venture focused on personalized cancer vaccines. From December 2014 until February 2016, he served as Senior Vice President, Product Strategy and Operations at Dicerna Pharmaceuticals, Inc. From 2006 to 2014, Dr. Ashburn held various positions of increasing responsibility at Genzyme/Sanofi Oncology, including holding the position of global product leader for Leukine® and Elitek® in addition to various business development roles of increasing seniority. Dr. Ashburn has an M.D. from Harvard Medical School, a Ph.D. in Organic Chemistry from Massachusetts Institute of Technology and a B.S. from Ball State University where he majored in Chemistry and obtained a minor degree in Computer Science.
John M. Goldberg, M.D. has served as our Chief Medical Officer since February 2022 and prior to that as our Senior Vice President, Clinical Development from October 2018 to February 2022. Prior to joining us, he served as the Senior Medical Director at H3 Biomedicine Inc., a developer of genomics-based cancer therapies, from November 2016 until October 2018, Medical Director at Agenus, Inc., a publicly traded biotechnology company, from July 2015 until November 2016, and as the Director of Pediatric Oncology Early Phase Clinical Trials, including leading the pediatric oncology Phase 1 program, at the University of Miami, Miller School of Medicine from 2008 until 2015. Dr. Goldberg has extensive experience in the design, oversight and conduct of first-in-human clinical oncology trials of neo-antigen vaccines, dendritic cell vaccines and GVAX® (a cell-based granulocyte macrophage-colony stimulating factor gene-transduced tumor vaccine), as well as the design, oversight and conduct of clinical trials of checkpoint inhibitors and costimulatory agonists. He is a pediatric oncologist with 14 years of experience treating children with cancer and enrolling patients to phase 1 trials. Dr. Goldberg served as a fellow and a junior faculty member at the Dana-Farber Cancer Institute from 2002 until 2008 and as a Pediatric Resident at the University of Rochester from 1999 until 2002. Dr. Goldberg holds an M.D. from the University of Massachusetts Medical School and an A.B. in Biological Sciences from the University of Chicago.
Steve Harbin has served as our Chief Operating Officer and Chief of Staff since December 2020. Since April 2019, Mr. Harbin has served as President of Albourne Consulting LLC, a consultancy firm he owns that provides strategic counsel to early-stage biotech companies. In this capacity, Mr. Harbin provided consulting services to us in connection with our strategic manufacturing and operational objectives from July 2019 until his appointment as our Chief Operating Officer and Chief of Staff. Previously, Mr. Harbin served as the Chief Sustainability Officer and Senior Vice President of Corporate Facilities & Norwood Manufacturing at Moderna, Inc., a U.S.-based biotechnology company, from August 2017 to April 2019. Prior to that, he served as the Senior Vice President of Global Operations, Quality & Corporate Facilities at Moderna from October 2016 to August 2017, and as Senior Vice President, Human Resources, Global Operations, Quality & Corporate Facilities at Moderna from 2013 to 2016. Mr. Harbin also previously held the position of Senior Vice President, Global Operations at bioMériux SA, a multinational biotechnology company, and served in a variety of senior business and operational leadership roles for both publicly and privately held biotechnology companies. Mr. Harbin holds a B.S. in Agriculture and a diploma in Farm Management from Durham College of Agriculture and Horticulture in the United Kingdom.
Christophe Quéva, Ph.D. has served as our Chief Scientific Officer and Senior Vice President, Research since October 2017. Prior to joining us, from August 2015 until September 2017, he was the Chief Scientific Officer at iTeos Therapeutics SA, a biopharmaceutical company headquartered in Belgium focused on the development of innovative immuno-oncology therapies. From 2012 until July 2015, Dr. Quéva was the Director of Biology, Translational Medicine and, previously, the Director of Biology, Oncology and Inflammation, at Gilead Sciences, Inc., a biopharmaceutical company. From 2006 until 2011, Dr. Quéva served as Director of Research, Hematology Oncology Therapeutic Area at Amgen Inc., a multinational biopharmaceutical company, and from 1998 to 2006 he held various positions at AstraZeneca, a multinational pharmaceutical company. Dr. Quéva served as a post-doctoral fellow at Fred Hutchinson Cancer Research Center in Seattle, Washington, after receiving his Ph.D. in Life and Health Sciences from the University of Lille, France. Since May 2021, he has served as a venture partner at BPI France, a French public investment bank.
Richard Wanstall has served as our Chief Financial Officer and Treasurer since May 2022. Prior to joining us, Mr. Wanstall served as Chief Financial Officer and Treasurer of Aileron Therapeutics, Inc., a clinical-stage chemoprotection oncology company, from December 2019 to May 2022, and previously as Aileron's Vice President, Finance and Operations since joining that company in July 2018. From 2014 to July 2018, Mr. Wanstall served as Vice President, Finance at Moderna Therapeutics, Inc., a biotechnology company focused on drug discovery and drug development based on messenger RNA. Prior to Moderna, Mr. Wanstall served as Senior Vice President, Global Finance at Stream Global Services, Inc., a multinational business process outsourcing company, from 2010 to 2014. Previously, Mr. Wanstall served in management roles in finance, accounting and SEC reporting for several technology and financial services companies. Mr. Wanstall began his career at the accounting firm of Coopers & Lybrand. Mr. Wanstall received a B.A. from Salem State College, and an M.B.A. from Babson College.
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Executive Compensation
Compensation Overview
For the year ended December 31, 2021, our Chief Executive Officer and our two other most highly compensated officers were:
We refer to these executive officers as our named executive officers.
Summary Compensation Table
The following table shows the total compensation awarded to, earned by, or paid to each of our named executive officers for the years ended December 31, 2021 and 2020.
NAME AND PRINCIPAL POSITION |
| YEAR |
| SALARY ($)(1) |
|
| BONUS ($) |
|
| OPTION AWARDS ($)(2) |
| NON-EQUITY INCENTIVE PLAN COMPENSATION ($)(3) |
|
| ALL OTHER COMPENSATION ($)(4) |
| TOTAL ($) |
Theodore (Ted) Ashburn, M.D., Ph.D. |
| 2021 |
| 523,000 |
|
| — |
|
| 2,252,680 |
| 228,813 |
|
| 8,700 |
| 3,013,193 |
President, Chief Executive Officer and |
| 2020 |
| 448,607 |
|
| 75,000 | (5) |
| 1,357,701 |
| 202,611 |
|
| — |
| 2,083,919 |
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen W. Harbin |
| 2021 |
| 250,000 |
|
| — |
|
| 1,053,341 |
| 145,833 |
|
| 7,709 |
| 1,456,883 |
Chief Operating Officer and |
| 2020 |
| 67,178 | (6) |
| — |
|
| 5,606,802 |
| 6,970 | (7) |
| — |
| 5,680,950 |
Chief of Staff
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John P. McCabe(8) |
| 2021 |
| 393,300 |
|
| — |
|
| 870,440 |
| 137,655 |
|
| 8,700 |
| 1,410,095 |
Former Chief Financial Officer and |
| 2020 |
| 346,195 |
|
| 50,000 | (5) |
| — |
| 133,134 |
|
| — |
| 529,329 |
Treasurer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Narrative to the Summary Compensation TableDissolution.
The Compensation Committee of our board of directors has historically determined our executives’ compensation and determinesIt is the compensation of our named executive officers. Our Compensation Committee typically reviews and discusses management’s proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those discussions and its discretion, the Compensation Committee then approves the compensation of each executive officer after discussions without members of management present. Any adjustments to the compensationcurrent intent of the Chief Executive Officer as well asBoard, assuming approval of the Dissolution, that any equity awardscash will first be used to pay our outstanding current liabilities and then will be grantedretained to pay ongoing corporate and administrative costs and expenses associated with winding down the Chief Executive Officer is approved by the Board. We generally do not provide perquisitescompany, liabilities and potential liabilities relating to or personal benefitsarising out of any litigation matters and potential liabilities relating to our named executive officers that are not availableindemnification obligations, if any, to our employees generally.
Annual Base Salary
The annual base salaries of our named executive officers are generally reviewed, determined and approved by our Compensation Committee and Board, in the case of the Chief Executive Officer, periodically in order to compensate our named executive officers for the satisfactory performance of dutiesservice providers, or to our company. Annual base salaries are intendedcurrent and former officers and directors, before such cash, if any remaining, will be available for distribution to provide a fixed component of compensation to our named executive officers, reflecting their skill sets, experience, roles and responsibilities. Base salaries for our named executive officers have generally been set at levels deemed necessary to attract and retain individuals with superior talent.
The following table sets forth the annual base salaries for each of our named executive officers for 2021 and 2022, as determined by the Compensation Committee and the Board:stockholders.
NAME |
| 2021 BASE SALARY ($) |
|
| 2022 BASE SALARY ($) |
|
Theodore (Ted) Ashburn, M.D., Ph.D. |
| 523,000 |
|
| 558,000 |
|
President, Chief Executive Officer and Director |
|
|
|
|
|
|
Stephen W. Harbin |
| 250,000 |
|
| 430,000 |
|
Chief Operating Officer and Chief of Staff |
|
|
|
|
|
|
John P. McCabe (1) |
| 393,300 |
|
| 405,000 |
|
Former Chief Financial Officer and Treasurer |
|
|
|
|
|
|
Non-Equity Incentive Plan Compensation
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations for each fiscal year. Each of our named executive officers is eligible to receive an annual performance bonus based on the achievement of individual and company-wide annual performance goals as determined by our Compensation Committee. Each officer is assigned a target bonus expressed as a percentage of his base salary.
Name |
| 2021 Bonus Target (%) |
|
| 2022 Bonus Target (%) |
Theodore (Ted) Ashburn, M.D., Ph.D. |
| 50 |
|
| 50 |
Stephen W. Harbin |
| 40 |
|
| 40 |
John P. McCabe |
| 40 |
|
| 40 |
The Board uponwill determine, in its sole discretion, the recommendationtiming of the Compensation Committee, determineddistribution of the remaining amounts, if any, to our stockholders in the Dissolution. We can provide no assurance as to if or when any such distributions will be made, and we cannot provide any assurance as to the amount to be paid to stockholders in any such distributions, if any are to be made. Stockholders may receive substantially less than the amount that we currently estimate that they may receive, or they may receive no distribution at all. To the extent funds are available for distribution to stockholders, the Board intends to seek to distribute such funds to our stockholders as quickly as possible, as permitted by the DGCL, and intends to take all reasonable actions to optimize the distributable value to our stockholders.
If our stockholders do not approve the Dissolution Proposal, we would not be able to continue our business operations.
On June 2, 2023, we announced that the percentage attainmentBoard had approved a plan to reduce our workforce by 55 employees, representing substantially all of our corporate goalsheadcount, in order to preserve cash resources. We have retained a limited number of employees and contractors to assist with the exploration of strategic alternatives for 2021 was 87.5%. Our 2021 corporate goals emphasized the presentation of positive clinical data inCompany. If our ongoing clinical trial of ONCR-177, clinical candidate nominationsstockholders do not approve the Dissolution Proposal, the Board will continue to explore what, if any, alternatives are available for our other product candidates, the achievement of certain financing and business development targets, our ability to manage our business within our forecasted budget and to meet certain manufacturing goals, among other objectives. Each of our named executive officers was paid 87.5% of his target bonus amount, which amounts are reflected in the columnfuture of the Summary Compensation Table above titled “Non-Equity Incentive Plan Compensation.”
Harbin Special Bonus Opportunity
In February 2022, the Compensation Committee approved a one-time special bonus for Mr. Harbin in the amount of $350,000, payable as described below. The Compensation Committee determined that this bonus opportunity was appropriateCompany in light of Mr. Harbin’s base salary for 2021, which had been establishedits discontinued business activities; however, those alternatives are likely limited to seeking voluntary dissolution at a lower levellater time with potentially diminished assets or seeking bankruptcy protection or protection under other insolvency laws. It is unlikely that these alternatives would result in contemplationgreater stockholder value than the proposed Plan of part-time employment,Dissolution and the Dissolution.
The Board may determine not to proceed with the Dissolution.
Even if the Dissolution Proposal is approved by our stockholders, the Board may determine in recognition of his full-time efforts duringits sole discretion not to proceed with the year. Mr. Harbin is eligibleDissolution. If our Board elects to receive the full bonus on June 30, 2023, subject to his employment with us as of such date. In addition, in the event that we achieve specified milestones relatedpursue any alternative to the operational readinessPlan of Dissolution, our stockholders may not receive any of the funds that might otherwise be available for distribution to our stockholders. After the Certificate of Dissolution has been filed, revocation of the Dissolution would require stockholder approval under Delaware law.
Our stockholders may be liable to third parties for part or all of the amount received from us in our liquidating distributions if reserves are inadequate.
If the Dissolution becomes effective, we expect to establish a contingency reserve designed to satisfy any additional claims and obligations that may arise. Any contingency reserve may not be adequate to cover all of our facility in Andover, Massachusettsclaims and obligations. Under the DGCL, if we fail to create an adequate contingency reserve for payment of our expenses, claims and obligations, each stockholder could be held liable for payment to our creditors for claims
10
brought prior to June 30, 2023, Mr. Harbin will be entitled to receive one-halfor after the expiration of the bonus asSurvival Period (as defined below) after we file the Certificate of that earlier date. In addition, inDissolution with the event thatSecretary of State (or, if we achieve specified financial milestones related to our financing activities prior to June 30, 2023, Mr. Harbin will bechoose the Safe Harbor Procedures (as defined under the section entitled to receive one-half"Proposal 1 - Approval of the bonus opportunity as of that earlier date. Payment of the bonus as of such earlier date is in each case also subject to Mr. Harbin’s continued employment with us as of the date of milestone achievement. In the event Mr. Harbin’s employment is terminated for any reason, including in connection with or as a result of a change of control, he will forfeit any unpaid portion of the bonus. In the event that Mr. Harbin’s employment terminates after achievement of a specified milestone for which a portion of the bonus is earned, such amount paid to Mr. Harbin will not be subject to clawback by us or forfeiture by Mr. Harbin.
Equity Incentives
Although we do not have a formal policy with respectDissolution Pursuant to the grantPlan of equity incentive awardsDissolution - Delaware Law Applicable to our executive officers, or any formal equity ownership guidelines applicable to them, we believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help align the interests of our executives with those of our stockholders. In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our executive officers to remain employed by us during the vesting period. Accordingly, our Compensation Committee periodically reviews the equity incentive compensation of our executive officers and from time to time may grant or, in the case of the Chief Executive Officer, may make a recommendation to our board of directors to grant equity incentive awards in the form of stock options and restricted stock awards.
We use stock options and restricted stock awards to compensate our executive officers in the form of initial grants in connection with the commencement of employment and also at other various times during their employment. Stock options and restricted stock awards are granted to our executive officers by the Compensation Committee or by our board of directors. None of our executive officers is currently party to an employment agreement that provides for automatic award of stock options or restricted stock awards. We have granted stock options and restricted stock awards to our executive officers with time-based vesting. The options and restricted stock awards that we have granted to our executive officers typically become exercisable as to 25% of the shares underlying the option or vest with respect to 25% of the restricted shares, as the case may be, on the first anniversary of the grant date, and as to an additional 1/48th of the original number of shares underlying the option or restricted shares, as the case may be, monthly thereafter. Vesting rights of stock options cease upon termination of employment and exercise rights cease shortly after termination, except that exercisability is extended in the case of death or disability. Vesting rights of restricted stock awards cease upon termination of employment and we have a right to repurchase unvested restricted shares within a limited period of time following termination of employment. Prior to the exercise of an option, the holder has no rights as a stockholder with respect to the shares subject to such option, including no voting rights and no right to receive dividends or dividend equivalents. Prior to vesting of restricted stock awards, the holder generally has rights as a stockholder with respect to the restricted shares, including voting rights and the right to receive dividends on vested shares or dividend equivalents, subject to certain exceptions.
In March 2021 and 2022, we granted options to purchase shares of our common stock to our named executive officers in the amounts listed next below under our 2020 Equity Incentive Plan (the "2020 Plan"). Each of these options granted in March 2021 is exercisable at a price per share equal to the closing trading price of our Common Stock on March 1, 2021 as reported by Nasdaq, which was $15.85, and vests as to 25% of the underlying shares on the first anniversary of the grant date, with the remainder vesting in equal monthly installments over 36 months thereafter, subject to the named executive officer's continuous service through each applicable vesting date. The options granted in March 2022 are exercisable at a price per share equal to the closing trading price of our Common Stock on March 1, 2022 as reported by Nasdaq, which was $2.00, and are subject to the same vesting schedule applicable to the 2021 options. Mr. Harbin was granted options to purchase 87,125 shares of our common stock in June 2021. Mr. Harbin's options are exercisable at a price per share equal to the closing trading price of our Common Stock on June 15, 2021 as reported by Nasdaq,
which was $16.79, and vests as to 25% of the underlying shares on the first anniversary of the grant date, with the remainder vesting in equal monthly installments over 36 months thereafter, subject to his continuous service through each applicable vesting date.
Name |
| Number of shares of Common Stock Underlying Options Granted in 2021 |
| Number of shares of Common Stock Underlying Options Granted in 2022 |
Theodore (Ted) Ashburn, M.D., Ph.D. |
| 199,000 |
| 211,000 |
Stephen W. Harbin |
| 87,125 |
| 87,500 |
John P. McCabe |
| 76,894 |
| 90,000 |
Outstanding Equity Awards as of December 31, 2021
The following table provides information regarding stock options held by our named executive officers that were outstanding as of December 31, 2021. None of our named executive officers held other stock awards at the end of 2021.
|
| OPTION AWARDS |
| ||||||
NAME |
| NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE |
| NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE |
| OPTION EXERCISE PRICE ($) |
| OPTION EXPIRATION DATE(1) |
|
Theodore (Ted) Ashburn, M.D., Ph.D. |
| 299,317 |
| 51,104 | (2) | 1.81 |
| 11/13/2028 |
|
|
| 191,950 |
| 149,295 | (3) | 5.32 |
| 9/16/2029 |
|
|
| 36,932 |
| 89,692 | (4) | 15.00 |
| 9/30/2030 |
|
|
|
|
| 199,000 | (5) | 15.85 |
| 2/28/2031 |
|
Stephen W. Harbin |
| 2,068 |
| — |
| 3.87 |
| 8/14/2029 |
|
|
| 646 |
| 1,422 | (6) | 14.99 |
| 9/21/2030 |
|
|
| 42,250 |
| 126,750 | (7) | 27.99 |
| 12/6/2030 |
|
|
| — |
| 113,000 | (8) | 27.99 |
| 12/6/2030 |
|
|
| — |
| 87,125 | (9) | 16.79 |
| 6/14/2031 |
|
John P. McCabe |
| 98,555 |
| 32,852 | (10) | 1.81 |
| 2/27/2029 |
|
|
| 60,365 |
| 46,951 | (11) | 5.32 |
| 9/16/2029 |
|
|
| — |
| 76,894 | (12) | 15.85 |
| 2/28/2031 |
|
Employment Agreements and PotentialOur Dissolution - Payments and Benefits Upon Termination or Change in ControlDistributions to Claimants and Stockholders -
Below are descriptionsSafe Harbor Procedures under DGCL Sections 280 and 281(a)" beginning on page 17 of our employment agreements and arrangements with our named executive officers. The agreements generally providethis proxy statement), for at-will employment without any specific term and set forth the named executive officer’s initial base salary, annual target bonus and severance benefits upon a qualifying termination of employment or change in control of our company. Each named executive officer is also eligible to participate in all employee benefit plans that are generally available to our employees. Furthermore, each of our named executive officers has executed our standard form of proprietary information and inventions assignment agreement. The key terms of the employment agreements with our named executive officers, including potential payments upon termination or change in control, are described below.
Theodore (Ted) Ashburn, M.D., Ph.D.We entered into an employment agreement with Dr. Ashburn in July 2018 setting forth the terms of his employment, which was subsequently amended in November 2018 and April 2020, and was amended and restated in connection with our IPO. Dr. Ashburn was entitled to an initial annual base salary of $400,000, which was subsequently increased in January 2021 to $523,000 and in January 2022 to $558,000. Dr. Ashburn is also eligible to receive an annual performance bonus pursuant to the agreement as a target bonus based on his achievement of performance objectives set by our Board, after consultation with Dr. Ashburn, as well as overall company and individual performance. In connection with the closing of the IPO, Dr. Ashburn’s target bonus amount was increased to 50% of his base salary.
Dr. Ashburn’s amended and restated employment agreement also provides for certain severance benefits. In the event of a termination without cause or for good reason, not in connection with a change in control (each term as defined in his employment agreement), Dr. Ashburn is entitled to receive cash severance payments equal to 12 months of base salary, payment by us of the cost of up to 12 months of COBRA continuation coverage, any earned but unpaid annual bonus from the yearclaims brought prior to the yearexpiration of the termination, accelerated vesting of any outstanding time-based equity awards that would have vested in the 12 months following the date of termination, and an additional severance payment equal to a pro rata portion of Dr. Ashburn’s target annual bonus for the year in which the termination occurs. In the event of a termination without cause or for good reason within 60 days prior to or 12 months following a change in control, Dr. Ashburn will be entitled to receive 18 months of cash severance, up to 18 months of COBRA continuation coverage and full accelerated vesting of all outstanding equity awards.
Steve Harbin.We entered into an employment agreement with Mr. Harbin in December 2020 setting forth the terms of his employment. Mr. Harbin was entitled to an annual base salary of $250,000 in 2021, in exchange for his commitment to providing services to us approximately three days per week. His salary was increased to $430,000 for 2022, in recognition that he is now employed by us on a full-time basis. Mr. Harbin is eligible to receive a target annual bonus per calendar year in an amount up to 40% of his annual base salary. Mr. Harbin was granted a stock option under the 2020 Plan to purchase (a) 169,000 shares of our common stock, subject to vesting as to 25% of the underlying shares on December 7, 2021 and as to the remaining underlying shares in equal monthly installments over 36 months thereafter, subject to Mr. Harbin’s continued service through each such vesting date, and (b) 113,000 shares of our common stock that will vest on December 7, 2024, subject to accelerated vesting upon the achievement of specified milestones as described in the Outstanding Equity Awards table above.
Mr. Harbin’s employment agreement also provides for certain severance benefits. In the event of a termination without cause or for good reason, not in connection with a change in control (each term as defined in his employment agreement)Survival Period), Mr. Harbin is entitled to receive cash severance payments equal to 12 months of base salary, payment by us of the cost of up to 12 months of COBRA continuation coverage, and accelerated vesting of any outstanding time-based equity awards that would have vested in the 12 months following the date of termination. In the event of a termination without cause or for good reason within 60 days prior to or 12 months following a change in control, in addition to the severance benefits for a non-change in control termination, Mr. Harbin would receive full accelerated vesting of all outstanding equity awards.
John P. McCabe. We entered into an offer letter with Mr. McCabe in July 2019 setting forth the terms of his employment, and in connection with our IPO in 2020, we entered into an employment agreement with Mr. McCabe. Mr. McCabe was entitled to an initial annual base salary of $330,000, which was subsequently increased, most recently in February 2022, to $405,000.
In connection with the closing of our IPO, Mr. McCabe's annual target bonus was increased to 40%. Mr. McCabe's employment agreement also provided for certain severance benefits. In the event of a termination without cause or for good reason, not in connection with a change in control (each term as defined in his employment agreement), Mr. McCabe was entitled to receive cash severance payments equal to 12 months of base salary, payment by us of the cost of up to 12 months of COBRA continuation coverage, any earned but unpaid annual bonus from the year prior to the year of the termination, and accelerated vesting of any outstanding time-based equity awards that would have vested in the 12 months following the date of termination. In the event of a termination without cause or for good reason within 60 days prior to or 12 months following a change in control, in addition to the severance benefits for a non-change in control termination, Mr. McCabe would have received full accelerated vesting of all outstanding equity awards.
As previously disclosed, effective April 1, 2022, Mr. McCabe resigned as our Chief Financial Officer and Treasurer. In connection with his resignation, we and Mr. McCabe entered into a consulting agreement pursuant to which, among other things, Mr. McCabe is providing advisory services to us for a period of up to six months. As consideration for his advisory services, Mr. McCabe will be paid an hourly rate and his outstanding equity awards will continue to vest during the term of the consulting agreement.
Equity Benefit Plans
For more information on our current equity compensation program and decisions regarding the grants of equity awards in fiscal 2021 for our named executive officers, see “Equity Incentives” above. Since the completion of our IPO in October 2020, we have granted equity awards to employees, including our named executive officers, under our 2020 Plan. Outstanding equity awards held by our named executive officers that we granted prior to our IPO were granted under our 2016 Plan. Our Board has delegated authority to our Compensation Committee to administer the terms of our 2020 Plan and 2016 Plan. Please refer to the plan documents filed as exhibits to our Annual Report for the terms of such plans.
Other Benefits and Perquisites; Health and Welfare Benefits
We provide a comprehensive benefits package, including medical insurance, dental insurance, vision insurance, life insurance, disability insurance and an employee stock purchase plan, which is intended to meet the requirements of Section 423 of the Code. These benefits are generally available to all employees, including our named executive officers. We believe the benefits described above and our 401(k) matching program described below are necessary and appropriate to provide a competitive compensation package to our named executive officers and employees.
We do not provide our named executive officers with any perquisites that we do not provide to all of our other employees.
No Tax Gross-Ups
We do not make gross-up payments to cover our named executive officers’ personal income taxes that may pertain to any of the compensation or perquisites paid or provided by us.
401(k) Plan
We maintain a 401(k) plan intended to qualify as a tax-qualified plan under Section 401 of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. The 401(k) plan provides that each participant may contribute up to the lesser of 100%(i) such stockholder’s pro rata share of hisamounts owed to creditors in excess of the contingency reserve and (ii) the amounts previously received by such stockholder in Dissolution from us and from any liquidating trust or her compensationtrusts. Accordingly, in such event, a stockholder could be required to return part or all of the statutory limit,distributions previously made to such stockholder, and a stockholder could receive nothing from us under the Plan of Dissolution. Moreover, if a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a situation in which was $19,500 for calendar year 2021 and is $20,500 for 2022. Participants who are age 50 and older duringa stockholder may incur a net tax cost if the tax year may make additional elective deferralsrepayment of up to $6,500 for the calendar years 2021 and 2020. Beginning on January 1, 2021, we have made matching contributions of up to 3.0% of their compensationamount previously distributed does not cause a commensurate reduction in accordance with IRS annual compensation limits of $305,000taxes payable in 2022 and $290,000 in 2021. Employees’ contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives accordingan amount equal to the participant’s directions. Employees are immediately and fully vested in their contributions.
Rule 10b5-1 Sales Plansamount of the taxes paid on amounts previously distributed.
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which theystockholders of record will contract with a brokernot be able to buy or sell shares of our common stock after we close our stock transfer books on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or officer when entering into the plan, without further direction from the director or officer. It is
also possible that the director or officer could amend or terminate the plan when not in possession of material, nonpublic information. In addition, our directors and executive officers may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material, nonpublic information.Effective Time.
Director Compensation
Non-Employee Director Compensation Policy
In October 2020, following market researchIf the Board determines to proceed with the Dissolution, we intend to close our stock transfer books and advice from its compensation consultant, our Board adopted a non-executive director compensation policy that went into effect upon the closingdiscontinue recording transfers of our IPO. This policy was subsequently amended in March 2021. Undercommon stock at the Effective Time. After we close our director compensation policy,stock transfer books, we paywill not record any further transfers of our non-employee directors a cash retainer for servicecommon stock on our Board and for service on each committee on which the director is a member. The chairmanbooks except at our sole discretion by will, intestate succession or operation of the Board and the chairman of each committee receive higher retainers for such service. These fees are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that the amount of such payment is prorated for any portion of such quarter that the director is not serving on our Board. Under our current policy, the fees paid to non-employee directors for service on the board of directors and for service on each committee of our Board on which the director is a member are as follows:
|
| MEMBER ANNUAL FEE |
| CHAIRMAN ADDITIONAL ANNUAL FEE | ||
Board of Directors |
| $ | 35,000 |
| $ | 30,000 |
Audit Committee |
|
| 7,500 |
|
| 7,500 |
Compensation Committee |
|
| 5,000 |
|
| 5,000 |
Nominating and Corporate Governance Committee |
|
| 4,500 |
|
| 4,000 |
We also reimburse our non-employee directors for reasonable travel and other expenses incurred in connection with attending meetings of our Board and any committee of our Board on which they serve.
In addition, under our director compensation policy, each non-employee director receives, upon his or her initial election or appointment to our Board, an option to purchase 25,000law. Therefore, shares of our common stock underwill not be freely transferable after the 2020 Plan. EachEffective Time. As a result of these options vest in equal monthly installments until all shares are vested on the third anniversary of the date of grant, subject to the non-employee director’s continued service as a director through each applicable vesting date. Further, on the date of each annual meeting of stockholders, each non-employee director that has served on our Board since at least the beginning of such calendar year will receive an option to purchase 12,500 shares of our common stock under the 2020 Plan. Each of these options will vest in equal monthly installments over the 12 months following the date of grant such that the option is fully vested on the first anniversary of the date of grant, subject to the non-employee director’s continued service as a director through each applicable vesting date. For each non-employee director who remains in continuous service until immediately prior to the closing of a change in control (as definedthe stock transfer books, all liquidating distributions in the 2020 Plan),Dissolution will likely be made pro rata to the shares subjectsame stockholders of record as the stockholders of record as of the Final Record Date.
We plan to his or her then outstanding initial grant and annual grants that were grantedinitiate steps to exit from certain reporting requirements under the director compensation policyExchange Act, which may substantially reduce publicly available information about us. If the exit process is protracted, we will become fully vested immediately priorcontinue to bear the expense of being a public reporting company despite having no source of revenue.
Our common stock is currently registered under the Exchange Act, which requires that we, and our officers and directors with respect to Section 16 of the Exchange Act, comply with certain public reporting and proxy statement requirements thereunder. Compliance with these requirements is costly and time-consuming. We plan to initiate steps to exit from such reporting requirements in order to curtail expenses; however, such process may be protracted and we may be required to continue to file Current Reports on Form 8-K or other reports to disclose material events, including those related to the closingDissolution. Accordingly, we will continue to incur expenses that will reduce any amount available for distribution, including expenses of such change in control. All options issuedcomplying with public company reporting requirements and paying its service providers, among others. If our reporting obligations cease, publicly available information about us will be substantially reduced.
Stockholders may not be able to our non-employee directors under our director compensation policy are issued at exercise pricesrecognize a loss for U.S. federal income tax purposes until they receive a final distribution from us.
As a result of the Dissolution, for U.S. federal income tax purposes, a stockholder that is a U.S. person generally will recognize gain or loss on a share-by-share basis equal to the difference between (1) the sum of the amount of cash and the fair market value of property, if any, distributed to the stockholder with respect to each share, less any known liabilities assumed by the stockholder or to which the distributed property (if any) is subject, and (2) the stockholder’s adjusted tax basis in each share of our common stock. A liquidating distribution pursuant to the Plan of Dissolution may occur at various times and in more than one tax year. Any loss generally will be recognized by a stockholder only in the tax year in which the stockholder receives our final liquidating distribution, and then only if the aggregate value of all liquidating distributions with respect to a share of our common stock is less than the stockholder’s tax basis for that share. Stockholders are urged to consult with their own tax advisors as to the specific tax consequences to them of the Dissolution pursuant to the Plan of Dissolution. See the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Certain Material U.S. Federal Income Tax Consequences of the Proposed Dissolution" beginning on page 23 of this proxy statement.
The tax treatment of any liquidating distribution may vary from stockholder to stockholder, and the discussions in this proxy statement regarding tax consequences are general in nature.
We have not requested a ruling from the IRS with respect to the anticipated tax consequences of the Dissolution, and we will not seek an opinion of counsel with respect to the anticipated tax consequences of any
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liquidating distributions. If any of the anticipated tax consequences described in this proxy statement prove to be incorrect, the result could be increased taxation at the corporate or stockholder level, thus reducing the benefit to our stockholders and/or us from the Dissolution. Tax considerations applicable to particular stockholders may vary with and be contingent on the stockholder’s individual circumstances. You should consult your own tax advisor for tax advice instead of relying on the discussions of tax consequences in this proxy statement.
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PROPOSAL 1 - APPROVAL OF THE DISSOLUTION PURSUANT TO THE PLAN OF DISSOLUTION
We are asking you to authorize and approve the Dissolution and the Plan of Dissolution. Our Board has determined that the Dissolution is advisable and in the best interests of the Company and our stockholders, has approved the Dissolution and has adopted the Plan of Dissolution. The reasons for the Dissolution are described under "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Background of the Proposed Dissolution" beginning on page 14 of this proxy statement. The Dissolution requires approval by the holders of a majority of our outstanding shares of common stock entitled to vote at the Special Meeting that is the subject of this proxy statement. Our Board unanimously recommends that our stockholders authorize the Dissolution.
In general terms, when we dissolve, we will cease conducting our business, wind up our affairs, dispose of our non-cash assets, pay or otherwise provide for our obligations, and distribute our remaining assets, if any, during a post-dissolution period of at least three years, as required by the DGCL. With respect to the Dissolution, we will follow the dissolution and winding-up procedures prescribed by the DGCL, as described in further detail under "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Delaware Law Applicable to Our Dissolution" beginning on page 16 of this proxy statement. Our liquidation, winding up and distribution procedures will be further guided by our Plan of Dissolution, as described in further detail under "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Our Plan of Dissolution" beginning on page 19 of this proxy statement. You should carefully consider the risk factors relating to our complete liquidation and dissolution and described under "Risk Factors - Risks Related to The Dissolution" beginning on page 9 of this proxy statement.
Subject to the requirements of the DGCL and our Plan of Dissolution, as further described below, we will use our existing cash to pay for our winding up procedures, including:
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ESTIMATED DISTRIBUTIONS TO STOCKHOLDERS
Based on currently available information, we estimate that we will have in the range between approximately $0.1 million and $1.4 million of cash that we will be able to distribute to stockholders in connection with the Dissolution, which implies a per share distribution range of $0.00 to $0.05 per share of common stock. Calculating such an estimate is inherently uncertain and requires that we make a number of assumptions regarding future events, many of which are unlikely to ultimately be true. We used the following assumptions when calculating the estimated distributable cash value: (i) $2.5 million payable for insurance, (ii) $0.7 million payable for accounting fees, wind-down administration services, and legal fees, (iii) $3.4 million payable for wages and severance under existing employment contracts, (iv) $3.5 million payable for other general and administrative costs, including lease cancellation and settlement of outstanding liabilities, and (v) a $1.3 million tax credit that we expect to receive from the U.S. federal government for employee retention efforts associated with the COVID-19 pandemic. These estimates do not include cash that may be available for distribution from the proceeds from any sales or dispositions of our remaining assets, including our intellectual property.
Distributions, if any, to our stockholders may be paid in one or more distributions. Such distributions will not occur until after the Certificate of Dissolution is filed, and we cannot predict the timing or amount of any such distributions, as uncertainties as to the ultimate amount of our liabilities, the operating costs and amounts to be set aside for claims, obligations and provisions during the liquidation and winding-up process, and the related timing to complete such transactions make it impossible to predict with certainty the actual net cash amount that will ultimately be available for distribution to stockholders or the timing of any such distributions. Examples of uncertainties that could reduce the value of distributions to our stockholders include: uncertainty regarding the proceeds we may receive in the course of our efforts to monetize our remaining assets, if any; uncertainty as to whether we will be able to negotiate an exit from our lease for our facility located in Andover, Massachusetts; unanticipated costs relating to the defense, satisfaction or settlement of lawsuits or other claims threatened against us or our directors or officers; amounts necessary to resolve claims of any creditors or other third parties; and delays in the liquidation and dissolution or other winding up process.
Our estimate of the anticipated initial distribution amounts is preliminary and many of the factors that are necessary to determine how much, if any, we will be able to distribute to our stockholders in liquidation are subject to change and outside of our control. While we intend to pursue matters related to our liquidation and winding up promptly if we obtain approval from our stockholders, the timing of many elements of this process after our Dissolution will not be entirely within our control and, therefore, we are unable to estimate when we would be able to begin making any post-Dissolution liquidating distributions to our stockholders. See the section entitled "Risk Factors - Risks Related to The Dissolution" beginning on page 9 of this proxy statement.
The description of the Dissolution contained in this introductory section is general in nature and is subject to various other factors and requirements, as described in greater detail below.
BACKGROUND OF THE PROPOSED DISSOLUTION
In the ordinary course from time to time, our Board and management team have evaluated and considered a variety of financial and strategic opportunities for the Company as part of our long-term strategy to enhance value for our stockholders, including potential mergers and acquisitions, asset sales and divestitures, business combinations, partnerships, collaborations and other strategic transactions.
As part of the ongoing consideration and evaluation of our long-term prospects and strategies, our Board frequently reviews, with our management, strategic and financial alternatives in light of developments in our business, the competitive landscape, the economy generally and financial markets, all with the goal of enhancing value for our stockholders and making a positive impact in patients’ lives. As part of this process, from time to time, our management has engaged in business development and/or strategic discussions with industry participants. This includes contacts with numerous companies regarding potential strategic transactions.
Historically, we were a clinical-stage biopharmaceutical company focused on developing viral immunotherapies to transform outcomes for cancer patients. Using our two proprietary platforms, we were developing a pipeline of intratumorally and intravenously administered product candidates designed to selectively attack and kill tumor cells and deliver transgenes to stimulate the human immune system against tumors.
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In November 2022, our Board and management began working with outside advisors, including a financial advisory, on a formal and informal basis, to confidentially explore the sale of our manufacturing facility in Andover, Massachusetts or other transactions that would leverage the value of our manufacturing facility and capabilities.
On November 30, 2022, we announced that we were reprioritizing our product pipeline to focus on our product candidate ONCR-021, with plans to submit an investigation new drug application to the U.S. Food and Drug Administration in mid-2023. Concurrently, we announced that we were discontinuing the Phase 1 clinical trial of our prior lead candidate, ONCR-177, and that further development of our other product candidates would be dependent on our ability to obtain additional financing. We also announced a 20% reduction in our workforce with the remaining workforce solely focused on the clinical development of ONCR-021 and related manufacturing efforts.
Despite discussions with multiple potential third parties, we were unsuccessful in identifying any interested purchasers or partners, or any viable transactions related to our manufacturing facility and capabilities. As a result, in May 2023, we began working with outside advisors to confidentially explore a sale or merger of the Company or one or more sales of our assets, including a reverse merger, along with any other strategic transaction related to our technology and capabilities.
On May 12, 2023, we prepaid in full all of our outstanding obligations and other fees due under our Loan and Security Agreement with K2 HealthVentures LLC ("K2HV"), as lender and administrative agent, and Ankura Trust Company, LLC, as collateral agent for the lender. The prepayment consisted of $20.0 million in principal and approximately $1.6 million of accrued interest and related fees and expenses. Following the prepayment, the Loan and Security Agreement was terminated in its entirety and all liens against our assets were released.
On May 22, 2023, concurrent with our press release announcing our financial results for the quarter ended March 31, 2023, we announced that, following the prepayment of our debt with K2HV, we expected that our remaining cash and cash equivalents and investments would enable us to fund our operating expenses and capital expenditure requirements into the third quarter of 2023.
In connection with the filing of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, we concluded that changes in business circumstances indicated that the carrying amount of our long-lived assets, consisting of our property and equipment and right of use asset associated with our manufacturing facility, may not be fully recoverable. As a result, we performed a recoverability test to compare our forecast of the undiscounted cash flows expected to result from the use and eventual disposition of our long-lived assets to their carrying values on our balance sheet. Following this analysis, we recognized a non-cash impairment loss of $14.6 million for the three months ended March 31, 2023. In connection with the disclosures related to our impairment loss, we announced that we were evaluating opportunities to finance our continued operations and the further development of our programs, including, but not limited to, the potential sale or lease of our facilities, property and equipment.
Despite broad canvassing and discussions with multiple third parties, we were unsuccessful in identifying any interested purchasers or partners, or any viable transactions, related a sale or merger of the Company or one or more sales of our assets.
On May 29, 2023 our Board approved, and on June 1, 2023 we announced, a plan to reduce our workforce by 55 employees, representing substantially all of our headcount, in order to preserve cash resources. We retained a limited number of employees and contractors to assist with our exploration of strategic alternatives.
In light of the strategic alternatives review and following the implementation of our most recent headcount reduction, our Board determined that approving the Plan of Dissolution gives our Board the most flexibility in optimizing value for our stockholders and as a result, on June 6, 2023, our Board adopted resolutions approving the Plan of Dissolution and the Dissolution and recommended that our stockholders approve the Plan of Dissolution and the Dissolution.
REASONS FOR THE PROPOSED DISSOLUTION
The Board believes that the Dissolution is in the best interests of Oncorus and our stockholders. The Board considered and pursued at length potential strategic alternatives available to Oncorus such as mergers, asset sales or dispositions, strategic partnerships and other business combination transactions, and, following the results of such review, now believe that pursuing a dissolution and wind-up of the Company in accordance with the Plan of Dissolution gives our Board the best opportunity and most flexibility to optimize value for our stockholders.
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In making its determination to approve the Dissolution, the Board considered, in addition to other pertinent factors, the fact that Oncorus currently has no significant remaining business operations or business prospects; the fact that Oncorus will continue to incur substantial accounting, legal and other expenses associated with being a public company despite having no source of revenue or financing alternatives; and the fact that Oncorus has conducted an evaluation to identify remaining strategic alternatives involving Oncorus’s assets or Oncorus as a whole, such as mergers, asset sales or dispositions, strategic partnerships and other business combination transactions, that could have a reasonable likelihood of providing value to our stockholders in excess of the amount the stockholders may be able to receive in a liquidation. As a result of its evaluation, the Board concluded that the Dissolution provides the best opportunity to maximize any remaining value for Oncorus and its stockholders among the alternatives now available to Oncorus and is therefore in the best interests of Oncorus and its stockholders. Accordingly, the Board approved the Plan of Dissolution and Dissolution of Oncorus pursuant thereto and recommends that our stockholders approve the Dissolution Proposal.
DELAWARE LAW APPLICABLE TO OUR DISSOLUTION
We are a corporation organized under the laws of the State of Delaware and the Dissolution will be governed by the DGCL. The following is a brief summary of some of the relevant provisions of the DGCL applicable to the Dissolution. The following summary is qualified in its entirely by Sections 275 through 283 of the DGCL, which are attached to this proxy statement as Annex B.
Dissolution under the DGCL Generally
Authorization of Board and Stockholders. If a corporation’s board of directors deems it advisable that the corporation should dissolve, it may adopt a resolution to that effect by a majority vote of the whole board and notify the corporation’s stockholders entitled to vote on the dissolution of the adoption of the resolution and the calling of a meeting of stockholders to act on the resolution. Our Board has unanimously adopted a resolution approving the Dissolution and the Plan of Dissolution and declaring them advisable and recommending them to our stockholders. The Dissolution must be authorized and approved by the holders of a majority of our outstanding shares of common stock on the Record Date entitled to vote on the Dissolution Proposal.
Certificate of Dissolution. If a corporation’s stockholders authorize its dissolution, to consummate the dissolution the corporation must file a certificate of dissolution with the Secretary of State. If our stockholders authorize the Dissolution at the Special Meeting, we intend to file the Certificate of Dissolution with the Secretary of State as soon as practicable after the receipt of such approval. However, the timing of such filing is subject to the discretion of the Company.
Possible Permitted Abandonment of Dissolution. The resolution authorizing a dissolution adopted by a corporation’s board of directors may provide that, notwithstanding authorization of the dissolution by the corporation’s stockholders, the board of directors may abandon the dissolution without further action by the stockholders. While we do not currently foresee any reason that our Board would abandon our proposed Dissolution once it is authorized by our stockholders, to provide our Board with the maximum flexibility to act in the best interests of our stockholders, the resolutions adopted by our Board included language providing the Board with the flexibility to abandon the Dissolution without further action of our stockholders at any time prior to the filing of the Certificate of Dissolution.
Time of Dissolution. When a corporation’s certificate of dissolution is filed with the Secretary of State and has become effective, along with the corporation’s tender of all taxes (including Delaware franchise taxes) and fees authorized to be collected by the Secretary of State, the corporation will be dissolved. We refer to the effective time of the Certificate of Dissolution herein as the “Effective Time.”
Continuation of Corporation After Dissolution
A dissolved corporation continues its existence for three years after dissolution, or such longer period as the Delaware Court of Chancery may direct, for the purpose of prosecuting and defending suits and enabling the corporation to settle and close its business, to dispose of and convey its property, to discharge its liabilities and to distribute to its stockholders any remaining assets. A dissolved corporation may not, however, continue the business for which it was organized. Any action, suit or proceeding begun by or against the corporation before or during this survival period does not abate by reason of the dissolution, and for the purpose of any such action, suit or proceeding, the corporation will continue beyond the Survival Period until any related judgments, orders or decrees are fully executed, without the necessity for any special direction by the Delaware Court of Chancery. Our Plan of
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Dissolution will govern our winding up process after Dissolution. See the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Our Plan of Dissolution" beginning on page 19 of this proxy statement.
Payment and Distribution to Claimants and Stockholders
A dissolved corporation must make provision for the payment (or reservation of security for payment) of current and certain potential future claims against the corporation in accordance with the applicable provisions of the DGCL and the distribution of remaining assets to the corporation’s stockholders. The dissolved corporation may do this by following one of two procedures, as described below.
Safe Harbor Procedures under DGCL Sections 280 and 281(a) (the “Safe Harbor Procedures”)
A dissolved corporation may elect to give notice of its dissolution to persons having a claim against the corporation (other than claims against the corporation in any pending actions, suits or proceedings to which the corporation is a party) (“Current Claimants”) and to persons with contractual claims contingent on the occurrence or nonoccurrence of future events or otherwise conditional or unmatured (“Contingent Contractual Claimants”), and after giving these notices, following the procedures set forth in the DGCL, as described below.
The Plan of Dissolution provides the Board with the discretion to elect to follow the Safe Harbor Procedures rather than the Alternative Procedures.
Current Claimants
Notices and Publication. The notice to Current Claimants must state (1) that all such claims must be presented to the corporation in writing and must contain sufficient information reasonably to inform the corporation of the identity of the claimant and the substance of the claim; (2) the mailing address to which the claim must be sent; (3) the date (the “Claim Date”) by which the claim must be received by the corporation, which must be no earlier than 60 days from the date of grantthe corporation’s notice; (4) that the claim will be barred if not received by the Claim Date; (5) that the corporation may make distributions to other claimants and havethe corporation’s stockholders without further notice to the Current Claimant; and (6) the aggregate annual amount of all distributions made by the corporation to its stockholders for each of the three years before the date of dissolution. The notice must be published at least once a termweek for two consecutive weeks in a newspaper of ten years.general circulation in the county in which the corporation’s registered agent in Delaware is located and in the corporation’s principal place of business and, in the case of a corporation having $10.0 million or more in total assets at the time of dissolution, at least once in all editions of a daily newspaper with a national circulation. On or before the date of the first publication of the notice, the corporation must also mail a copy of the notice by certified or registered mail, return receipt requested, to each known claimant of the corporation, including persons with claims asserted against the corporation in a pending action, suit or proceeding to which the corporation is a party.
2021 Non-Employee Director CompensationEffect of Non-Responses to Notices. If the dissolved corporation does not receive a response to the corporation’s notice by the Claim Date from a Current Claimant who was given actual notice according to the foregoing paragraph, then the claimant’s claim will be barred.
Treatment of Responses to Notices. If the dissolved corporation receives a response to the corporation’s notice by the Claim Date, the dissolved corporation may accept or reject, in whole or in part, the claim. If the dissolved corporation rejects a claim, it must mail a notice of the rejection to the Current Claimant by certified or registered mail, return receipt requested, within 90 days after receipt of the claim (or, if earlier, at least 150 days before the expiration of the Survival Period). The notice must state that any claim so rejected will be barred if the Current Claimant does not commence an action, suit or proceeding with respect to the claim within 120 days of the date of the rejection.
Effect of Non-Responses to Rejections of Claims. If the dissolved corporation rejects a claim and the Current Claimant does not commence an action suit or proceeding with respect to the claim within the 120-day post- rejection period, then the Current Claimant’s claim will be barred.
Contingent Contractual Claims
Notices. The notice to Contingent Contractual Claimants (persons with contractual claims contingent on the occurrence or nonoccurrence of future events or otherwise conditional or unmatured) must be in substantially the same form and sent and published in the same manner, as notices to Current Claimants and shall request that Contingent Contractual Claimants present their claims in accordance with the terms of such notice.
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Responses to Contractual Claimants. If the dissolved corporation receives a response by the date specified in the notice by which the claims from Contingent Contractual Claimants must be received by the corporation, which must be no earlier than 60 days from the date of the corporation’s notice to Contingent Contractual Claimants, the dissolved corporation must offer to the Contingent Contractual Claimant such security as the dissolved corporation determines is sufficient to provide compensation to the claimant if the claim matures. This offer must be mailed to the Contingent Contractual Claimant by certified or registered mail, return receipt requested, within 90 days of the dissolved corporation’s receipt of the claim (or, if earlier, at least 150 days before the expiration of the post- dissolution survival period). If the Contingent Contractual Claimant does not deliver to the dissolved corporation a written notice rejecting the offer within 120 days after receipt of the offer for security, the claimant is deemed to have accepted the security as the sole source from which to satisfy the claim against the dissolved corporation.
Determinations by Delaware Court of Chancery
A dissolved corporation that has complied with the Safe Harbor Procedures must petition the Delaware Court of Chancery to determine the amount and form of security that will be (1) reasonably likely to be sufficient to provide compensation for any claim against the dissolved corporation that is the subject of a pending action, suit or proceeding to which the dissolved corporation is a party, other than a claim barred pursuant to the Safe Harbor Procedures, (2) sufficient to provide compensation to any Contingent Contractual Claimant who has rejected the dissolved corporation’s offer for security for such person’s claims made pursuant to the Safe Harbor Procedures, and (3) reasonably likely to be sufficient to provide compensation for claims that have not been made known to the dissolved corporation or that have not arisen but that, based on facts known to the dissolved corporation, are likely to arise or to become known to the dissolved corporation within five years after the date of dissolution or such longer period of time as the Delaware Court of Chancery may determine, not to exceed ten years after the date of dissolution. The Court of Chancery may appoint a guardian ad litem in respect of any such proceeding brought upon the petition of a dissolved corporation that has complied with the Safe Harbor Procedures, in which case the reasonable fees and expenses of any Court-appointed guardian (including all reasonable expert witness fees)would be paid by the dissolved corporation and potentially reduce the remaining assets, if any, available for distribution to stockholders.
Payments and Distributions
If a dissolved corporation has followed the Safe Harbor Procedures, then it will (1) pay the current claims made but not rejected, (2) post the security offered and not rejected for contractual claims that are contingent, conditional or unmatured, (3) post any security ordered by the Delaware Court of Chancery in response to the dissolved corporation’s petition to the Court described above, and (4) pay or make provision for all other claims that are mature, known and uncontested or that have been finally determined to be owing by the dissolved corporation. If there are insufficient assets to make these payments and provisions, then they will be satisfied ratably in accordance with legal priorities, to the extent that assets are available.
All remaining assets will be distributed to the dissolved corporation’s stockholders, but not earlier than 150 days after the date of the last notice of rejection given by the dissolved corporation to a Current Claimant pursuant to the Safe Harbor Procedures.
Alternative Procedures under DGCL Section 281(b) (the "Alternative Procedures")
If a dissolved corporation does not elect to follow the Safe Harbor Procedures, it must adopt a plan of distribution pursuant to which it will (1) pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims known to the corporation, (2) make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the dissolved corporation that is the subject of a pending action, suit or proceeding to which the dissolved corporation is a party and (3) make such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the dissolved corporation or that have not arisen but that, based on facts known to the dissolved corporation, are likely to arise or to become known to the dissolved corporation within ten years after the date of dissolution. If there are insufficient assets to make these payments and provisions, then they will be satisfied ratably in accordance with legal priorities, to the extent assets are available. All remaining assets will be distributed to the dissolved corporation’s stockholders.
The following table sets forth information regardingPlan of Dissolution adopted by the compensation earnedBoard and proposed to the stockholders for serviceapproval constitutes the plan of distribution for purposes of the Alternative Procedures, although the Plan of Dissolution provides that our
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Board has the discretion to decide to abandon any plans to follow the Alternative Procedures and to follow the Safe Harbor Procedures as permitted by Delaware law.
Liabilities of Stockholders and Directors
If a dissolved corporation follows either the Safe Harbor Procedures or the Alternative Procedures, then (1) a stockholder of the dissolved corporation’s will not be liable for any claim against the dissolved corporation in an amount in excess of the lesser of (a) the stockholder’s pro rata share of the claim and (b) the amount distributed to the stockholder. If a dissolved corporation follows the Safe Harbor Procedures, then a stockholder of the dissolved corporation will not be liable for any claim against the dissolved corporation on which an action, suit or proceeding is not begun before the expiration of the Survival Period. In no event will the aggregate liability of a stockholder of a dissolved corporation for claims against the dissolved corporation exceed the amount distributed to the stockholder in dissolution. If a dissolved corporation fully complies with either the Safe Harbor Procedures or the Alternative Procedures, then the dissolved corporation’s directors will not be personally liable to the dissolved corporation’s claimants.
Application of These Procedures to Us
We currently plan to elect to follow the Alternative Procedures. However, our Plan of Dissolution specifically permits our Board during the year ended December 31, 2021. Dr. Ashburn, our Presidentdiscretion to decide to abandon any plans to follow the Alternative Procedures and Chief Executive Officer, is alsoto follow the Safe Harbor Procedures as permitted by Delaware law. If we follow the Safe Harbor Procedures, then the required published notices would be published in a membernewspaper of general circulation in New Castle County, Delaware (the location of our registered agent), and Andover, Massachusetts (the location of our principal place of business), as well as in a daily newspaper with national circulation, since our total assets will exceed $10.0 million at the time of dissolution. For more information about our liquidation, winding up and distribution procedures, see the section entitled "Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Our Plan of Dissolution" beginning on page 19 of this proxy statement.
OUR PLAN OF DISSOLUTION
The Dissolution will be conducted in accordance with the Plan of Dissolution, which is attached to this proxy statement as Annex A and incorporated by reference into this proxy statement. The following is a summary of our Plan of Dissolution and does not purport to be complete or contain all of the information that is important to you. To understand our Plan of Dissolution more fully, you are urged to read this proxy statement as well as the Plan of Dissolution. Our Plan of Dissolution may be modified, clarified or amended by action by our Board but did not receiveat any time and from time to time, as further described below.
additional compensation for serviceAuthorization and Effectiveness
Our Plan of Dissolution will be deemed approved if the holders of a majority of the outstanding shares of stock entitled to vote on the Dissolution Proposal have authorized the Plan of Dissolution and the Dissolution and will constitute our authorized plan and will evidence our authority to take all actions described in the Plan of Dissolution. Following the authorization of the Dissolution by our stockholders, at such time as we determine to be appropriate, we will file the Certificate of Dissolution with the Secretary of State and ensure that all relevant taxes (including Delaware franchise taxes) and fees are paid, unless the Dissolution is abandoned by the Board prior to that time. The Effective Time of our Dissolution will be when the Certificate of Dissolution is filed with the office of the Secretary of State or such later date and time that is stated in the Certificate of Dissolution.
Survival Period
For three years after the Effective Time (or such longer period as the Delaware Court of Chancery may direct) (the “Survival Period”), we will continue as a director. The compensationbody corporate for Dr. Ashburn as an executive officer is set forth above under “—Summary Compensation Table.”
NAME |
| FEES EARNED OR PAID IN CASH ($) |
| OPTION AWARDS ($) (1)(2) |
| ALL OTHER COMPENSATION ($) |
|
| TOTAL ($) |
Mitchell Finer, Ph.D.(4) |
| 105,000 |
| 149,000 |
| 22,752 | (3) |
| 276,752 |
Scott Canute |
| 46,625 |
| 149,000 |
| — |
|
| 195,625 |
Luke Evnin, Ph.D. |
| 51,625 |
| 149,000 |
| — |
|
| 200,625 |
Mary Kay Fenton |
| 53,750 |
| 149,000 |
| — |
|
| 202,750 |
Robert Kirkman, M.D.(5) |
| 18,089 |
| — |
| — |
|
| 18,089 |
Briggs Morrison, M.D.(6) |
| 3,750 |
| — |
| — |
|
| 3,750 |
Spencer Nam |
| 50,750 |
| 149,000 |
| — |
|
| 199,750 |
Eric Rubin, M.D.(7) |
| 20,861 |
| 298,000 |
| — |
|
| 318,861 |
Cameron Wheeler, Ph.D.(5) |
| 22,114 |
| — |
| — |
|
| 22,114 |
Barbara Yanni(8) |
| 14,960 |
| 235,455 |
| — |
|
| 250,415 |
General Liquidation, Winding Up and Distribution Process
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We intend to Financial Accounting Standardelect to follow the Alternative Procedures described under the section entitled “Proposal 1 - Approval of the Dissolution Pursuant to the Plan of Dissolution - Delaware Law Applicable to Our Dissolution - Alternative Procedures under DGCL Section 281(b)” beginning on page 18 of this proxy statement but our Board Accounting Standards Codification Topic 718,retains the basis for computing stock-based compensationdiscretion to opt to dissolve the Company in accordance with the Safe Harbor Procedures.
The Board intends to seek to distribute funds, if any, to our stockholders as quickly as possible, as permitted by the DGCL and the Plan of Dissolution, and intends to take all reasonable actions deemed advisable by the Board to optimize the distributable value to our stockholders.
Continuing Employees and Consultants
During the Survival Period, we may retain, hire, employ or contract with employees, consultants, agents, trustees, independent professional advisors (including legal counsel, accountants and financial advisors) and others, as the Board may determine, from time to time, to be necessary or advisable to effect the Dissolution as described in our consolidatedPlan of Dissolution. The Board also expects that outside legal and financial statements. This calculation assumes thatadvisors will continue to advise on and assist with the directorDissolution.
After filing the Certificate of Dissolution, the Board expects it will performmaintain the requisite service for the award to vest in full as required by SEC rules. The assumptions we used in valuing options are described in Note 10 to our annual consolidated financial statements included in our Annual Report. These amounts do not reflect the actual economic value that will be realized by the director upon vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options.
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Sale, Exchange or Disposition of Our Remaining Assets
We have a broad portfolio of patents and patent applications, know how and other intellectual property that covers our Board effective asself-amplifying RNA technology and our lipid nanoparticles. These patents and patent applications include claims related to our platforms, products, methods, manufacturing processes, and potential future products and developments, with expected expiring dates not earlier than between 2026 and 2043. The Plan of Dissolution contemplates the sale, exchange or other disposition of all of our 2021 annual meetingremaining non-cash assets, including our intellectual property, if and at such time as the Board may approve, without further stockholder approval. The Plan of stockholders held on June 16, 2021.
Limitationsone or more sales, exchanges or dispositions. The assets may be sold or disposed of Liability and Indemnification Mattersto one or more acquirors in one or more transactions over a period of time. It is not anticipated that any further stockholder votes will be solicited with respect to the approval of the specific terms of any particular sales or other dispositions of assets approved by the Board. We do not anticipate amending or supplementing this proxy statement to reflect any such agreement or sale, unless required by applicable law, or selling any additional assets in the future. See the section entitled "Risk Factors - Risks Related to the Dissolution" beginning on page 9 of this proxy statement.
Our amendedCosts and restated certificateExpenses
We will pay all costs and expenses that may be determined from time to time to be necessary or advisable to effect the Dissolution in accordance with the Plan of incorporation contains provisionsDissolution and as may be necessary or advisable to continue our existence and operations. These costs and expenses may include, without limitation, brokerage, agency, professional, consulting and other fees and expenses of persons rendering services to the Company in connection with the matters described in the Plan of Dissolution and costs incurred to comply with contracts to which the Company is a party.
Indemnification
We will continue to indemnify our officers and directors in accordance with, and to the extent required or permitted by, the DGCL, our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and any contractual arrangements, whether these arrangements existed before the Dissolution or were entered into after the Dissolution. During the Survival Period, acts and omissions of any indemnified or insured
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person in connection with the implementation of the Plan of Dissolution will be covered to the same extent that limitthey were covered before the liabilityeffective time of the Dissolution. The Board is authorized to obtain and maintain insurance as may be necessary to cover the Company’s indemnification obligations, including seeking an extension in time and coverage of our current and former directors for monetary damagesinsurance policies currently in effect.
Stockholder Approval
Authorization of the Dissolution by the holders of a majority of the outstanding stock of the Company entitled to vote thereon shall, to the fullest extent permitted by Delawarelaw, constitute approval of all matters described in this proxy statement relating to the Dissolution, including our Plan of Dissolution.
Authorization of the Dissolution by the holders of a majority of the outstanding stock of the Company shall constitute the authorization of the sale, exchange or other disposition in liquidation of all of the remaining property and assets of the Company after the effective time of the Dissolution, whether the sale, exchange or other disposition occurs in one transaction or a series of transactions, and shall constitute approval and ratification of any and all contracts for sale, exchange or other disposition whether or not conditioned on stockholder approval.
Subsidiary
As part of the Dissolution, we may take actions with respect to our subsidiary, based on the advice and counsel of our legal and other advisors and in accordance with the requirements of the laws and charter documents governing such subsidiary, to liquidate, dissolve or otherwise wind up such subsidiary.
Legal Claims
We will defend any claims against us, our officers or directors or our subsidiaries, whether a claim exists before the Effective Time or is brought during the Survival Period, based on advice and counsel of our legal and other advisors and in such manner, at such time and with such costs and expenses as we or our Board may approve from time to time. During the Survival Period, we may continue to prosecute any claims that we had against others before the Effective Time and may institute any new claims against any person as may be determined to be necessary or advisable to protect the Company and its assets and rights or to implement the Plan of Dissolution. At our discretion, we may defend, prosecute or settle any lawsuits, as applicable.
Effective Time; Stock of the Company
The Effective Time will be the effective time of the Certificate of Dissolution as filed with the Secretary of State of Delaware.
From and after the Effective Time, and subject to applicable law, each holder of shares of our common stock shall cease to have any rights in respect of that stock, except the right to receive distributions, if any, pursuant to and in accordance with the Plan of Dissolution and the DGCL. After the Effective Time, our stock transfer records shall be closed, and we will not record or recognize any transfer of our common stock occurring after the Effective Time, except, in our sole discretion, such transfers occurring by will, intestate succession or operation of law as to which we have received adequate written notice. We expect the Effective Time to be as soon as reasonably practicable after the Dissolution is approved by our stockholders. No stockholder or beneficial owner shall have any appraisal rights in connection with our Dissolution and winding-up. It is anticipated that no further trading of our shares will occur after the Effective Time.
Unclaimed Distributions
If any distribution to a stockholder cannot be made, whether because the stockholder cannot be located, has not surrendered a certificate evidencing ownership of the Company’s common stock or provided other evidence of ownership as required in the Plan of Dissolution or by the Board or for any other reason, the distribution to which the stockholder is otherwise entitled will be transferred, at such time as the final liquidating distribution is made by us, or as soon as practicable after that distribution, to the official of such state or other jurisdiction authorized by applicable law to receive the proceeds of the distribution. The proceeds of such distribution will thereafter be held solely for the benefit of and for ultimate distribution to the stockholder as the sole equitable owner of the distribution and will be treated as abandoned property and escheat to the applicable state or other jurisdiction in accordance with applicable law. The proceeds of any such distribution will not revert to or become the property of us or any other stockholder.
Liquidating Trust
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While we do not currently propose transferring our assets to a liquidating trust, we may do so if deemed appropriate by our Board, based on advice of our legal, tax and accounting advisors. We may, for example, transfer assets to a liquidating trust if we are unable to complete the Dissolution within the initial three-years of the Survival Period.
Abandonment, Exceptions, Modifications, Clarifications and Amendments
Notwithstanding the authorization of the Dissolution by our stockholders as described in this proxy statement, our Board will have the right, as permitted by the DGCL, to abandon the Dissolution at any time before the Effective Time and terminate our Plan of Dissolution, without any action by our stockholders, if our Board determines that to do so is in the best interest of us and our stockholders. Without further action by our stockholders, our Board may, to the extent permitted by Delaware law, provides that directorswaive, modify or amend any part of our Plan of Dissolution, and may provide for exceptions to or clarifications of the terms of our Plan of Dissolution. After the Effective Time, revocation of the Dissolution would require stockholder approval under Delaware law.
Contingent Liabilities; Reserves
Under Delaware law, we are required, in connection with the Dissolution, to pay or make reasonable provision for payment of our liabilities and obligations. We will pay all of our expenses (including operating and wind-up expenses to be incurred throughout the Dissolution and wind-up process) and other known, non-contingent liabilities. We have used and anticipate continuing to use cash until the end of the Survival Period for a corporation willnumber of items, including, but not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:limited to, the following:
We will maintain a reserve, consisting of cash or other assets that we believe will be adequate for the satisfaction of all of our current unknown, contingent and/or conditional claims and liabilities. We may also take other steps to provide for the satisfaction of the reasonably estimated amount of such claims and liabilities, including acquiring insurance coverage with respect to certain claims and liabilities. We currently estimate that we will maintain a cash reserve in the range between approximately $0.2 million and $0.5 million of cash for expenses as well as unknown, contingent and/or conditional liabilities during the Survival Period.
The estimated amount of the reserve is based upon certain estimates and assumptions and a review of our estimated operating expenses and future estimated liabilities, including, without limitation, estimated operating costs, directors’ and officers’ insurance, legal, accounting and consulting fees and miscellaneous expenses, and accrued expenses reflected in our financial statements. There can be no assurance that the reserve will be sufficient. If any of our estimates regarding the expenses to be incurred in the liquidation process, including expenses of personnel required and other operating expenses (including legal, accounting and consulting fees) necessary to dissolve and liquidate the Company and the expenses to satisfy outstanding obligations, liabilities and claims during the liquidation process, are inaccurate, we may be required to increase the amount of the reserve. After the liabilities, expenses and obligations for which the director derivedreserve is established have been satisfied in full (or determined not to be owed), we will distribute to our stockholders any remaining portion of the reserve.
In the event we fail to create an improper personal benefit.adequate reserve for the payment of our expenses and liabilities and amounts have been distributed to the stockholders under the Plan of Dissolution, our creditors may be able to pursue claims against our stockholders directly to the extent that they have claims co-extensive with such stockholders’ receipt of liquidating distributions. See the section entitled “Risk Factors - Risk Factors Related to the Dissolution - Our stockholders may be liable to third parties for part or all of the amount received from us in our liquidating distributions if reserves are inadequate” beginning on page 10 of this proxy statement.
These limitationsIf we were held by a court to have failed to make adequate provision for our expenses and liabilities or if the amount required to be paid in respect of liability dosuch liabilities exceeded the amount available from the reserve and any
22
assets of the liquidating trust or trusts, a creditor of ours could seek an injunction against the making of liquidating distributions under the Plan of Dissolution on the grounds that the amounts to be distributed were needed to provide for the payment of our expenses and liabilities. Any such action could delay or substantially diminish the cash distributions to be made to stockholders under the Plan of Dissolution.
Reporting Requirements
Whether or not applythe Dissolution is approved, we will have an obligation to liabilities arisingcontinue to comply with the applicable reporting requirements of the Exchange Act until we have exited from such reporting requirements. We plan to initiate steps to exit from certain reporting requirements under federal securitiesthe Exchange Act. However, such process may be protracted and we may be required to continue to file Current Reports on Form 8-K to disclose material events, including those related to the Dissolution. Accordingly, we will continue to incur expenses that will reduce the amount available for distribution, including expenses of complying with public company reporting requirements and paying its service providers, among others.
Interests of Certain Persons in the Dissolution
After the Effective Time, we expect that our Board (or some subset thereof) and some of our officers will continue in their positions for the purpose of winding up our business and affairs. We expect to compensate these individuals at a level consistent with their compensation level prior to Effective Time.
On June 6, 2023, in connection with the approval by the Board of the Plan of Dissolution, the Board appointed Brian Shea, the Company's General Counsel and Secretary, as the Company's Interim Chief Executive Officer and President. In connection with his appointment, the Board approved an incentive entitling Mr. Shea to an additional six months of his base salary (the "Retention Bonus"), or approximately $130,000, payable on the earlier of (a) July 31, 2023 or (b) the approval of the Plan of Dissolution by the Company’s stockholders (such earlier date being referred to as the "Retention Date"). The Retention Bonus is payable to Mr. Shea provided that he remains actively employed with the Company through (and does not provide any notice of resignation prior to) the Retention Date. Termination of Mr. Shea’s employment with the Company for cause or in connection with the Company’s pursuit of bankruptcy protection or similar protection under applicable insolvency laws prior to the Retention Date shall constitute a complete forfeiture of the Retention Bonus by Mr. Shea.
See "Security Ownership of Certain Beneficial Owners and do not affectManagement" for information regarding the availabilitynumber of equitable remedies, such as injunctive relief or rescission.shares of common stock owned by our directors and executive officers.
Our amendedAmended and restated bylaws provideRestated Certificate of Incorporation and Amended and Restated Bylaws and the DGCL
During the Survival Period, we will continue to be governed by our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, insofar as their terms apply and insofar as necessary or appropriate to implement our Plan of Dissolution. Our Board will continue to have the authority to amend our Amended and Restated Bylaws as it may deem necessary or advisable. To any extent that we are requiredthe provisions of our Plan of Dissolution conflict with any provision of the DGCL, the provisions of the DGCL shall prevail.
Authority of the Board
Our Board, without further action by our stockholders, is authorized to indemnifytake all actions as they deem necessary or advisable to implement our directorsPlan of Dissolution. All determinations and officersdecisions to be made by our Board will be at the absolute and sole discretion of our Board to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delawareapplicable law.
We have also entered and expect to continue to enter into indemnification agreements with our directors and officers. With certain exceptions, these indemnification agreements provide, among other things, that we will indemnify our directors and officers for certain expenses, including damages, judgments, fines, penalties, settlements and costs and attorneys’ fees and disbursements, incurred by a director or officer in any claim, action or proceeding arising in his or her capacity as a director or officer of our company or in connection with service at our request for another corporation or entity. The indemnification agreements also provide for procedures that will apply in the event that a director or officer makes a claim for indemnification. We believe that the amended and restated certificate of incorporation and amended and restated bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED DISSOLUTION
We also maintain a directors’ and officers’ insurance policy pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors and officers.
The limitation of liability and indemnification provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.
EQUITY COMPENSATION PLAN INFORMATIONCertain U.S. Federal Income Tax Consequences
The following table providesdiscussion is a general summary of certain information with respectmaterial U.S. federal income tax consequences of the proposed Dissolution to our common stockholders. The following discussion is based on the Code, its legislative history, the Treasury Regulations and published rulings and decisions, all of our equity compensation plansas currently in effect as of December 31, 2021.
Plan Category |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(#) |
| Weighted- average exercise price of outstanding options, warrants and rights (b)($) |
| Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) (c)(#) |
| |
Equity compensation plans approved by security holders: |
|
|
|
|
|
|
|
|
2016 Equity Incentive Plan |
| 1,787,902 |
| $ | 3.91 |
| — | (1) |
2020 Equity Incentive Plan |
| 1,898,891 |
| $ | 17.39 |
| 2,132,067 | (2) |
2020 Employee Stock Purchase Plan |
| — |
|
| — |
| 280,000 | (3) |
Equity compensation plans not approved by security holders |
| — |
|
| — |
| — |
|
Total |
| 3,681,793 |
|
|
|
| 2,412,067 |
|
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individual circumstances. The discussion below does not address any U.S. federal income tax consequences to our stockholders who, for U.S. federal tax purposes, are subject to special rules, such as:
For purposes of this discussion, a “U.S. holder” is a beneficial owner of shares of common stock of the Company that for U.S. federal income tax purposes is:
U.S. Federal Income Tax Consequences to the Company
Until all of our remaining assets, if any, have been distributed to our stockholders or a liquidating trust and the liquidation is complete, we will continue to be subject to U.S. federal income tax on our income, if any, such as interest income. We will recognize gain or loss, if any, upon the sale of any assets held directly by us in connection with our Dissolution in an amount equal to the difference between (1) the fair market value of the consideration received for each asset sold and (2) our adjusted tax basis in the asset sold. We may also recognize income from the liquidation and dissolution of our subsidiary that will occur as part of the proposed Dissolution. We should not recognize any gain or loss upon the distribution of cash to our stockholders as part of the proposed Dissolution. We currently do not anticipate making distributions of property other than cash to stockholders as part of the proposed Dissolution. If we do make a liquidating distribution to our stockholders of property other than cash, we generally will recognize gain or loss upon the distribution of the property as if the property were sold to our stockholders for
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its fair market value on the date of the distribution. Any tax liability resulting from the proposed Dissolution will reduce the cash available for distribution to our stockholders.
U.S. Federal Income Tax Consequences to U.S. Holders
Stockholders that receive any distributions made by us pursuant to the Plan of Dissolution will be treated as receiving those amounts as full payment in exchange for their shares of common stock in the Company. A stockholder generally will recognize gain or loss on a share-by-share basis equal to the difference between (1) the sum of the amount of cash and the fair market value of property, if any, distributed to the stockholder with respect to each share (including distributions to any liquidating trust, as discussed below), less any known liabilities assumed by the stockholder or to which the distributed property (if any) is subject, and (2) the stockholder’s adjusted tax basis in each share of our common stock. A stockholder may determine gain or loss on a block-by-block basis if the stockholder holds blocks of our common stock (generally as a result of acquiring a block of common stock at the same time and at the same price). Each stockholder must allocate liquidating distributions proportionately to each share of common stock, or, if applicable, each block of common stock, held by the stockholder. Liquidating distributions are first applied against, and reduce, the stockholder’s adjusted tax basis with respect to a share or a block before recognizing any gain or loss. A stockholder will recognize gain to the extent the aggregate distributions allocated to the share of common stock or, if applicable, block of common stock exceeds the stockholder’s adjusted tax basis with respect to such share or such block. A stockholder will recognize loss only to the extent the stockholder has an adjusted tax basis with respect to a share or a block after taking into account all liquidating distributions allocated to the share or the block. Any loss can only be recognized in the tax year that a stockholder receives our final liquidating distribution.
Generally, gain or loss recognized by a stockholder in connection with the proposed Dissolution will be capital gain or loss, and will be long- term capital gain or loss if the stockholder has held a share or block for more than one year or short-term capital gain or loss if the stockholder has held the share or block for one year or less. Certain stockholders, including individuals, may qualify for preferential tax rates on long-term capital gains. The deductibility of capital losses is subject to certain limitations. While we do not anticipate distributing any contingent claims to our stockholders or a liquidating trust as part of the proposed Dissolution, amounts, if any, received by a stockholder upon the resolution of a contingent claim that has been distributed could be considered ordinary income rather than capital gain. Stockholders should consult their own tax advisors with respect to the tax consequences of receiving a contingent claim as part of the proposed Dissolution.
If we effect the proposed Dissolution, we intend to provide stockholders and the IRS with statements indicating the amount of cash, and, as applicable, our best estimates of the fair market value of any other property, distributed to our stockholders (or transferred to the liquidating trust, as discussed below) at such time and in such manner as required by applicable Treasury Regulations.
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Backup Withholding
Distributions to any stockholder that fails to provide the appropriate certification in accordance with applicable Treasury Regulations generally will be reduced by backup withholding at the rate applicable at the time of the distributions. Backup withholding generally will not apply to payments made to certain exempt recipients, such as corporations. Backup withholding is not an additional tax. Amounts that are withheld under backup withholding rules may be refunded or credited against the stockholder’s U.S. federal income tax liability, if any, provided that certain required information is furnished to the IRS in a timely manner. Stockholders should consult their own tax advisors regarding the application of backup withholding in their particular circumstances.
THE U.S. FEDERAL INCOME TAX CONSEQUENCES SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY. STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR CONSEQUENCES THAT MAY APPLY TO THEM.
Votes Required
The affirmative vote of holders of a majority of the shares of our common stock outstanding on December 31the Record Date and entitled to vote on the Dissolution Proposal is required to approve the Dissolution Proposal. Abstentions, broker non-votes, and failures to vote will have the same effect as a vote “AGAINST” the Dissolution Proposal.
Board Recommendation
The Board recommends that the stockholders vote “FOR” the Dissolution Proposal to approve the Dissolution in accordance with the terms and conditions of the preceding calendar year, or a lesser numberPlan of shares as may be determined by our Board. On January 1, 2022, the number of shares of our common stock reserved for issuance under our 2020 Plan increased by 1,292,458 shares, which represents 5%Dissolution.
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PROPOSAL 2 - APPROVAL OF AN ADJOURNMENT OF THE SPECIAL MEETING
Our stockholders are being asked to consider and vote upon an adjournment of the total number of shares of our common stock outstanding on December 31, 2021.
TRANSACTIONS WITH RELATED PERSONS
Related Person Transactions Policy and Procedures
We maintain a related party transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related party transactions. The policy became effective on October 1, 2020. For purposes of our policy only, a related party transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related party are, were or will be participants and in which the amount involved exceeds the lesser of $120,000 and one percent of the average of our total assets at year-end for the last two completed fiscal years. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related party is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related party transaction, including any transaction that was not a related party transaction when originally consummated or any transaction that was not initially identified as a related party transaction prior to consummation, our management must present information regarding the related party transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body of our Board, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related parties, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our Code of Business Conduct and Ethics, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.
In considering related party transactions, our Audit Committee, or other independent body of our Board, will take into account the relevant available facts and circumstances including, but not limited to:
The policy requires that, in determining whether to approve, ratify or reject a related party transaction, our Audit Committee, or other independent body of our Board, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or other independent body of our Board, determines in the good faith exercise of its discretion.
All of the transactions described were approved by our Board considering similar factors to those described above.
Certain Related-Party Transactions
Other than compensation arrangements with our directors and executive officers already described in this proxy statement under the headings “Non-Employee Director CompensationPolicy” and “Executive Officer and Director Compensation,” the following is a summary of transactions since January 1, 2020 to which we have been a participant, in which:
We have entered into various employment-related agreements and compensatory arrangements with our directors and executive officers that, among other things, provide for compensatory and certain severance and change in control benefits. For a description of these agreements and arrangements, see the sections titled Non-Employee Director CompensationPolicy” and “Executive Officer and Director Compensation.”
We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable in arm’s length transactions.
Public Offerings
February 2021 Public Offering
In connection with a public offering of our common stock in February 2021, certain of our related parties purchased shares of our common stock from the underwriters and on the same terms as other investors in the offering. The following table summarizes purchases of shares of our common stock in our follow-on offering by our related parties:
RELATED PARTY |
| SHARES OF COMMON STOCK |
|
| TOTAL PURCHASE PRICE |
Entities affiliated with Deerfield Management Company(1) |
| 300,000 |
| $ | 5,700,000 |
CHI Advisors LLC(2) |
| 105,000 |
| $ | 1,995,000 |
Citadel Multi-Strategy Equities Master Fund Ltd.(3) |
| 39,000 |
| $ | 741,000 |
Initial Public Offering in October 2020
In connection with our IPO in October 2020, certain of our related parties purchased shares of our common stock from the underwriters at the IPO price of $15.00 per share, and on the same terms as other investors in our IPO. The following table summarizes purchases of shares of our common stock in our IPO by our related parties:
RELATED PARTY |
| SHARES OF COMMON STOCK |
| TOTAL PURCHASE PRICE | |
Perceptive Life Sciences Master Fund, Ltd.(1) |
| 1,027,666 |
| $ | 15,414,990 |
Entities affiliated with Deerfield Management Company(2) |
| 1,000,000 |
| $ | 15,000,000 |
Citadel Multi-Strategy Equities Master Fund Ltd.(3) |
| 890,003 |
| $ | 13,350,045 |
CHI Advisors LLC(4) |
| 666,666 |
| $ | 9,999,990 |
MPM Asset Management LLC(5) |
| 325,000 |
| $ | 4,875,000 |
Private Placements of Securities
Series Preferred Stock Financing
On a series of dates in August 2019, November 2019 and September 2020, we sold an aggregate of 104,225,300 shares of our Series B convertible preferred stock in multiple closings at a purchase price of $0.8597 per share for an aggregate amount of $89.6 million. Upon the closing of our IPO in October 2020, all 104,225,300 shares of our Series B convertible preferred stock automatically converted into our common stock on a one-to-0.0827 basis. The following table summarizes purchases of our Series B convertible preferred stock by related persons:
STOCKHOLDER |
| SHARES OF SERIES B PREFERRED STOCK |
| TOTAL PURCHASE PRICE ($) |
Cowen Healthcare Investments II LP and affiliated entities(1) |
| 14,539,956 |
| 12,500,000 |
Citadel Multi-Strategy Equities Master Fund Ltd.(2) |
| 11,631,963 |
| 9,999,998 |
Perceptive Life Sciences Master Fund, Ltd.(3) |
| 11,631,963 |
| 9,999,998 |
Entities affiliated with MPM Capital(4) |
| 9,379,588 |
| 8,063,632 |
UBS Oncology Impact Fund L.P.(5) |
| 8,466,660 |
| 7,278,788 |
Entities affiliated with Deerfield Management Company(6) |
| 7,349,283 |
| 6,318,179 |
Arkin Bio Ventures Limited Partnership(7) |
| 3,383,843 |
| 2,909,089 |
Entities affiliated with Kensington-SV Global Innovations LP(8) |
| 2,907,988 |
| 2,499,997 |
Spencer Nam(9) |
| 23,263 |
| 19,999 |
Employment Arrangementsthe Special Meeting to approve the Dissolution Proposal.
WeIn the Adjournment Proposal, we are asking you to authorize the holder of any proxy solicited by the Board to vote in favor of granting discretionary authority to the proxy holders, and each of them individually, to adjourn the Special Meeting, from time to time, to a later date or dates, for the purpose of soliciting additional proxies. If the stockholders approve the Adjournment Proposal, we could adjourn the Special Meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders that have entered into employment agreementspreviously voted.
Votes Required
The Adjournment Proposal requires the approval of the holders a majority in voting power of the shares present virtually or offer letter agreements with certainby proxy at the Special Meeting and entitled to vote on the proposal. With respect to the Adjournment Proposal, abstentions will have the effect of our executive officers. For more information regarding these agreements with our named executive officers, see “Executive Officer and Director Compensation–Employment Agreements and Potential Payments and Benefits Upon Termination or Change in Control.”a vote against the proposal.
Severance ArrangementsBoard Recommendation
The employment agreements and offer letter agreements we have entered into with certainBoard recommends that the stockholders vote “FOR” the adjournment of our executive officers provide for certain severance arrangements. For more information regarding these arrangements with our named executive officers, see “Executive Officer and Director Compensation–Employment Agreements and Potential Payments and Benefits Upon Termination or Change in Control.the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the time of the Special Meeting to approve the Dissolution Proposal.
Indemnification Agreements27
We have entered, and intend to continue to enter, into indemnification agreements with each of our directors and executive officers. The indemnification agreements that are currently in place and our amended and restated bylaws, require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. For more information regarding these agreements, see “Executive Officer and Director Compensation–Limitations of Liability and Indemnification Matters.”TABLE OF CONTENTS
Executive and Director Compensation
We have granted equity awards to certain of our executive officers and directors. See the section titled “Executive Officer and Director Compensation” for a description of these equity awards.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information known to us regarding the beneficial ownership of shares of our common stock as of March 31, 2022,2023 by: (i) each of our named executive officers; (ii) each of our current directors; (iii) all of our current executive officers and directors as a group; and (iv) each person, or group of affiliated persons, known by us to beneficially own more than 5% of any class of our voting securities.
Information with respect to beneficial ownership is based on information furnished to us by each director, executive officer or stockholder who holds more than 5% of our outstanding common stock, and Schedules 13G or 13D filed with the SEC, as the case may be. Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he or she possesses sole or shared voting or investment power of that security, and includes options and warrants that are currently exercisable within 60 days of March 31, 2022.2023. Options and warrants to purchase shares of our common stock that are exercisable within 60 days of March 31, 2022,2023, and shares of common stock issuable upon conversion of indebtedness at the option of the holder within 60 days of March 31, 2023, are deemed to be beneficially owned by the persons or entities holding these options, warrants and convertible notes for the purpose of computing percentage ownership of that person or entity, but are not treated as outstanding for the purpose of computing any other person’s or entity’s ownership percentage. Except as indicated in the footnotes below, each of the beneficial ownersnatural persons named in the table below has, to our knowledge, sole voting and investment power with respect to all shares of common stock listed as beneficially owned by him or her, except for shares owned jointly with that person’s spouse.
We have based our calculation of beneficial ownership on 25,883,19626,095,363 shares of our common stock outstanding as of March 31, 2022.2023. Unless otherwise indicated, the address for each of the stockholders in the table below is c/o Oncorus, Inc., 50 Hampshire Street, Suite 401, Cambridge,4 Corporate Drive, Andover, Massachusetts 02139.01810.
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Number of Shares Beneficially Owned |
| Percentage of Shares Beneficially Owned |
|
5% or greater stockholders: |
|
|
|
|
|
Entities affiliated with Deerfield Management Company(1) |
| 2,848,970 |
| 11.0 | % |
Entities affiliated with MPM Capital(2) |
| 2,718,343 |
| 10.5 |
|
UBS Oncology Impact Fund L.P.(3) |
| 2,252,953 |
| 8.7 |
|
CHI Advisors LLC(4) |
| 2,106,903 |
| 8.1 |
|
Citadel Multi-Strategy Equities Master Fund Ltd.(5) |
| 1,901,309 |
| 7.3 |
|
Entities affiliated with Blackrock, Inc.(6) |
| 1,354,009 |
| 5.2 |
|
Named executive officers and directors: |
|
|
|
|
|
Theodore (Ted) Ashburn, M.D., Ph.D.(7) |
| 770,831 |
| 2.9 |
|
Steve Harbin(8) |
| 92,783 |
| * |
|
John McCabe(9) |
| 206,214 |
| * |
|
Scott Canute(9) |
| 23,263 |
| * |
|
Mitchell Finer, Ph.D.(10) |
| 573,519 |
| 2.2 |
|
Luke Evnin, Ph.D.(11) |
| 2,380,230 |
| 9.2 |
|
Mary Kay Fenton(9) |
| 19,454 |
| * |
|
Spencer Nam(12) |
| 19,724 |
| * |
|
Eric Rubin, M.D.(9) |
| 7,638 |
| * |
|
Barbara Yanni(9) |
| 6,944 |
| * |
|
All current executive officers and directors as a group (12 persons)(13) |
| 4,374,089 |
| 15.9 |
|
|
| Number of Shares Beneficially Owned |
| Percentage of Shares Beneficially Owned |
|
5% or greater stockholders: |
|
|
|
|
|
Entities affiliated with MPM Capital(1) |
| 2,869,568 |
| 11.0 | % |
UBS Oncology Impact Fund L.P.(2) |
| 2,252,953 |
| 8.6 |
|
Arkin Bio Ventures and affiliates(3) |
| 2,508,481 |
| 9.6 |
|
CHI Advisors LLC(4) |
| 2,367,436 |
| 9.1 |
|
Entities and persons affiliated with Citadel Multi-Strategy Equities Master Fund Ltd.(5) |
| 2,017,854 |
| 7.7 |
|
K2 HealthVentures Equity Trust LLC and affiliates(6) |
| 2,593,767 |
| 9.0 |
|
|
|
|
|
|
|
Named executive officers and directors: |
|
|
|
|
|
Theodore (Ted) Ashburn, M.D., Ph.D.(7) |
| 923,056 |
| 3.4 |
|
Stephen W. Harbin(8) |
| 264,189 |
| 1.0 |
|
John M. Goldberg, M.D.(9) |
| 263,118 |
| * |
|
Mitchell Finer, Ph.D.(10) |
| 588,413 |
| 2.2 |
|
Luke Evnin, Ph.D.(11) |
| 2,541,872 |
| 9.7 |
|
Douglas M. Fambrough III, Ph.D.(12) |
| 12,500 |
| * |
|
Mary Kay Fenton(12) |
| 31,802 |
| * |
|
Spencer Nam(13) |
| 33,726 |
| * |
|
Eric Rubin, M.D.(12) |
| 23,958 |
| * |
|
Barbara Yanni(12) |
| 23,263 |
| * |
|
All current executive officers and directors as a group (11 persons)(14) |
| 4,756,897 |
| 17.1 |
|
* Represents beneficial ownership of lessLess than 1%. of the outstanding shares of our common stock.
28
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30
HOUSEHOLDING OF PROXY MATERIALS
The SEC has adopted rulesSome banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for the Proxy Materials or other Annual Meeting materials with respect to two or more stockholders sharing the same address by delivering a single setonly one copy of Proxy Materials or other Annual Meeting materials addressed to those stockholders.This process, which is commonly referred to as “householding,” potentially means extra convenience forstockholders, cost savings for companies and enables us to reduce our environmental impact.
This year, a number of brokers with account holders who are our stockholders will be “householding” our Proxy Materials. A single set of Proxy Materials will be delivereddocuments, including this proxy statement, may have been sent to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice fromin your broker that theyhousehold. We will be “householding” communications to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding” and would prefer to receivepromptly deliver a separate setcopy of Proxy Materials, please notify your brokereither document to you upon written or Oncorus, Inc. Direct your writtenoral request to Oncorus, Inc., 50 Hampshire Street, Suite 401, Cambridge,4 Corporate Drive, Andover, Massachusetts 02139, Attn: Brian J. Shea, Corporate Secretary, or at (857) 320-6400. Stockholders who currently receive01810, (339) 240-3330. If you are receiving multiple copies of the Proxy Materials at their addresses and would like to request “householding” of their communicationsreceive only one copy per household, you should contact their brokers.your bank, broker or other nominee record holder, or you may contact us at the above address and phone number.
STOCKHOLDER PROPOSALS
We do not intend to hold future annual meetings of stockholders, including the 2023 or 2024 annual meeting, if the Plan of Dissolution is approved.
31
OTHER MATTERS
TheOur Board knowsdoes not know of no businessany other matters to be brought before the Annual Meeting which isSpecial Meeting. If any other matters not referred tomentioned in this proxy statement are properly brought before the accompanying Notice of Annual Meeting. Should any such matters be presented,meeting, the personsindividuals named in the enclosed proxy shall haveintend to use their discretionary voting authority under the authority to take such action in regard to such matters as in their judgment seems advisable. If you hold shares through a broker, bank or other nominee as described above, they will not be ableproxy to vote your sharesthe proxy in accordance with their best judgment on anythose matters.
32
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
We file annual, quarterly and current reports, proxy statements and other businessinformation with the SEC. These documents may be accessed through the SEC’s electronic data gathering, analysis and retrieval system, or EDGAR, via electronic means, including the SEC’s home page on the Internet (www.sec.gov).
The SEC allows us to incorporate by reference the information and reports we file with it, which means that comes beforewe can disclose important information to you by referring you to these documents. The information incorporated by reference is an important part of this proxy statement, and information that we file later with the Annual Meeting unless they receive instructions from you with respectSEC will automatically update and supersede the information already incorporated by reference. Such documents are considered to such matter.
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|
|
May 13, 2022
A copybe a part of this proxy statement, effective as of the Company’sdate such documents are filed. In the event of conflicting information in these documents, the information in the latest filed document should be considered correct. We are incorporating by reference the documents listed below, which we have already filed with the SEC, and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, including all filings made after the date of the filing of this proxy statement, except as to any portion of any future report or document that is not deemed filed under such provisions:
Upon request, either orally or in writing, we will provide, without charge, upon writtento each person, including any beneficial owner, to whom a copy of this proxy statement is delivered, a copy of the documents incorporated by reference into this proxy statement but not delivered with the proxy statement. You may request to: Corporate Secretary,a copy of these filings, and any exhibits we have specifically incorporated by reference as an exhibit in this proxy statement, at no cost by writing us at the following address: Oncorus, Inc., 50 Hampshire Street, Suite 401, Cambridge,4 Corporate Drive, Andover, Massachusetts 0213901810, (339) 240-3330.
33
ANNEX A
PLAN OF LIQUIDATION AND DISSOLUTION
OF
ONCORUS, INC.
This Plan of Liquidation and Dissolution (the “Plan”) is intended to accomplish the complete liquidation and dissolution Oncorus, Inc., a Delaware corporation (the “Company”), in accordance with Section 281(b) of the General Corporation Law of the State of Delaware (the “DGCL”).
(i) The Company (a) shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims known to the Company, (b) shall make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the Company which is the subject of a pending action, suit or proceeding to which the Company is a party and (c) shall make such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the Company or that have not arisen but that, based on facts known to the Company, are likely to arise or to become known to the Company within 10 years after the date of dissolution. All such claims shall be paid in full and any such provision for payment made shall be made in full if there are sufficient assets. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of assets legally available therefor.
(ii) After the payments are made pursuant to clause (i) above, if there are any assets remaining, the Company shall distribute to its stockholders, in accordance with the Company’s certificate of incorporation, as amended and/or restated through the Effective Time, all remaining assets, including all available cash, including the cash proceeds of any sale, exchange or disposition, except such cash, property or assets as are required for paying or making reasonable provision for the claims and obligations of the Company. Such distribution may occur all at once or in a series of distributions and shall be in cash or assets, in such amounts, and at such time or times, as the Board in its absolute discretion, may determine. If and to the extent deemed necessary, appropriate or desirable by the Board, in its absolute discretion, the Company may establish and set aside a reasonable amount of cash and/or property to satisfy claims against the Company, including, without limitation, tax obligations, all expenses related to the sale of the Company’s property and assets, all expenses related to the collection and defense of the Company’s property and assets, and the liquidation and dissolution provided for in this Plan.
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Notwithstanding anything contained herein to the contrary, the Company, at the sole discretion of the Board, may opt to dissolve and wind-up the Company in accordance with the procedures set forth in Sections 280 and 281(a) of the DGCL.
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ANNEX B
Sections 275 through 283 of the DGCL
§ 275. Dissolution generally; procedure.
(a) If it should be deemed advisable in the judgment of the board of directors of any corporation that it should be dissolved, the board, after the adoption of a resolution to that effect by a majority of the whole board at any meeting called for that purpose, shall cause notice of the adoption of the resolution and of a meeting of stockholders to take action upon the resolution to be given to each stockholder entitled to vote thereon as of the record date for determining the stockholders entitled to notice of the meeting.
(b) At the meeting a vote shall be taken upon the proposed dissolution. If a majority of the outstanding stock of the corporation entitled to vote thereon shall vote for the proposed dissolution, a certification of dissolution shall be filed with the Secretary of State pursuant to subsection (d) of this section.
(c) Dissolution of a corporation may also be authorized without action of the directors if all the stockholders entitled to vote thereon shall consent in writing and a certificate of dissolution shall be filed with the Secretary of State pursuant to subsection (d) of this section.
(d) If dissolution is authorized in accordance with this section, a certificate of dissolution shall be executed, acknowledged and filed, and shall become effective, in accordance with § 103 of this title. Such certificate of dissolution shall set forth:
(1) The name of the corporation;
(2) The date dissolution was authorized;
(3) That the dissolution has been authorized by the board of directors and stockholders of the corporation, in accordance with subsections (a) and (b) of this section, or that the dissolution has been authorized by all of the stockholders of the corporation entitled to vote on a dissolution, in accordance with subsection (c) of this section;
(4) The names and addresses of the directors and officers of the corporation; and
(5) The date of filing of the corporation’s original certificate of incorporation with the Secretary of State.
(e) The resolution authorizing a proposed dissolution may provide that notwithstanding authorization or consent to the proposed dissolution by the stockholders, or the members of a nonstock corporation pursuant to § 276 of this title, the board of directors or governing body may abandon such proposed dissolution without further action by the stockholders or members.
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(f) If a corporation has included in its certificate of incorporation a provision limiting the duration of its existence to a specified date in accordance with § 102(b)(5) of this title, a certificate of dissolution shall be executed, acknowledged and filed in accordance with § 103 of this title within 90 days before such specified date and shall become effective on such specified date. Such certificate of dissolution shall set forth:
(1) The name of the corporation;
(2) The date specified in the corporation’s certificate of incorporation limiting the duration of its existence;
(3) The names and addresses of the directors and officers of the corporation; and
(4) The date of filing of the corporation’s original certificate of incorporation with the Secretary of State.
The failure to timely file a certificate of dissolution pursuant to this subsection with respect to any corporation shall not affect the expiration of such corporation’s existence on the date specified in its certificate of incorporation pursuant to § 102(b)(5) of this title and shall not eliminate the requirement to file a certificate of dissolution as contemplated by this subsection. If a certificate of good standing is issued by the Secretary of State after the date specified in a corporation’s certificate of incorporation pursuant to § 102(b)(5) of this title, such certificate of good standing shall be of no force or effect.
(g) A corporation shall be dissolved upon the earlier of:
(1) The date specified in such corporation’s certificate of incorporation pursuant to § 102(b)(5) of this title; or
(2) The effectiveness in accordance with § 103 of this title of a certificate of dissolution filed in accordance with this section.
§ 276. Dissolution of nonstock corporation; procedure.
(a) Whenever it shall be desired to dissolve any nonstock corporation, the governing body shall perform all the acts necessary for dissolution which are required by § 275 of this title to be performed by the board of directors of a corporation having capital stock. If any members of a nonstock corporation are entitled to vote for the election of members of its governing body or are entitled to vote for dissolution under the certificate of incorporation or the bylaws of such corporation, such members shall perform all the acts necessary for dissolution which are contemplated by § 275 of this title to be performed by the stockholders of a corporation having capital stock, including dissolution without action of the members of the governing body if all the members of the corporation entitled to vote thereon shall consent in writing and a certificate of dissolution shall be filed with the Secretary of State pursuant to § 275(d) of this title. If there is no member entitled to vote thereon, the dissolution of the corporation shall be authorized at a meeting of the governing body, upon the adoption of a resolution to dissolve by the vote of a majority of members of its governing body then in office. In all other respects, the method and proceedings for the dissolution of a nonstock corporation shall conform as nearly as may be to the proceedings prescribed by § 275 of this title for the dissolution of corporations having capital stock.
(b) If a nonstock corporation has not commenced the business for which the corporation was organized, a majority of the governing body or, if none, a majority of the incorporators may surrender all of the corporation rights and franchises by filing in the office of the Secretary of State a certificate, executed and acknowledged by a majority of the incorporators or governing body, conforming as nearly as may be to the certificate prescribed by § 274 of this title.
(c) If a nonstock corporation has included in its certificate of incorporation a provision limiting the duration of its existence to a specified date in accordance with § 102(b)(5) of this title, a certificate of dissolution shall be executed, acknowledged and filed in accordance with § 103 of this title within 90 days before such specified date and shall become effective on such specified date. Such certificate of dissolution shall include the information required by § 275(f) of this title. The failure to timely file a certificate of dissolution pursuant to this subsection with respect to any nonstock corporation shall not affect the expiration of such corporation’s existence on the date specified in its certificate of incorporation pursuant to § 102(b)(5) of this title and shall not eliminate the requirement to file a
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certificate of dissolution as contemplated by this subsection. If a certificate of good standing is issued by the Secretary of State after the date specified in a nonstock corporation’s certificate of incorporation pursuant to § 102(b)(5) of this title, such certificate of good standing shall be of no force or effect.
§ 277. Payment of franchise taxes before dissolution, merger, transfer or conversion.
No corporation shall be dissolved, merged, transferred (without continuing its existence as a corporation of this State) or converted under this chapter until:
(1) All franchise taxes due to or assessable by the State including all franchise taxes due or which would be due or assessable for the entire calendar month during which such dissolution, merger, transfer or conversion becomes effective have been paid by the corporation; and
(2) All annual franchise tax reports including a final annual franchise tax report for the year in which such dissolution, merger, transfer or conversion becomes effective have been filed by the corporation;
notwithstanding the foregoing, if the Secretary of State certifies that an instrument to effect a dissolution, merger, transfer or conversion has been filed in the Secretary of State’s office, such corporation shall be dissolved, merged, transferred or converted at the effective time of such instrument.
§ 278. Continuation of corporation after dissolution for purposes of suit and winding up affairs.
All corporations, whether they expire by their own limitation or are otherwise dissolved, shall nevertheless be continued, for the term of 3 years from such expiration or dissolution or for such longer period as the Court of Chancery shall in its discretion direct, bodies corporate for the purpose of prosecuting and defending suits, whether civil, criminal or administrative, by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, to discharge their liabilities and to distribute to their stockholders any remaining assets, but not for the purpose of continuing the business for which the corporation was organized. With respect to any action, suit or proceeding begun by or against the corporation either prior to or within 3 years after the date of its expiration or dissolution, the action shall not abate by reason of the dissolution of the corporation; the corporation shall, solely for the purpose of such action, suit or proceeding, be continued as a body corporate beyond the 3-year period and until any judgments, orders or decrees therein shall be fully executed, without the necessity for any special direction to that effect by the Court of Chancery.
Sections 279 through 282 of this title shall apply to any corporation that has expired by its own limitation, and when so applied, all references in those sections to a dissolved corporation or dissolution shall include a corporation that has expired by its own limitation and to such expiration, respectively.
§ 279. Trustees or receivers for dissolved corporations; appointment; powers; duties.
When any corporation organized under this chapter shall be dissolved in any manner whatever, the Court of Chancery, on application of any creditor, stockholder or director of the corporation, or any other person who shows good cause therefor, at any time, may either appoint 1 or more of the directors of the corporation to be trustees, or appoint 1 or more persons to be receivers, of and for the corporation, to take charge of the corporation’s property, and to collect the debts and property due and belonging to the corporation, with power to prosecute and defend, in the name of the corporation, or otherwise, all such suits as may be necessary or proper for the purposes aforesaid, and to appoint an agent or agents under them, and to do all other acts which might be done by the corporation, if in being, that may be necessary for the final settlement of the unfinished business of the corporation. The powers of the trustees or receivers may be continued as long as the Court of Chancery shall think necessary for the purposes aforesaid.
§ 280. Notice to claimants; filing of claims.
(a) (1) After a corporation has been dissolved in accordance with the procedures set forth in this chapter, the corporation or any successor entity may give notice of the dissolution, requiring all persons having a claim against the corporation other than a claim against the corporation in a pending action, suit or proceeding to which the corporation is a party to present their claims against the corporation in accordance with such notice. Such notice shall state:
a. That all such claims must be presented in writing and must contain sufficient information reasonably to inform the corporation or successor entity of the identity of the claimant and the substance of the claim;
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b. The mailing address to which such a claim must be sent;
c. The date by which such a claim must be received by the corporation or successor entity, which date shall be no earlier than 60 days from the date thereof; and
d. That such claim will be barred if not received by the date referred to in paragraph (a)(1)c. of this section; and
e. That the corporation or a successor entity may make distributions to other claimants and the corporation’s stockholders or persons interested as having been such without further notice to the claimant; and
f. The aggregate amount, on an annual basis, of all distributions made by the corporation to its stockholders for each of the 3 years prior to the date the corporation dissolved.
Such notice shall also be published at least once a week for 2 consecutive weeks in a newspaper of general circulation in the county in which the office of the corporation’s last registered agent in this State is located and in the corporation’s principal place of business and, in the case of a corporation having $10,000,000 or more in total assets at the time of its dissolution, at least once in all editions of a daily newspaper with a national circulation. On or before the date of the first publication of such notice, the corporation or successor entity shall mail a copy of such notice by certified or registered mail, return receipt requested, to each known claimant of the corporation including persons with claims asserted against the corporation in a pending action, suit or proceeding to which the corporation is a party.
(2) Any claim against the corporation required to be presented pursuant to this subsection is barred if a claimant who was given actual notice under this subsection does not present the claim to the dissolved corporation or successor entity by the date referred to in paragraph (a)(1)c. of this section.
(3) A corporation or successor entity may reject, in whole or in part, any claim made by a claimant pursuant to this subsection by mailing notice of such rejection by certified or registered mail, return receipt requested, to the claimant within 90 days after receipt of such claim and, in all events, at least 150 days before the expiration of the period described in § 278 of this title; provided however, that in the case of a claim filed pursuant to § 295 of this title against a corporation or successor entity for which a receiver or trustee has been appointed by the Court of Chancery the time period shall be as provided in § 296 of this title, and the 30-day appeal period provided for in § 296 of this title shall be applicable. A notice sent by a corporation or successor entity pursuant to this subsection shall state that any claim rejected therein will be barred if an action, suit or proceeding with respect to the claim is not commenced within 120 days of the date thereof, and shall be accompanied by a copy of §§ 278-283 of this title and, in the case of a notice sent by a court- appointed receiver or trustee and as to which a claim has been filed pursuant to § 295 of this title, copies of §§ 295 and 296 of this title.
(4) A claim against a corporation is barred if a claimant whose claim is rejected pursuant to paragraph (a)(3) of this section does not commence an action, suit or proceeding with respect to the claim no later than 120 days after the mailing of the rejection notice.
(b) (1) A corporation or successor entity electing to follow the procedures described in subsection (a) of this section shall also give notice of the dissolution of the corporation to persons with contractual claims contingent upon the occurrence or nonoccurrence of future events or otherwise conditional or unmatured, and request that such persons present such claims in accordance with the terms of such notice. Provided however, that as used in this section and in § 281 of this title, the term “contractual claims” shall not include any implied warranty as to any product manufactured, sold, distributed or handled by the dissolved corporation. Such notice shall be in substantially the form, and sent and published in the same manner, as described in paragraph (a)(1) of this section.
(2) The corporation or successor entity shall offer any claimant on a contract whose claim is contingent, conditional or unmatured such security as the corporation or successor entity
determines is sufficient to provide compensation to the claimant if the claim matures. The corporation or successor entity shall mail such offer to the claimant by certified or registered mail, return receipt requested, within 90 days of receipt of such claim and, in all events, at least 150 days before the expiration of the period described in § 278 of this title. If the claimant offered such security does not deliver in writing to the corporation or successor entity a
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notice rejecting the offer within 120 days after receipt of such offer for security, the claimant shall be deemed to have accepted such security as the sole source from which to satisfy the claim against the corporation.
(c) (1) A corporation or successor entity which has given notice in accordance with subsection (a) of this section shall petition the Court of Chancery to determine the amount and form of security that will be reasonably likely to be sufficient to provide compensation for any claim against the corporation which is the subject of a pending action, suit or proceeding to which the corporation is a party other than a claim barred pursuant to subsection (a) of this section.
(2) A corporation or successor entity which has given notice in accordance with subsections (a) and (b) of this section shall petition the Court of Chancery to determine the amount and form of security that will be sufficient to provide compensation to any claimant who has rejected the offer for security made pursuant to paragraph (b)(2) of this section.
(3) A corporation or successor entity which has given notice in accordance with subsection (a) of this section shall petition the Court of Chancery to determine the amount and form of security which will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity within 5 years after the date of dissolution or such longer period of time as the Court of Chancery may determine not to exceed 10 years after the date of dissolution. The Court of Chancery may appoint a guardian ad litem in respect of any such proceeding brought under this subsection. The reasonable fees and expenses of such guardian, including all reasonable expert witness fees, shall be paid by the petitioner in such proceeding.
(d) The giving of any notice or making of any offer pursuant to this section shall not revive any claim then barred or constitute acknowledgment by the corporation or successor entity that any person to whom such notice is sent is a proper claimant and shall not operate as a waiver of any defense or counterclaim in respect of any claim asserted by any person to whom such notice is sent.
(e) As used in this section, the term “successor entity” shall include any trust, receivership or other legal entity governed by the laws of this State to which the remaining assets and liabilities of a dissolved corporation are transferred and which exists solely for the purposes of prosecuting and defending suits, by or against the dissolved corporation, enabling the dissolved corporation to settle and close the business of the dissolved corporation, to dispose of and convey the property of the dissolved corporation, to discharge the liabilities of the dissolved corporation and to distribute to the dissolved corporation’s stockholders any remaining assets, but not for the purpose of continuing the business for which the dissolved corporation was organized.
(f) The time periods and notice requirements of this section shall, in the case of a corporation or successor entity for which a receiver or trustee has been appointed by the Court of Chancery, be subject to variation by, or in the manner provided in, the Rules of the Court of Chancery.
(g) In the case of a nonstock corporation, any notice referred to in the last sentence of paragraph (a)(3) of this section shall include a copy of § 114 of this title. In the case of a nonprofit nonstock corporation, provisions of this section regarding distributions to members shall not apply to the extent that those provisions conflict with any other applicable law or with that corporation’s certificate of incorporation or bylaws.
§ 281. Payment and distribution to claimants and stockholders.
(a) A dissolved corporation or successor entity which has followed the procedures described in § 280 of this title:
(1) Shall pay the claims made and not rejected in accordance with § 280(a) of this title,
(2) Shall post the security offered and not rejected pursuant to § 280(b)(2) of this title,
(3) Shall post any security ordered by the Court of Chancery in any proceeding under § 280(c) of this title, and
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(4) Shall pay or make provision for all other claims that are mature, known and uncontested or that have been finally determined to be owing by the corporation or such successor entity.
Such claims or obligations shall be paid in full and any such provision for payment shall be made in full if there are sufficient assets. If there are insufficient assets, such claims and obligations shall be paid or provided for according to their priority, and, among claims of equal priority, ratably to the extent of assets legally available therefor. Any remaining assets shall be distributed to the stockholders of the dissolved corporation; provided, however, that such distribution shall not be made before the expiration of 150 days from the date of the last notice of rejections given pursuant to § 280(a)(3) of this title. In the absence of actual fraud, the judgment of the directors of the dissolved corporation or the governing persons of such successor entity as to the provision made for the payment of all obligations under paragraph (a)(4) of this section shall be conclusive.
(b) A dissolved corporation or successor entity which has not followed the procedures described in § 280 of this title shall, prior to the expiration of the period described in § 278 of this title, adopt a plan of distribution pursuant to which the dissolved corporation or successor entity (i) shall pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured contractual claims known to the corporation or such successor entity, (ii) shall make such provision as will be reasonably likely to be sufficient to provide compensation for any claim against the corporation which is the subject of a pending action, suit or proceeding to which the corporation is a party and (iii) shall make such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to the corporation or that have not arisen but that, based on facts known to the corporation or successor entity, are likely to arise or to become known to the corporation or successor entity within 10 years after the date of dissolution. The plan of distribution shall provide that such claims shall be paid in full and any such provision for payment made shall be made in full if there are sufficient assets. If there are insufficient assets, such plan shall provide that such claims and obligations shall be paid or provided for according to their priority and, among claims of equal priority, ratably to the extent of assets legally available therefor. Any remaining assets shall be distributed to the stockholders of the dissolved corporation.
(c) Directors of a dissolved corporation or governing persons of a successor entity which has complied with subsection (a) or (b) of this section shall not be personally liable to the claimants of the dissolved corporation.
(d) As used in this section, the term “successor entity” has the meaning set forth in § 280(e) of this title.
(e) The term “priority,” as used in this section, does not refer either to the order of payments set forth in paragraph (a)(1)-(4) of this section or to the relative times at which any claims mature or are reduced to judgment.
(f) In the case of a nonprofit nonstock corporation, provisions of this section regarding distributions to members shall not apply to the extent that those provisions conflict with any other applicable law or with that corporation’s certificate of incorporation or bylaws.
§ 282. Liability of stockholders of dissolved corporations.
(a) A stockholder of a dissolved corporation the assets of which were distributed pursuant to § 281(a) or (b) of this title shall not be liable for any claim against the corporation in an amount in excess of such stockholder’s pro rata share of the claim or the amount so distributed to such stockholder, whichever is less.
(b) A stockholder of a dissolved corporation the assets of which were distributed pursuant to § 281(a) of this title shall not be liable for any claim against the corporation on which an action, suit or proceeding is not begun prior to the expiration of the period described in § 278 of this title.
(c) The aggregate liability of any stockholder of a dissolved corporation for claims against the dissolved corporation shall not exceed the amount distributed to such stockholder in dissolution.
§ 283. Jurisdiction.
The Court of Chancery shall have jurisdiction of any application prescribed in this subchapter and of all questions arising in the proceedings thereon, and may make such orders and decrees and issue injunctions therein as justice and equity shall require.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date SCAN TO VIEW MATERIALS & VOTE 0 0 0 0 0 0 0 0 0 0000572412_1 R1.0.0.240000616941_1 R1.0.0.6 ONCORUS, INC. 50 HAMPSHIRE STREET, SUITE 401 CAMBRIDGE,4 CORPORATE DRIVE ANDOVER, MA 0213901810 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on June 21, 2022.July 27, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/ONCR2022ONCR2023SM You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 21, 2022.July 27, 2023. 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. The Board of Directors recommends you vote FOR the following director nominees:Dissolution Proposal and the Adjournment Proposal. For Against Abstain 1. To elect three Class II directors, each to hold office until our annual meetingThe approval of stockholders in 2025. Nominees For Withhold 1a. Luke Evnin, Ph.D. 1b. Spencer Nam 1c. Eric Rubin, M.D. Thethe liquidation and dissolution of Oncorus, Inc. (the "Company") and the Plan of Liquidation and Dissolution (the "Plan of Dissolution"), which, if approved, will authorize the Company's Board of Directors recommends you vote FORto liquidate and dissolve the following proposal: For Against AbstainCompany in accordance with the Plan of Dissolution (the "Dissolution Proposal"). 2. To ratifyThe approval of an adjournment of the selection bySpecial Meeting, if necessary, to solicit additional proxies if there are not sufficient votes at the Audit Committeetime of our Board of Directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.Special Meeting to approve the Dissolution Proposal (the "Adjournment Proposal"). NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
0000572412_2 R1.0.0.24 Our Annual Meeting will be broadcast live on the Internet. To listen to the broadcast, log on to: www.virtualshareholdermeeting.com/ONCR20220000616941_2 R1.0.0.6 Important Notice Regarding the Availability of Proxy Materials for the AnnualSpecial Meeting: The Notice and Proxy Statement and Form 10-KProxy Materials are available at www.proxyvote.com ONCORUS, INC. AnnualSpecial Meeting of Stockholders June 22, 2022, 1:July 28, 2023 9:00 PM Eastern TimeAM ET This proxy is solicited byon behalf of the Board of Directors The stockholder(s) hereby appoint(s) Theodore (Ted) Ashburn M.D., Ph.D.Brian Shea and Brian J. Shea, or eitherAlexander Nolte, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of ONCORUS, INC. that the stockholder(s) is/are entitled to vote at the AnnualSpecial Meeting of Stockholders to be held virtually, via live webcast at www.virtualshareholdermeeting.com/ONCR2022,ONCR2023SM, at 1:9:00 PM, Eastern TimeAM, ET on June 22, 2022,July 28, 2023, and any adjournment or postponement thereof. 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 Director's recommendations. Continued and to be signed on reverse side
